Booze News: Distilled in Room 215

A blog about the Baltimore City Liquor Board

Rules and Regulations Committee #7

Written by Becky Witt

The seventh meeting of the Rules and Regulations Committee was held on September 29, 2015.

The group began with a discussion of regulations concerning the delivery of alcohol, found in proposed Rule 3.11. Mr. Hurdle stated that he had done some investigation into the matter, and, for the Drizly app, delivery drivers are not employees of the licensees; rather they are agents of Drizly.

They also revisited requirements for an applicant who applies for a liquor license as a sole proprietor (with no corporate entity). This situation is not well-covered in state law: Article 2B section 9-101 covers partnerships, corporations, LLCs, and unincorporated associations but not individuals. The committee went back and forth about whether a sole proprietor should be subject to the residency and registered voter status requirements that applied to the other categories of applicants. Mr. Kodenski said that it would be “unlawful” to do this, because “caselaw says that you don’t have to be a citizen to have a license.” Kodenski did not cite to any case or provide any detail about this argument. Mr. Tom Yeager asked about the purpose of the voter registration requirement. Kodenski responded that “there’s no purpose” and “when Trump is President, we’re going to get rid of all this.”

Rule 4.01 – Minors (a) Sales to Minors – No licensee shall sell, furnish, or allow to be furnished by his/her agent or employee alcoholic beverages to any person under twenty-one (21) years of age or to any person with the knowledge that such person is purchasing or acquiring such beverages for consumption by any person under twenty-one (21) years of age. (b) Minor Employee: In Baltimore City, a licensee may employ a person 18 years of age or older to sell, serve, deliver, or otherwise deal with alcoholic beverages.

Rule 4.02 – Inebriates & Drug Addicts: (a) A licensee, his or her agent(s) and/or employee(s) must not sell or serve any alcoholic
beverage to any intoxicated person, or to any person who appears to be under the influence of alcohol and/or drugs, or who is acting in a disorderly manner. A licensee, his or her agent(s) and/or employee(s) must not permit any intoxicated person, or any person who appears to be
under the influence of alcohol and/or drugs, or who is acting in a disorderly manner, to consume or possess any alcoholic beverage on the licensed premises. The licensee, his or her agent(s), and/or employee(s) must determine that the person to whom the sale or service is made, or who is consuming or possessing an alcoholic beverage on the licensed premises, is not intoxicated, under the influence of alcohol and/or drugs, or acting in a disorderly manner prior to the sale, service, possession or consumption of any alcoholic beverage.

Rule 4.03 – Solicitation (a) No licensee shall permit or suffer any person, employed in or a frequenter of his establishment to solicit for himself or others the purchase by patrons of any product sold therein, or money with which to buy the same, or with which to play any amusement or entertainment device; nor shall any licensee permit or suffer any person, employed in his establishment to accept such product or money as a gift from a patron, except by way of a bona fide gratuity. (b) No licensee shall pay, offer to pay, or suffer to be paid by any person any commission, gratuity or fee in money, goods or other consideration for or in connection with the sale of any product or the use of any amusement or entertainment device. This subsection does not apply to a licensee who has been issued a license under Art 2B § 6-201(d)(6)(d-1) or Art. 2B (c) No licensee shall employ any solicitor or salesman for the purpose of soliciting outside of the licensed premises, orders for the sale of alcoholic beverages and no sale shall be consummated outside of the licensed premises. (d) No licensee shall employ or use any loud speaker or other sound-making or amplifying device which projects the sound outside the licensed premises for the purpose of soliciting orders for the sale of alcoholic beverages.

Rule 4.04 – Free Food and Prizes (a) No licensee shall offer free food to encourage the sale of alcoholic beverages. Provided, however, that licensees may offer free of charge cheese, crackers, pretzels, nuts and the like in connection with the consumption of alcoholic beverages on the premises. (b) No alcoholic beverages shall be sold or given away as prizes in connection with the playing of any game or device.

Rule 4.05 – Prohibited hours (a) No licensee shall permit any person, including, but not limited to an employee, patron, or family member of an employee or agent of the licensee, to consume alcoholic beverages on the licensed premises during hours when such sales are prohibited by law. (b) No alcoholic beverages shall be served, dispensed, furnished or given away in any part of the premises during hours when such sales are prohibited by law.

Rule 4.06 – Alcoholic Beverage Containers (a) No licensee shall reuse or refill any bottle or other container of alcoholic beverages, unless it is a refillable container as defined and outlined by Article 2B, Section 8-203(e); nor shall any licensee adulterate, dilute, or fortify the contents of any such bottle or container. (b) No licensee shall sell, serve or furnish alcoholic beverages (other than beer or wine) by the bottle for consumption on the premises, except Class “B” licensees serving alcoholic beverages to patrons in rented or leased private rooms.

