It’s an annual rite known as “Alcohol Day” among insiders, and it’s taking place in Annapolis this afternoon – as the House of Delegates’ Economic Matters Committee holds a hearing on nearly 60 separate pieces of legislation affecting the alcoholic beverage control regimens of local jurisdictions across Maryland.
This year, nearly a quarter of the bills on the agenda are aimed at making changes in Montgomery County’s liquor control system, including two measures back for a return engagement after stirring controversy in recent sessions.
One proposal, which originated with the Nighttime Economy Task Force in 2013, is designed to attract outside restaurant entrepreneurs by easing residency requirements for liquor licenses; the other could pave the way for one of the nation’s leading alcoholic beverage retailers to open a local outlet, by increasing the number of licenses a single individual can hold.
Both bills – one with Sen. Richard Madaleno, D-Kensington, as the lead sponsor, the other authored by Sen. Brian Feldman, D-Potomac – also will receive a hearing in the Senate Education, Health and Environmental Affairs Committee Friday. Madaleno said he is upbeat about the prospects of his proposal being enacted this session, while Feldman said of his bill: “I’m optimistic, but this won’t be a pushover.”
One reason for Feldman’s hesitation will be evident at this afternoon’s hearing: The Maryland Licensed Beverage Association — which represents many of the state’s “Mom and Pop” retailers of beer, wine and distilled spirits — is a perennial opponent of his legislation, and its members are expected to be out in force.
Feldman’s bill would double the maximum number of so-called Class A licenses – which allow sale of alcohol for consumption off-premises – from one to two per business owner. Although it would apply statewide, the legislation is aimed at providing a potential boost to Total Wine & More, the nation’s largest privately-held alcoholic beverage retailer. The company’s Montgomery County corporate headquarters are located immediately adjacent to Feldman’s legislative district.
While the owners of Total Wine & More, David and Robert Trone, operate more than 100 stores nationwide in 15 states, current law has limited the two brothers to one store each in Maryland – now located in Laurel and Towson – while foreclosing the possibility of a retail store in the county in which the company is headquartered. Data provided by the company last year indicated that 20 to 25 percent of the sales in the Laurel store, along with another Total Wine & More outlet just across the Potomac River in McLean, Va., are generated by Montgomery County residents.
But, even if Feldman’s bill were to pass this year, it remains unclear how quickly Total Wine & More might seek to open a store here. Company officials have indicated in the past that their business model – which features 8,000 varieties of wine in each store, along with several thousand more brands of beer and distilled spirits – would be in conflict with Montgomery County’s unique liquor control system, in which the county has a near-monopoly on the distribution of alcoholic beverages.
Although an ad hoc County Council committee this week is set to begin discussing possible changes to the county’s liquor control system, any recommendations are said to be months away. That, in turn, would delay needed state legislative action on such changes until at least next year’s session of the Maryland General Assembly.
If many of the smaller retailers in the state see the expansion of enterprises such as Total Wine & More as a threat, Feldman’s bill would apply only to stores whose sales are overwhelmingly derived from alcoholic beverage sales: It would therefore not open the way for beer and wine sales in supermarkets, another perennial flashpoint in Annapolis.
If Feldman, who has been pushing his license expansion legislation since 2013, is cautiously optimistic that the third time is the charm, it is perhaps because he has picked up some influential support this year: Sen. Joan Carter Conway, D-Baltimore, who chairs the Education, Health and Environmental Affairs panel, is co-sponsoring the measure, while Del. Charles Barkley, D-Germantown, who chairs the House’s Alcoholic Beverages Subcommittee, has introduced companion legislation.
Meanwhile, Madaleno has picked up a bill first introduced last year by then-Del. Tom Hucker, D-Silver Spring, who was elected to the County Council last fall. The legislation is intended to loosen current restrictions that anyone holding a liquor license in Montgomery County be a county resident and a registered voter.
Based on findings by the Nighttime Economy Task Force that current law might be hampering the entry of non-residents seeking to open restaurants in locations such as Bethesda and Silver Spring, Hucker last year proposed allowing residents of other Maryland jurisdictions as well as northern Virginia to hold such licenses.
But that approach met with objections from Sen. Jamie Raskin, D-Takoma Park, then chair of the county’s Senate delegation. Citing the so-called Commerce Clause of the U.S. Constitution, Raskin, a law professor and constitutional expert, said the original version of the bill “raised questions about whether we could favor residents of one neighboring state, but not allow anyone from another neighboring state – like Pennsylvania or Delaware – to have the same privileges.”
This year, Madaleno has sought to resolve that issue by proposing legislation that would allow anyone outside of Montgomery County – whether in-state or out-of-state – to apply for a license, but require an 80 percent super-majority of the five-member Montgomery County Board of License Commissioners for approval. Raskin, who said he personally favors opening the granting of liquor licenses to non-residents, feels that Madaleno’s approach “would take care of any Commerce Clause privileges and immunities objections that we could face.”
At present, if a non-resident wants to open an establishment serving liquor in the county, he or she must find a local manager or resident agent to be the official license applicant. Madaleno recently cited an episode involving prominent restaurateur Bryan Voltaggio, who “wanted to open in Bethesda, didn’t have the resident agent, and when confronted with this whole thing decided ‘OK, I’m going to open across Western Avenue” in the District of Columbia.
Madaleno noted this weekend that the earlier version of his bill had received the backing of a large majority of the county’s House delegation last year, while adding, “I think there’s still strong support for it.” Referring to the constitutional questions that had been raised, he added, “It’s just a matter of talking with my Senate colleagues as to why this year’s bill is a little bit different than last year’s.”
But Barkley, a key figure in moving alcoholic beverage legislation in the House, appears to remain skeptical.
Barkley last year resisted opening up the licensing process to out-of-state residents. “Sometimes, when you open it up to out-of-staters, you have nobody who is locally responsible,” he said recently. “At least, if they’re not in Montgomery but in the state of Maryland, you have access to them.” As for the prospects for Madaleno’s bill in the House this year, Barkley said, “I don’t know where it’s going to go.”
Besides the Feldman and Madaleno proposals, the Montgomery County-related bills to be heard during today’s “Alcohol Day” hearing range from measures loosening long-time restrictions on carry-out sale of alcoholic beverages in Takoma Park – a legacy of that municipality’s Seventh Day Adventist roots – to allowing refillable wine containers of up to 34 ounces. The latter is a follow-on to last year’s law legalizing refillable “beer growlers.”
Another bill, introduced two weeks ago by the leadership of the county’s House delegation, sought to boost the county’s first micro-distillery, Twin Valley Distillers of Rockville, by letting it distribute a limited amount of its rum and vodka to local establishments, much as local micro-breweries are now permitted to do.
The bill was withdrawn late last week, after backers decided it was too late in the session to move on its own. But there may be an effort to attach a provision benefitting Twin Valley to other legislation moving through this year’s legislative session.