DISCLAIMER

 

08-017-O

ORDINANCE NO. __________


AN ORDINANCE AMENDING SECTIONS 8-13; 8-35; 8-41; 8-42; 8-43; 8-44;8-56; 8-63; AND REPEALING 8-29.5 OF THE DULUTH CITY CODE, 1959, AS AMENDED; REGULATING THE SALES OF INTOXICATING LIQUOR.

CITY PROPOSAL:

The city of Duluth does ordain:

     Section 1. That Section 8-13 of the Duluth City Code, as amended, is amended to read as follows:

Sec. 8-13. Definitions.

     For the purposes of this Division, the following words and phrases shall have the meanings respectively ascribed to them by this Section:

     (a)  Alcoholic beverages. Distilled, fermented, spirituous, vinous, and malt beverages containing .5 percent or more of ethyl alcohol by weight which are potable for consumption by human beings.;

     (b)  At retail. Such term means for use or consumption by the purchaser and not for resale.;

     (c)  Bed and breakfast establishment. Any bed and breakfast inn authorized by Section 50-35 of this Code or other residential, owner occupied, historically or architecturally unique, overnight lodging facility that serves meals to its guests and which is authorized or allowed by local law and is found by the alcoholic beverage board to be the functional equivalent of a bed and breakfast inn.;

     (d)  Club. Any corporation duly organized under the laws of the state for civic, fraternal, social or business purposes, or for intellectual improvement, or for the promotion of sports, or a congressionally chartered veterans' organization which shall have more than 50 members and which shall, for more than a year, have owned, hired or leased a building or space in a building of such extent and character as may be suitable and adequate for the reasonable and comfortable accommodation of its members, whose affairs and management are conducted by a board of directors, executive committee or other similar body chosen by the members at a meeting held for that purpose, none of whose members, officers, agents or employees is paid directly or indirectly any compensation by way of profit from the distribution or sale of beverages to the members of the club, or to its guests, beyond the amount of such reasonable salary or wages as may be fixed and voted each year by the directors or other governing body.;

     (e)  Exclusive liquor store. An establishment used exclusively for the sale of intoxicating liquor for consumption off or away from the licensed premises where sold, and the sale of ice, soft drinks and cigarettes.;

     (f)  Hotel. Any establishment having a resident proprietor or manager, where, in consideration of payment therefor, food and lodging are regularly furnished to transients, which maintains not less than 50 guest rooms with bedding and other suitable and necessary furnishings in each room, which is provided with a suitable lobby, desk and office for the registration of its guests at the main entrance and on the ground floor, which employs an adequate staff to provide suitable and the usual service and which maintains, under the same management and control as the rest of the establishment and has as an integral part thereof, a dining room with appropriate facilities for seating not less than 30 guests at one time and where the general public is, in consideration of payment therefor, served with meals at tables.;

     (g)  Intoxicating liquor. Ethyl alcohol and distilled, fermented, spirituous, vinous and malt beverages containing in excess of 3.2 percent of alcohol by weight.;

     (h)  Manufacturer. Every person who, by any process of manufacture, fermenting, brewing, distilling, refining, rectifying, blending or by the combination of different materials, prepares or produces intoxicating liquors for sale.;

     (i)  Malt liquor. Any beer, ale or other beverage made from malt by fermentation and containing not less than one-half of one percent alcohol by volume.;

     (j)  Theater. A building containing an auditorium in which live dramatic, musical, dance or literary performances are regularly presented to holders of tickets purchased for those performances. A theater shall not include an adult entertainment establishment as defined by Section 5-17(b) of this Code;

     (k)  3.2 percent malt liquor. Any malt liquor containing not less than one-half of one percent alcohol by volume nor more than 3.2 percent alcohol by weight.;

     (l)  Off sale. The sale of alcoholic beverages in original packages in retail stores for consumption off or away from the premises where sold.;

     (m)  On sale. The sale of alcoholic beverages by the glass for consumption on the premises only.;

