BILL ANALYSIS
SB 1260
Page 1
Date of Hearing: August 4, 2010
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Felipe Fuentes, Chair
SB 1260 (Yee) - As Amended: May 5, 2010
Policy Committee: Governmental
Organization Vote: 18 - 0
Urgency: No State Mandated Local Program:
Yes Reimbursable: No
SUMMARY
This bill allows certain lodging establishments to expand the
manner in which they sell beer and wine to their guests for
consumption on the premises. Specifically, this bill:
1)Authorizes hotels and motels to sell or furnish beer and wine
in sealed containers from the "food sale" areas for
consumption on the premises.
2)Defines "food sale" area as a facility that offers guests
items like prepackaged sandwiches, snacks, candy, and soft
drinks.
FISCAL EFFECT
1)Given the large number of lodging establishments that could
now be interested in licenses to sell beer and wine, costs
could be in excess of $200,000 for workload associated with
the Department of Alcoholic Beverage Control (ABC) providing
licenses and enforcement for new beer and wine licenses for
these limited service establishments. These costs would be
fully offset by increased licensing revenue. [ABC Fund]
2)Negligible, non-reimbursable costs for prosecution and/or
incarceration, offset by fine revenue, for misdemeanor
violations of provisions associated with significantly
expanding the number and types of facilities that will likely
sell alcoholic beverages.
COMMENTS
SB 1260
Page 2
1)Purpose . The sponsor, the California Hotel and Lodging
Association, contends that "limited service" lodging
establishments that do not have restaurants or bars are
unfairly restricted from selling beer and wine. Under current
law, these hotels and motels can provide locked "mini bars" in
their guest rooms or they can serve wine and beer at a
reception hosted by the manager. However, they are not
allowed to sell wine or beer otherwise. This bill would allow
them to sell beer and wine to their registered guests and
invitees of their guests without requiring the installation of
mini bars in the guest rooms.
2)Key Issue . Under current law, hotels and motels in the state
that do not have a bar or restaurant on the premises can only
sell alcohol under limited circumstances. They can obtain a
restricted (Type 70) license which allows them to sell small
bottles of liquor, 50 milliliters or less, through
restricted-access mini bars located in guests' rooms, or they
can include the cost of wine and beer in the cost of the room
and host receptions where the alcohol is provided without an
additional charge. These licenses are one of the most
expensive licenses offered by ABC, with an initial fee of
$6,000. In addition, under current law, hotels and motels may
also apply for off-sale beer and wine (Type 20) licenses that
do not restrict sales to guests and their invitees. Only 34
hotels in the state currently hold both Type 20 and Type 70
liquor licenses.
Under this legislation, rather than going to the expense and
work associated with stocking and maintaining individual mini
bars in guest rooms or hosting receptions, hotels and motels
would be allowed to sell full bottles of wine or six packs of
beer to their quests as long as they maintain a food sale
area, which could be as limited as a shelf area with snack
foods such as candy bars and chips for sale. Aside from the
cost of the initial license fee, it would be an inexpensive
business model for hotel clerks on duty at the front desk to
also sell beer and wine to hotel patrons and their guests.
Given the attractive nature of the business model and the fact
that there are an estimated 3,500 hotels and motels in the
state that meet the definition of a limited services lodging
establishment, the committee believes this could lead to a
significant number of hotels and motels who will begin selling
beer and wine.
SB 1260
Page 3
3)Related Legislation . In 2007, SB 696 (Yee), a substantially
similar, was held on this committee's Suspense File.
Analysis Prepared by : Julie Salley-Gray / APPR. / (916)
319-2081