May 21, 2019

Fair and Festival Alcohol Guidelines

The warm weather is finally here. It is festival season again in Kentucky and many of our cities have voted to allow alcohol sales in recent years. In response to questions we have received, KLC is offering this guide for how alcohol may be sold at fairs and festivals.

KRS 243.260 sets the guidelines for a special temporary license for fairs and festivals. KRS 243.260(1) states that a special temporary license may be issued in a wet territory to any regularly organized fair, exposition, racing association, or other party, when, in the State Alcohol Board’s opinion, a necessity for the license exists. This license holds the same privileges and restrictions of a quota retail drink licensee and an NQ4 retail malt beverage licensee at the designated premises, not to exceed 30 days.  So a special temporary license is needed to be obtained from both the state and the local ABC in order for alcohol to be sold at the event.  If your city does not allow for this type of license, you may want to amend your local ABC ordinance.  

KRS 243.260(2) states that a nonprofit organization holding an NQ4 retail malt beverage license may be issued a special temporary license to sell distilled spirits and wine by the drink on the licensed premises for a specified and limited time, not to exceed 10 days. The temporary license may be issued in conjunction with any public or private event, including but not limited to weddings, receptions, reunions, or similar occasions.

KRS 243.260(3) states that the holder of a special temporary license may sell, serve, and deliver alcoholic beverages by the drink, for consumption only at the designated premises and during the dates and times for the qualifying event.

A special temporary license SHALL NOT be issued for an event in a dry or moist territory. KRS 243.260.

804 KAR 4:250 offers additional guidance as to the issuance of a special temporary license for fairs and festivals. It defines in Section One an organized civic or community sponsored event as “a public gathering of broad appeal where citizens are invited and encouraged to attend without significant cost of admission that is sponsored or acknowledged by the city or county government in which the event is conducted, including any convention, conference, celebration, pageant, parade, festival, fair, public display, commemoration, or other type of public assemblage for the benefit and enjoyment of the general public.”

This means that a city can adopt a policy stating the requirements for an interested group to obtain either sponsorship from the city, or most likely a simple acknowledgement that the event is an organized civic or community event. A city should consider what standards it will require from a health, safety, and welfare standpoint and it cannot be overstated that a city has the right to refuse to sponsor or acknowledge an event as being an organized civic or community sponsored event. By adopting a set of criteria, the city will effectively be creating a record as to what standards were not met should the decision to refuse to sponsor or acknowledge an event be challenged.

An application for a special temporary license must be completed and submitted no later than five working days prior to the date for which the license is requested. 804 KAR 4:250, Section Two. KLC strongly encourages applicants to file the required licensing paperwork as far in advance of the five-day deadline as possible to guarantee no last-minute application roadblocks due to missing or erroneous paperwork. The State Board limits applicants for a special temporary license to regularly organized fair, exposition, racing association, nonprofit organization, political function, or a for-profit individual, corporation, or organization if the license will be used in conjunction with an organized civic or community sponsored event. 804 KAR 4:250, Section Three.

Here is a link to the special temporary license application:

https://abc.ky.gov/Licensing/Licensing%20Applications/Special%20Temporary%20License%20Application.pdf

Section Four of 804 KAR 4:250 gives some guidance as to what the city should be looking for in approving the event for a for-profit applicant (not a non-profit) and the need for some documentation, such as a form from the local ABC administrator or a resolution from the city, that the city supports the event. Section Four states, “[a]n application by for-profit individual, corporate, or organizational applicants for a temporary license in conjunction with an organized civic or community sponsored event shall submit written or documentary evidence of the civic nature of the event, including promotional materials or news articles evidencing the local government's knowledge of, and support for, the event for which the applicant seeks a temporary license.”

Most importantly, microbreweries, distilleries, and small farm wineries all have special mobile privileges under their respective licenses which allow them to go to “fairs, festivals, and other types of events and sell their products by the drink or by package.” 804 KAR 4:250, Section Five.

Microbreweries

A microbrewery license shall authorize the licensee to sell unlimited amounts of malt beverage by the drink and not more than one case of packaged malt beverages produced on the premises of the microbrewery to consumers at fairs, festivals, and other similar types of events located in a wet territory as long as they meet the licensing and distribution requirements of KRS 243.157(3)(b)(2) and KRS 243.157(3)(c)(2).

Distilleries

A distiller may sell alcoholic beverages by the drink, containing spirits distilled or bottled on the premises of the distillery, to consumers at fairs, festivals, and other similar types of events located in a wet territory. KRS 243.0305(9)

Small Farm Wineries

A small farm winery license shall authorize the licensee to sell by the drink or by the package, at fairs, festivals, and other similar types of events, wine produced by it or by another licensed small farm winery, at retail to consumers if all sales occur in a wet territory, without having to obtain separate licenses. KRS 243.155(2)(e).

Your city will still have the authority to strictly define the area where the fair or festival is taking place and should enforce all applicable local and state alcohol laws within the fair or festival itself, and the surrounding area.

Special Temporary Alcoholic Beverage License

Charitable and nonprofit organizations may also obtain a special temporary alcoholic beverage auction license. KRS 243.036. This license authorizes the holder to purchase, transport, receive, possess, store, sell, and deliver alcoholic beverages to be sold by auction or raffle or consumed at charity or nonprofit events. KRS 243.036(2)(a).  A charitable or nonproft organization must also obtain the local special temporary auction license from the city where the event is to be held.  KRS 243.070(1)(j). 

The holder is also authorized to purchase, transport, receive, possess, store, sell, and deliver limited specially labeled bottles of alcoholic beverages to be sold at charity or nonprofit events. KRS 243.036(2)(b). In addition, this license allows the holder to obtain alcoholic beverages from distillers, rectifiers, wineries, small farm wineries, brewers, microbreweries, wholesalers, distributors, retailers, or any other person, by gift or donation, for the purpose of charity or nonprofit events. KRS 243.036(2)(c).

Finally, and most importantly, the license holder is authorized to receive payment for alcoholic beverages sold at events. KRS 243.036(2)(d). So, the local charity or nonprofit lucky enough to possess a bottle of Pappy Van Winkle can now auction the bottle off in a legal and authorized manner by filling out a special temporary license application: 

Each alcoholic beverage auction or raffle conducted by a charitable organization shall be subject to all restrictions and limitations contained in KRS Chapters 241 to 244 and the administrative regulations issued under those chapters. These auctions or raffles shall be authorized only on the days and only during the hours that the sale of alcoholic beverages is otherwise authorized in the city. KRS 243.036(3).

The location at which the alcoholic beverages are auctioned, raffled, or consumed under this section shall not constitute a public place for the purpose of KRS Chapter 222. Charitable or nonprofit events may be conducted on licensed or unlicensed premises. The charitable organization possessing a special temporary alcoholic beverage auction license shall post a copy of the license at the location of the event. KRS 243.036(4). A special temporary alcoholic beverage auction license shall not be issued for any period longer than thirty (30) days. KRS 243.036(5).

A distiller, rectifier, winery, small farm winery, brewer, microbrewery, wholesaler, distributor, or retailer may donate, give away, or deliver any of its products to a charitable or nonprofit organization possessing a special temporary alcoholic beverage auction license. KRS 243.036(6).

We hope that this sheds a little bit of summer sunlight on your alcohol questions related to fairs and festivals and as always, should you have any questions, please contact the KLC Department of Municipal Law and Training at 800.876.4552.