Rule 4.07 – Open Containers and Illegal Possession and Consumption of Alcoholic Beverages – Formerly Rule 4.09. (a) A licensee, his or her agent(s) and/or employee(s) must not permit any person(s) to leave the licensed premises with an alcoholic beverage, unless it is a bottle of wine that has been properly recorked.

Mr. Stanley Fine pointed out that some wine bottles have caps instead of corks now, so the committee added “or recapped” to the end of subsection (a).

(b) A licensee may permit a patron who has purchased a bottle of wine and who has partially consumed the bottle of wine with the meal, to leave the licensed premises with the partially consumed bottle of wine, if the bottle has been corked or capped by the licensee or an employee of the licensee. (c) No licensee shall possess or permit any person to consume any alcoholic beverages not permitted to be sold under his license at any place on the licensed premises or in the building in which the licensed premises are located. (d) A licensee and/or his or her agent(s) and/or employee(s) mst not permit any person in the package sale area and allow a customer to consume or open any alcoholic beverage on the licensed premises. (e) No licensee shall allow patrons that purchase items for either off or on premise consumption to loiter in front of their establishments and openly consume such alcoholic beverages within the public right of way directly in front of the licensed premise.

Rule 4.08 – Relations with Wholesalers – Formerly Rule 4.10 (a) No licensee shall purchase alcoholic beverages except from a duly licensed manufacturer or wholesaler; nor shall any licensee sell to any other licensee any alcoholic beverages; and no licensee shall, at any time, keep or permit to be kept upon the licensed premises, any alcoholic beverages unless purchased in accordance with the Rule. (b) No licensee shall solicit or accept directly or indirectly any gift of alcoholic beverages, any tie-up advertisement in newspapers or other periodicals, or any gift or rebate of any sort, from a manufacturer, wholesaler, or person engaged in the distribution of alcoholic beverages, except a sign, display or any other of advertisement or a value not in excess of $150.00 from any brewer or beer wholesaler. If manufactured directly by the beer wholesaler, then the value of the sign cannot exceed or $50.00. (c) No licensee shall have any interest in the business of any manufacturer or wholesaler of alcoholic beverages, nor shall any such manufacturer or wholesaler have any interest in the business of any licensee.

Rule 4.09 – Drive-In Dispensaries – Formerly Rule 4.11 (a) No alcoholic beverages may be sold, served or consumed anywhere on the licensed premises of licensees maintaining drive-in or curb-service dispensaries, except inside permanent buildings situated thereon, and provided for such purposes.

There are apparently one or two licensees in Baltimore City that are allowed to have drive-in dispensaries, but no new drive-ins are allowed to be created.

Rule 4.10 – False Statements – Formerly Rule 4.12. Neither an applicant for a license, nor a licensee is permitted to make any false statement, material or otherwise, in any original application for an alcoholic beverage license, renewal application, letter or written statement, in testimony before the Board or to any other representative of the Board who may be conducting an official investigation.

Rule 4.11 – Discrimination- Formerly 4.14 – A licensee, his/her agent(s) and/or employee(s) may not directly or indirectly refuse, withdraw from, or deny to any person the services, accommodations, advantages, facilities and privileges offered on said licensee’s premises on the grounds of race, creed, religion, physical or mental handicap, color, sex, national origin, age, occupation, marital status, political opinion, sexual orientation, gender identity or expression thereof, or personal appearance, except that reasonable dress codes may be utilized where posted notice is given.

Rule 4.12 – Gambling – Formerly 4.15. Except when specifically authorized by law, a licensee, his or her agent(s) and/or employee(s) must not allow the licensed premises to be used for the purpose of bookmaking or gambling in any form.

Mr. Peter Kimos argued that the Board should not be enforcing this rule against licensees; he said that the state should legalize gambling, and that the committee should suggest that statutory change to state legislators. Mr. Stanley Fine, who represents the Horseshoe Casino, replied that he would not support that change.

Rule 4.13 – Drugs and Illegal Narcotics – Combination of 4.13 and 4.16. (a) A licensee, his or her agent(s) and/or employee(s) must not permit the licensed premises to be used for the sale, transfer, accommodation for the sale or transfer, or possession of any controlled dangerous substance as defined by the Annotated Code of Maryland. (b) A licensee, his or her agent(s) and/or employee(s) must not use, possess, sell or allow to be used, dispensed, or sold on the licensed premises any type of illegal drugs or narcotics.

