ABC Board has the right to write the regulations without any objection from the Board of Commissioners. Mr. Chairman, although the "blue ribbon committee" which was appointed by the Commissioners has disbanded, I asked Mrs. Henry Gichner, of 5160 Linnean Terrace NW., Washington, D.C., who was chairman of the "blue ribbon committee," to make a review of H.R. 8920 and advise me of her findings. Mrs. Gichner is well known in Washington and I think everyone will admit that she has only the public interest at heart but at the same time is qualified to determine qualified to determine whether or not this is fair legislation. Mr. Speaker, I herewith ask unanimous consent to insert her letter of November 1, 1963, to me in the RECORD at this point.

WASHINGTON, D.C.,
November 1, 1963.

Hon. WILLIAM L. SPRINGER,
House Office Building,
Washington, D.C.

MY DEAR MR. SPRINGER: I am writing to you only as an interested citizen of the District of Columbia. I happen to be a member of the Citizens Council for the District of Columbia. I was also chairman of the special committee, appointed by the Commissioners of the District in April 1962, to "conduct a cooperative study of the Alcoholic Beverage Control System." The report of this so-called blue-ribbon committee was submitted to the Commissioners of the District of Columbia in July 1962.

Certain provisions of the new bill, H.R. 8920, as reported in the newspapers, seem to

ill advised and possibly dangerous. Upon study of the bill, I would like to make the following comments:

1. I object strongly to the provision which sets up the ABC Board as an independent agency. Today, the philosophy of those interested in the welfare of the District of Columbia has expressed itself as favoring centralization of responsibility under the Board of Commissioners. To remove one of

the important agencies, namely the ABC Board, from their supervision and jurisdiction seems a bad mistake. I would also urge that the power to prescribe hours and/or days of sale of alcoholic beverages should be

reserved to the Commissioners of the District of Columbia, rather than assigning it to the ABC Board.

2. The provision with regard to limitation of advertising, (d) of section 38, is much too restrictive and should be eliminated. This kind of restriction (supply available for sale at a given time) is applied to no other industry, nor is the provision that an individual customer may purchase an unlimited amount of the same article at any time. Sellers of other goods have always been able to "limit quantity for sale" and have so stated in their advertising. This whole paragraph is unfair to the dealers, and seems to me an artificial restraint of the principle of free enterprise.

3. I do not understand the provision (7) of paragraph (g), section 38. How can one retailer sell to another retailer "for purposes of accommodation" when (5) of section 11 states that "such license shall not authorize the licensee to sell other licensees for resale." Are these two statements inconsistent?

4. Section 18 deals with, among other things, what is understood to mean display articles and equipment. In the old law, the amount of such article was specified at $10. This amount was unrealistic, especially since it was understood to cover the cost of extravagant displays, obviously costing much more. It has now been proposed to substitute $15 for the old $10. This,

too, is an unrealistic figure, and as time goes on and costs increase, may prove to be an even more impossible figure in the future. It is suggested that the determination of the cost of display articles, etc. and the limitation thereof be left to the discretion of the ABC Board, who would have the right to change such specification from time to time, without having to go through the labors of having a congressional bill introduced for such purpose.

I have not studied the bill carefully in all detail. However, the portions I have reviewed seem to me to need amendment or

revision. The Commissioners of the District of Columbia and the Justice Department voiced objections to portions of the bill introduced last year. Some of these objections have been met and corrected. Others are still present in H.R. 8920, though couched in different language or hidden in unclear terms.

If the Congress is honestly concerned with the welfare of the District of Columbia and the enactment of legislation to help make it a "model" community, then the bill to regulate the alcoholic beverage industry should safeguard the interests of the entire community: the government (the Commissioners), the public and the members of the industry.

Yours very truly,

Mrs. HENRY GICHNER.

I feel that Mrs. Gichner does represent community sentiment. I feel sure that if the "blue ribbon committee" were in operation today that the findings which Mrs. Gichner has made of her own accord would be unanimously ratified by the "blue ribbon committee."

Mr. Chairman, the U.S. Department of Justice has been opposed to this bill consistently. The author has tried in various ways to work around these objections. He has not been successful. I ask unanimous consent at this point to insert in the RECORD a letter of the Department of Justice of November 5, 1963, signed by Nicholas deB. Katzenbach, Deputy Attorney General, with reference to this legislation and especially that provision of this legislation which attempts to remove the Alcoholic Beverage Control Board from the jurisdiction of the District of Columbia.

U.S. DEPARTMENT OF JUSTICE, OF-
FICE OF THE DEPUTY ATTORNEY
GENERAL,

Washington, D.C., November 5, 1963.
Hon. WILLIAM L. SPRINGER,
House of Representatives,
Washington, D.C.

