Researcher: DC Page 1 3/25/24
OLR Bill Analysis
sHB 5234
AN ACT CONCERNING THE DEPARTMENT OF CONSUMER
PROTECTION'S RECOMMENDATIONS REGARDING ALCOHOLIC
LIQUOR REGULATION.
TABLE OF CONTENTS:
SUMMARY
§§ 1, 3 & 6-8 — BUSINESS ENTITIES
Explicitly subjects specified types of business entities to the Liquor Control Act’s
provisions by defining them as “business entities” for purposes of the act; makes
conforming changes
§ 2 — FRANCHISOR OR LANDLORD PROFITS
Generally allows a franchisor or landlord to receive profits from alcoholic liquor sales from
a franchisee or tenant
§ 4 — PACKAGE STORE APPLICATIONS AND OPENING DEADLINE
Allows DCP to refuse to accept an incomplete package store application and to establish a
deadline for when a package store must open to the public for continuous operation
§ 5 — WHOLESALER TERMINATION OR ADDITIONAL
APPOINTMENT NOTICE
Allows DCP to prescribe how the copy of a notice it receives is sent when a manufacturer
or out-of-state shipper permittee wants to terminate or diminish a wholesaler’s territory or
appoint an additional one
§ 8 — DONATIONS
Expands the permittees that may donate to a noncommercial entity permittee and allows
all of them to offer tastings
§ 9 — APPLICATION-RELATED INVESTIGATIONS
Allows DCP to investigate an applicant’s backer and the suitability of a proposed permit
premises
§§ 10 & 14-16 — PENALTIES AND DCP AUTHORITY
Allows DCP to impose additional fines; extends certain existing penalties to applicants
and certain backers (e.g., disciplinary actions on the permit, fines, compromise instead of
suspension); and allows applicants whose permit application is denied to appeal
§ 11 — HOLDING TWO PERMITS
Allows (1) certain out-of-state shipper permittees to also hold an out-of-state retailer
shipper’s permit for wine and (2) a restaurant permittee to hold a Connecticut Craft Cafe
permit 2024HB-05234-R000101-BA.DOCX
Researcher: DC Page 2 3/25/24
§ 13 — PORTION OF BUILDING USED AS PERMIT PREMISES
Allows permittees where a portion of the building is not used as a permit premises to
separate the portion rather than have it effectively closed
§ 17 — CONSUMER BARS AND CONSUMER SERVIC E BARS
Allows, rather than requires, DCP to adopt regulations on consumer bars; allows DCP to
adopt regulations to allow more than one consumer service bar (i.e., place where food is
primarily ordered)
§ 18 — NUISANCE AND EMBARGOING OR CONFISCATING
CERTAIN ITEMS
Allows DCP to (1) confiscate alcoholic liquor that has been deemed a nuisance and (2)
embargo and confiscate certain items during an investigation or inspection (e.g.,
unauthorized gambling device, unauthorized pharmaceuticals)
§ 19 — IMMUNITY FOR MINORS PARTICIPATING IN
ENFORCEMENT ACTIONS
Indemnifies and grants immunity to minors who participate in DCP alcohol-related
investigations and enforcement actions
§ 20 — STATEMENT OF PURCHASER’S AS AGE
Updates a required statement by alcohol purchasers whose age is in question and provides
an electronic alternative to permittees
§ 21 — LOITERING
Generally prohibits permittees from allowing intoxicated people from loitering on permit
premises
SUMMARY
This bill makes various unrelated changes to the Liquor Control Act.
Among other things, the bill allows the Department of Consumer
Protection (DCP) to:
1. (a) refuse to accept an incomplete package store application or (b)
establish a deadline for when a package store must open to the
public for continuous operation;
2. investigate an applicant’s backer and the suitability of a proposed
permit premises;
3. impose additional fines;
4. allow more than one consumer service bar (i.e., place where food
is primarily ordered); and
5. (a) confiscate alcoholic liquor that has been deemed a nuisance, 2024HB-05234-R000101-BA.DOCX
Researcher: DC Page 3 3/25/24
and (b) embargo and confiscate certain items during an
investigation or inspection (e.g., unauthorized gambling devices,
unauthorized pharmaceuticals).
Additionally, the bill:
1. generally allows a franchisor or landlord to receive profits from
alcoholic liquor sales from a franchisee or tenant;
2. indemnifies and grants immunity to minors who participate in
DCP alcohol-related investigations and enforcement actions;
3. updates a required statement that an alcohol purchaser whose
age is in question must fill out and provides an electronic
alternative to permittees;
4. generally prohibits permittees from allowing intoxicated people
from loitering on permit premises; and
5. makes various minor, technical, and conforming changes (e.g.,
correcting internal references (§ 12)).