The committee changed “drugs and illegal narcotics” to “CDS,” which stands for controlled dangerous substances.

Rule 4.14 – Live Entertainment without Authorization. (a) A licensee shall only provide “Live Entertainment” and or Special Amusement if
he/she has complied with obtaining a “Live Entertainment” privilege as directed by Rule 1.11(a) of the rules and regulations of this Board. For example, musical acts (including karaoke), theatrical acts (stand-up comedy), plays, revues, dancing, magic acts, disc jockeys (performing with amplified microphones and equipment), or similar activities all constitute Live Entertainment under Baltimore City Zoning Law. (b) Any licensee found to be providing “Live Entertainment” without complying with Rule 1.10 of the rules and regulations of this Board is in violation and can be charged with providing “Live Entertainment without Authorization” under this subsection.

Mr. Fine asked that shouldn’t this be a zoning violation, which would be enforced by a zoning inspector? Michelle Wirzberger replied that zoning inspectors don’t work at 1am, which is when these violations take place. Fine asked the Executive Secretary how the Liquor Board enforces these types of violations under the current rules; she responded that the licensee is charged with a violation of Rule 4.18, which is a catch-all for any type of illegal conduct. Minda Goldberg, from the city solicitor’s office, asked whether the Liquor Board has a different definition of what is considered “live entertainment” from the BMZA. Mr. Thomas Akras, Deputy Executive Secretary of the agency replied that the Liquor Board uses the Zoning Board’s definitions and interpretations: whatever the Zoning Board allows, the Liquor Board allows. Mr. Hurdle asked whether trivia nights count as live entertainment and said that the Zoning Board doesn’t know whether they count or not. The Liquor Board staff did not answer that question.

Rule 4.15 – Sexual Practices and Obscenity – Formerly 4.17 (a) No licensee shall permit or suffer his premises to be used for the purpose of any sexual activity, nor shall any licensee or suffer any employee, patron or frequenter to solicit any person for prostitution or other immoral purposes. (b) No licensee shall permit or suffer any person to appear in any act or other performance with breasts or the lower torso uncovered, nor shall any licensee knowingly permit or suffer his premises to be used for the conduct, exhibition or performance of an obscene act or other performance. This rule does not apply to licensees that have a valid Adult Entertainment License issued by this Board. (c) No licensee shall permit or suffer his premises to become a disorderly house.

The committee removed subsection (c), because they believed it was confusingly vague.

Rule 4.16 – Illegal Conduct – Formerly 4.18. (a) No licensee shall commit or allow the commission on his premises of any act which shall be contrary to any federal, state or local statute, law or ordinance or against the public peace, safety, health, welfare, quiet or morals.(b) No licensee shall commit, allow, or facilitate an environment where the commission on his premises of any act of violence shall be contrary to any federal, state or local statute, law or ordinance or against the public peace, safety, health, welfare, quiet or morals.

The committee omitted subsection (b), after licensees’ attorneys said it was too vague. Board staff had created this section to cover situations in which the licensee is not acting responsibly to avoid incidents of violence or disturbance (i.e., not hiring adequate security, not calling the police when necessary, etc.).

Rule 4.17 – Storage – Formerly 4.19 (a) No licensee shall store or keep any alcoholic beverages, except on the premises covered by the license or at a public or government controlled warehouse having a permit issued under the provisions of Article 2B of the Maryland Code. (b) No licensee shall store or keep any alcoholic beverages, on the premises, unless it is six inches removed from the ground.

Mr. Akras explained that the Maryland code requires that stock be kept six inches above the ground, not two.

Rule 4.18 – Alterations – Formerly 4.20 (a) No license holder shall make any alteration or additions to a licensed premises or change the manner in which alcoholic beverages are dispensed without first obtaining permission from the Board. (b) No licensee shall make installations or alterations on the licensed premises until all the necessary permits have been obtained, approved, and use permits issued from all of the applicable agencies within the City of Baltimore, which include, the Department of Housing and Community Development of Baltimore City, the Baltimore City Fire Department and Baltimore City Health Department.

Regarding subsection (c), Mr. Fine argued that the licensee should have the same amount of time to do alterations as the city code allows, which is 12 months. A major rehab will take significant time to complete. The Board has been interpreting Article 2B section 10-503(d) to mean that alterations must also be completed within 180 days. Section 10-503(d) says, “a transfer of any license shall be completed not more than 180 days after the Board approves the transfer.” There is nothing explicitly in this section that would require alterations to be completed within 180 days. The committee removed subsections (c), (d), and (e).