DEAR CONGRESSMAN SPRINGER: This is in response to your request for the views of the Department of Justice concerning the committee print dated September 11, 1963, showing subcommittee amendments to H.R. 2036, a bill to revise the District of Columbia Alcoholic Beverage Control Act.

Although the committee print has been drawn to meet the specific objections previously expressed by the Department of Justice to H.R. 2036, we still are not aware of the need for this legislation.

A question has been raised concerning the desirability of making the Alcoholic Beverage Control Board an independent agency with the power to promulgate rules and regulations relating to the alcoholic beverage trade in the District of Columbia (secs. 4 and 7). Existing law vests in the Board of Commissioners of the District of Columbia the powers which the print would give to the Alcoholic Beverage Control Board. (Title I, appendix, D.C. Code, 1961 ed., pp. 81, 103, and title 25, D.C. Code, 1961 ed., secs. 104 and 107.)

In view of the fact that almost all governmental agencies of the District of Columbia are not independent, but are subject to the control of the Board of Commissioners, and the creditable way in which the Board of Commissioners has administered existing law (free of the liquor scandals which have arisen in other metropolitan areas), we see no reason to remove the Alcoholic Beverage Control Board from its control.

In addition, we note that section 38(d) of the print would prohibit a licensed wholesaler or retailer who advertises or offers to sell an alcoholic beverage at a "special" or "unusual" price from limiting the quantity of the beverage that each customer may purchase. We are unaware of the need for this provision which would inhibit the business judgments of the licensees affected.

I hope that our comments will be of assistance to you, and I apologize for our delay in responding to your request. Sincerely yours,

NICHOLAS DEB. KATZENBACH,

Deputy Attorney General. As Mr. Katzenbach so well points out: Almost all governmental agencies of the District of Columbia are not independent, but are subject to the control of the Board of Commissioners, and the creditable way in which the Board of Commissioners has administered existing law (free of the liquor scandals which have arisen in other metropolitan areas), we see no reason to remove the Alcoholic Beverage Control Board from its control.

FEDERATION OF CITIZENS ASSOCIA-
TIONS, OF THE DISTRICT OF Co-
LUMBIA,

Washington, D.C., November 6, 1963.
Hon. WILLIAM L. SPRINGER,
House of Representatives Committee on the

District of Columbia, Washington, D.C. DEAR MR. SPRINGER: The above-entitled District of Columbia Alcoholic Beverage Control Act introduced only on October 12, 1963, is the omnibus successor, ingeniously diluted, of several bills supported by the alcoholic beverage industry for the District of Columbia. Similar legislation has been considered by many citizens' associations in the District and by the Federation of Citizens Associations and they have urged that it not be passed.

In its present form there has been no opportunity for the associations to give detailed consideration to the bill and I am therefore obliged to rely on the past expressions on the same subject matter. It is obvious from a reading of the present bill that its basic purpose is to remove from the control of the Commissioners of the District of Columbia not only the entire wholesale and retail liquor business in the District, but also the control of the police, fire, welfare inspections and other members when engaged in any investigation or prosecution which is covered by this comprehensive act. This

is bad government. In the absence of local suffrage it is even more imperative that the responsibility for the control of this debatable industry must be concentrated in its basic essentials in the District Commissioner.

However disguised, the proposed act would utilize severe penalties and suspension or revocation of licenses for the independent, competitive pricing of alcoholic beverages in the District. This is price fixing no matter how sugar coated and is devised to give monopolistic control to manufacturers and distributors of alcoholic beverages.

The act proposed unrealistic and ridiculous limitations on the importation of alcoholic beverages other than through the monopoly licensees. For example, section 34(b) makes it unlawful for a common carrier to transport into the District wine, spirits, or beer

in a quantity in excess of 1 gallon during 1 calendar month for delivery to any one person in the District other than the holder of a manufacturer's, wholesaler's, or retailer's license. Such action is made a crime and with its enforcement would require every trucker or other common carrier to maintain a fantastic complexity of records. Section 37, while purporting to relate to false advertising is so vague in its scope as to render unlawful the publication of any publisher, radio broadcast licensee, or other advertising medium unless he maintains the names and addresses of every advertiser and the full text of the advertisement and first reaches a conclusion as to what would be a false advertisement. Particular reference is made to paragraph 38 (d) on page 65 of the bill in this connection.

We wonder precisely the reaction of your constituents when they become aware by police prosecution of their violation of section 27(a) providing that "no person shall in the District of Columbia drink any alcoholic beverage in any public space with respect to which a license has not been issued under this act; ** ** I question that any average citizen could conceivably become aware of the risks which he is assuming.

