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Posts from the ‘D.C. Council’ Category

DC Council Introduces Bill to Regulate Event Promoters

In response to several incidents of violence at promoter-hosted events in DC, DC Councilman Jim Graham introduced a bill that would require independent event and party promoters in DC to be licensed by the DC government. Specifically, licensed promoters would have to attend training sessions conducted by the DC Alcoholic Beverage Regulation Administration (“ABRA”), maintain personal liability umbrella insurance with a minimum liability limit of $3 million, and pay a $250 registration fee. In justifying the bill, Mr. Graham noted three serious incidents of violence near bars and restaurants which occurred during promoter-hosted events during the last two years.

However, many promoters are against the new regulations. One seasoned promoter believes the bill is targeting the wrong people. He notes that even though promoters are tasked with bringing in patrons and even hosting the events, the security and the responsibility to operate the premise still lies entirely within the purview of the restaurant operator, as is codified in DC hospitality laws. While violent incidents are unfortunate, unavoidable occurrences, the main responsibility should lie with the owner and operator of the venue, not the promoters, as is clearly stipulated in DC law. The instances where promoters were given partial control over the venue due to poor management or lax security should never have happened if existing laws were adequately enforced. In addition, he noted that the bill can be easily evaded if the venue simply registers independent promoters as temporary staff during events.

Council members Anita Bonds and Jack Evans co-sponsored the bill. It has been referred to the Committee on Business, Consumer, and Regulatory Affairs.

D.C. Council Supports Minimum Wage Increase but Excludes Tipped Employees

The D.C. Council approved a bill that would increase the city’s minimum wage to $11.50.  If approved by Mayor Vincent C. Gray, the minimum wage will increase to $9.50 next summer; $10.50 in 2015, and $11.50 in 2016, a full year prior to similar bills passed in Montgomery County and Prince George’s County.

The D.C. Council must hold a final vote on the rate-increase measure and send it to Gray, probably by early 2014.

Gray supports raising the minimum wage from its current $8.25 to $10 an hour in 2014, but no higher.  In September, Gray vetoed the Large Retailer Accountability Act, would have required big-box stores in the city to pay its employees a minimum of $12.50 an hour.

Notably, the bill excludes a wage increase to tipped employees, including waiters, bartenders, and busboys, whose current minimum is $2.77 per hour before tips.  The Restaurant Association Metropolitan Washington noted that restaurants have small profit margins and would be forced to raise prices and cut staff if they had to pay minimum wages to tipped employees.

Update:

1/16/2014

On January 15, 2014, Mayor Vincent C. Gray signed the bill increasing the minimum wage in the District to $11.50, starting in July 2016.

D.C. Food Trucks Are Here to Stay

On June 18th, 2013, the District of Columbia Council voted unanimously in favor of a set of regulations that outline how and where food trucks are allowed to operate within the city proper, signaling what is likely to be the end of a mercurial four-year debate over the legality of street-operated food truck vendors. According to media sources, the current provisions seem to satisfy the demands of both bricks-and-mortar restaurant owners and food truck operators, who have been in fierce competition with one another over the district’s bustling and hungry clientele.  Though certain non-controversial aspects of the legislation had been passed by the council as early as June 5th, several key changes to the mobile vending rules were introduced through the amendments passed on the 18th.

The first of these changes is a reduction of the buffer zone around city-designated “mobile roadway vending zones” from the previously proposed 500 feet to 200 feet.  This amendment eases the restrictions placed upon food truck vendors who are not able to acquire vending zone permits, which are doled to applicants monthly on a lottery basis, allowing them to sell their products in closer proximity to the high-traffic vending zones than previously allotted.

The second amendment allows food trucks outside of the vending zones to park in spaces with a minimum of six feet of unobstructed sidewalk space as opposed to the ten feet-requirement what was originally proposed.  The amendment also clarifies that parking meters are not considered to be obstructions.  Under this change in the legislation, food trucks are given slightly more freedom in terms of where they can park in the city, allowing them to sell in a greater range of locations and alleviating some owners’ fears of being blocked entirely from much of the downtown area.  Lastly, a third amendment reduces the fine for expired parking meters from $2000 to $50, though the fee will double for repeat offenders.

While not quite the “status-quo” proposal that many food truck vendors lauded and not quite the crackdown that restaurateurs anticipated, the regulations nevertheless appears to settle the ongoing conflict between the mobile and immobile food vendors.  The finalized version of these regulations currently awaits the signature of Mayor Vincent Gray, who is reviewing the revisions.

