Legal Changes Ahead For Liquor Licenses

With two (2) new board members sworn-in on January 24, 2017, and the Council considering both the Mayor’s proposed changes to the law and the Board’s Final Rulemaking to amend the Municipal Regulations, there are changes abound for the gamut of license types.

In February, the Council is going to hold a public hearing on Mayor Bowser’s proposed amendments to the Alcoholic Beverage Regulation Act. The legislation, as proposed by the Mayor, accomplishes a litany of changes, clarifications, modifications to the Act, as presently written. Many of the changes are technical in nature, likely intended to conform the law to current practice, however, there are some substantive changes, that licensees need to be aware of.

Here is a quick and dirty summary of the practical issues that might impact your operations if the law is passed as is. I have divided up the changes by class of license, so you can simply read the ones applicable to your business.

1. Off-premises retailers who have security cameras would be required to turn over footage to ABRA Investigators or MPD upon request;
2. Beer and wine stores (class B) would be allowed to sell growlers;
3. Liquor Stores (class A & B) would be allowed to apply for a one-day substantial change;

1. Hotel patrons would be allowed to remove resealed bottles of wine from the premises;
2. B & B’s would be allowed to apply for outdoor seating;

1. Would permit wine pub and distilleries to transport alcohol between multiple locations that the licensee owns;
2. Would allow on-premises retailers to let third parties use the establishment for special events in certain circumstances;

1. Would require the ABC Board to make records available within five (5) days of a request;
2. Would repeal the extended hours of operation for sales, service, and consumption during daylight savings time;
3. Would allow for extended hours during MLB All-Star Game and World Cup events;
4. Would prohibit a licensee or licensee’s designee from bribing an ABRA Investigator; (this wasn’t already a violation?!)
5. Would create an exemption from the 400-foot restriction from schools for new licensees in the SW Waterfront zone and on University campuses;

1. Manufacturers licensees could hold multiple manufactures licenses;
2. Would exempt festival, farmers markets and pub crawl licenses for the generally applicable appropriateness standards;
3. Would create an exemption for retail licensees in residential areas, where the establishment has been operating in the same location within the last two (2) years;
4. Would repeal the exemption for nude dancing establishments in manufacturing zones and proximity to the ballpark;
5. Would allow manufacturers licensees to apply for extended hours;
6. Would allow liquor stores, manufactures, and pubs to sell gift bags and gift-wrapped packages and bottles containing alcohol;
7. Allow for the production of bottled mixed drinks.

The above list is not exhaustive, it is comprised of the provisions in the proposed law that, in my estimation, could impact the operations of licensees, or the business plans of applicants. There is far more to the proposed law than I have summarized. For example, there are pages of new or replacement code sections that are intended to “clarify” existing law, without changing it. To read the entire bill, as submitted by the Mayor, follow this link to the Council website

In October 2017, the Board published its Final Rulemaking in the DC Register, triggering a 90-day Council Review Period. Assuming that the Council approves, the Rulemaking will amend the Municipal Regulations (DCMR) that govern operations of licensed establishments, as well as the procedural activities of the Board itself.

Much like the proposed changes to the Act, the rewrite of the Regulations include a number of technical and clarifying changes, that may not impact the day-to-day operations of licensees. I have tried not to include a summary of those procedural provisions. Following, is a list, of the substantive aspects of the new regulations, that might impact your business.

1. Renewal periods for all licenses are updated to be three (3) years, except where a license is issued during a license period, it shall only be valid until the end of the period in which it was issued;
2. The 400 foot restriction (from schools and recreation centers) shall not apply to internet retailers or Class B retailers located inside of Hotels with no direct public access;
3. Where the penalty for a violation is a mandatory written warning, the “clock” resets after four (4) years and the licensee shall again be entitled to a written warning for the same offense;
4. Tavern and Nightclub licensees without an entertainment endorsement are prohibited from rearranging furniture to make a dancefloor larger than 140 square feet; Requires groups of five (5) or more protestants to designate representative(s) in the protest letter;
5. Allows the Board to deny an application or dismiss a protest for failure to appear at a protest status hearing;
6. If an applicant’s second refiled renewal application is dismissed for failure to appear, and not reinstated, the license will be allowed to expire, and the applicant may not file a third renewal application and must file an application for a new license;
7. If the Board proposes modifications to a settlement agreement which are rejected by the parties (or not responded to) the settlement agreement shall be rejected and the matter scheduled for a Protest Hearing;
8. And the Board may, on motion, or of its own accord limit the number of persons who may testify on behalf of the applicant, licensee or protestant if the Board determines the testimony is redundant;

Much like the proposed changes to the law, the new Regulations are far more comprehensive than I have summarized above. To see all of the revisions in long form, they are published on ABRA’s website here.

The Board opened its regular meeting on January 24, 2018, by swearing in two (2) newly appointed members, Bobby Cato and Rema Wahabzadah. According to his bio-Mr. Cato co-founded and runs an events and brand marketing firm and is a D.C licensed realtor. Ms. Wahabzadah is in-house counsel for an online pharmacy and has had some experience representing licensees before the Board.

With all of the changes in the law and regulations swirling around, it will be interesting to see how the new members impact the existing voting blocks on the Board.