Last summer, the Kentucky General Assembly’s landmark legislation surrounding liquor licensing came into effect. Senate Bill 13 (SB13) overhauled the process for gaining a liquor license in the Commonwealth. These changes constitute a necessary response to Kentucky’s fast-evolving alcoholic beverage industry. However, the overhaul may be disruptive to some applicants and license holders as it is initially rolled out. Likewise, county and city governments will be impacted by SB13, as they are forced to update ordinances, licensing procedures, forms and renewal schedules.
The main thrust of SB13 is to simplify the licensing process. One example of how SB13 accomplishes this goal is its consolidation of the number of license types from 88 to 44. SB13 also eliminates inconsistencies for license types and activities relating to the sale of alcoholic beverages on particular premises. For example, under the old law, a “package” beer license permitted a liquor store customer to drink a can of beer from his purchased package while still inside the store. That oddity has changed. Under SB13, a malt beverage package license now permits only the sale of packaged beer for consumption off the premises. Another notable change enacted by SB13 is that out-of-state producers of distilled spirits and wine must obtain licenses to operate in Kentucky, just like out-of-state producers and/or suppliers of beer have always been required to do.
SB13 has also changed laws so that by default, the sale of alcoholic beverages is now permitted on any primary, regular, local option or special election day. Under the old law, retail alcohol sales were prohibited on election days while the polls were open. This is a smart change, in this author’s opinion, because it allows small businesses to increase their revenue (thereby increasing tax revenue as well) and eliminates arguably unnecessary and paternal restrictions on responsible adults. However, the new law also respects the various differing local viewpoints on the issue. Thus, if a county so chooses, it is free to prohibit retail alcohol sales on election days by enacting an ordinance to that effect.
If you operate a drinking establishment, you should be aware of the enhanced powers provided to the Department of Alcoholic Beverage Control (ABC) under SB13. For instance, SB13 expands the scope of the law to provide ABC with increased regulatory power to shut down “disorderly premises.” SB13 amends the law to prohibit disorderly conduct by tavern owners and their employees, whereas the old law only applied to the conduct of patrons. This amendment could significantly increase the exposure to liability for bar owners across the Commonwealth. Finally, SB13 expanded the definition of what constitutes “disorderly conduct” to now include: (1) creating a public nuisance; (2) engaging in criminal activity that would constitute a misdemeanor; and (3) failing to maintain minimum health, fire, safety or sanitary standards.
As SB13 is put into effect, applicants and regulators are sure to experience setbacks, headaches and delays. However, considering ABC’s limited resources, it has responded to this overhaul in a surprisingly efficient fashion. Nevertheless, if you are applying for a liquor license, seeking to renew or expand the licenses you currently hold, or if your establishment becomes the subject of an ABC investigation, it is important to contact an attorney with particularized experience in this area.
Mark Hervey is a Northern Kentucky attorney practicing at Dressman Benzinger LaVelle psc.
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