Rule 4.19 – Gifts – Formerly 4.21. (a) A licensee, his/her agent(s) and/or employee(s) must not give or otherwise transfer to any member of the Board or any of its agents or employees, directly or indirectly, any commission, remuneration, or gift except as provided by the Ethics Law, Article 8 of the Baltimore City Code.

Rule 4.20 – Prohibited Activities by License Type – Replaced Chapter 5. (a) Class A and Class A-2: No On-Premise Consumption (i) The holders of a Class A and Class A-2 license shall not allow patrons that
purchase alcoholic beverages for off-premise consumption to consume those alcoholic beverages on location of the premises at any time during the operation of the business. (b) Class B Licensees: Open Kitchen with Food Service (i) The holders of a Class B license shall have on premises a fully functioning kitchen having complete facilities and utensils for preparing and serving hot and/or cold meals to the public. It shall have a wait staff available to take order and deliver food to customers. (ii) The premises shall maintain a menu advertising the serving of a variety of meals. There shall be on the premises at all times sufficient food to fill orders from the menu (iii) For the purposes of this subsection, an Open Kitchen with Food Service is not an establishment where the patron can order food that is prepared and cooked at a location other than the licensed premises and brought to the licensed premises for consumption. (iv) Invoices of food purchases must be available for presentation to Board inspectors or other law enforcement officials upon request. (c) Class BD-7 Licensees: Open and Operating Tavern at all times (i) Definitions: The Board considers all Class BD-7 licenses as tavern operations. (a) A tavern is defined as an establishment where alcoholic beverages are habitually sold for on premise consumption. Such alcoholic beverages must be served at a bar or in a lounge area, which cannot be separated from the public by any fixed barrier. (b) A bar is defined as a counter, in whatever configuration (horseshoe, Lshaped, U-shaped, etc.), at which stools and/or chairs have been placed and from which alcoholic beverages are habitually served for on premise consumption. (c) A package goods area is defined as an area within the licensed premises which has as its primary activity the sale of package goods and in which no on premise consumption regularly takes place. (I). While no new separate package goods areas can be constructed, any BD-7 licensee who has operated under a previously approved separate package goods store, department and/or section may continue the operation of the separate store, department and/or section provided such separate package goods area (ii) Prohibition: The holders of a Class BD-7 license shall grant all patrons access to a fully functioning/open and operating tavern portion of the licensed premises, wherever that may be on the premises, at any and all times when the packaged goods area is open and operating (a) A fully functioning/open and operating tavern shall have a counter, in whatever configuration (horseshoe, L-shaped, U-shaped, etc.), at which stools and/or chairs have been placed and from which alcoholic beverages are habitually served by a bartender for on premise consumption. There shall be no barriers or partitions separating the patrons of the establishment, who wish to drink on premise, from the bartender who is serving the alcoholic beverages. (c) Class C Licensees: May not be Open to the General Public (i) Class C establishments are prohibited from granting the general public access to the licensed premises. Class C establishment are open and operating for the purposes of serving their membership. To that end, all Class C licensees must have on site and available for inspection by Board inspectors or other law enforcement personnel, the following: (a) A daily sign-in sheet documenting when members and their guests visit the club. (b) A Members log that details membership and dues information for each active member of the club.

There was a great deal of discussion about this section, mostly relating to the kitchen requirements of a Class B restaurant license and the definition of a Class BD-7 tavern license. The term “open kitchen” for a restaurant license was changed to “functional kitchen,” because the kitchen may close at some point in the evening, but the bar can remain open. Licensees will still be required to show their food receipts to inspectors to prove that they have the required food sale receipts percentage. The committee removed the section that requires waitstaff, because sometimes restaurants do not employ waitstaff to bring food out to patrons.

Regarding BD-7 licenses, Minda Goldberg, from the city solicitor’s office, asked what the term “habitually” means in the context of the rule. The word is confusing and could be replaced with a clearer term like “primarily.” Ms. Bailey-Hedgepeth and Mr. Akras, along with, of course, the licensees and licensees’ attorneys, all strongly objected to this suggestion, because there are many BD-7s currently open throughout the city that almost exclusively sell packaged goods. Bailey-Hedgepeth explained that the Liquor Board interprets “habitually” to mean that the licensees have to make tavern service available to customers if they specifically request it. Mr. Fine did agree with Ms. Goldberg that there should not be barriers between the package goods and the on-sale portions of the building. No one else agreed with this provision, and the discussion ended with a promise to discuss more the following week.

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