For more information about the regulations, please contact Rosemarie Salguero at rsalguero@dbmlawgroup.com or Andre Barlow at abarlow@dbmlawgroup.com.

How do changes to the District of Columbia’s alcohol licensing laws affect your business?

On May 1, 2013, D.C. Law 19-310 the “Omnibus Alcoholic Beverage Regulation Amendment Act of 2012” (Act), which amended Title 25 of the D.C. Code will take effect on a permanent basis.  The Act was previously adopted on an emergency basis on January 14, 2013. Below, we have summarized the major changes to Title 25, according to license classes.

Retailer Class C/D Licensees:

On-premise Class C/D licensees are full service restaurants with food sales accounting for at least 45% of all gross sales receipt.

Relevant changes include the following:

  • Citizens associations who have met the requirements of § 25-601(3) and have registered with ABRA, shall be notified of new restaurant license applications at least 30 days before the Board’s receipt of the application;
  • Voluntary Agreements will now be called Settlement Agreements, and there are explicit provisions that are prohibited from appearing in these agreements.  Click here for a list;
  • Restaurants may purchase alcoholic beverages from Retailer’s Class A licensees (liquor stores) when District wholesalers are closed;
  • It is a now a primary tier violation for failure to comply with the 45% statutory food requirements, meaning penalties shall be no less than $1,000 for the first violation, $2,000 for the second violation within 2 years , and $4,000 for the third within 3 years.
  • Restaurants may now store books and records on the premise electronically, as long as they are easily accessible for inspection by ABRA investigators;
  • A protest hearing for a new license application must be within 75 days of the end of the protest period;
  • ABRA must maintain a noise complaint line and track noise complaints; and
  • Brew pubs may sell resealed containers of beer to consumers for off-premises consumption.

Retail Class B Licensees:

Off-premises Class B retailer licensees are primarily grocery stores.   A grocery store is defined as having its primary business purpose as the sale of a full range of fresh, canned, and frozen food items, and the sale of alcoholic beverages is incidental (sale of alcohol does not exceed 15% of its total volume of gross receipts on an annual basis).

Relevant changes include the following:

  • The law now permits the issuance of additional retailer’s class B licenses if the total number of retailer’s class B licenses is less than 300;
  • Full service grocery stores may sell resealed containers of beer (growlers) for off-premises consumption; and
  • Licensees may now also sell wines with an alcohol percentage of 15%.

Retail Class A Licensees:

Off-premise Class A licensees are mainly liquor stores.

Relevant changes include the following:

  • It is now a secondary tier violation to knowingly allow a patron to exit an on-premises establishment with an open container of alcohol; and
  • Liquor stores may now sell alcoholic beverages on Sunday.

The following provision applies to ALL licensees:

The Board may now fine a licensee up to $30,000 and suspend a license for 30 consecutive days for a 4th primary tier violation within 4 years and revoke the license after the 5th violation.

If you have any questions about the new changes, please contact Rosemarie Salguero at rsalguero@dbmlawgroup.com or Andre Barlow at abarlow@dbmlawgroup.com.

No Compromise: Food Truck Association Continues Campaign Against DCRA Regulations

The D.C. Food Truck Association (“DCFTA”) activated its public relations and lobbying campaign to oppose the District of Columbia’s Department of Consumer and Regulatory Affairs’ (“DCRA”) second attempt to update the vending regulations in the District.  On October 5, DCRA published proposed regulations to update the 30-year-old regulations which provide health and safety guidelines for sidewalk and roadway vendors but currently do not include food trucks.

In a continuous effort to encourage food truck owners to operate in designated areas and avoid overcrowding city streets, the Government’s most recent legislation establishes Mobile Roadway Vending (“MRV”) zones, wherein up to three food trucks may park from 11:00 a.m. to 3:00 p.m. so long as the individual trucks hold operating licenses.  Outside of these zones, food trucks are still permitted to park in metered parking spaces as they have been, provided they pay for the meter.

In spite of the flexibility that this legislation gives to food trucks while also clearing up traffic in otherwise crowded streets, the DCFTA vehemently opposes the newly proposed regulations.  In particular, the DCFTA cites the need for dense concentration of food trucks during certain planned events as a primary incentive to turn down the Government’s proposal.  DCFTA also objects to the requirement that an MRV may not be established “[w]here the adjacent unobstructed sidewalk is less than ten feet (10 ft.) wide in the Central Business District or seven feet (7 ft.) wide outside the Central Business District.”

