BILL ANALYSIS Ó
AB 1322
Page 1
CONCURRENCE IN SENATE AMENDMENTS
AB
1322 (Daly and Wilk)
As Amended June 30, 2016
Majority vote
--------------------------------------------------------------------
|ASSEMBLY: | 74-0 |(May 7, 2015) |SENATE: |28-7 |(August 15, |
| | | | | |2016) |
| | | | | | |
| | | | | | |
--------------------------------------------------------------------
Original Committee Reference: G.O.
SUMMARY: This bill allows beauty salons and barber shops to
serve their clients limited quantities of beer or wine at no
extra charge without obtaining a license or permit from the
Department of Alcoholic Beverage Control (ABC) if specified
requirements are satisfied.
The Senate amendments:
1)Make it explicit that nothing in this bill shall be construed
to preempt the authority of a city or city and county to
restrict or limit the consumption of alcoholic beverages
within its jurisdiction.
2)Make technical changes
3)Add co-author.
AB 1322
Page 2
EXISTING LAW:
1)Establishes ABC and grants it exclusive authority to
administer the provisions of the ABC Act in accordance with
laws enacted by the Legislature.
2)Makes it unlawful for any person other than a licensee of the
ABC to sell, manufacture, or import alcoholic beverages in
this state.
3)Provides that no license or permit shall be required for the
serving of alcoholic beverages in a "limousine" or as part of
a "hot air balloon ride" service, provided there is no extra
charge or fee for the alcoholic beverages.
4)Provides that ABC must deny an application for a license if
issuance would create a law enforcement problem, or if
issuance would result in, or add to, an undue concentration of
licenses in the area where the license is desired. For liquor
stores and other specified retail license, however, the ABC is
authorized to issue a license if the respective local
government determines that public convenience or necessity
would be served by granting the license.
5)Caps the number of new on and off-sale general licenses issued
by the ABC at one for every 2,500 inhabitants of the county
where the establishment is located (2,000:1 for on sale
licenses). If no licenses are available from the state due to
the population restrictions, those people interested in
obtaining a liquor license may purchase one from an existing
licensee, for whatever price the market bears. In 1994, the
Legislature approved a three-year moratorium on the issuance
of new off-sale beer and wine licenses, which at the time was
not bound by any population to license restriction. In 1997,
this moratorium was made permanent.
AB 1322
Page 3
6)Establishes the Barbering and Cosmetology Act, which provides
for the licensure and regulation of barbers and
cosmetologists, including the practice of skin care by
licensed estheticians, by the Board in the Department of
Consumer Affairs. (Business and Professions Code (BPC)
Section 7316)
7)Establishes the specified requirements that applicants for a
cosmetology, esthetician, barbering, manicurist and
electrologist license must meet in order to sit for the
licensure examination. (BPC Sections 7321, 7321.5, 7324,
7326, 7330)
AS PASSED BY THE ASSEMBLY, this bill allowed beauty salons and
barbershops to serve up to 12 ounces of beer or six ounces of
wine as part of their beauty services without a license or
permit, provided there is no extra charge or fee for the beer or
wine, the salon or barber shop is in good standing with the
California Board of Barbering and Cosmetology, and the beer or
wine is only provided during normal business hours and in no
case later than 10 p.m.
FISCAL EFFECT: According to the Senate Appropriations
Committee, pursuant to Senate Rule 28.8, negligible state costs.
COMMENTS: This bill, as amended is consistent with Assembly
actions.
Background: In October of 1985, the Attorney General issued
opinion No. 85-701, which held that the operator of a commercial
enterprise who offers and provides complimentary alcoholic
beverages to guests, customers, or passengers while charging for
the services rendered is deemed to have "sold" the alcoholic
beverage, thereby necessitating an alcoholic beverage license.
AB 1322
Page 4
At the time, this opinion affected a large number of California
businesses (e.g., limousine and bus services, and
bed-and-breakfast inns) which had made a practice of offering
complimentary champagne and other alcoholic beverages to
passengers and guests as part of their service.