     (n)  Package or original package. Any container or receptacle holding alcoholic beverages, which container or receptacle is corked or sealed.;

     (o)  Public place. Any place that the general public can occupy as a matter of right or any place that is open to the general public by invitation, either for business purposes or otherwise.;

     (p)  Restaurant. Any establishment, other than a hotel, under the control of a single proprietor or manager, having appropriate facilities for the serving of meals and for seating not less than 25 guests at one time and where, in consideration of payment therefor, meals are regularly served at tables to the general public, which employs an adequate staff to provide the usual and suitable service to its guests and a principal part of the business of which is the serving of foods. One or more bowling alleys maybe included in the licensed premises of a restaurant if table service is available throughout the licensed premises.;

     (q)  Sale, sell, dispense or sold. All barters and all manners or means of furnishing alcoholic beverages for a consideration. Such term shall include all transactions, whether for cash, credit or other considerations and shall include transactions where the consideration for the alcoholic beverage is included or combined with another transaction or where the consideration is called a "donation" or used to purchase any ticket, token or other object redeemable for alcoholic beverages.;

     (r)  Wholesaler. Any person engaged in the business of selling alcoholic beverages to retail dealers.;

     (s)  Wine. The product made from the normal alcoholic fermentation of grapes, including still wine, sparkling and carbonated wine, wine made from condensed grape must, wine made from other agricultural products than sound, ripe grapes, imitation wine, compounds sold as wine, vermouth, cider, perry and sake, in each instance containing not less than one-half of one percent nor more than 24 percent alcohol by volume for nonindustrial use. Wine does not include distilled spirits as defined by Minnesota Statutes, Chapter 340A.101, Subd. 9.

     Section 2. That Section 8-35 of the Duluth City Code, as amended, is amended to read as follows:

Sec. 8-35. Licensee personally liable for unauthorized sales.

     Any sale of alcoholic beverages in or from any place licensed under this Article by any clerk, barkeeper or other employee in such place shall be deemed the act of the employer and the local managing agent as well as that of the person actually making the sale. Such employer and local managing agent shall be liable to for all the penalties provided by this Code for such sale equally with the person actually making the sale.

     Section 3. That Section 8-41 of the Duluth City Code, as amended, is amended to read as follows:

Sec. 8-41. Types generally.

     (a)  With respect to intoxicating liquor, there shall be six eight types of licenses: on sale, on sale club, on sale wine, on sale culinary class, on sale theater, temporary on sale, off sale and a brewery malt liquor off sale.;

     (b)  On sale licenses shall permit the licensee to sell intoxicating liquor at retail for consumption on the licensed premises only.;

     (c)  On sale culinary class licenses shall permit the licensee to sell intoxicating liquor subject to the restrictions of Section 8-44(d) of this Chapter and Minnesota Statutes Section 340A.4041, or its successor;

     (d)  The on sale theater license authorizes sales on all days of the week to persons attending events at the theater;

     (e)  Temporary on sale licenses shall permit the licensee to sell intoxicating liquor on sale temporarily in connection with a social event sponsored by the licensee.;

     (f)  Except as provided herein, off sale licenses shall permit the licensee to sell intoxicating liquor at retail in original packages for consumption off the licensed premises only.;

     (g)  Brewery malt liquor off sale licenses shall permit breweries holding on sale licenses or a brewer who manufactures fewer than 3,500 barrels of malt liquor in a year to sell malt liquor off sale in 64-ounce containers commonly known as growlers, subject to the restrictions in Minnesota Statutes, Section 340A.301, subd. 7(b), or its successor, and this Chapter.;

     (h)  Notwithstanding the provisions of sections 8-21 and 8-22 of this Chapter, it shall be lawful for the holder of an off sale intoxicating liquor license or a brewery malt liquor off sale license to provide samples as provided in Minnesota Statutes, Section 340A.510, subd. 1 and subd. 2 or its successor.;

     (i)  With respect to 3.2 percent malt liquor, there shall be three types of licenses: on sale, off sale and temporary on sale.