The sheer inadvisability of jamming through this legislation without thorough understanding by the Members of Congress is so apparent that we cannot believe it will occur, but we sincerely hope that you will be able to convince the Congressmen that as residents of the District for most of the year they can't afford such an absurd and unbalanced act.

Sincerely yours,

WILLIAM A. ROBERTS, President, Federation of Citizens Associaations.

Mr. Chairman, in my opinion, this legislation is one of self-interest for the liquor industry in the District of Columbia. In the 5 years that I have been a member of the House District Committee this appears to me the most flagrant bill of self-interest that I have known anything about. Every disinterested party, including the Department of Justice, the District Board of Commissioners, the three community newspapers, the Federation of Citizens Associations of the District of Columbia, and innumerable citizens who have made their views known to me by letter and telephone, have been opposed to this bill.

Practically all of the effort to enact this bill on the House side of Congress has been through the "liquor lobby." For the past several weeks the Secretary of the District Liquor Association has been practically living in the Halls of Congress. If he were here any more than he has been I think it would be necessary for the House Administration Committee to rent him a separate room in the building. He has done almost everything except sleep here. I know that many of you have had him constantly on your doorstep.

Generally speaking, I think that the newspapers do express a certain conscience for the District of Columbia. I do not mean by that that the newspapers are always right. However, when all three of the newspapers in the District of Columbia, that is the Washington Post, the Evening Star, and the Daily News are against this bill, I am sure that most Members realize there certainly must be some very questionable provisions in this liquor bill.

Here is what the Washington Post, in an editorial of October 29, titled "The Liquor Lobby Again" said:

The new bill arrives just as a commission of inquiry in New York has recommended that the State abandon its "price maintenance" laws for liquor because they generate indefensibly high profits for the dealer at the consumer's expense. The bottle sold here for $3.83 costs $4.99 in New York.

The bill repeats the earlier attempt to give the District's Alcoholic Beverage Control Board full independence of the District Commissioners' supervision. In the past, the Board has consistently shown sympathy to the idea of price fixing and the Commissioners have consistently opposed it. The purpose of this cry for independence is wholly suspicious.

Those Members who do not favor turning

liquor regulation over to the liquor industry will oppose the bill.

The Evening Star, in an editorial of June 15, 1963, has this to say:

One of its worst features would entirely remove the Alcoholic Beverage Control Board, with all the vast pressures which buffet that agency, from any supervisory check or control by the District Commissioners. Another would prohibit retailers from selling liquor below a tediously detailed formula of the retailer's costs, thereby ending not only loss-leader advertising but bargains for the prudent shopper. Still another questionable section would add a lot of muddy and totally unnecessary verbiage to the existing controls against false advertising. There are others. At an initial hearing the other day, the Commissioners gave this measure a welldeserved lambasting. We trust, in the lamentable event hearings are resumed, that

it will continue to receive more of the same.

The Washington Daily News, in an editorial of October 31, 1963, entitled "Here We Go Again," had this to say of the bill:

Once again we have before the House a bill *** to revamp the District's liquor laws * * against the best advice of the District Commissioners and to the undoubted disadvantage of citizens who long

have enjoyed comparatively low prices here.

This time it's somewhat more sedately

dressed, but it remains essentially the same act *** an ill-considered and unnecessary move in the direction of permitting liquor wholesalers to regulate prices to their own gain.

This bill, for instance, would set up the Alcoholic Beverage Control Board as an in

dependent agency, its members appointed by

the District Commissioners, to be sure, but their actions and powers removed from whatever supervision they now receive.

As it is, the Alcoholic Beverage Control Board is hardly noted for a penchant to hold its actions up to public view. It has been noted, however, for its past inclination to view kindly the liquor industry's philosophy of price maintenance. Regardless of the

honest convictions of the Board, to permit it to completely draw the blinds on its day-to

day activities is to invite unbridled mischief at some future date.

When the bill comes up on the floor, it would be well to force a rollcall vote. Then everyone will know just who believes in competition and who does not.

I believe that these editorials and news stories from which I have quoted do reflect much of the feeling about the dangers of allowing this bill to be passed and to become law. The Members of Congress are the only ones who can guard the public interest and look after the welfare of all of the citizens of the District of Columbia. In my opinion, one of

the ways in which the welfare of the District can be protected is to vote this bill down.

Mr. MULTER. Mr. Chairman, I yield myself such time as I may consume.

Mr. CHARLES H. WILSON. Mr. Chairman, will the gentleman yield for a question?

Mr. MULTER. Surely.

