Full slate of liquor license changes on agenda

Commission to take up slew of rule change proposals Wednesday

The Department of Liquor Control is proposing rule changes that include fewer requirements for nonprofit special events and allowing restaurants to apply for liquor licenses before they open.

The liquor commission will take up the changes during a public hearing at 10 a.m. Wednesday at the Department of Liquor Control’s conference room, 2145 Kaohu St., Room 108.

One of the changes would allow restaurant owners to apply for liquor licenses before they open. Previously, restaurants had to apply for a general dispenser license and show that at least 30 percent of their gross revenue came from food sales during the first year, Liquor Control Director Glenn Mukai said during a commission meeting on Oct. 5.

With the changes, applicants could receive Class 2 restaurant licenses if they produce an affidavit stating that at least 30 percent of the establishment’s revenue will come from food sales. They also would have to submit monthly reports on food and liquor revenues throughout the first year.

The new rules also would allow a restaurant license to be transferred to another applicant taking over the same location. The new owner also must agree to bring in at least 30 percent of gross revenue from food sales and submit monthly reports on food and liquor revenues.

“I think they’re both good rules, actually,” Josh Phillips, general manager at Captain Jack’s Island Grill in Lahaina, said Thursday. “If you have your ducks in a row and you’re ready to open up a restaurant, . . . there should be no reason why you shouldn’t be able to acquire the permit before.”

Phillips said the change to allow permit transfers also makes sense, because “it makes sales of restaurants go a lot smoother as far as the changeover process.”

Currently, a business owner who takes over a restaurant has to apply for new permits, he said.

Other rule changes could create a lot less paperwork for nonprofits planning special events.

The commission agreed to ease the rules last year after some nonprofits complained that department requirements for special licenses were too strict — including requiring board members to list all employment since age 18 and any traffic tickets of more than $25, as well as undergo a background check and fingerprinting.

The department’s new rules for Class 10 special licenses allow the commission to “waive any hearings, fees, notarization of documents, submission of floor plans and other requirements.” The special license would allow fundraising events to auction liquor in sealed or covered glass, ceramic or metal containers, or services that provide liquor.

No background check would be required, though nonprofit applicants would have to provide a current list of officers and directors. Proof of liquor liability insurance also would be required unless waived by the commission.

Nonprofits could ask the commission to waive requirements for temporary licenses that would cover liquor sales at one-day fundraising events. No criminal history record checks would be required for a temporary permit.

Changes to other license categories include:

• Class 4 retail dealer licensees would be allowed to sell up to one half-gallon of beer, malt beverages or cider in sealed containers provided by the patron. Current rules do not specify the capacity of beverages that retail dealers can sell.

• Class 14 brewpub and Class 18 small craft producer pubs would be allowed to have minors on the premises, so long as they were accompanied by a parent or legal guardian.

Other proposed changes would eliminate the need for federal tax clearance for liquor license applications and renewals. Only state tax clearance would be required.

Liquor licenses will not be issued to minors, any person who has been convicted of a felony and not pardoned, or any other person the commission does not deem fit for a license. The rules also state that licenses cannot be issued “to any partner in a partnership, or a corporation, trust or association, the officers, directors or any other person of which, or any of them, would be disqualified” under the rules.

Proposed changes add that when it comes to “publicly traded companies or entities ultimately solely owned by a publicly traded company, only the officers and directors designated as primary decision makers shall be considered to determine disqualification.”

Liquor rules have stirred controversy over the past two years, as community members and nonprofits have protested rules that included 24-hour alcohol sales and requirements for special events. Community members also have complained that the commission has failed to properly notify the public before making major changes.

Council members called for more oversight of the department and commission Monday following the release of an audit that was critical of the department and commission. The audit’s 54 recommendations included having the mayor and council conduct an annual review of the commission, holding Sunshine Law training for liquor commissioners and updating the department’s operations manual.

Council Member Don Guzman said Thursday that he hoped the department and commission would bring the changes to the council for review, even though it’s not required to do so, given that so many changes are being proposed.

“In my mind, one public hearing isn’t enough,” Guzman said. “They need to go through the whole gamut of allowing the council to look at some of the policies and rule changes they’re proposing.”

The liquor department sets policy for the department, independent of the mayor and County Council. The mayor and council nominate and approve commission members.

A question to the department on Thursday was answered with an emailed statement saying that the proposed rules are due to changes at the state level and directing The Maui News to the minutes of an Oct. 5 commission meeting.

* Colleen Uechi can be reached at cuechi@mauinews.com.