| SB 243 w/ SA 1 | Signed | Cruce | This Act cleans up antiquated portions of The Liquor Control Act, under Title 4, by updating provisions that have been in the Code since the 1930s and making technical corrections to conform existing law to the standards of the Delaware Legislative Drafting Manual.
This Act also creates two new license types: (1) a special event license and (2) a bottle club license for businesses offering creative arts experiences like painting, candle-making, and other arts and engagement activities.
In addition to technical changes, this Act makes all of the following changes to Title 4 of the Code:
Sections 2, 7, 8, 15, 11, and 22 changes “retailer” or “retail” to “package store” in § 512A, § 512C, § 524, and § 904.
Section 1 updates and modernizes definitions in § 101 by lowering the number of customers for concert hall licenses, clarifying that IRS-recognized 503(c)(3) or similar organizations may obtain gathering licenses, clarifying that an “importer” also means a wholesaler or distributor because the terms are used interchangeably throughout Title 4 and the Office of the Alcoholic Beverage Commissioner (“Office”) regulations, renaming a “retailer” as a “package store” and providing a clearer definition, and adding a new definition of “special event” for the special event license created by this Act.
Section 2 requires the Office, under § 304, to provide current licensing data on its public-facing website rather than submitting annual reports to the Governor and the General Assembly. The Office already provides the licensing data on its website in lieu of paper reports that become stale quickly. Section 2 also updates how the Office provides notice of a hearing to consider a license application and the protests to the license application by removing the requirement to post the notice on the entrance door of the proposed licensee’s establishment and requiring the Office to mail notice by first class mail instead of registered mail. These changes reflect modern practices.
Section 3 updates antiquated fiscal provisions in § 310 by requiring the Office to deposit receipts with the Office of the State Treasurer instead of the Division of Revenue and by requiring the Office to maintain receipt records and make the records available to the Division of Accounting instead of the Office of the State Treasurer.
Section 4 allows the Auditor of Accounts (“Auditor”) to audit the Office, under § 313, as often as the Auditor considers necessary instead of requiring the Auditor to conduct an annual audit of the Office.
Section 5 clarifies, under §501, that importers licensed as suppliers must deliver products directly to a licensed warehouse of a Delaware licensed importer because brokerage import firms licensed by the federal government as importers are also licensed as suppliers by the Office and act as agents of suppliers.
Section 6 cleans up sentence structure in § 508 to clarify manufacturer and distillery reporting requirements.
Section 9 removes the domestic sales cap on production for distilleries licensed under § 512E, because no other state has a similar production cap.
Section 10 creates a new § 512H that allows the Delaware Alcoholic Beverage Control Commissioner (“Commissioner”) to grant to a qualified applicant a special event license for festivals, arts, crafts fairs, and other similar open-air events. The special event license permits the service and sale of alcoholic liquors for consumption on the licensed premises at special events hosted on the licensed premises by the landowner or tenant (the landowner could contract with a promotional company. A qualified applicant may hold only 1 special event license. The licensed premises must meet certain requirements, including having controlled ingress and egress. Also, at each special event sufficient food must be available at all times when alcohol is sold. A licensee must submit each special event to the Commissioner for review and approval at least 30 days prior to the special event (caterers have 20 days to provide the same materials but the Office feels the 10 extra days are needed for larger events), and the appropriate political subdivision must have approved the special event. The Commissioner may suspend a special event license, deny future licenses, or impose a fine of up to $10,000 per violation if the special event license holder has made misrepresentations on its application materials or fails to comply with the requirements of § 512H.
Section 11 updates § 514 to allow an in-state manufacturer to donate alcoholic liquors to gathering license holders and require applicants for a biennial premises type gathering license to provide notice of application under § 524, unless the applicant has already been granted a biennial premises type gathering license and has no violations.
Section 12 expands § 515A to allow the Commissioner to grant a bottle club license to a business establishment where customers pay a fee to participate in a creative arts experience, including painting, pottery-making, candle-making, or other similar activities. Some of these types of businesses already tell customers that the customers may bring alcohol, like a bottle of wine, on the premises. The bottle club license allows a licensed business’s customers to bring alcohol onto the business’s premises for on-premises consumption by the customer if sufficient food is provided while alcohol is being consumed.
Section 13 updates § 516 by replacing “store” with “package store”, which eliminates off-premises licenses for restaurants and clubs because these establishments can now sell alcohol to-go. But the few existing licenses will be grandfathered, just like the taproom off-premises license that was eliminated in 1983.
Section 14 gives a property owner or governing body who receives a notice of application under § 524 the option to file protests with the Office by email and updates the Office’s mailing address.
Section 16 changes hearing requirements under § 541 so that the Office is not required to hold a hearing to consider a license application and the protests to the application, unless at least 5 persons who filed protests and who reside or own property located within 1 mile of the premises or in any incorporated areas located within 1 mile of the premises pre-register to testify at the hearing. Community members often will sign a filed protest, but then not show up to testify at the hearing. Yet the Office incurs hundreds of dollars in costs, including hiring a court reporter and publishing the hearing notice in 2 newspapers. This causes delay in approving an application and causes the State to incur costs for a hearing it did not need to hold because the application could have been granted on the paperwork. Requiring at least 5 persons to pre-register to testify should help small businesses open more quickly and still preserve a community’s opportunity to address concerns about an application at a hearing. The Office is sensitive to community concerns about license applications and believes that the communities should be able to voice their concerns at a hearing. But the Office also believes that having the option to cancel a hearing, if the persons who file a protest choose not to follow through with the protest, would alleviate unnecessary costs and delays in processing license applications. Section 16 also requires the Office to post the hearing notice on the State Public Meeting Calendar instead of publishing the hearing notice in a newspaper, because hearing notices are already mailed and emailed to individuals who have filed a protest with the Office.
Section 18 adds a new license fee under § 554 for the new special event license. Section 18 also adds holders of a beer garden license to the list of licensees required to pay an additional $100 biennial license fee to be deposited in the Overservice Investigation Fund used to implement, administer, and enforce the Delaware Responsible Alcohol Beverage Server Training Program. All other on-premises license types pay the fee and the omission of the beer garden licenses appears to be a statutory oversight.
Sections 19 and 21 remove an antiquated provision that permits spouses, brothers, sisters, other family members, and employers to appeal to the Commissioner to investigate, decide, and then prohibit the sale of alcohol to certain people.
Section 20 adds requirements for labeling batched cocktails and infused beverages prepared by licensees to § 712, so that customers know the ingredients used in the cocktails and beverages.
Section 23 delays implementation of Section 10 and Section 12 of this Act, so that the Office may prepare to implement the new special event license and the new bottle club license. This Act takes effect on the Act’s enactment into law and Section 10 and Section 12 of this Act are to be implemented the earlier of the following:
(1) Six months from the date of the Act’s enactment into law.
(2) Notice by the Alcoholic Beverage Control Commissioner published in the Register of Regulations that final regulations to implement Section 10 and Section 12 of this Act have been adopted.
This Act requires a greater than majority vote for passage because § 11 of Article VIII of the Delaware Constitution requires the affirmative vote of three-fifths of the members elected to each house of the General Assembly to impose or levy a tax or license fee. | AN ACT TO AMEND TITLE 4 OF THE DELAWARE CODE RELATING TO ALCOHOL. |
