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Legislative Update: Mayor Gray Proposes Extending Hours of Alcohol Sales in the District

On Tuesday, March 27th, Mayor Vincent Gray testified before the D.C. Council on his proposed 2013 fiscal budget.   One of his proposals for raising revenue includes allowing bars and nightclubs to serve alcohol until 3 a.m. on weekdays and 4 a.m. on weekends.  Extending alcohol sales hours by one hour is expected to raise an extra $5 million from alcohol taxes.  D.C. Police Chief Cathy L. Lanier  supported the proposal, but Council member Jim Graham (Ward 1), who is the Chairperson of the Committee of Human Services, the oversight committee for the Alcohol and Beverage Regulation Administration (ABRA), voiced opposition to the proposal.

Graham’s committee will hold a hearing on the subject on April 17th at 5pm at the John A. Wilson Building, Room 500.  Persons wishing to testify should contact Malcolm Cameron, Committee on Human Services, at 724-8191 or e-mail [email protected] by April 16th.

Click here to read full coverage about Mayor Gray’s budget proposal.

Legislative Update: JOBS Bill Clears Congress

On Tuesday, March 27th, the Jumpstart Our Business Startups Act or JOBS Act was passed again by the United States House of Representatives and is now awaiting signature by the President.   The bill aims to make it easier for small businesses to access investment capital by relaxing Securities and Exchange Commission (“SEC”) regulations such as removing the SEC restrictions that prevent “crowdfunding” so entrepreneurs can raise equity capital from a large pool of small investors who may or may  not be considered “accredited” by the SEC.   The bill allows companies to pool up to $1 million from investors without registering with the SEC, or up to $2 million if the company provides investors with audited financial statements.  Individual contributions are limited to $10,000 or 10 percent of the investor’s annual income, whichever is less.   The bill also includes a provision making it easier for small businesses to go public by increasing the offering threshold for companies exempted from SEC registration from $5 million to $50 million.  While the bill has been controversial, the House approved the measure 380-41, and President Obama is expected to sign it.   After the president signs the bill into law, it will not take effect until new investment rules are written by the Securities and Exchange Commission, a process that could push into next year.

ABRA Board Public Hearing on the Glover Park Moratorium Zone set for March 21, 2012

On February 10, 2012, Advisory Neighborhood Commission (“ANC”) 3B sent a written request to the Alcoholic Beverage Control Board requesting that it renew the existing Glover Park Moratorium Zone for another three year period, but asked that the Board amend the moratorium to increase the existing cap on the number of permitted Class CR (restaurant) retailer’s licenses from 12 to 14.

A moratorium zone limits the number of liquor licenses in a specific area. Currently, the Glover Park Moratorium restricts issuance of any retailer’s license class A, B, CN, CT, CX, DN, DT, or DX, and capped the number of CR (restaurant licenses) at 12.  The moratorium is set to expire on April 16, 2012.

The Glover Park ANC voted to increase the cap of the 16-year long moratorium to bring in two more restaurants at its last meeting, held on Tuesday, March 6th.  Glover Park, which has been struggling to be seen as an attractive hangout for years, flirted with the idea of lifting the cap entirely, but residents concerns that the neighborhood would turn into a raucous bar crawl influenced its decision to request an extension from the Board.

In requesting the renewal of an existing moratorium pursuant to D.C. Official Code § 25-352, ANC 3B must establish to the Board that the present conditions in the moratorium area, based upon the appropriateness standards set forth in D.C. Official Code §§ 25-313 and 25-314, justify an extension of the moratorium.  These standards include the effects of any establishment in the area on (1) real property values; (2) peace, order, and quiet, including the noise and litter; and (3) upon residential parking needs and vehicular and pedestrian safety.

The ABRA Boards hearing on the matter will be held on Wednesday, March 21, 2012 at 11:00 a.m. at 2000 14th Street, N.W., Board Hearing Room, Suite 400, Washington, D.C. 20009.  Individuals and representatives of organizations who wish to testify should contact Martha Jenkins, General Counsel, at (202) 442-4456, or by e-mail at [email protected] by March 16, 2012.

D.C. Council to impose sales tax on Food Truck Operators

On March 1, 2012, the Committee on Finance and Revenue of the Council of the District of Columbia passed out of committee, by unanimous vote, the Vendor Sales Tax Collection and Remittance Act of 2012, which would require vendors in the District to collect sales taxes from patrons and remit them to the District, like other businesses.  Both Virginia and Maryland require food vendors to collect sales tax.

Councilmember Jack Evans (D-Ward 2) first introduced the bill last year to amend a section of the District’s tax code that exempts sidewalk and mobile street vendors from sales tax requirements.  Currently, sidewalk and mobile street vendors, including food trucks, pay a quarterly fee of $375 to the District in lieu of having to pay the 10% retail sales tax on prepared food the way other food service businesses must.

Food truck operators’ main objection to the bill focuses on how the District will tax each street vendor.   Food truck operators claim that there exists the threat that they will be taxed multiple times because some trucks hold multiple operating licenses.

Stephen Cordi, Deputy Chief Financial Officer for the District’s Office of Tax and Revenue, is quoted in a Washington Post article on the subject as stating, “the way [he] reads the proposed bill, each business vendor — not the individual licensees tied to the business vendor — would be required to submit sales taxes.”

Food truck operators also argue that this issue should be dealt with under the proposed vending regulations that the D.C. Department of Consumer and Regulatory Affairs issued in January.  The new regulations created controversy between the food truck community, which largely supports the regulations, and the brick-and-mortar restaurants, who argue that the rules grant food trucks an unfair competitive advantage.

The public comment period for the new vending regulations closed last week. More than 3,200 comments were submitted to the DCRA and the department plans to spend the next week or two reviewing the opinions and talking with city agencies and various stakeholders about how to resolve the conflicts between food trucks and bricks-and-mortars. The DCRA hopes to bring the final regulations to the D.C. Council before the end of the year. The Council could reject the regulations and force all parties to operate under the current ones.

Evans said to the Washington Post that he could not wait any longer for the Council to approve the new vending regulations before moving ahead with the tax bill.  “My position is, if I give you enough time and if you don’t do it, [expletive] you, I’m going to move ahead and put the tax in place. That’s how I operate. People know that’s how I operate.”

The Vendor Sales Tax Collection and Remittance Act, which is expected to pass the full Council, could receive its first reading in April and go into effect October 1st.