News for the Hospitality Executive
Latest California Legislation and Proposals Affecting
the Lodging Industry
By Jim Butler, Hotel Lawyer | Author of www.HotelLawBlog.com
What happens in Vegas may stay in Vegas, but what happens in California spreads like wildfire. That's why the lodging industry tends to pay such close attention to what is brewing in the California legislature. So, "heads up!" The California legislature is back in session. A number of new laws have already taken effect and a lot of bills are in the hopper. The City of Anaheim (home of Disneyland) has hit Internet travel providers with a whopping TOT bill.
This article by Jim Abrams tells about these and other developments
facing the lodging industry in California and quite probably beyond the
happens in California spreads like wildfire
By James O. Abrams, Hotel Lawyer
How to take charge of your destiny: Work with the CH&LA
Before discussing the legislative developments, we want to remind readers that the most effective way for hospitality lenders, owners, and operators to take charge of their destiny in Sacramento is to participate in the California Lodging Industry Legislative Awareness Summit. The 8th annual Summit, which will be held April 1, 2009, at the Sheraton Grand Hotel and the State Capitol, is comprised of the leadership of the state's lodging industry: the event is sponsored by the California Hotel & Lodging Association in conjunction with the Asian American Hotel Owners Association, the California Lodging Industry Association, and the California Association of Bed and Breakfast Inns.
Highlights of this year's Summit include a panel of hospitality industry lobbyists, moderated by Marlene Colucci, EVP of Public Policy for the American Hotel & Lodging Association, a panel featuring JMBM's Jim Abrams covering new key developments involving ADA lawsuits, a keynote address by Insurance Commissioner Steve Poizner, who is also a candidate for governor, and an all-important visit to the Capitol to communicate the lodging industry's concerns to our elected officials. This one-day event is the best investment you can make in the success of your business in California. For more information and to register, go to http://www.calodging.com/events/calilas.shtml.
The Legislature is in session!
California budget: Although the Legislature has enacted a budget to run through June 30, 2010, its viability is dependent on the fate of a six ballot measures that will be voted upon May 19. Even if all of those measures pass, it is quite likely that the continuing deterioration of the national and California economies (California's unemployment rate is now over 10%) will push the new budget into the red, thereby requiring a renewed round of political roller derby.
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:
AB 838 (Cal/OSHA). When Cal/OSHA adopted regulations dealing with heat illness injuries in outdoor occupations, employers fought hard to keep Cal/OSHA from regulating indoor places of employment. This bill would require the Occupational Safety and Health Standards Board, by July 1, 2011, to adopt a standard for controlling the risk of occurrence of heat illness where employees work indoors.California Ballot Measures: There are at the present time six propositions qualified for the May 19, 2009, Statewide Special Election Ballot (to implement the new budget), three propositions qualified for the June 8, 2010, Primary Election Ballot, ten initiatives and referenda in circulation, and four initiatives pending title and summary at the Attorney General's office. And it's going to get much, much worse. The measures in circulation and pending at the AG's office cover such things as voter identification requirements, pro and con measures dealing with same-sex marriage, a one percent increase in the sales tax to fund education, changing the super-majority required to approve a budget from 2/3 to 55%, a "wealth tax," term limits, among other things. It is also anticipated that there will be measures put forward to allow open primaries, tax commercial real estate at higher rates than residential real estate, and to cover many other topics. (To keep up on these measures, go to CH&LA updates.)
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:
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.
For information about any of the items mentioned in this blog or anything
else involving California, national, or local governmental affairs matters
relating to the hospitality industry, contact Jim Abrams at JMBM at 415.
984.9679 or firstname.lastname@example.org.
Jim Butler is one of the top hotel lawyers in the world. GOOGLE “hotel lawyer” or “hotel mixed-use” or “condo hotel lawyer” and you will see why. He devotes 100% of his practice to hospitality, representing hotel owners, developers and lenders. Jim leads JMBM’s Global Hospitality Group®—a team of 50 seasoned professionals with more than $40 billion of hotel transactional experience, involving more than 1,000 properties located around the globe. In the last 5 years alone, they have brought their practical advice to more than 80 “hotel-enhanced mixed-use” projects, a term Jim coined to fill a void in industry lexicon. This term describes one of the hottest developments in real estate-where hotels work together with shopping center, residential, office, retail, spa and sports facility components to mutually enhance the entire project’s excitement and success. Jim and his team are more than “just” great hotel lawyers. They are also hospitality consultants and business advisors. They are deal makers. They can help find the right operator or capital provider. They know who to call and how to reach them. They are a major gateway of hotel finance, facilitating the flow of capital with their legal skill, hospitality industry knowledge and ability to find the right “fit” for all parts of the capital stack. Because they are part of the very fabric of the hotel industry, they are able to help clients identify key business goals, assemble the right team, strategize the approach to optimize value and then get the deal done. Jim is the author of the Hotel Law Blog, www.HotelLawBlog.com. He can be reached at +1 310.201.3526 or email@example.com.
|Also See:||A New Sheriff in Town, the Department of Justice Auditing Hotels for ADA Compliance; Cost Effective Steps for a Proactive ADA Compliance Program / March 2009|