Mr. CHARLES H. WILSON. I have been rather surprised at the discussion which has taken place so far by the gentlemen on the other side of the aisle. One of the strong cases which has been emphasized is the fact that this legislation has been defeated on prior occasions and, therefore, this is sufficient reason not to consider it seriously.

As a new Member of Congress, I can recall about 10 or 12 years ago in the State of California that we had a great liquor scandal. The way in which it was straightened out was to adopt the ABC Board form of control. They took over complete authority of this important activity.

Is not this similar to what is done in most of our States, to have a board of autonomous control?

Mr. MULTER. This is exactly the same as in every jurisdiction of the United States. In each of the 34 States where they have a liquor board or a liquor authority or a commissioner, one person or one board or one commissioner has the sole and complete jurisdiction.

In the monopoly States the States have full and complete control and again under a single board or official.

May I indicate, apparently other Members may have gotten the same idea as the gentleman did, that this bill has been before the House and has been defeated, or before the committee and has been defeated. This bill has never been voted down by a committee or by the House. The so-called blue ribbon com

mittee that was appointed did have the effect of delaying action in the last Congress until it was too late to bring the bill out. The bill has not been voted down in the Committee, and it has not been before the House.

Mr. CHARLES H. WILSON. In connection with the blue ribbon committee, are they residents of the District or are they from the outside; does the gentleman know?

Mr. MULTER. I think it is safe to say they came from the metropolitan area of Washington. of Washington. Not all of them came from the District.

May I say this so called blue ribbon committee was supposed to represent the community. It came into being to give us their views. Whether they had any meetings or not, I do not know. They did not conduct any hearings. They did send up a report for the record which came to us over the signature of the chairman of that committee and was written for her and for her committee by an assistant corporation counsel under the direction of the District Commissioners. It was not the views at all of the so-called citizens' committee. Despite that, we considered them item by item, and you have not heard and will not hear on the floor today a single word in support of any of their recommendations not already in the bill. All

of their good recommendations are now in the bill. They were in the bill when we had it before the full committee in the last session. The only thing you find them talking about is taking away from the Commissioners their right to review the actions of the Board. I say the Board should act in the first instance and if they do anything wrong an appeal to the courts should be had.

Mr. SPRINGER. Mr. Chairman, will the gentleman yield?

Mr. MULTER. I yield to the gentleman from Illinois.

Mr. SPRINGER. I think there is some dispute there. I do not believe all of the things are in the bill that were recommended by the blue ribbon committee. I think the letter that was written speaking about price control is one that was strongly objected to in the original bill.

Mr. MULTER. Let me take up that point.

When the bill was first introduced in the last session of Congress there was a price-fixing provision in it. But it is not in there now, and it was not in it when it came before the full committee. We took that out. We met the objections of the Attorney General. There is no price fixing of any kind whatsoever in this bill. There is a provision against false, misleading, and fraudulent advertising, and that is what the newspapers are objecting to.

Mr. SPRINGER. I suggest the gentleman read the report in full. I did not put those in the record because I believe under the rules of the House the distinguished gentleman's name was mentioned, so I did not include that. If you will read the editorials cited, one of the real objections is that this is a pricefixing formula.

Mr. MULTER. That is their charge, but it is a false charge.

Mr. SPRINGER. I think the gentleman has a right to say that, but I disagree with him. I believe the newspapers are reasonably correct. I do not wish to dispute my chairman. I respect him, but I want to be sure there is no misunderstanding as to what is in the editorials.

Mr. MULTER. Let me make this point about the publishers: In the last session the publishers association sent up its representatives to testify. The very day they were testifying the newspapers were carrying these false and fraudulent advertisements. We confronted them with it after they said "We, the newspapers, have a right to censor these ads, and we do keep out the bad advertising." We showed them the ads some of which are in the record. This year they did not come in for examination. They merely sent in a statement, and the very day the statement came in the newspapers again carried these false, fraudulent, and misleading advertisements.

include price fixing. I want such as surances as I can get on this point from the gentleman from New York.

Is the gentleman telling the House categorically that under this bill the Alcohol Beverage Control Board established under this legislation would have no power whatsoever to fix prices?

Mr. MULTER. I say this as unequivocally and as categorically as I can say it-the Board has no power, and nothing in this bill will give the ABC Board or the Commission the right to fix prices on anything. Even though it was not necessary, we went so far as to put a provision in the bill to permit joint advertising, because there came up the question that under the guise of regulating joint advertising they might fix prices. So we put in a provision that nothing in this bill shall prohibit joint advertising.

