The 442nd session of the Maryland legislature adjourned on April 12, 2021.
There were no balloons dropped from the balconies at sine die, ostensibly because of Covid-19 social distancing there were no high school pages to drop celebratory balloons from the balconies, but it is worthy of note that this year the legislature passed House Bill 391 criminalizing intentionally releasing balloons?
During the 90 day General Assembly session, senators and delegates considered 2,347 bills and passed 817. Only a modest number of that legislation passed involves alcoholic drink. The Governor has until the 30th day after presentment to sign or veto bills.
This post is a review of the alcoholic beverage legislation enacted this session.
Time and space do not allow a recitation of the bills that failed, but many were not successful, including a much discussed bill that would have allowed supermarket sales.
The new laws compiled below, while adding to the alcoholic beverage regulatory scheme, merely tweak production, distribution and sales. Savvy players in the alcoholic beverage industrial complex will find business opportunities to lead and profit in matters of beer, wine and spirits, including opportunities advantaged by these newly enacted laws.
Retail Sale or Delivery for Off-premises Consumption
On March 19, 2020, in response to the spread of Covid-19 in the State and citing the protection of public health by furthering the goals of social distancing and promotion of compliance with isolation protocols, Maryland Governor Hogan issued an executive order expanding alcoholic beverage delivery and carryout services. The order allowed licensed establishments to deliver or sell alcoholic beverages for off-premises consumption despite any restrictions inherent in their licenses. The order remains effective until after the termination of the state of emergency and rescission of the proclamation of a catastrophic health emergency.
Senate Bill 205/ House Bill 12 are no doubt the most impactful enactment this year when that new law will authorize local alcoholic beverages licensing boards to temporarily adopt regulations authorizing specified license holders to provide alcoholic beverages by delivery or sale for off-premises consumption on a temporary basis. In considering whether to adopt these regulations, a local licensing board must weigh the need to promote economic recovery for small businesses in the wake of the Covid-19 pandemic and the need to protect public health and welfare.
The bills limit an alcoholic beverages license holder to delivering or selling alcoholic beverages that are authorized under its license. Local licensing boards may not increase a license fee or otherwise charge extra for the expanded privileges authorized under the bills, but may set a limit on the amount of alcohol that may be sold or delivered in a single transaction. The bills also require the Alcohol and Tobacco Commission and the Maryland Department of Health jointly to conduct a study on the impact of the expansion of access to alcohol and report to the General Assembly on the findings of the study by December 31, 2022. The bills terminate on June 30, 2023.
Manufacturer’s Licenses and Off-site Permits
Senate Bill 821/ House Bill 1232 are emergency bills that make various temporary changes to the regulation of alcoholic beverage manufacturers in the State. Broadly, the bills significantly alter provisions on off-site and special event permits and alter the licensing fees and privileges of several manufacturer’s licenses. With respect to permits, the bills repeal specified manufacturer’s permits and establish a manufacturer off-site permit and a brewery special event permit. With respect to licensing, the bills alter the fee structure for most manufacturer’s licenses, authorize most manufacturers to sell and deliver their own alcoholic beverage products to consumers if specified procedures are followed, alter the limitations of the Class 7 limited beer wholesaler’s license, and alter the privileges associated with Class 1 distillery licenses and Class 8 farm-brewery licenses. The consumer delivery provisions in particular are intended to help manufacturers return to economic health after suffering the impacts of the pandemic.
A manufacturer off-site permit may be issued to the holder of a specified manufacturer’s license. The permit authorizes the holder to provide samples of and to sell alcoholic beverages produced by the holder. The brewery special event permit may be issued to the holder of a specified brewery license and authorizes the license holder to conduct a special event to provide samples and sell products manufactured by the license holder.
Existing law provides that alcoholic beverage manufacturer’s licenses may be issued by ATC for a set annual fee. These bills instead authorize ATC to determine the annual license fee, as long as the fee does not exceed a specified cap, which is the existing annual fee. The bills also authorize most alcoholic beverage manufacturers to sell and deliver their products in accordance with specified rules.
In addition, the bills increase certain barrel limits for a Class 7 limited beer wholesaler’s license and allow the holders of Class 1 distillery and Class 8 farm brewery licenses to sell and deliver their products directly to individuals in the State who meet specified criteria. The bills terminate on December 31, 2022.