           (1)  On sale licenses shall permit the licensee to sell 3.2 percent malt liquor at retail for consumption on the licensed premises only.;

           (2)  Off sale licenses shall permit the licensee to sell 3.2 percent malt liquor at retail in original packages for consumption off the licensed premises only.;

           (3)  A temporary on sale license shall permit the licensee to sell 3.2 percent malt liquor at retail for a limited period of time at a designated licensed premise only.;

     (j)  No alcoholic beverage license of any type shall be granted to any elective, executive or administrative officer of the city, nor to any employee holding a position in the classified service of the city and working as a licensed peace officer in the police department or as a fire marshal or assistant fire marshal, nor shall any such officer or employee engage in the business, except that employees in the classified service not working as a licensed peace officer in the police department or as a fire marshal or assistant fire marshal may work in any licensed establishment if they do not participate in the management of the business.

     Section 4. That Section 8-42 of the Duluth City Code, as amended, is amended to read as follows:

Sec. 8-42. Issuance or transfer of an on sale license; application procedure; limitation on issuance of inactive licenses.

     (a)  Whenever there shall be filed with the city clerk an application for the issuance of an on sale alcoholic beverage license or for a transfer thereof, the fire marshal and the St. Louis County health department shall proceed to inspect and examine such premises and make a report to the alcohol, gambling and tobacco commission as to whether such premises show substantial compliance with the requirements of this Chapter and other applicable laws. The police department shall investigate the applicant and report whether the applicant is a proper person to receive such license. In the event such reports and any supplementary assurances indicate the building will comply with the requirements of laws relating to on sale alcoholic beverage licenses, including building, fire and health codes, a license may be granted, which shall be held by the city clerk until completion of the proposed premises. Thereafter, a final inspection and report shall be made by each of such officers and if their reports indicate that the premises meet the requirements of all applicable laws and are otherwise suitable for the operation of the business permitted by such license, then the clerk shall physically deliver the license to the applicant. In the event that construction of the proposed premises is not prosecuted by the applicant with reasonable diligence, or in the event the building, when completed, does not comply with the requirements above set forth, the council may revoke such license as provided for in this Chapter;

     (b)  No alcoholic beverage license may be renewed if the licensee has not made sales authorized by the license at any time during the one-year period immediately prior to the date of renewal;

     (c)  Within 30 days of a change in managers or local managing agents by a license holder, the license holder shall provide written notice of such change to the city clerk on the form required by the city. The failure of any license holder to comply with the provisions of this paragraph shall be grounds for the revocation of all alcoholic beverage licenses held by such license holder. This paragraph shall take effect on September 1, 2008.

     Section 5. That Section 8-43 of the Duluth City Code, as amended, is amended to read as follows:

Sec. 8-43. Bottle clubs and consumption and display permits.

     (a)  Definitions;

           (1)  Bottle clubs. For the purposes of this Section, a bottle club is a club, as defined in Section 8-13, or an unincorporated society which, except for its lack of incorporation, otherwise meets the requirement of a club, as defined in such Section, and which is not licensed for the sale of intoxicating liquors, either on sale or off sale, or both;

           (2)  Sale. For the purposes of this Section, sale shall include any form of dispensing;

     (b)  No administrative officer of the city shall grant approval for issuance of any annual consumption and display permit to a bottle club permit by the liquor control commissioner of the state of Minnesota unless the city council has authorized such approval by resolution after investigation and recommendation regarding such permit application has been made by the alcohol, gambling and tobacco commission pursuant to the procedures set forth in Section 8-7 of this Chapter, except that such recommendation shall be made by the commission to the council within 30 days after submission of the permit application to the commission;

