Friday, September 5, 2014

Research Q of the Week: Fall Festival Season & Liquor Licensing (9/5)

Question: An organization wants to hold a festival in the city and hopes to sell alcohol.  How does the liquor licensing work for such an event?

Answer: Let me guess, Octoberfest? Halloween? Apple harvest? We have so many great reasons to celebrate in Minnesota well after Labor Day has passed. Most festivals, regardless of season, will take place in a park, the city street, or a private parking lot. But an on-sale retail license within the city typically restricts the consumption and sale of alcohol to the building and any fenced in patio area. It usually excludes the parking lot and certainly the city streets and parks.

Hmm. This means that a different kind of license is almost always necessary.

For the city, the first step is to understand how the alcohol will be served and who will be serving it.  Remember that a license or permit (issued by the city, state, or both!) is required to serve or sell alcohol. Also, think about potential liability and whether or not the group has insurance coverage for the event. Many groups will already have insurance, but for groups that needs one-time, single event coverage, the League has a program called TULIP that can help. 

Now, there are two main methods to lawfully sell alcohol during events:

Temporary on-sale license for nonprofit organizations
One method is the temporary on-sale license. This is a popular choice because it allows alcohol sales for a definite period up to four days on property that is not owned by the license holder. The license may be issued to charitable, religious, or other nonprofit organizations in existence for at least three years; registered political committees; and state universities. Since these organizations might not ordinarily sell alcohol, this license conveniently exempts the license holder from liability insurance requirements under Minnesota Statutes § 340A.409.  It does not mean the licensee is exempt from liability. 

A temporary on-sale license also allows the holder to contract for liquor catering services with a duly licensed on-sale licensee, which is common. This license is issued by the city and must also be approved by the commissioner of public safety. While this license is fairly flexible, one of the downsides is that cities can only issue 12 days’ worth of licenses each year to any single organization or for any single location. 

Community festival authorization for existing license-holders
Another licensing method applies specifically to community festivals.  Here, a license may be issued to any current holder of a retail on-sale license within the city. The license must specify the area in which the alcohol will be sold and consumed and the licensee must prove that it has liability insurance coverage according to Minnesota Statutes § 340A.409.  This license requires only the approval of the city.

Other licensing methods may apply, and the League’s Liquor Licensing and Regulation memo is an incredible resource for general information.  Because every situation is a little different–cities have different ordinances, no two events are the same, and the organizations might be more or less organized than others–don't hesitate to work with your city attorney to hammer out the specific details. Once the work is done, feel free to kick back with a beverage and enjoy the event!
Written by Jake Saufley. Contact the League's Research and Information Service staff by emailing research@lmc.org, or by calling (651) 281-1200 or (800) 925-1122.

This blog post conveys general information. It’s not legal advice. Please check with your city attorney before acting on this information.




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