Industry Practice Prohibition
House Bill 185 prohibits an alcoholic beverages license holder in the State, or an employee of a license holder, from conditioning the sale of alcoholic beverages for on-premises consumption on the purchase of more than one serving of an alcoholic beverage at a time. The issuer of an alcoholic beverages license may revoke or suspend the license for violating this prohibition. In addition, the bill establishes criminal penalties for a violation, which include a fine or possible imprisonment.
Alcohol and Tobacco Commission
Senate Bill 761/ House Bill 1336 include the Executive Director of ATC in the State’s retirement and pension plan and provide that the Executive Director has the designation of a peace officer. This gives the Executive Director the same status as other ATC employees in the pension system.
Local Alcoholic Beverages Legislation
Senate Bill 677/ House Bill 883 establish a Class B-D beer, wine, and liquor license that authorizes the holder to sell beer, wine, and liquor for on-premises consumption, as specified. The bills also authorize the board of license commissioners to issue up to two licenses in a single year. A license holder must complete a Food Alcohol Ratio Report once every licensing cycle.
Senate Bill 731/ House Bill 1059 establish a gift basket permit that may be issued to a person whose primary business is the sale and delivery of flowers or specified gift baskets. The permit holder may not hold any other alcoholic beverages license or permit in the county. The permit holder’s annual sales from alcoholic beverages may not exceed 10% of the holder’s annual gross sales.
Senate Bill 679/ House Bill 880, both emergency bills, authorize the board of license commissioners to reimburse license holders for certain annual license fees, as specified, for the 2020 through 2021 licensing period. The board must also waive or impose lower annual fees relating to the same types of licenses for the 2021 through 2022 licensing period.
Anne Arundel County
Senate Bill 489/ House Bill 679 establish a Class MT (movie theater) beer and wine license. The board of license commissioners may issue the license to the owner of a movie theater in the county that holds a crowd control training certification. The license authorizes the sale of beer and wine for on-premises consumption, as specified.
Senate Bill 944/ House Bill 1136, both emergency bills, require the board of license commissioners, if funding is available, to reimburse each license holder in the county the entire amount of the annual license fee for specified licenses for the 2020 through 2021 licensing period. If the balance of fees remitted to the county by the Comptroller is not sufficient to reimburse each license holder in the county the entire amount of the annual license fee for specified licenses for the 2020 through 2021 licensing period, the board must reimburse each license holder (1) a percentage of the annual license fee in proportion to the total amount of the balance of fees remitted to the county by the Comptroller and (2) for the following year, the remaining balance of the annual license fee that was not reimbursed during the previous fiscal year or a percentage of the annual license fee in proportion to the total amount of the balance of fees remitted to the county by the Comptroller.
Senate Bill 490 requires the board of license commissioners to hire a full-time chief inspector, as specified, and removes the authorization for the board to hire a part-time chief inspector.
Senate Bill 547/ House Bill 868 authorize the board of license commissioners to issue a Class B-D-7 license in the 4800 block of Harford Road in the 45th alcoholic beverages district under specified circumstances. House Bill 256 then alters the hours of sale for a Class B-D-7 license holder located in Baltimore City along specified geographic boundaries.
House Bill 1288 generally restricts license holders in specified geographical areas in the 40th alcoholic beverages district in Baltimore City from selling alcoholic beverages before 10:00 a.m. or after 10:00 p.m. Specified classes of licenses are exempt from the restriction on hours of operation. The board may issue a Class B-D-7 license and a Class C beer, wine, and liquor (BWL) license in the 40th alcoholic beverages district, as specified.
Senate Bill 426/ House Bill 572 authorize specified holders of a Class 9 limited distillery license in the 46th alcoholic beverages district, who also hold a Class D (6-day) BWL license under specified circumstances, to apply to the board of license commissioners to convert the existing Class D (6-day) BWL license into a Class D (7-day) BWL license. The bills also authorize the board to issue (1) a Class D beer and light wine license for an establishment in a specified geographic boundary that has executed a memorandum of understanding with Brewer’s Hill Neighbors, Inc., and (2) a Class B BWL license for a restaurant at a specified address. The bills make permanent provisions established by Chapters 676 and 677 of 2019 pertaining to interactions between a specified Class 1 distillery and retail dealer in Port Covington. In addition, the bills repeal specified authorizations to issue or transfer a license within specific geographic areas.