     (c)  All bottle clubs licensed permitted by the state to do business in the city of Duluth shall pay a fee, which shall be set in accordance with Section 31-6(a) of this Code, annually to the city in addition to any fee paid to the state. The fee payable to the city shall be paid prior to the beginning of operation of a bottle club, and prior to April 1 of the following and each succeeding year;

     (d)  The provisions and regulations of Sections 8-15, 8-16, 8-17, 8-18, 8-19, 8-24, 8-26, 8-28, 8-34 and 8-35 shall fully and equally apply and regulate establishments holding bottle club licenses from the Minnesota state liquor control commissioner;

     (e)  The city clerk, subject to the requirements of Minnesota law, may issue a one day permit for the consumption and display of intoxicating liquor to a nonprofit organization in conjunction with a social activity in the city sponsored by the organization;

     (f)  A permit issued pursuant to this Section permits the consumption and display of intoxicating liquor on the premises. The permit does not authorize the sale of intoxicating liquor.

     Section 6. That Section 8-44 of the Duluth City Code, as amended, is amended to read as follows:

Sec. 8-44. To whom licenses issued--intoxicating liquor.

     (a)  On sale intoxicating liquor licenses shall be granted only to establishments which are used exclusively for the sale of intoxicating liquor, cigars, cigarettes, ice, all forms of tobacco, 3.2 percent malt liquor and soft drinks at retail and to hotels, clubs, restaurants and bowling alleys.;

     (b)  On sale club licenses shall be granted, subject to the approval of the commissioner of public safety, only to clubs or to congressionally chartered veterans organizations which have been in existence for three years or more. Such license shall authorize the sale of intoxicating liquors only to members of the licensed organization and their bona fide guests.;

     (c)  On sale wine licenses shall be granted only to restaurants or bed and breakfast establishments and shall authorize licensees on every day of the week to sell wine not exceeding 14 percent alcohol by volume, for consumption on the licensed premises only, in conjunction with the sale of food. A bed and breakfast establishment may furnish wine only to registered guests of the establishment and, if the facility contains a licensed commercial kitchen, also to guests attending private events at the facility if such events are otherwise authorized by Chapter 50 of this Code. Sunday hours of sale shall be from Noon to 1:00 a.m. Monday. No on sale wine license shall be in effect until it is approved by the liquor control commissioner of the state of Minnesota.;

     (d)  On sale culinary class licenses shall be granted only to business establishments that meet the following conditions:

           (1)  The business establishment is not otherwise eligible for an on sale intoxicating liquor license; and

           (2)  That, as a regular part of its business the establishment conducts culinary or cooking classes for which payment is made by each participant and only if such participant has made an advance reservation.

     The license authorizes the licensee to furnish to each participant in each class, at no additional cost to the participant, up to a maximum of six ounces of wine or 12 ounces of intoxicating malt liquor, during and as part of the class, for consumption on the licensed premises only;

     (e)  Temporary on sale liquor licenses shall be issued only to:

           (a) (1)    Clubs, charitable organizations, religious organizations and other nonprofit organizations in existence for at least three years;

           (b) (2)    A registered political committee;

           (c) (3)    A state university; or

           (d) (4)    A brewer who manufactures fewer than 3,500 barrels of malt liquor in a year,

in connection with a social event sponsored by the licensee. The license shall be issued for a limited length of time, not to exceed four consecutive days. Temporary on sale licenses to any one organization or for one location shall not exceed more than three four-day, four three-day, six two-day or 12 one-day licenses, in any combination not to exceed 12 days per year. No more than one license shall be issued to any one organization or for any one location within any 30-day period unless the licenses are issued in connection with an event officially designated a community festival by the city. The city may authorize the temporary on sale liquor license on premises other than premises the licensee owns or permanently occupies. The license may provide that the licensee may contract for intoxicating liquor catering services with the holder of a full-year on sale intoxicating liquor license used by the city.;

     (f)  Off sale intoxicating liquor licenses shall be granted only to exclusive liquor stores.;

     (g)  Brewery malt liquor off sale licenses shall be granted to:

           (a) (1)    Breweries holding on sale licenses; or

           (b) (2)    A brewer who manufactures fewer than 3,500 barrels of malt liquor in a year, and shall be subject to all restrictions, terms and conditions contained in Minnesota Statutes, Section 340A.301, subd. 7(b), or its successor.