Sidewalk vendors currently have a similar restriction, which requires vendors to maintain ten feet (10 ft.) and seven feet (7 ft.) walkways where they vend.  Restaurants with sidewalk cafes must also follow strict regulations that maintain unobstructed walkways.  Food trucks claim they are being unduly burdened by these long established rules for maintaining clear walkways for pedestrians.

DCFTA is lobbying the D.C. Council, which ultimately must vote on these regulations, and is asking food truck supporters to petition Mayor Vincent Gray to rewrite the rules.  The public can still make comments on these regulations until 5pm on November 13th.

Comments may be sent to Helder Gil, Legislative Affairs Specialist, the Department of Consumer and Regulatory Affairs at 1100 Fourth St. SW, Room 5164, Washington, D.C. 20024. Comments may be e-mailed to DCVendingRegs@dc.gov.

Reform Hearing Set for July 12, 2012: Omnibus Alcoholic Beverage Regulation Amendment Act of 2012

The D.C. Council Committee on Human Services is hosting a hearing on July 12, 2012 at 11:00 AM for the Omnibus Alcoholic Beverage Regulation Amendment Act of 2012 (“Omnibus”).  The bill, introduced by Councilmember Jim Graham (Ward One) and cosponsored by Jack Evans (Ward Two) is set to amend Title 25 of the D.C. Code, which pertains to alcoholic beverages.  The hearing will take place at Room 412 of the John A. Wilson Building at 1350 Pennsylvania Ave. NW (photo ID required).

The following are among some of the 43 changes proposed by Omnibus:

  • To create a new Wine Pub permit that allows for the manufacturing and the sale of wine to consumers;
  • To increase the wine alcohol percentage that can be sold by retailer’s class B licensees from 14% to 15%;
  • To allow retailer’s class C and D licensees to purchase from retailer’s class A licensees when District wholesalers are closed;
  • To require notice of placarded license applications to citizen associations registered with ABRA;
  • To require a group of five or more residents or property owners to be within a 400 foot radius to qualify for standing;
  • To require citizens associations to give notice to applicants and offer applicants an opportunity to address their voting body at a duly scheduled meeting;
  • To require citizen associations to give notice to applicants and offer applicants an opportunity to address their voting body at a duly scheduled meeting;
  • To make it a primary tier violation for failure to comply with the statutory food requirements;
  • To require that windows and doors of an establishment remain closed for a noise violation under D.C. Code  § 25 -725 to occur;
  • To make it a secondary tier violation to knowingly allow a patron to exit an on-premises establishment with an open container of alcohol;
  • To establish an affirmative defense to a violation of D.C. Code § 25-783(a) that the person was 21 years of age or older;
  • To allow the Board to fine a licensee $30,000 and suspend a license for 30 consecutive days for a fourth primary tier violation within four years.

The full bill can be found here.  A full recap of the hearing will be provided in a subsequent blog posting.

For more information please contact Rosemarie Salguero or Andre Barlow in our Hospitality Practice Group, at info@dbmlawgroup.com or (202) 589-1834.

 

D.C. Council Approves Bill Extending Alcohol Service Hours for Holidays, Extended Service During Inauguration

On June 5, the D.C. Council put the final stamp of approval on the bill permitting D.C. bars, restaurants and hotels to serve patrons until 4:00 a.m. the night before federal and D.C. holidays. This extension of hours is expected to bring in at least $3.2 million in revenues, preventing a deficit and a potential increase in taxes and fees.

As reported in our May 16th post, D.C. Council Bill 19-743, which can be viewed here starting on page 29, amends District of Columbia Official Code Title 25 Chapter 7 to allow licensed establishments to serve patrons one hour later on approved dates.  In addition to the night preceding District and federal holidays, the Saturdays and Sundays preceding Memorial Day and Labor Day will also see extended service hours.  Extended service will also be permitted on the Saturday and Sunday adjacent to New Year’s Day and Independence Day, as long as either holiday falls on a Friday through Monday.

Mayor Vincent C. Gray’s initially proposed extending alcohol service hours by one hour from 2:00 a.m. to 3:00 a.m. and 3:00 a.m. to 4:00 a.m. on weeknights and weekends, respectively.  However, the D.C. Human Services Committee voted 3-2 to strip this proposal from the 2013 budget, described in our May 3rd post.  This vote followed the standoff seen throughout the district between several neighborhood groups in opposition of the proposal and local entrepreneurs, as detailed in our April 18th post.

