05-11-11 Council Agenda - Laserfiche WebLink

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Kelly & Lemmons, P.A. AT T O R N E Y S AT LAW ❑ Trevor S. Oliver toliver@kellyandlemmons.com May 6, 2011 'To: Little Canada City Council Re: Comments on Liquor License Updates I reviewed the proposed amendments to the City's liquor licensing ordinances (Sections 701 to 706 of the City Code) and have the following comments: 1. Insurance and Bond Requirements. The Council has a free hand to set the insurance or bond amount required to obtain a liquor license. Minn. Stat. § 340A.409 expressly allows a local government to set higher insurance or bond coverage requirements than those set in State law. For reference, the City's current liability caps are $500,000 per claimant /$1.5 million per occurrence, and the City commonly requires parties contracting with the City to carry at least that amount of insurance. The Roseville limits ($500,000 /$1 million) reflect a compromise amount, as in contracts, many parties have complained that, due to the way contractor liability insurance is sold, it is prohibitively difficult to get $1.5 million in liability coverage. Dram shop insurance may or may not present the same problem. 2. Three -Year Tenure Requirement for Temporary Permits. The Council should specify its reasons for a three -year waiting period either on the record or within the ordinance, as this is the type of provision that is commonly subject to legal challenge. There is a clear public - safety interest in preventing fly -by -night organizations from obtaining temporary liquor Licenses, and in removing any incentive to get around the normal ban on temporary liquor sales by quickly forming a nonprofit or "club" organization. However, as with all time or distance restrictions on an activity, the Council should publicly state the reasons why it chose the number it did, to further head off later claims that the figure is "arbitrary." 3. Wine License Issues. 1 noticed a few issues with wine licensing that could be addressed in this round of updates. a. 'The definition of "wine" in Section 701 states that a product must have at least 7% alcohol by volume to be considered wine. Literally applied, the current definition of "wine" prohibits the holder of a wine license from serving any wine that is less than 7% AI3V — or under a combination wine /3.2 license, serving any wine that is between 3.2% ABV and 7% ABV. State law defines "wine" as a product having between 0.5% and 24% alcohol by volume, which would appear to better fit our intent (state law also caps ABV for on -sale wine licenses at 14 %, as does our ordinance). b. The opening sentence of 704.010 is confusing, and appears to say that the sale of wine, even by off-sale liquor stores, requires an on -sale wine license ( "no person ... shall directly or indirectly deal in, sell, or keep for sale "). Given that all wine, of any ABV, is still "intoxicating liquor" when it comes to a general prohibition on unlicensed sale or service, I don't believe there is a need for this first sentence. 200 CROSS12OADS, 7300 HUDSON BOULEVARD n SAINT PAUL, MINNESOTA 55128 TELEPHONE 651-224-3781 FACSIMILE 651 -223 -8019 www.kellyandlemmons.com 3