State Update
October 22, 2001
MARYLAND
Frederick County, Maryland, offers new caterer's licenses. Beginning on
October 1, 2001, restaurants and hotels in Frederick County, Maryland holding a
Class B restaurant or hotel (on-sale) beer, wine and liquor license will be able
to get into the off-site catering business.
Though appropriately licensed hotels and restaurants have been allowed to
host catered events on their licensed premises without holding a caterer's
license, the new caterer's license will give restaurants and hotels the ability
to provide alcoholic beverages at publicly or privately sponsored events that
are held off the premises covered by the Class B license.
As of October 1, 2001, hotels and restaurants must obtain a caterer's license
to prepare, deliver, and provide food and alcoholic beverages for consumption at
the catered events. In addition, the holder of a caterer's license must provide
all service employees to serve the alcoholic beverages at the catered events. At
least one of those employees must be certified by an alcohol awareness program
and must be on the premises at all times during the catered events.
Additional guidelines require that alcoholic beverages remain in the
possession of a caterer's license-holder after the event and be returned to the
premises covered under the Class B license. Furthermore, a caterer's
license-holder may only sell alcoholic beverages at a catered event during the
hours and days that are permitted for a Class B license-holder.
The annual fee for the caterer's license will be $1,500. Class B holders
interested in initiating the application process should contact the Comptroller
of Maryland, Alcohol and Tobacco Tax Division for the appropriate application
form.
TEXAS
Garza named new TABC administrator. Rolando Garza was recently named
Administrator for the Texas Alcoholic Beverages Commission (TABC) and began the
job on August 13, 2001. Mr. Garza is the 12th TABC administrator since 1935 when
the agency was created. We wish Mr. Garza the best of luck and congratulate him
on his new post.
New open-container law. Recently enacted House Bill 5 makes it an offense
to "knowingly possess an open container [of alcohol] in the passenger area
of a motor vehicle that is located on a public highway regardless of whether the
vehicle is being operated or is stopped or parked." For purposes of the new
law, the "passenger area" does not include a trunk or the area behind
the last upright seat of the vehicle if it has no trunk.
Percentage of food sales threshold lowered. House Bill 1614 decreases the
percentage of food sales a business must make to establish itself as primarily a
food establishment from 75 percent to 50 percent. The lowered threshold is
designed to help regulatory officials more easily delineate bars from
restaurants.
Applicants required to notify neighbors. House Bill 1806 now requires
applicants for permits or licenses under the Alcoholic Beverage Code to give
written notice of the application to each residential address within 300 feet of
the property lines of the premises for which the license is sought. Former
notice requirements entailed the applicant's posting a sign on the premises
noting that a permit request was pending. The bill also permits a county judge
to consider any recommendations of the state senator or representative who
represents the area when an application involves a retail beer license.
Penalties for sales to minors increase. Texas is also concerned with
alcohol consumption by minors. House Bill 2331 increases the penalties for
certain retailers who sell, serve or deliver alcoholic beverages to a minor. A
first violation of this provision may now result in a 90-day suspension of the
holder's license (formerly 60 days); a second violation may result in a six
month suspension (formerly three months). The bill provides that the offense of
purchasing alcohol for or giving alcohol to a minor is now a Class A, rather
than a Class B, misdemeanor.
NEW YORK
Wholesalers receive franchise protection. Governor Pataki singed into law
New York Senate Bill No. 5577 on September 19, 2001. The bill revises Section
55-c of the alcoholic beverage control law and provides New York wholesalers
unprecedented franchise protection.
Under the new law, a beer supplier must ensure that any regional or national
consolidation plan is non-discriminatory and truly multistate in nature before
the supplier may have valid cause for terminating an existing distribution
relationship. In such a consolidation plan, a "region" may not consist
entirely of New York, and beer suppliers will have to pay wholesalers before
terminating their relationship if the consolidation plan is approved. Further,
beer suppliers must pay wholesalers the fair market value of the lost or
diminished distribution rights and any other applicable damages. The law applies
retroactively to June 15, 2001.
For more information, contact Grace Yang at 1-888-688-8500 or via e-mail at
gyang@hklaw.com.