The Legislature has responded to a number of concerns raised by
various business entities over the years relative to this matter
by enacting narrowly crafted legislation to address the problem.
Specifically, SB 1546 (Beverly), Chapter 1354, Statutes of
1986, provides that no license or permit shall be required for
the serving of complimentary alcoholic beverages in limousines.
A few years later, AB 2416 (Governmental Organization
Committee), Chapter 639, Statutes of 1998, was enacted which
granted hot air balloon ride services the same privilege.
In California, it is unlawful for any corporation, club, or
organization to sell, give, serve, dispense, keep, or allow to
be consumed on its premises any alcoholic beverage unless
licensed or permitted by law. This prohibition includes the
serving of free alcohol with the purchase of another good or
service. It is also unlawful for any person to keep or consume
an alcoholic beverage on any premises open to the public other
than as specifically permitted by law.
According to the State Board of Barbering and Cosmetology
(CBBC), within the Department of Consumer Affairs, there are a
total of 41,830 beauty salon and barbershop location permits
issued in the State. The CBBC "location license" does not
differentiate between a beauty salon or barbershop. The
following services are not under the jurisdiction of the CBBC:
body-piercing, braiding, ear candling, laser services, massage,
permanent make-up, medical services, threading and reflexology.
Purpose of the bill: According to the author's office, many
beauty salons and barber shops throughout California offer
complimentary alcoholic beverages to their customers. However,
AB 1322
Page 5
because these establishments often lack ABC licenses, they may
be in violation of state and local alcohol licensing
requirements. This bill is intended to grant beauty salons and
barber shops the opportunity to serve beer or wine to their
clients aged 21 or over without an ABC license or permit,
provided there is no extra fee charged for the beverage.
In support: Drybar Holdings LLC (known as "Drybar"), the
sponsor of this bill, notes that it is a fast-growing beauty
business in California, providing customers with expert services
in "blow outs" of hair (that is, washing and blow-dry styling by
a professional stylist). Eighteen Drybar locations, employing
800 individuals, are currently located throughout the state.
Drybar contends that this bill seeks to address an issue that
has arisen relative to beauty salons that choose to provide a
complimentary glass of wine or champagne to clients while they
visit the business establishment for services. ABC has informed
Drybar that each of its locations would need to be licensed to
sell alcoholic beverages even though the wine or champagne
provided to clients is complimentary. This bill will exempt
beauty salons and barber shops, in good standing with the CBBC,
from needing to be licensed by the ABC in order to offer
complimentary beer, wine or champagne. Drybar states that a
similar exemption exists for other types of businesses that
serve complimentary alcoholic beverages to their clients (e.g.,
limousine services, hot air balloon rides, etc.)
In opposition: Opponents are concerned about the unintended
consequences of allowing alcohol consumption at beauty/barbering
establishments. For instance, opponents question whether the
ABC is capable of monitoring the thousands of licenses that have
been issued under the CBBC. Opponents also point out that this
bill makes no mention of age requirements or proper "responsible
beverage service" training of persons pouring the alcohol.
Furthermore, opponents believe that the alcohol industry may
begin marketing and distributing their products through
beauty/barbering establishments as another means of public
tastings.
AB 1322
Page 6
Prior legislation: AB 2416 (Governmental Organization
Committee), Chapter 639, Statutes of 1998. Provided that no
license or permit is required for the serving of alcoholic
beverages as part of a hot air balloon ride service, provided
there is no extra charge or fee for the alcoholic beverages.
SB 1546 (Beverly), Chapter 1354, Statutes of 1986. Provided
that no license or permit is required for, the serving of
alcoholic beverages in a limousine regulated by the Public
Utilities Commission provided there is no extra charge for the
alcoholic beverages.
AB 1252 (N. Waters), Chapter 753, Statutes of 1977. Permitted
the Director of ABC to authorize the conversion of any on-sale
general license for "seasonal business" to an on-sale general
license, as specified.
Analysis Prepared by:
Eric Johnson / G.O. / (916) 319-2531 FN:
0003798