Mr. DINGELL. The reason I am concerned is I note on page 38 of the report in the part dealing with changes in the law as required to be printed under the Ramseyer rule that it says:

The Board is hereby authorized and directed to prescribe such rules and regulations as it deems necessary

(1) relating to displays or other services or articles of property given or sold any retail licensee under this Act by any manufacturer or wholesaler of alcoholic beverages, including the establishment of limitations as to the cost thereof, notwithstanding section 19 of this Act;

the bill, I will put it into the bill. The newspapers try to charge that this is to bring in price fixing through the back door. It is not.

Mr. SPRINGER. Mr. Chairman, will the gentleman yield?

Mr. MULTER. I yield to the gentleman from Illinois.

Mr. SPRINGER. I just want to read further what the Post has had to say about the matter:

True, Mr. MULTER has now been constrained to somewhat veil his language. But he continues to define any merchandising practice "substantially lessening competition" as unfair competition, punishable by license revocation. In this context, of course, substantially lessening competition means price ing to outlaw discounting in the District's cutting. Mr. MULTER is still diligently tryliquor stores.

Mr. MULTER. The answer to that is just this. This is the exact language you will find in the Robertson-Patman Act, the Antitrust Act, and all the other acts enforceable by the Antitrust Division of the Department of Justice and the Federal Trade Commission. This is to meet that situation.

Mr. DINGELL. The language in this bill does not mean that the Board or the wholesaler or the manufacturer has the right to fix prices?

Mr. MULTER. I once again say to the gentleman-he is correct. That is what we intend to do and that is what this language does. If anybody can give us

Mr. MULTER. No, it does not. Mr. DINGELL. Then I note on page 65 of the bill on line 11, subsection (c) it reads as follows:

It is hereby declared that knowingly to advertise, to offer to sell, or to sell any alcoholic beverage, either by retailers or wholesalers, with the intent, effect, or the result of deceiving any purchaser or prospective purchaser, substantially lessening competition, unreasonably restraining trade, or tending to create a monopoly is an unfair method of competition, contrary to public policy, and in contravention of the policy of

this section.

Does this either directly or indirectly give the Board the power to fix prices over alcoholic beverages?

Mr. MULTER. No, it does not. It is not intended to. I say to the gentleman's question categorically it is not intended to and it does not. Historically, this has to do with discounts or so-called loss leaders, where they take a branded item and advertise it at a certain price, and when you walk in behind the man who opens the store he is all out of it, and tries to tout you onto another item. Under this bill he can advertise it as a loss leader or any way he pleases, but he has to have it on hand and offer it at that price when you walk in and ask him to sell it to you. That is what the bill would do.

Mr. DINGELL. May I say at this time I am very much concerned this bill does

Mr. MULTER. I say it does not. It is not intended to. If anybody can come up with better language to say that in

will say it again.

Mr. DINGELL. I thank the gentleman.

Mr. MULTER. Mr. Speaker, for the guidance of those who are interested, the following is a summary of the bill and what is sought to be accomplished by it, and a section-by-section analysis of the changes sought to be accomplished by this bill:

BACKGROUND OF H.R. 8920

Extended hearings on proposed changes in the Alcoholic Beverage Control Act for the District of Columbia were held in the last Congress on H.R. 8908, by a subcommittee of this committee, and during this session on H.R. 684 and H.R. 2036. The reported bill, H.R. 8920 -House Report 881-embodies various proposals and amendments drafted and incorporated therein to meet suggestions for improvement in the law made at the hearings and during consideration of the proposed legislation in executive sessions of the subcommittee and of the full committee.

H.R. 8920 rewrites the Alcoholic Beverage Control Act for the District of Columbia-title 25, District of Columbia Code, sections 101-139-which it repeals, but continues the present Alcoholic Beverage Control Board with its present members and establishes it as an independent agency of the District government.

As an independent agency, the Board under this bill succeeds to most of the regulatory powers now exercised by the Commissioners of the District of Columbia, and would be free of the general supervisory powers now exercised by such

Commissioners over the Board's management of its administrative and internal affairs and functions.

In addition to establishing the Board as such an independent agency, the bill further provides that Board members may be removed by the Commissioners "only for inefficiency, neglect of duty, or malfeasance in office." Under the code provisions relating to the present Board, there is no such specific authority of removal. Also, the bill provides that upon removal for cause or otherwise a member may continue to serve on the Board until his successor shall have been appointed. The code contains no such provision.

Although the bill rewrites entirely the present Alcoholic Beverage Control Act, many of the features and much of the language of the repealed act are retained. However, several major innovations and changes are provided for in the bill, some of which are as follows:

APPEALS TO THE COURT

The Board is vested with power to issue, transfer, reissue, and revoke licenses. Its action on any question of fact in this regard is final and conclusive, except that in the case of a reissuance, revocation, or suspension of a license, any party aggrieved by the Board's action may appeal to the District of Co

lumbia Court of Appeals formerly the municipal court of appeals for the

District of Columbia.