EFFECTIVE DATE: Upon passage
§§ 1, 3 & 6-8 — BUSINESS ENTITIES
Explicitly subjects specified types of business entities to the Liquor Control Act’s
provisions by defining them as “business entities” for purposes of the act; makes
conforming changes
Definitions (§ 1)
The bill explicitly subjects specified types of business entities to the
Liquor Control Act’s provisions by defining them as “business entities”
for purposes of the act. Under the bill, a “business entity” is any
incorporated or unincorporated association, corporation, firm, joint
stock company, limited liability company (LLC), limited liability
partnership (LLP), partnership, trust, or other legal entity.
Generally, the new definition clarifies that the Liquor Control Act
applies to certain types of entities (e.g., limited liability companies) that
are not specifically included in the act’s definitions under current law.
The bill makes conforming changes to other (1) definitions in the Liquor 2024HB-05234-R000101-BA.DOCX
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Control Act (e.g., adding business entities to the definition of
“proprietor”) and (2) prohibitions and requirements in the act, as
described below.
Prohibition of DCP Commissioner and Certain Employees in
Alcoholic Liquor Market (§ 3)
Current law prohibits the DCP commissioner and its employees who
have certain enforcement duties and responsibilities related to the
Liquor Control Act from directly or indirectly having an interest in a
partnership that deals or manufactures alcoholic liquor. The bill
expands the prohibition to include being a member or owner of a
business entity that deals or manufactures alcoholic liquor. As under
existing law, being a corporation shareholder is allowed.
In-State Transporter Permits (§ 6)
The bill specifically prohibits all business entities from transporting
alcoholic beverages into the state without an in-state transporter permit,
among other tax requirements. Current law already specifically
prohibits corporations, incorporated or unincorporated associations,
partnerships, trusts, or other legal entities from doing so.
Catering Establishment (§ 7)
The bill expands the business types that may own or operate a
catering establishment by specifically allowing joint stock companies,
LLCs, LLPs, trusts, and other legal entities to do so. By law, a catering
establishment may serve alcoholic liquor at a function, occasion, or
event on its premises under certain conditions.
Temporary Permit for Noncommercial Entity (§ 8)
Under current law, the backer or permittee conducting a fundraising
event, outing, picnic, social gathering, or auction must keep all profits
from an auction or sale of beer, spirits, or wine, and no profits may be
paid to any individual or corporation. The bill expands this prohibition
to include all business entities.
§ 2 — FRANCHISOR OR LANDLORD PROFITS
Generally allows a franchisor or landlord to receive profits from alcoholic liquor sales from
a franchisee or tenant 2024HB-05234-R000101-BA.DOCX
Researcher: DC Page 5 3/25/24
The bill generally allows a franchisor or landlord to receive profits
from alcoholic liquor (e.g., beer, wine, and spirits) sales from a
franchisee or tenant that may sell alcoholic liquor. The franchisor or
landlord may do so if he or she does not:
1. control the permit premises’ operations;
2. direct sales of alcoholic liquor from the permit premises; or
3. otherwise engage in activities indicating ownership or
proprietorship of the franchisee or tenant.
Under the bill, DCP may require a franchisor or tenant to get
approval as a backer to receive these profits. In determining whether to
give approval as a backer, DCP must consider the percentage of the
profits the franchisor or landlord receives and evaluate whether the
franchisor or landlord may:
1. supervise, hire, retain, or discharge those employed on the
permit premises;
2. set menu selections or prices or establish hours or days of
operations for the permit premises;
3. decide whether or when a patio may be used on the permit
premises;
4. order or accept alcoholic liquor deliveries for the permit
premises;
5. arrange advertising for the permit premises, including
advertising on the Internet or through social media;
6. dictate decorations for the permit premises;
7. access banking accounts related to the permit premises;
8. incur debt on behalf of a permit backer; and
9. enter into agreements with other entities on a backer’s behalf. 2024HB-05234-R000101-BA.DOCX
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§ 4 — PACKAGE STORE APPLICATIONS AND OPE NING
DEADLINE
Allows DCP to refuse to accept an incomplete package store application and to establish a
deadline for when a package store must open to the public for continuous operation
The bill allows DCP to (1) refuse to accept any incomplete package
store permit application or (2) establish a deadline for when a package
store permit applicant must open to the public for continuous operation.
