California Hotel & Lodging Association : Issues and Legislation

Because what happens in California tends to spread across the country, everyone involved in the lodging industry always needs to pay attention to what is brewing in the Golden State. For example:

This summary provides an update on these and other developments facing the lodging industry in California and quite probably beyond the state's boundaries.

California Legislature: February 27 was the deadline for introducing bills in the 2009-2010 session, and we are still wading through all of them, but quite a few have already been identified as having a potential impact on the lodging industry. In addition to numerous bills dealing with workers' compensation changes, employment law amendments, and numerous other issues, here are some key bills to note at this early stage in the legislative process:

Assembly Bill 109: Introduced by Assembly Member Feuer. This legislation imposes a moratorium on the construction, conversion, enhancements or modifications of a billboard to a digital format if it can be seen from the highway. The bill also prohibits conversion of official highway digital displays to advertisements for commercial purposes. Oppose

Assembly Bill 141: This measure by Assembly Member Tran, Republican from Costa Mesa, would permit an individual non-exempt employee to request an “employee-selected” flexible work schedule providing for workdays up to 10 hours per day within a 40-hour workweek and would allow employers to implement this schedule without any obligation to pay overtime compensation. Support

Assembly Bill 527: This bill is contrary to public policy in that it undermines and interferes with the employer’s right to present evidence in administrative hearings before the Labor Commissioner. This bill turns the process upside down and eliminates the employee’s burden to prove their case. By eliminating the employee’s burden to prove the employer’s records are false, the bill creates an unfair advantage - just one false record could result in an award to the employee for up to three years of back pay. Oppose

Assembly Bill 838: Introduced by Assembly Member Swanson, Democrat from Oakland, would require the Occupational Safety and Health Standards Board (Cal-OSHA) by July 1, 2011, to adopt standards for controlling the risk of occurrence of heat illness where employees work indoors. Similar standards exist for specified workers outdoors. Oppose

Assembly Bill 849: Also by Assembly Member Swanson, this bill amends California’s current Family Rights Act by increasing the individuals eligible to take family leave and among other things, adds new definitions to the act such as new definitions of “child” and “parent,” in the latter case would include an employee’s “parent-in-law.” Oppose

Assembly Bill 943: This bill prohibits employers from using consumer credit reports for employment purposes unless the
information is “substantially job related” which is defined narrowly and unless the position being sought is
managerial, with a city or county, with law enforcement, or required by law to request a report. Oppose

Assembly Bill 1000: Introduced by Assembly Member Ma, Democrat from San Francisco, Assembly Bill 1000 would enact statewide the paid sick day ordinance adopted by the City and County of San Francisco. The bill would permit employees who work in California for seven days or more in a calendar year to be entitled to sick leave, which shall be accrued at a rate of no less than one hour for every 30 hours worked. Oppose

Assembly Bill 1019: This bill proposes to require wholesalers located within California who distribute alcoholic beverages to retailers for consumption in the state, to pay a $0.10 per drink surcharge, the funds from which to be used for a variety of health care related services. Oppose

Assembly Bill 1020: Introduced by Assembly Member Emmerson, Republican from Redlands, this bill would impose federal standards effective December 19, 2008, relating to anti-entrapment systems and drains for all public swimming pools, wading pools and spas, including those at lodging facilities. Monitor

Assembly bill 1288: Introduced by Assembly Member Fong, Democrat from Cupertino, would prohibit the state and any local government from requiring an employer, except the state and local governments, to use an electronic employment verification system. Support

Assembly Bill 1421: Another bill by Assembly Member Swanson that proposes to amend the 8-hour day law. This bill would provide that time spent in transit on a facility-provided conveyance from a remote employee parking location to and from the place at which an employee’s presence is required by the employer shall be considered to be part of a workday when the employee is employed at an airport, amusement park, sports venue, or entertainment venue. Oppose

Senate Bill 35: This bill would require the Governor to designate a state agency to establish and maintain a clearinghouse database that enables a food bank or a nonprofit organization, as defined, that has an interest in receiving nonperishable and perishable food donations to contact a food facility, as defined, that has an interest in donating food. This bill contains other related provisions. Oppose unless Amended

Senate Bill 183: Introduced by Senator Lowenthal, Democrat from Long Beach, Senate Bill 183 is an “intent” bill, with the actual language to be added at a later date. The bill deals with carbon monoxide alarms and is expected to be similar to legislation Senator Lowenthal authored last year, which was vetoed by the Governor. Last year’s bill would have required the installation of carbon monoxide alarms in “all dwellings intended for human occupancy (including lodging rooms) with a fossil fuel burning heater or appliance, fireplace or attached garage. Monitor

Senate Bill 241: The California Retail Food Code provides for the regulation of health and sanitation standards for retail food facilities, including mobile food facilities and satellite food service, as defined, by the State Department of Public Health. Under existing law, local health agencies are primarily responsible for enforcing this code. A violation of these provisions is punishable as a misdemeanor. This bill would revise this definition to include the shell egg of an avian species, as specified, except a balut and an egg product. This bill contains other related provisions and other existing laws. Support

Senate Bill 287: Introduced by Senator Calderon, Democrat from Montebello, this is the major meal period legislation for the year. Sponsored by the California Chamber of Commerce, Senate Bill 287 will provide much needed flexibility to the meal period law and regulation Support

Senate Bill 355: Introduced by Senator Romero, Democrat from Los Angeles, the bill relates to so-called “economy hotels,” and would require persons operating one or more economy hotel in California to post, on the Internet Web site operated by that person for the purpose of taking reservations for the hotel, the total number of calls for police services and the ration of calls for police service per guest room during the most recent calendar year, and would also require that information be posted at the front desk of each economy hotel in a conspicuous location for public inspection.