This innovation substantially changes the code provisions relating to such appeals. Under the code, only revocations or suspensions for more than 30 days could be appealed to the Commissioners whose findings on such appeals were final and conclusive as no further appeals were provided for.

MAKING AND AMENDING REGULATIONS

The Board is vested with specific authority to make regulations concerning all phases of the alcoholic beverage business. Such regulations, however, shall not be made, altered, or revoked until after a public hearing thereon.

Under the code, broad regulatory power is vested in the Commissioners, whose regulations become effective 5 days after their being published in a newspaper of general, daily distribution; and no public hearing is required.

LICENSES

In all, 12 kinds of licenses may be issued under the bill, as under the code, as follows-annual fees also are shown: First. Manufacturer's license, class A-$5,775.

Second. Manufacturer's license, class B-$4,125.

Third. Wholesale license, class A $2,475. Fourth. Wholesale license, class B$1,250.

Fifth. Retail license, class A-$1,250. Sixth. Retail license, class B-$165. Seventh. Retail license, class C-$825, and so forth.

Eighth. Retail license, class D-$330. Ninth. Retail license, class E-$40. Tenth. Retail license, class F-$7.50. Eleventh. Solicitor's license-$100 each license.

Twelfth. Consumption license for a club-$100.

LICENSE PRIORITIES

The bill would grant a priority or preference to license applications received from persons required to relocate their licensed business establishments by reason of the exercise by the Federal or District governments, of the power of eminent domain, or in aid of urban renewal, redevelopment, highway, transportation, or other governmental program. The code contains no comparable provision.

BOTTLE CLUBS

Provisions in the code permitting licensing of bottle clubs are omitted in the bill and, therefore, repealed under the provisions of section 39(4) which repeals the Alcoholic Beverage Control Act of 1935-title 25, District of Columbia Code, section 101-139.

STANDUP DRINKING

Extends standup drinking privileges to hotels and clubs and permits such drinking in restaurants, hotels, and clubs by assemblages of more than six persons in a private room previously approved by the Board and in an enclosed area on such premises by its patrons waiting to be seated at public tables.

CREDIT SALES

Sales on reasonable credit terms are permitted between licensees. In addition, holders of retail licenses class C, D, credit to their customers. or E may sell alcoholic beverages on credit to their customers. Under the code, this privilege was limited to holders of retail license, class E.

IMPORT RESTRICTIONS

The bill limits the quantity of alcoholic beverages that may be imported or brought into the District by the general public to 1 gallon during any calendar month. Under the code, the restriction is 1 gallon at any one time.

TESTS CHANGED

Throughout the code and the bill, there are prohibitions against one class of licensees holding an interest in another class of licensees when, in the judgment of the Board, such interest would tend to influence the one class to make its principal purchases of beverages from the other class.

In the case of corporate licensees, the code prohibitions apply only to holders of 25 percent or more of the common stock of such licensees. In the case of individuals and partnerships, this interest was required to be substantial.

Under the bill, the above tests are eliminated and the prohibitions are made to apply to any person having any interest in any licensee if in the judgment of the Board such interest will tend to bring about an undesirable practice.

Further, with regard to hotels, clubs, are conditioned upon the Board's being and restaurants, under the code licenses

satisfied that the sale of alcoholic beverages is not the prime source of revenue of such establishments. Under the bill, the Board must be satisfied that the sale of food is the source of a reasonable amount of revenue to such establishments as a condition to their being granted a license.

TAXES

The bill continues the tax on every wine-gallon of alcohol and spirits at $1.50 per such gallon.

The most significant change in the bill in this area is its provision that the Commissioners may provide that the taxes imposed herein shall not apply to imported beverages for the personal and official use of heads of foreign diplomatic and consular missions; and to sales to such persons by wholesale licensees if such beverage was purchased for such purposes and was withdrawn from a customs bonded warehouse under supervision of the Secretary of the Treasury and located on the vendor licensee's premises.

In the absence of such a regulation, it would appear that these transactions would be fully taxable at the rates imposed by this section.

The code contains no similar provision.

IDENTIFICATION OF ALCOHOLIC BEVERAGES

The bill makes it mandatory that the Board shall require that containers of alcoholic beverages carry the license number of each licensee selling or offering the same for sale.

The code provision is permissive only as to the Commissioners in this instance.

FALSE ADVERTISING AND SALES BELOW COST

The bill invests the Board with jurisdiction and powers similar to those possessed by the Federal Trade Commission and the Department of Justice in the areas of false and misleading advertising and restraint of trade.