     Section 7. That Section 8-56 of the Duluth City Code, as amended, is amended to read as follows:

Sec. 8-56. Fees.

     (a)  The license fee for off sale and on sale 3.2 percent malt liquor licenses shall be paid to the city clerk not later than March 15 of each year. The license fee for off sale intoxicating liquor licenses shall be paid to the city clerk not later than July 15 of each year. The license fee for on sale intoxicating liquor licenses may, at the option of the licensed applicant, be paid to the city clerk either in one lump sum not later than July 15 in each year, or in four equal installments, which shall be paid not later than July 15, October 15, January 15 and April 15, respectively. In any case where any payment for any alcoholic beverage license is not made when due, a penalty fee, which shall be set in accordance with Section 31-6(a) of this Code, shall be added to the fee. Nonpayment of fees shall constitute good cause for suspension or revocation of any license.;

     (b)  Payment for license fees shall be made by certified check payable to the city treasurer of the city or in lawful money of the United States of America and when such fees are received by the city clerk they shall be transmitted to the city treasurer. Upon the granting of a license as provided in this Article the amount of fee for such license shall be paid into the general fund.;

     (a)  The annual fees for all on sale intoxicating liquor licenses shall be set in accordance with Section 31-6(a) of this Code.

     (c)  Whenever any licensee holding an on sale intoxicating liquor license shall at any time for any purpose operate more than one permanent bar, such licensee shall pay an additional annual license fee, which shall be set in accordance with Section 31-6(a) of this Code, for each such additional permanent bar. A so-called service bar which is used solely by employees of the licensee shall not be considered a bar for purposes of this Section;

     (d)  The annual fees for all licenses and permits provided for in this Chapter shall be set in accordance with Section 31-6(a) of this Code.

     (b)  The annual fee for an off sale intoxicating liquor license shall be set in accordance with Section 31-6(a) of this Code;

     (c)  The fee for a temporary on sale liquor license shall be set in accordance with Section 31-6(a) of this Code;

     (d)  The annual fee for an on sale 3.2 percent malt liquor license shall be set in accordance with Section 31-6(a) of this Code;

     (e)  The annual fee for an off sale 3.2 percent malt liquor license shall be set in accordance with Section 31-6(a) of this Code;

     (f)  The annual fee for a brewery malt liquor off sale license shall be set in accordance with Section 31-6(a) of this Code.

     Section 8. That Section 8-63 of the Duluth City Code, as amended, is amended to read as follows:

Sec. 8-63. Same--Corporations.

     (a)  Alcoholic beverage licenses may be issued to any corporation authorized to do business in the state of Minnesota if an officer or a managing agent of the corporation is a resident of Minnesota residing within 50 miles of the Duluth City Hall.;

     (b)  No corporation shall be granted a license to sell alcoholic beverages if any of its officers, directors, shareholders, local managers or local managing agents have been convicted within five years prior to the application for such license for violation of any law relating to the manufacture, sale, distribution or possession of alcoholic beverages, or have had an interest in a license to sell alcoholic beverages which was revoked within the last five years for violation of any such law, or for cause, and unless such officers, directors, shareholders, local managers and local managing agents are of good moral character and reputation. This paragraph shall not apply to clubs, or to corporations whose stock is publicly held and listed and traded by the public on a recognized stock exchange, except with respect to those provisions dealing with local managers and local managing agents.;

     (c)  A corporation shall state in its application for an alcoholic beverage license the names of its shareholders, directors, officers, local managers and local managing agents. The transfer, sale, pledge or assignment of the record or equitable ownership of any stock of a corporate license holder to new or different shareholders, or the election or appointment of any new or different directors, officers, local managers or local managing agents by a corporate license holder shall be deemed a transfer of all alcoholic beverage licenses held by such corporation and, in such case, the provisions of Section 8-67 of this Code, shall be applicable. The failure of any corporate license holder to comply with the provisions of this paragraph shall be grounds for the revocation of all alcoholic beverage licenses held by such corporation. This paragraph shall not apply to clubs, or to corporations whose stock is publicly held and listed and traded by the public on a recognized stock exchange, except with respect to those provisions dealing with local managers and local managing agents.