The bill defines a “economy hotel” as any hotel, motel, or other transient lodging facility with 10 or more guestrooms, for which the average daily rate during the most recent calendar year is less than $100. Additionally, Senate Bill 355 defines“average daily rate” as the average rental income per occupied room over the previous calendar year. Average daily rate shall be calculated by dividing the room revenue by the number of rooms. Oppose

Senate Bill 356: This bill strengthens existing economic impact analysis provisions by closing loopholes that allow agencies to declare that a proposed regulation has no significant economic impact without providing an explanation. Additionally, the bill stimulates small business growth by building on existing provisions that encourage agencies to consider “reasonable” alternatives that are less burdensome to California small businesses. In doing so, the bill closes a loophole that allows agencies to state there is no “reasonable” alternative without providing any justification for not pursuing an alternative. Support

Senate Bill 380: A second bill relating to meal periods and introduced by Senator Dutton, Republican from the Inland Empire. Support

Senate Bill 789: This bill proposes to take away agricultural employees’ right to a private ballot when deciding on union
representation by replacing the private ballot with a scheme called “card check” that allows a union to
organize the employees if a majority of them simply sign a card. Under this system, the union
organizers themselves oversee the process, and the employees’ votes could be made public to
the employer, the union organizers and co-workers. Oppose

Senate Bill 807 : The provisions of this bill will reduce unnecessary litigation costs for employers by providing
clarity and guidance for complying with and enforcing meal period laws so employees have the
opportunity to take meal breaks and revises the timeframe for recovering penalties. Support

Senate Bill 810: Introduced by Senator Leno, Democrat from San Francisco, this bill is identical to past attempts to enact a single-payer health insurance plan for California. CH&LA has opposed all previous single-payer bills and this is clearly one of our key bills for the Legislative Summit. Oppose

Local News
Anaheim TOT Bill to Travelocity And Others: One of the most contentious, ongoing fights throughout the country has to do with attempts by local governmental entities to collect transient occupancy tax from Internet travel providers (ITPs), such as Travelocity, Expedia, and Hotels.com. In short, the cities claim that the ITPs buy rooms from hotels for a fixed price (on which the TOT is paid) and then sell the rooms to the public for higher amounts. The cities argue that the ITPs owe TOT on the "markup." To date, the ITPs have been winning these court cases. However, Anaheim has convinced an administrative hearing officer to force a number of ITPs to pay over $21 million! Here is an excerpt from a February 13, 2009, press release from the City of Anaheim:

An administrative hearing officer has ordered a group of online travel companies to pay the City of Anaheim $21.3 million dollars in back taxes, interest and penalties. The companies have been collecting the tax known as a Transient Occupancy Tax (TOT) on the retail price guests pay for the room, but have been remitting to the City only the tax on the wholesale price paid by the online travel companies.

"The issue at hand is full reimbursement of the taxes collected," said Anaheim Mayor Curt Pringle. "There is no reason why online travel companies should be paying a different amount of taxes than others who book the same hotel rooms. The hearing officer’s decision is both logical and fair."

An issue in the case was the companies' tax liability per the Anaheim Municipal Code and the assessment of taxes owed from January 2000 through March 2008.

According to the hearing officer’s decision, the companies in the case, Expedia, Orbitz, Priceline, Travelocity and related businesses, will be required to pay the 15% TOT on the difference between the wholesale and retail rates of hotel rooms they purchased and resold in Anaheim between 2000-2008, as well as all service fees associated with the transactions. The online travel companies are also being required to pay penalties and interest.

The $21.3 million ruling, handed down on February 9, is expected to influence a host of similar suits filed on behalf of local governments throughout the country.

As a result of the February 9 ruling, the online travel companies have since filed an action in Orange County Superior Court asking for the ruling of the administrative hearing officer to be overturned. Despite this appeal, the City will continue its efforts to recoup its share of TOT revenues from these companies.

The ITPs are appealing this ruling, but it is possible they will have to pay the $21.3 million owing as a prerequisite to this challenge. Needless to say, everyone involved in the TOT equation nationwide is watching the outcome of this proceeding.

National News
Card Check Legislation - "Think Again"
AH&LA, our national affiliate, has produced a new video describing card check, what it will do to our industry, information about the legislation itself, and describing the many ways that you and your staff can fight this proposal. Check it out!
Learn more about the so-called Employee Free Choice Act (EFCA).

AH&LA, our national affiliate, has produced a new video describing card check, what it will do to our industry, information about the legislation itself, and describing the many ways that you and your staff can fight this proposal. Check it out!

CH&LA Member

Government Relations Issues & Legislation