In this regard, the bill makes it unlawful for any person knowingly to disseminate false and misleading advertising of alcoholic beverages for the purpose of directly or indirectly inducing the purchase of such beverages in the District of Columbia.

A willful, knowing, violation of the above by a licensee may result in the suspension or revocation of his license if such facts are shown upon a hearing on such violations.

Advertising media and personnel are generally exempt from the application of this section unless they refuse to supply the name and address of the licensee or other person causing them to disseminate such false and misleading advertisement.

Retailers and wholesalers advertising special, unusual or bargain prices are required to specify the quantities of each item available at such prices, and to have same on hand; and no limitation on quantity per customer may be imposed.

This section does not apply, however, to sales below a cost determined in good faith to meet lawful competition; bona fide clearance sales; final liquidation sales; sales of imperfect or damaged ment agencies, and to charitable orgabeverages; sales on contract to Governnizations and relief agencies; sales under permits specifically authorizing sales under cost without regard to the prohibitions of this section, et cetera.

Violations of this section may result in the suspension or revocation of the license.

A section-by-section analysis of the bill follows:

SUMMARY OF CHANGES MADE BY THE BILL, H.R. 8920, IN THE ALCOHOLIC BEVERAGE CONTRACT ACT FOR THE DISTRICT OF COLUMBIA (TITLE 25, SECS. 101-139)

SECTION 1 OF H.R. 8920

Section 1 of H.R. 8920 (pp. 1–68) is made up of 39 sections which are revisions of the Alcoholic Beverage Control Act as amended by the bill. Changes in these sections will be first considered:

Sections 1 and 2 of the ABC Act, as amended-no changes.

Section 3 of the ABC Act, as amended, contains definitions. They are the same as provided in present law, with the following exceptions:

(3) Wine: Same as subsection (c) of section 103 of the code, except that the definiition of "light wines" therein is deleted and transposed to subsection 18 herein where it is defined as "champagne and wines containing 14 perecnt or less alcohol by volume."

*

(5) Alcoholic beverage: Same as subsection (e) of section 103 of the code, except that the separate term "beverage" is deleted.

(7) Club: Same as subsection (g) except for the following: (a) subject to Board approval, space outside and adjoining the building-including public property-may be used to provide reasonable and comfortable accommodations for its members and guests.

(NOTE. This provision will permit the establishment of club dining or drinking facilities on public sidewalks and other public property outside and adjoining such club building.)

(b) The Board must be satisfied that the sale of food is the source of a reasonable amount of revenue to such club.

(NOTE. This changes the test required by subsection (g) (2).)

(10) Hotel: Same as subsection (j) of the code, but adds: (a) provisions identical to subsection 7 (a) and (b) above; (b) and deletes the requirement that only a bona fide business incidental to the operation of a dining room may be conducted therein.

(14) Restaurant: Same as subsection (n) of the code, plus the same additions and deletions to the definition as are made to the definition of "hotel," as set out in subsection (10) above.

(16) Tavern: Same as subsection (q) of the code except that the Board must be satisfied that the sale of food is the source of a reasonable amount of the revenue of such tavern.

(17) Corporation Counsel: Means the attorney for the District designated by the Commissioners to perform the functions prescribed for the Corporation Counsel in this bill. There is no corresponding provision in the code.

(18) Light wines: See subsection (3) above.

Section 4 amends the current code provisions to

(1) establish the Alcoholic Beverage Control Board of three members as an independent agency of the District.

(2) provide for removal of Board members by the Commissioners "only for inefficiency, neglect of duty, or malfeasance in office."

(3) require Board members to be of good character and otherwise fit for the trust to be imposed in them.

(4) permit each Board member to continue to serve as such until his successor is appointed.

(5) provide for the for the determination of Board members' salaries in accordance with the provisions of the Classification Act of 1949, as amended (5 U.S.C. 1071 et seq.).

(6) give the Board authority to hire necessary personnel and to define the duties and responsibilties of the positions established in this regard.

(NOTE.-Reorganization Order No. 35: G. F. 25-100, C.O. 302, 853114, June 16, 1953, ordered that there is hereby established under the direction and control of the Commissioners, an Alcoholic Beverage Control Board consisting of three persons appointed by the Commissioners. The members of the then existing Board were reappointed to the new Board and all powers and authority authorized by statute or by the Commissioners to be exercised by the previous Board was thereafter vested in the new Board. The order abolished the preexisting Board and establishes such positions with such duties and responsibilities as said Board-with the approval of the Commissioners to whom assigned-shall from time to time determine.)