This measure also includes the extension of service hours during what the bill designates “Inaugural Week,” which occurs the week of January 15 through January 21 in 2013.  During this week, licensed bars, restaurants, and hotels can serve patrons until 4:00 a.m.  However, these establishments must provide the Alcoholic Beverage Control Board and the D.C. Metropolitan Police with written notice of their hours of operation and a public safety plan no later than January 7, 2013.  These businesses must also pay fee for each day they extend their hours ($250 for a CN license, $100 for a CR or CT license, $50 for any other license).

For more information please contact Michael J. Kozlowski Jr., at mkozlowski@dbmlawgroup.com or (202) 589-1834.

D.C. Council Committee Rejects Extended Bar Hours; Votes to Increase Alcohol Tax

The D.C. Human Services Committee voted 3-2 to strip from the 2013 fiscal budget the Mayor’s proposal to extend alcohol sales to 3 a.m. on weekdays and 4 a.m. on weekends.  Instead, the committee proposed increasing the sales tax on alcoholic beverages above the current level of 10 percent.  This alcohol excise tax, paid by wholesalers and increasing product costs for both on-premise venues and retailers alike, would result in a price increase for both businesses and consumer alike.

As reported in our April 18th post, many neighborhood groups organized against extending bar hours, citing the potential for increased late-night noise, crime, and parking issues.  Entrepreneurs endorsed the proposal as a way to boost the city’s reputation as a world-class hospitality destination..

Lynne Breaux, president of the Restaurant Association Metropolitan Washington (RAMW), issued a press release criticizing the council members for increasing the tax burden on local small businesses.

“Restaurants and bars are the first businesses to be tapped to help create a sense of community in areas of new development or to revitalize existing neighborhoods – and are the first businesses to be targeted for taxes, fees and excessive regulatory oversight,” said Breaux.

If the alcohol tax increase is defeated, several council members told the Washington Post that the proposed extension of bar hours could resurface as members try to balance the budget.

“Certainly, we could do it on a temporary basis and see what the ramifications are,” said council member David A. Catania (I-At Large). “If some of the negative consequences come to fruition, we could revisit.”

The committee did, however, unanimously approved two of Gray’s alcohol proposals, including allowing bars to serve until 4 a.m. during the week of the presidential inauguration. The committee also agreed to allow Class A and Class B carryout liquor stores to open at 7 a.m. instead of 9 a.m., except on Sundays.

The committee did not vote on a proposal that would allow liquor stores to open on Sundays.

Entrepreneurs, City Residents Face Off At Hearing On Extended Alcohol Sale Hours

On Tuesday night, Ward 1 Councilmember and Chairman of the Human Services Committee, Jim Graham, heard six-hours of testimony from District residents and the hospitality and business community members about D.C. Mayor Vincent Gray’s proposal to extend bar hours in order to raise $5 million in new revenue.

The witness list, available here, included 48 individuals as well as Fred Moosally, Director of the Alcohol Beverage Regulation Administration (ABRA).

Entrepreneurs endorsed Mayor Gray’s proposal and offered support to the idea that extended sales hours will increase revenue as well as boost the city’s reputation as a world-class hospitality destination.  Business owners pointed out that many establishments have Voluntary Agreements, which limit their operating hours.  Owners stated that this type of staggered closings, some bars closing earlier while other close later, would alleviate any concerns of excessive noise from patrons leaving the establishment at later hours.

In his testimony, Mr. Moosally confirmed that the extended hours would not apply to 267 bars, nightclubs and restaurants that have existing Voluntary Agreements with their neighbors.

Council member Graham appeared steadfast in his opposition to longer sale hours, particularly in light of the number of witnesses at the hearing from Adams Morgan and Kaloroma, neighborhoods located in the council member’s own ward, who opposed the extension of hours.  Neighborhood opponents argued that the longer hour would exacerbate existing noise and parking issues and create public safety concerns such as drunk driving.   Some opponents said they could support it if the extended hours were limited to downtown or in non-residential areas, however, Graham stated that would place some establishments at a competitive disadvantage against others who could close later.

Despite his disapproval of the Mayor’s proposal, if it does not pass, Graham would be forced to raise the $5 million in new revenue or make spending cuts to the city’s fiscal 2013 budget to replace the projected revenue expected from this proposal.

According to the Washington Post, Council Chairman Kwame R. Brown may have the final say on whether the fiscal year 2013 budget can remain balanced without Gray’s proposal. At a news conference Tuesday, Brown said he remains undecided on the proposal but understands community opposition.

To watch the entire six-hour hearing, click here.

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.