Administrative Penalties

What are administrative penalties and how do they work?

An administrative penalty is:

• a legal mechanism that allows a local governing body to penalize alcohol license holders for failing to comply with state laws or local ordinances relating to sales of alcoholic beverages

• usually a monetary fine, or the suspension or revocation of an alcohol license

• administered by a local governing body (city council, county board), rather than the court system

• imposed upon the license holder (in contrast to state laws that target the behavior of individual sellers and servers of alcohol

• intended to provide an alternative enforcement mechanism that is more cost-effective, timely and practical than prosecuting servers and sellers through the court system

• provides an alternative to criminal prosecution, but does not necessarily replace criminal prosecution (some communities pursue both prosecution and administrative penalties)

• can be written and passed as a local ordinance or state law
  

Why administrative penalties are important for your community

• The time and expense associated with prosecuting alcohol-related laws through the court system may discourage some communities from enforcing them. Because prosecuting servers and sellers may be a long and expensive process for district attorneys, judges may not want to spend time on these cases. Hence, some violators may never be penalized. Administrative penalties are less cumbersome to impose than are criminal violations, and therefore may be more likely to be enforced by local officials. In addition, enforcement of an administrative penalty may seem less harsh than court proceedings; therefore, it may be more acceptable to a community.

• An administrative penalty ordinance allows a local government to establish and enforce standards of behavior among alcohol licensees within its jurisdiction. A license to sell alcohol is a privilege, rather than a right, granted by state or local governments. Local governments can use an administrative penalty to revoke this privilege, thereby setting and upholding standards of health and safety related to alcohol.

• Administrative penalties may encourage alcohol licensees to create establishment policies and practices that discourage the sale of alcohol to underage youth. If alcohol licensees are held accountable for the actions of their employees, they may be more likely to adequately train and supervise their employees through server training programs and other policies and practices that encourage employees to comply with age-of-sale laws.

Considerations for passing an administrative penalties ordinance in your community

ISSUE: Alcohol licensees may argue that they should not be held responsible for illegal acts of individual servers or sellers.
RESPONSE: When management is not held accountable for complying with laws relating to the sale of alcohol, they may directly or indirectly pressure servers and sellers to focus on maximizing sales rather than avoiding illegal sales. (1) Administrative penalties ensure that management and individual servers and sellers are equally accountable for complying with the laws and are both working toward the same goal. Without management support and training, it may be impossible for servers and sellers to comply with the laws.

ISSUE: Alcohol licensees may perceive administrative penalties as unnecessarily harsh.
RESPONSE: Administrative penalties should be set up so that initial offenses result in fairly minor penalties, but multiple violations result in increasingly serious consequences. An initial administrative fine should neither be so modest that it is not taken seriously by offenders, nor so harsh that its enforcement is resisted. With increasing violations of alcohol-related laws, the penalty should be increased, with the maximum penalty being suspension or revocation of the establishment's alcohol license. While license revocation may seem extreme, it is important to remember that an alcohol license is a privilege, rather than a right, granted by the community and communities have the right to withdraw that privilege.

Note: Community members are strongly urged to consult with a local attorney to learn about state law requirements before attempting to pass a local ordinance on administrative penalties.

Considerations for implementation

• To apply administrative penalties, communities must identify the alcohol establishments that illegally sell alcohol to underage youth and/or intoxicated patrons. To implement an administrative penalty, mechanisms should exist for identifying alcohol licensees that do not comply with alcohol sale laws. For underage sales, compliance checks may be the most effective method for identifying non-compliant alcohol establishments (see compliance checks policy).

• Enforcement of administrative penalties should include a public hearing. Public hearings of accused violators give the local governing body and community members opportunities to publicly declare that illegal sales of alcohol are not acceptable in the community.

Administrative penalties, are an important and viable method for reducing the commercial availability of alcohol to youth and sales to intoxicated persons. While an administrative penalty ordinance gives local government the power to enforce state and local laws, alcohol licensees can and should police themselves through internal policies and practices that ensure employees' compliance with alcohol-related laws. These policies and practices can include:

• Responsible beverage server training programs (see responsible beverage service training )

• Internal compliance checks (see compliance checks)

• Warning posters (see warning posters)

Comprehensive efforts to reduce teen access to alcohol must also include strategies to reduce other sources of alcohol for youth, such as keg registration policies that penalize adults who buy beer kegs for youth (see keg registration).

What other communities have done

In Mississippi, an ordinance was passed that imposes administrative penalties on permit holders whose establishments are found selling alcohol to minors. Fines range from up to $500 for a first offense to up to $5000 for a third offense. License suspension periods range from three months for a first offense to one year for a third offense. (2)

Similarly, in St. Paul, Minnesota, an ordinance was passed that provides for administrative penalties against licensed establishments found selling alcohol to underage youth. The penalty for a first violation is a fine of $500-$1000; the penalty for a second offense within a year is a fine of $1000-$2000; third offense (within 18 months of first offense) penalty is license suspension of up to 18 months; and fourth offense penalty is revocation of the establishment's license. (St. Paul City Charter and the Legislative and Administrative Codes; Sec. 409.26)

Additional resources:
For sample ordinances to reduce the supply of alcohol to teens and young adults under age 21 see Appendix B of Alcohol Compliance Checks: A Procedures Manual for Enforcing Alcohol Age-of-Sale Laws . University of Minnesota, Alcohol Epidemiology Program, 2000.

References

1. Gehan JP, Toomey TL, Jones-Webb R, Rothstein C, Wagenaar AC. Alcohol outlet workers and managers: Focus groups on responsible service practices. Journal of Alcohol & Drug Education , 44(2):60-71, 1999.
   
2. Underage Drinking Enforcement Training Center, Office of Juvenile Justice and Delinquency Prevention. Where There's A Will: Mississippi AG Office Blankets State with Compliance Checks. Accessed online on 8/30/02 at:www.udetc.org

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