(7) delete authority of the Commissioners to provide for the expenses of the Board, but continues the requirement that the Commissioners shall include in their annual estimates such amounts as may be required for the salaries and expenses herein authorized. (NOTE. The remaining provisions of this section are identical with current code provisions.)

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Section 6, identical with code section 106 except that an appeal may be taken to the District of Columbia Court of Appeals (formerly the Municipal Court of Appeals for the District of Columbia) on any adverse finding by the Board relating to the reissuance, revocation, or suspension of a license.

Section 7, transfers to the Board the powers presently conferred upon the Commissioners in section 107 of the code, with the following amendments:

(1) the Board may prohibit sales of alcoholic beverages on such days as it determines necessary in the public interest.

(2) no regulation shall be made, altered, or revoked by the Board without first holding a public hearing thereon.

(3) the Board is further empowered to prescribe rules and regulations relating to(a) displays and other services or articles of property given or sold licensees by manufacturerers, etc., including limitations as to cost.

(b) the display of merchandise and the holding of fashion shows and exhibits in the hotel dining rooms licensed under the act.

(c) the conduct of hearings.

(d) the posting and availability of pricelists in restaurants and hotels subject to the act.

(4) no retailer's license, class A, shall be issued for an operation within 500 feet of the premises of another holder of such class of license.

Section 9 reduces, substantially, the length of its corresponding code section 109 but does not appear to change, substantially, the intent and meaning of section 109.

The term "offer for sale" and the provision making the section inapplicable to such offers and solicitations made upon the premises of the licensee-which appear in section 109-are deleted, however.

Section 10 deletes reference in section 110 of the code with regard to issuance of licenses to permit consumption of alcoholic beverages on club premises where food, nonalcoholic beverages, or entertainment is sold or provided for compensation, i.e., "bottle clubs."

Adds a requirement that the Board shall give priority to applications from persons required to relocate by reason of an exercise by the Federal or District governments of

the power of eminent domain, or in aid of any urban renewal, redevelopment, highway, transportation, or other governmental pro

gram.

Section 11 provides for the issuance of the same 12 types of licenses as does the code.

This section substitutes "Board" for "Commissioners" with regard to the power to formulate and issue regulations under the act.

This section also extends "standup" drinking privileges to hotels and clubs and provides that such drinking may be done in restaurants, hotels, and clubs by assemblages of more than six persons in a private room approved by the Board as well as in an enclosed area, on such premises, by patrons waiting to be seated at public tables.

(NOTE. Remaining provisions are identical with those in the code. There are no changes in license fees.)

Section 12 follows the language of Code section 113 except that the code provisions relating to 25 percent stockownership are deleted. In substitution thereof, the term "any interest" is prescribed.

Section 13-new matter provides that actions on applications shall not terminate by reason of the end of a licensing year. Fees on such applications shall, however, be adjusted by reason of such terminal date.

Otherwise, the proposed section is identical with section 114 of the code.

Section 14 makes the following changes in section 115-its corresponding code provision-to which it is identical in all other respects:

(a) Requires the Board-not the Commissioners-to prescribe the form of applications for licenses.

(b) Eliminates the obsolete provision prohibiting issuance of a license to persons convicted of misdemeanors under the National Prohibition Act within 5 years immediately preceding the date of their application.

(c) With the exception of a retailer's license class E, no manufacturer or wholesaler of alcoholic beverages-or its officers or stockholders, if a corporation-shall have any interest in the license or premises of an applicant for a wholesaler or retailer license if such interest-in the Board's judgmentwould tend to influence such licensee to purchase alcoholic beverages from such wholesaler or manufacturer.

(d) Substitutes "Commissioners" for "Collector of Taxes" as the party to whom license fees required by the act shall be paid.

(e) Provides that license applications shall be verified by the individual applicant, partners, or by a corporate officer-if a corporation. The code requires such verification in such instances by the president or vice president of the corporation.

Section 15 repeats the prohibitions and exceptions set forth in section 116 of the code but redefines the zoning areas involved as residential, special use, or commercial district.

Also requires that no part of the entrance to such establishment shall be visible from a sidewalk.

Section 17 provisions are identical to code section 118 with the exception of the following:

(a) All revocations and suspensions-and not just those suspensions of 30 days or more may be decreed only after a hearing, subject to court review, rather than review by the Commissioners as in present law.

(b) A license may be suspended or revoked if any of the principal officers or directors of a corporate licensee fails to meet the requirements of citizenship, age, and nonconviction of a felony.

(c) Deletes reference to misdemeanor convictions under the National Prohibition Act. (d) Licensees are required to furnish the Board information it may deem reasonably