     Section 9. That Section 8-29.5 of the Duluth City Code, as amended, is repealed in its entirety.

     Section 10. That this ordinance shall take effect and be in force 30 days from and after its passage and publication.


ADM/ATTY MAL/MAO:jkmr 2/12/2008


STATEMENT OF PURPOSE: The primary purpose of the ordinance is to incorporate new provisions of state law regulating alcoholic beverages. These include authorizing the theater and culinary class categories of on-sale licenses.


In addition, throughout this amendment paragraphs have been reorganized by providing alphabetical pagination and numerical subpagination. The reorganization does not change the substance of the Code. It provides the reader the ability to more easily locate a specific Code requirement and provides a better structure for citation.


Section 1 of the ordinance amends Section 8-13 of the Code and adds a definition for the word “theater.” This definition similar to state statute except that it expressly excludes an adult entertainment establishment. This amendment is related to the amendments found in Section 2 of the ordinance which authorizes the issuance of the theater license.


Section 2 of the ordinance amends Section 8-35 of the Code and makes the local managing agent liable for the acts of the employees of the licensee. Currently, only the license holder, normally a corporation, and the employee committing the violation is liable. This amendment will provide incentive to the local manager to ensure compliance with applicable laws.


Section 3 of the ordinance amends Section 8-41 of the Code and establishes two new license categories that Minnesota law now allows a city to issue. The on sale license category for a business offering culinary classes is a type of license created during the 2006 legislative session. The on-sale theater license allows sales to persons attending live events at a theater. The definition of theater, defined in amended Section 8-13(j), excludes adult entertainment establishments.


Section 4 of the ordinance amends Section 8-42 of the Code by requiring licensees to register changes in management within seven days of such change. It is also related to the amendments in Section 8 or the ordinance which eliminates the need to apply for a license transfer, and pay a license transfer fee, every time local management is changed. This change also allows for more efficient law enforcement activities because the police department will learn of management changes in a more efficient manner.


Section 5 of the ordinance amends Section 8-43 of the Code by updating the Code language so that it is consistent with current statutory language that now uses the phrase “consumption and display permit” when referring to what was previously known as a bottle club license. Consumption and display permits are annual permits issued by the state. These permits must be approved by the governing body of the local jurisdiction. They authorize the consumption of alcoholic beverages in business establishments but not the sale of such beverages. State law also authorizes a city to administratively issue one day consumption and display permits to non-profit organizations. By state law, the city is only authorized to issue ten one-day periods during the year. This amendment provides the city clerk with the authority to issue the one day permit. The amendment also expressly states that a consumption and display permit does not authorize the sale of intoxicating liquor.


Section 6 of the ordinance amends Section 8-44 of the Code by providing the standards applicable to the issuance of a culinary class license and incorporating statutory changes related to bed and breakfast facilities.


Section 7 of the ordinance amends Section 8-56 of the Code by using one paragraph to provide for the manner in which license fees are set rather than using separate paragraphs to restate the same process for each license category.


Section 8 of the ordinance amends Section 8-63 of the Code. It eliminates the current provision which deems a change in the management of a corporation a transfer of the license. The amendment would limit what is considered a transfer to changes in the equity ownership of the corporation.


Section 9 of the ordinance repeals Section 8-29.5 of the Code which defines persons born before September 1, 1967, as persons of legal age for the consumption of alcohol. It is a provision that has been mooted by the passage of time.