Senate Bill 472 updates specified statutory references to the boundaries of Baltimore City’s alcoholic beverages districts, so that they are defined as coterminous with the legislative districts in the Legislative Districting Plan of 2012, rather than the Legislative Districting Plan of 2002. The bill requires the board of license commissioners to exempt an activity made unlawful by the bill’s change in reference to district boundaries under specific circumstances.
Senate Bill 424/ House Bill 555 authorize the board of license commissioners to issue a Class D BWL license for use by a drugstore.
Senate Bill 38/ House Bill 677 require that each member of the board of license commissioners be a resident and voter of the county.
House Bill 1016 requires the board of license commissioners to reimburse each license holder in the county the entire amount of the annual fee for any license that authorizes the sale of alcoholic beverages for on-premises consumption only at a bar or restaurant.
Senate Bill 833/ House Bill 1018 authorize a Class 4 limited winery license holder in the county to hold or have a financial interest in one retail license that does not apply to the premises for which the Class 4 limited winery license applies.
Senate Bill 694/ House Bill 1270 increase, from 5 ounces to 12 ounces, the maximum amount of beer that the holder of a barbershop or a beauty salon beer and wine license may provide to a customer for on-premises consumption.
Senate Bill 793/ House Bill 1242 establish a beer and wine consumption permit and a beer, wine, and liquor consumption permit in the county. The board of license commissioners may issue these permits to holders of Class A licenses, as specified.
Senate Bill 693/ House Bill 1240 repeal the authorization for the license holder of a stadium license in the county to sell beer and wine in Styrofoam containers on the licensed premises to conform with existing State law banning specified uses of expanded polystyrene food service products.
Senate Bill 792/ House Bill 1272 increase, from 21% to 22%, the maximum percentage of alcohol by volume for wine that Class 3 wineries and Class 4 limited wineries holding a Class A wine license in the county may sell, as specified. Additionally, the maximum percentage of alcohol by volume for alcoholic beverages that a restaurant holding a Class B BWL hotel or restaurant license may sell for off-premises consumption increases from 14.5% to 22%.
Senate Bill 451/ House Bill 632 remove the one-time issuing fees for new Class C (club and organization) BWL licenses and new art establishment licenses. The bills also authorize a Class C per diem BWL license holder to purchase liquor, in addition to beer and wine, from a wholesaler.
Senate Bill 731/ House Bill 1059 establish a gift basket permit that may be issued to a person whose primary business is the sale and delivery of flowers or specified gift baskets. The permit hold may not hold any other alcoholic beverages license or permit in the county. The permit holder’s annual sales from alcoholic beverages may not exceed 10% of the holder’s annual gross sales.
Senate Bill 386/ House Bill 312 establish a Class ALP (assisted living program) BWL license. The board of license commissioners may issue the license to a manager of an assisted living program that is licensed by the Department of Human Services and may be operated under a management agreement, as specified.
Senate Bill 390/ House Bill 1100 establish a gift basket permit in the county. The bills authorize the board of license commissioners to issue the permit to a person (1) whose primary business is the sale and delivery of flowers; (2) whose business includes the sale and delivery of gift baskets of flowers, food, or other items; and (3) who does not hold any other alcoholic beverages license or permit. The board is prohibited from issuing a permit for use in conjunction with or on the premises of a chain store, supermarket, or discount house. A permit holder may sell and deliver, to consumers of a legal drinking age located in the county, gift baskets containing specified volumes of beer, wine, or liquor products, purchased from a retail license holder.
House Bill 1151 modifies the maximum number of Class A licenses of any type that the board of licenses commissioners may issue by authorizing the board to issue up to six Class A licenses in each election district in the county. The board may issue more than six Class A licenses in any election district if the total number of Class A licenses in any election district does not exceed one Class A license of any type for every 4,000 residents of the election district.
House Bill 1152 authorizes the holder of a Class B BWL license to sell beer, wine, and liquor in sealed containers for off-premises consumption only to a person who has purchased prepared food from the premises. The bill repeals the beer and wine (B-SBW) off-sale permit that a Class B BWL license holder previously needed to obtain to sell beer and wine for off-premises consumption, as specified. The board of license commissioners may limit the quantity of alcoholic beverages sold in a single transaction for off-premises consumption, as specified.