Under the bill, if a package store applicant does not meet the DCP-
established deadline, the department may deem the application
withdrawn and expired to prevent placeholding (i.e., applying for the
last available package store permit in a town and failing to open before
the deadline). By law, DCP may issue one package store permit for every
2,500 residents as determined by the most recent census.
§ 5 — WHOLESALER TER MINATION OR ADDITION AL
APPOINTMENT NOTICE
Allows DCP to prescribe how the copy of a notice it receives is sent when a manufacturer
or out-of-state shipper permittee wants to terminate or diminish a wholesaler’s territory or
appoint an additional one
Under current law, if a manufacturer or out-of-state shipper
permittee wants to terminate or diminish a wholesaler’s territory or
appoint an additional one, it must send written notice by certified or
registered mail, return receipt requested, to the wholesaler, and a copy
must be simultaneously sent to DCP. The bill instead allows DCP to
prescribe how the notice is sent.
Under the bill, the actions where this is applicable are when a
manufacturer or out-of-state shipper permittee seeks to:
1. terminate or diminish a wholesaler permittee’s territory after six
months or more or
2. appoint one or more additional wholesalers to distribute within
the territory (a) alcohol, spirits, or wine or (b) beer.
The bill requires that the additional beer wholesaler notice include
the name of each additional wholesaler and give a detailed description
of the just and sufficient cause necessitating the appointment. 2024HB-05234-R000101-BA.DOCX
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§ 8 — DONATIONS
Expands the permittees that may donate to a noncommercial entity permittee and allows
all of them to offer tastings
Existing law allows a manufacturer permittee, a wholesaler
permittee, or package store permittee to donate to a temporary liquor
permittee for a noncommercial entity, any beer, spirits, or wine they
manufacture, distribute, or sell, respectively.
The bill expands the permittees that may donate and allows all of
them to offer tastings for the noncommercial entity permittee. The
expanded permits include those for restaurants, cafes, out-of-state retail
shippers, and out-of-state shipper’s for alcoholic liquor, for wine, and
for beer.
§ 9 — APPLICATION-RELATED INVESTIGATIONS
Allows DCP to investigate an applicant’s backer and the suitability of a proposed permit
premises
The bill allows DCP to investigate (1) whether a permit should be
issued to an applicant’s backer (i.e., proprietor) or (2) the suitability of
the proposed permit premises. Existing law allows DCP to investigate
whether a permit should be issued to an applicant.
§§ 10 & 14-16 — PENALTIES AND DCP AUTHOR ITY
Allows DCP to impose additional fines; extends certain existing penalties to applicants
and certain backers (e.g., disciplinary actions on the permit, fines, compromise instead of
suspension); and allows applicants whose permit application is denied to appeal
DCP Reasonable Belief of Certain Actions (§ 10)
The bill allows DCP to impose a fine of up to $1,000 for instances
when the department reasonably believes an applicant or permittee has
committed certain actions (e.g., used alcohol in excess, willfully made
false statements in a material matter, or was convicted of violating
liquor laws). Existing law allows DCP to suspend, revoke, or refuse to
grant or renew a permit for these actions.
Under current law, a backer is subject to the same disqualifications as
a permit applicant or permittee for these actions. The bill expands the
actions to any disqualifications under the Liquor Control Act and its
regulations and applies it to an applicant’s backer. 2024HB-05234-R000101-BA.DOCX
Researcher: DC Page 8 3/25/24
Various DCP Disciplinary Actions (§ 14)
Existing law allows DCP to revoke, suspend, or place conditions on
any permit or provisional permit or impose a fine of up to $1,000 per
violation for cause as determined by a hearing. The bill extends these
disciplinary actions to an applicant, backer, or proposed backer.
Current law requires the department to give 10 days’ written notice
of the hearing, setting the particulars required in the civil pleadings and
the charges for the proposed disciplinary action. The bill instead
requires that the notice be provided in keeping with the Uniform
Administrative Procedure Act (UAPA). Among other things, the UAPA
requires that the parties be given reasonable notice that includes a short
and plain statement of the matters asserted.
Under the bill, withdrawing an application does not prevent DCP
from suspending or revoking the permit. (It is unclear how DCP could
suspend or revoke the permit if an application is withdrawn and no
permit is issued.)
Compromise in Lieu of Suspension (§ 15)
The bill allows DCP to accept an offer to compromise, in a certain
amount considering the circumstances, instead of suspending the
permit from an applicant and his or her backer. Existing law allows the
department to make this offer to a permittee or backer.
