OLCC Initiates Rulemaking Regarding Licensing “Food Carts”

The City of Portland sued the OLCC after it issued an annual liquor license to Cartlandia and the OLCC failed to move forward on rule making to imposed additional restrictions on the licensing of “food carts”. The OLCC has never licensed a “food cart” itself. Rather, the OLCC has licensed an exterior area adjacent to a food cart, just as it licenses an exterior area adjacent to a brick and mortar bar or restaurant. The OLCC has carefully reviewed the proposed operations of food cart applicants and imposed operational restrictions on them on a case-by-case basis.

Now, the OLCC is seeking to move forward on rules that would standardize the licensing requirements and operational restrictions on food carts, or, as the rule describes them, as “outdoor areas that do not abut a licensed building.”

In short, the OLCC will not issue a license and may cancel an existing license for a food cart if:

• Such alcohol service is not an authorized use per the local jurisdiction or lease;
• The outdoor area fails to quality for a minor posting III (meaning that the area is not a drinking environment and thus minors are allowed at all times); or
• The applicant or licensee fails to define the boundaries of the area, describe how it will control the area, fail to show how it will supervise the area or fail to adequately confine the area.

In addition, the rulemaking will impose additional operational requirements on food cart operations:

• A patron will not be allowed to possess more than two containers of alcohol at a time;
• A patron will not be allowed to bring alcohol to or remove from the licensed area;
• Amplified music will not be allowed from 10:00pm to 7:00am;
• Alcohol service will not be allowed from 10:00pm to 7:00am;
• The applicant or licensee will need to show how it will control the outdoor area; and
• The area must be appropriate for a minor posting III.

The rulemaking also applies to the patios of bars and restaurants and requires the following for such areas, but allows the applicant or licensee to show good cause that outweighs the denial basis:

• Such alcohol service is not an authorized use per the local jurisdiction or lease;
• The outdoor area does not abut the licensed premises;
• The applicant or licensee fails to define to the boundaries of the area or fails to show how it will supervise and control the area;
• The applicant or licensee will allow amplified entertainment in the outdoor area between 12:00am and 7:00am.

While the intentions motivating this rulemaking are likely well intentioned (and may be related to a mutually acceptable resolution of the lawsuit between the OLCC and Portland), removing the discretion from the OLCC in determining whether to license a “food cart” and what operational restrictions may be appropriate given the facts and circumstances at hand seems ill advised. A food cart operation may very well be able to operate effectively, responsibly and in compliance with Oregon law after 10:00pm, as an example. To date, I am not aware of any major compliance problems associated with alcohol service at a food cart.