House Bill 1155 authorizes the holder of a Class A license or an employee of the license holder to deliver alcoholic beverages within the county. An employee making a delivery must be at least 18 years old. The deliverer and recipient must both sign a form indicating that (1) the recipient claimed to be 21 years old and presented documentation to that effect; (2) the recipient knows it is a criminal offense for alcoholic beverages to be given to an individual under 21 years old; and (3) the deliverer examined the recipient’s identification. A delivery may not be made unless the purchaser or another individual at least 21 years old designated by the purchaser is physically present to receive the beverages at the place and time of delivery and pays for the purchase at the time of the order.
House Bill 1191 requires the Howard County Police Department to employ inspectors to assist the board. The bill specifies that the chief of the county police department must have final selection authority over the hiring of the inspectors. An inspector who investigates an alcoholic beverages license violation is authorized to issue a civil citation, as specified.
House Bill 430 repeals the capacity requirements for an applicant of a BWL Community Performing Arts Facility alcoholic beverages license.
House Bill 432 authorizes the board of license commissioners to issue a refillable or nonrefillable container permit for draft beer to the holder of a Class H beer and wine license if the licensed premises is in Damascus (12th election district).
House Bill 428, an emergency bill, requires the board of license commissioners to refund the annual fees and late fees for each alcoholic beverages license issued for the 2020 to 2021 licensing period, as specified. The bill also requires the board to waive the late fees for alcoholic beverages licenses issued for the 2021 to 2022 licensing period, as specified.
Prince George’s County
Senate Bill 739 authorizes an establishment in Prince George’s County located within a specified area on the campus of the University of Maryland, College Park Campus that is issued a Class BLX license to offer entertainment when individuals under the age of 21 years are present, as specified.
House Bill 974 authorizes the board of license commissioners to issue a Sunday off-sale permit to any Class A or Class B license holder with an off-sale privilege. An applicant for a Sunday off-sale permit must commit to spending a minimum of $50,000 to rehabilitate and renovate the licensed premises within one year after the permit is issued. By January 1, 2023, the board must conduct a study of Sunday off-sale permits to determine (1) how many permit holders failed to make the required reinvestment and (2) how many times the reinvestment requirement was waived.
The bill also prohibits the board of license commissioners from approving or renewing a license for a license holder or a stockholder of a corporation convicted of a felony related to operations under the license for at least 10 years and requires the board to revoke such a license. In addition, the bill provides that a license holder or employee who violates provisions on selling or providing alcoholic beverages to an underage individual is guilty of a misdemeanor and is subject to imprisonment not exceeding 2 years or a fine not exceeding $2,000, or both.
Queen Anne’s County
Senate Bill 855/ House Bill 323 remove the prohibition on the board of license commissioners issuing an alcoholic beverages license to an establishment located within 500 feet of a place of worship.
Senate Bill 854/ House Bill 349 alter the requirement for an alcoholic beverages inspector to inspect at unannounced times every licensed premises in the county from at least once every 60 days to at least once every 180 days.
St. Mary’s County
House Bill 529 authorizes the board of license commissioners to issue an on-site consumption permit to the holder of a Class 1 distillery license for use at the location of the licensed premises. The permit authorizes the sale of mixed drinks made from liquor produced by the distillery that are mixed with other nonalcoholic ingredients for on-premises consumption. An application for a permit must be made at least 30 days before the permit is to take effect.
House Bill 814, an emergency bill, requires the board of license commissioners to waive the entire annual licensing fee for the 2021 through 2022 licensing period for any alcoholic beverages license that authorizes the holder to sell alcoholic beverages for on-premises consumption only at a bar or restaurant if the license holder paid the fee for the 2020 through 2021 licensing period.
House Bill 1108, an emergency bill, increases, from 32 to 60, the number of times in a year that specified wineries may use a special event permit. The bill terminates June 30, 2023.
Senate Bill 715/ House Bill 795 repeal the requirement that the holder of a Class B BWL (golf course) license must have average daily receipts from the sale of food for each month that exceed the average daily receipts from the sale of alcoholic beverages. The bills also expand the authorized days in which a holder of a Class A BWL license may sell beer, wine, and liquor to Monday through Sunday from 6 a.m. to midnight instead of Monday through Saturday from 6 a.m. to midnight.
The General Assembly will reconvene on January 12, 2022.
Thank you to the Maryland Department of Legislative Services for the information provided above.