Appeals for Denied Permits (§ 16)
Under existing law, applicants for a permit whose application is
refused may appeal the decision under the UAPA procedures. The bill
also allows an applicant whose permit is denied to do so.
§ 11 — HOLDING TWO PERMITS
Allows (1) certain out-of-state shipper permittees to also hold an out-of-state retailer
shipper’s permit for wine and (2) a restaurant permittee to hold a Connecticut Craft Cafe
permit
By law, with certain exceptions, permittees of one class (i.e., tier) are
not allowed to be a permittee of another class (CGS § 30-48(a)).
The bill creates additional exceptions by allowing the following: 2024HB-05234-R000101-BA.DOCX
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1. an out-of-state shipper’s permittee for alcoholic liquor other than
beer, an out-of-state winery shipper’s permittee for wine, or an
out-of-state shipper’s permittee for beer to also hold of an out-of-
state retailer shipper’s permit for wine; and
2. a restaurant permittee to also hold a Connecticut craft cafe permit
if the permit premises are located at two different addresses.
§ 13 — PORTION OF BUILDING USED AS PERMIT PREMISES
Allows permittees where a portion of the building is not used as a permit premises to
separate the portion rather than have it effectively closed
Current law allows an alcoholic liquor permittee to use a building
where a portion is not used as the permit premises only if the applicant
signs an affidavit affirming that access from the other part of the
building to the permit premises is effectually closed, unless DCP allows
otherwise. The bill instead requires that the respective portions be
separate. It correspondingly allows DCP to (1) examine the premises to
see that the portion is effectively separate and (2) designate the manner
of the separation. (Under current law, the department may do these
things with respect to closings.)
Under current law, if a new way of accessing the permit premises is
opened after the permit is issued and without DCP’s consent endorsed
on the permit, the permit is forfeited and is null and void, with or
without notice. The bill eliminates the permit forfeiture penalty. As
under existing law, permittees and backers that open a new
unauthorized means of access are subject to the general permit penalty
provision that allows DCP to revoke, suspend, or place conditions on a
permit or impose a fine of up to $1,000 per violation after a hearing for
which written notice must be given (CGS §§ 30-55 & -113).
§ 17 — CONSUMER BARS AND CONSUMER SERVIC E BARS
Allows, rather than requires, DCP to adopt regulations on consumer bars; allows DCP to
adopt regulations to allow more than one consumer service bar (i.e., place where food is
primarily ordered)
Current law requires DCP to adopt regulations to allow more than
one consumer bar in any premises where on -premises alcohol
consumption is allowed. The bill instead makes adopting regulations 2024HB-05234-R000101-BA.DOCX
Researcher: DC Page 10 3/25/24
permissive. By law, a consumer bar is a counter, with or without seats,
where a patron may consume or purchase alcoholic liquor.
The bill also allows DCP to adopt regulations to allow more than one
consumer service bar in any premises where on-premises alcohol
consumption is allowed. A consumer service bar is a counter without
seats where a patron can buy alcoholic liquor, but its main function is
for buying food.
The bill allows alcoholic liquor to be served to a patron across the
consumer service bar but prohibits a patron from sitting or consuming
the alcohol or food at the bar. It allows minors (i.e., those under age 21)
to stand at the consumer service bar to order and receive food.
The bill prohibits a premises from having both a self-pour
endorsement and a consumer service bar endorsement.
§ 18 — NUISANCE AND EMBARG OING OR CONFISCATING
CERTAIN ITEMS
Allows DCP to (1) confiscate alcoholic liquor that has been deemed a nuisance and (2)
embargo and confiscate certain items during an investigation or inspection (e.g.,
unauthorized gambling device, unauthorized pharmaceuticals)
Nuisance
The bill allows the DCP commissioner or his authorized agent to
confiscate alcoholic liquor that has been deemed a nuisance (i.e.,
alcoholic liquor, along with its container, that the owner or keeper
intends to be illegally manufactured or sold).
Embargo
The bill allows the DCP commissioner or his authorized agent,
during an inspection or investigation of a permittee, to embargo (i.e.,
affix a tag or other appropriate markings) certain items that violate or
are suspected to violate the Liquor Control Act. The commissioner or
agent must give prior written notice to the permittee disclosing the
violation, or suspected violation, and embargo. The commissioner or
agent may do so if he or she has probable cause to believe that the
permittee possesses the embargoed item, or it is on the permit premises. 2024HB-05234-R000101-BA.DOCX
Researcher: DC Page 11 3/25/24
The bill allows DCP to embargo the following:
1. unauthorized gambling devices, illegitimate lottery tickets, or
illegal gambling or bookmaking equipment;
2. driver’s licenses or identification cards or imitations that a person
uses, other than the person’s own driver’s license or
identification card, to unlawfully (a) enter, or try to enter, the
premises, or (b) purchase, or attempt to purchase, alcoholic
liquor;
3. pharmaceutical drugs offered or made available for sale by any
unauthorized individual;
4. high-THC hemp produc ts or synthetic cannabinoids
(presumably, if the permittee had an intent to sell); and
5. tobacco products sold without a stamp or by any person other
than an authorized dealer.
