Memorandum

City of Lawrence

TO:	City Manager Mike Wildgen
FROM:	David L. Corliss, Assistant City Manager & Director of Legal                                                    Services
Date:	June 22, 2005
RE:	State Alcohol Law Changes  -  SB 298

The 2005 Kansas Legislature enacted Senate Bill 298.  SB 298 amends several laws regulating alcohol, particularly focusing on the issue of Sunday sales.  This memorandum presents several options for the City Commission to consider in response to this legislation.

Background

The City Commission enacted Charter Ordinance No. 35  in 2003 allowing for the retail sale of alcohol on Sundays, and adopted an ordinary Ordinance No. 7667 establishing hours and certain holidays for prohibited sales.  This was based on the legal position that the State law prohibiting Sunday sales was non-uniform, and that cities may, exercising their constitutional home rule powers, adopt a charter ordinance exempting the city from such non-uniform enactments and adopt substitute provisions.  A charter ordinance similar to Lawrence’s Sunday sales charter ordinance was upheld by the Kansas Supreme Court as a valid exercise of home rule powers in its 2004 decision in State ex. rel. Kline v. Unified Government of Wyandotte County. Largely in response to approximately 20 cities enacting similar charter ordinances and the Unified Government decision, the 2005 Kansas Legislature enacted Senate Bill 298. 

Senate Bill 298:  2005 Kan. Sess. Laws Ch. 201

Essentially, SB 298 invalidates the charter ordinances effective November 15, 2005 by making the applicable State liquor laws uniform.  Further, SB 298 authorizes cities to allow for Sunday sales of packaged liquor and on certain legal holidays.  SB 298 further authorizes cities to allow for Sunday and certain legal holiday sales of cereal malt beverages (CMB) (a separate enactment scheme and an issue not addressed in the charter ordinance.)

Pursuant to the new law, the City must act affirmatively to allow both Sunday sales of packaged liquor and Sunday sales of cereal malt beverages and sales of both on certain holidays.  If the City allows Sunday sales of packaged liquor, it must also allow Sunday sales of cereal malt beverages. To do nothing means the city will not allow for Sunday sale of alcoholic liquor and CMB in the original package. An ordinance allowing Sunday sales must contain language to expand the days of sale for packaged liquor to Sunday between the hours of 12:00 noon and 8:00 p.m. (the City’s Sunday sales hours are now 11:00 a.m. to 7:00 p.m.).  The ordinance must also allow sales on Memorial Day, Independence Day, and Labor Day, however, sales on Easter are prohibited. It must also include language to expand the days of sale for CMB in the original package to allow the sale on Sunday, except for Easter, between the hours of 12:00 noon and 8:00 p.m.  The ordinance must be published once each week for two consecutive weeks.   If no protest (5% of city voters at the last Presidential election) is received within 60 days of publication, the ordinance is effective on November 15, 2005 or 60 days after the publication, whichever is later.  The Douglas County Clerk’s office reports there were 40,042 Lawrence voters at the 2004 Presidential election, thereby establishing the protest requirement to force an election on an ordinance allowing Sunday sales at 2,002  (5% of 40,042). If the City proceeds with ordinance adoption this summer and a successful petition is presented, a special election will be required and the City must pay the direct expenses for holding the special election.

The new law also allows cities to adopt an ordinance prohibiting packaged liquor sales –becoming a dry city – by February 15, 2006. If a “wet” city decides to now prohibit packaged liquor sales, any existing liquor store may sell for up to 90 days or until its license expires, whichever occurs first, before being phased out.  Citizens may petition after November 15, 2005 for an election to determine whether or not to allow packaged liquor sales in the city. After February 15, 2006, cities would need to receive a petition for an election to change the status of packaged liquor sales in the city. Without previous discussion or interest in the “wet”/”dry” issue, City staff is not pursuing this option unless Commission direction is provided.

Next Steps

As of this date, the City has 19 retail liquor stores and has 33 retail stores with CMB off-premises licenses.  Whether these establishments desire continued (retail liquor) or new (retail CMB) Sunday sales is not known.  The Commission may wish to formally solicit the views of current establishments in consideration of the Sunday sale issue. 

Recommended Action:

Staff recommends that the Commission advise existing retail packaged liquor and CMB retailers that an ordinance allowing for Sunday sales will be placed on the City Commission’s July 26 regular agenda for adoption on first reading.  Establishments and the general public would be welcome to provide comment and input.  If adopted on final reading on August 2, 2005, with publication in the following week, the ordinance – without a sufficient protest – would allow for Sunday sales beginning November 15, 2005 – the earliest date allowed under the new law. A different schedule is also possible provided that there is a 60 day period after publication of the ordinance prior to November 15 (this assumes there is a desire not to have a gap between the ineffectiveness of the City’s current charter ordinance (on November 15) and when Sunday sales will be allowed under the new statutory scheme).