Brief Summary of Substitute Bill

Creates a nightclub liquor license for the sale of spirits, beer, and wine by businesses with food sales incidental to the sale of alcohol and whose primary business hours are between 9:00 p.m. and 2:00 a.m.
Provides that the cap on the number of spirits, beer, and wine restaurant licenses in the state applies to the combined total of restaurant and nightclub licenses and raises the cap from one license to each 1,300 people in the state to one license for each 1,200 people in the state.

Background:

The Liquor Control Board (Board) issues a number of types of liquor licenses. A spirits, beer, and wine restaurant license allows the sale of spirits by the glass, beer, and wine for consumption on the premises. To qualify as a "restaurant," the establishment must be maintained in a substantial manner for the preparing, cooking, and serving of complete meals. A cap limits the number of spirits, beer, and wine restaurant licenses to one license for each 1,300 people in the state. In addition, the Board must refuse a license if, in the Board's opinion, the licenses already granted are adequate for the reasonable needs of the community.

Before the Board issues any type of new or renewal license, it must give notice to the Chief Executive Officer of the city, county, or town. By rule, the Board provides 90 days notice of renewals. Within 20 days of the notice, the local government may file written objections and the Board may hold a hearing. In determining whether to grant or renew a license, the Board must give substantial weight to objections from the local government based upon chronic illegal activity associated with the applicant's operation of the premises or of other licensed premises, or the conduct of the applicant's patrons inside or outside the premises.

Before issuing a license, the Board must give consideration to the location of the business with respect to the proximity of churches, schools, and public institutions. The Board must also give written notice to public institutions identified by the Board, churches, and schools within 500 feet of the premises. "Public institution" is defined to mean institutions of higher education, parks, community centers, libraries, and transit centers.

Summary of Bill:

A spirits, beer, and wine nightclub license is created. A nightclub license may be issued only to persons whose business has food sales incidental to the sale of alcohol and has primary business hours between 9:00 p.m. and 2:00 a.m. A nightclub is an establishment that: (1) provides entertainment; (2) has as its primary source of revenue the sale of alcohol for consumption on the premises, cover charges, or both; and (3) has an occupancy load of 100 or more. The license allows the holder to sell at retail spirits by the drink, beer, and wine for consumption on the premises. Minors may be allowed on the premises but not in areas where alcohol is served or consumed. The annual fee is $2,000 and the Board may review the fee and set it at a level sufficient to defray the costs of licensing and enforcement.

Local governments may petition the Board to request that further restrictions be imposed on a nightclub license in the interest of public safety. Examples include not allowing minors anywhere on the premises, submitting a security plan, or signing a good neighbor agreement with the local government.

The cap on the number of spirits, beer, and wine restaurant licenses in the state is modified to apply to the combined total of restaurant and nightclub licenses and raised to one license for each 1,200 people in the state. The Board must refuse to grant a nightclub license if the Board determines that the nightclub licenses already granted are adequate for the reasonable needs of the community.

Other liquor provisions, including alcohol server training requirements and tax provisions, are amended to include the spirits, beer, and wine nightclub license.

The time period for a local government to object to a renewal of a liquor license is changed to at least 30 days before the expiration of the license.

Staff Summary of Public Testimony:

(In support) This is a Liquor Control Board (Board) request bill which gives local governments an opportunity to know a nightclub is being proposed and to object. Nightclubs exist today. The issue has been elevated recently and this bill provides a needed definition of nightclub and protections for neighborhoods. Local governments can work with the Board to make sure densities are appropriately managed. The food sales requirement for restaurants has always been troubling. Perhaps the Legislature should wait until enforcement resources are available.

(With concerns) When a bill was proposed a couple of years ago, adding liquor enforcement agents was part of the proposal. No new FTEs are proposed with this bill.

(Opposed) None.