The bill prohibits anyone from removing or disposing of any
embargoed item, by sale or otherwise, unless the commissioner or his
authorized agent first give written consent to do so.
Confiscation
In addition to any embargo, the bill allows the DCP commissioner or
his authorized agent to confiscate any driver’s license or identification
card or their imitations for the same reasons as for being embargoed.
The commissioner or agent must give the permittee a written inventory
of the items that have been confiscated along with a narrative
description for the confiscation.
Within two days after any confiscation, the commissioner or agent
must submit to the law enforcement agency with jurisdiction over the
permit premises a written notice disclosing the confiscation.
Hearing
Under the bill, within 15 days after a permittee receives written notice
of the violation, embargo, or confiscation, the permittee may submit a 2024HB-05234-R000101-BA.DOCX
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written request to DCP for a hearing to remove the embargo or revoke
the confiscation. The commissioner must hold a hearing within 45 days
after the department receives the request, and the hearing must be held
in accordance with the UAPA.
Liability
Under the bill, if the embargo is removed or confiscation is revoked,
neither the commissioner or the state may be held liable for any
damages incurred for any injury sustained because of the embargo, as
long as a court with proper jurisdiction finds there was probable cause
to impose the embargo or make the confiscation.
§ 19 — IMMUNITY FOR MINOR S PARTICIPATING IN
ENFORCEMENT ACTIONS
Indemnifies and grants immunity to minors who participate in DCP alcohol-related
investigations and enforcement actions
The bill grants immunity from personal liability to minors who
participate in alcohol-related investigations or enforcement actions
initiated by, or operated in conjunction with, DCP. It does so by
deeming them to be state officers under statutes relating to immunity
and indemnification for state officers and employees.
Under the bill, the minors are not liable for damage or injury that is
caused by actions they take at DCP’s direction related to the
investigation or enforcement action as long as they are not wanton,
reckless, or malicious (CGS § 4-165).
The bill also requires the state save harmless and indemnify these
minors from financial loss and expense from a claim, demand, suit, or
judgment from alleged negligence or deprivation of a person’s civil
rights, or other acts or omissions causing damage or injury. This
provision applies as long as the minor did not act wantonly, recklessly,
or maliciously (CGS § 5-141d).
§ 20 — STATEMENT OF PURCHASER’S AS AGE
Updates a required statement by alcohol purchasers whose age is in question and provides
an electronic alternative to permittees
The bill updates a required statement from alcohol purchasers whose 2024HB-05234-R000101-BA.DOCX
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age is in question. It does so by (1) revising the statutory form to include
those born in the 2000s and (2) providing an electronic alternative to
permittees.
Existing law requires permittees to print these statements and furnish
them to DCP for approval. The bill also allows the permittee to
electronically display these forms on electronic devices capable of
allowing the person whose age is in question to electronically complete
and sign the statement. Under the bill, a statement that is completed and
signed electronically must be stored in an electronic medium
immediately accessible from the permit premises, alphabetically
indexed, and in an electronic format that is accessible to DCP or any of
its agents or inspectors at any reasonable time.
By law, paper statements must be kept on file on the permit premises,
alphabetically indexed, in a suitable file box and available for inspection
at any reasonable time.
§ 21 — LOITERING
Generally prohibits permittees from allowing intoxicated people from loitering on permit
premises
Existing law prohibits alcoholic liquor permittees or their employees
from allowing certain groups of people (e.g., minors) to loiter on the
permit premises or be in the room where alcoholic liquor is kept or
served. The bill extends this prohibition to an intoxicated person.
It also extends to an intoxicated person existing law’s exemption that
allows unaccompanied minors to stay on the permit premises while
waiting for and consuming food prepared on the permit premises. This
exemption applies to barrooms with only one room and premises with
no effective separation between a barroom and dining room.
COMMITTEE ACTION
General Law Committee
Joint Favorable Substitute
Yea 22 Nay 0 (03/07/2024)