As of July 1, 2024, Indiana will no longer be on one of the unhappiest lists in the United States: U.S. States that ban happy hours. Throughout the 1980s, various states, including Indiana in 1985, banned happy hours, defined as a specific time during the day when alcoholic drinks are discounted for patrons. As such, Indiana bars, restaurants, and the ever-growing craft brewery and wine industries were not permitted to sell discounted alcoholic drinks to patrons for a specific, small period of time throughout a single day; for example, at the conclusion of the workday. Rather, if a licensed entity wished to sell an alcoholic beverage at a discounted price, that price had to remain consistent for the entire day. However, with Governor Eric Holcomb’s signing of HB 1086, Indiana now joins a larger list of states that permit happy hours with certain restrictions.
Restrictions on Happy Hours
Though HB 1086 does not restrict the type of alcohol that may be sold during designated happy hours, it does limit the following: the length of time of the price reduction, the amount of time happy hours may occur throughout a single week, and the time of day a happy hour may occur. First, HB 1086 restricts happy hours by limiting the amount of time one may occur to no more than four hours in a single day. Second, HB 1086 limits happy hours to an amount of time not to exceed fifteen hours in a single week. Third, HB 1086 continues to prohibit happy hours between the hours of 9:00 p.m. and 3:00 a.m.
The above restrictions in no way limit the permit holder’s ability to continue running drink specials or a ‘happy hour’ throughout the entirety of its business hours; rather, the above restrictions only apply where the holder wishes to provide a discount for only a portion of its business hours. For example, a permit holder could continue to sell discounted alcoholic beverages at 10:00 p.m., past the above-described timeline, if the permit holder had sold the same beverage(s) at the discounted price throughout the entirety of its operating hours. Moreover, if the business is open for twelve hours in a single day, the business could sell alcoholic beverage(s) at the discounted price for the entire twelve hours, and doing so would not run afoul of the four-hour daily limit; however, that same business could not run the same discount for a period of eleven hours in a single day for its twelve hour business day; doing so would violate the four-hour rule in a single day.
Carry-Out Beverages
In addition to ending the ban on happy hour, HB 1086 will legalize carry-out/“to-go” alcoholic beverages. Currently, the carrying out of any alcohol except in its original package/container is illegal. However, when HB 1086 takes effect on July 1, 2024, it will allow patrons to purchase carry-out alcoholic beverages, whether or not in their original packaging, including mixed drinks, if the beverage is sealed within a qualified container by the permit holder. A qualified container is defined as a bag of which has a total liquid capacity of less than four quarts, can be fully closed off once sealed, and is labeled with the following phrase “CONTAINS ALCOHOLIC BEVERAGES”. Similar to happy hours, so long as the beverage(s) is sealed in a qualified container, HB 1086 does not limit the type of alcohol that may be sold as carryout.
Liquor Liability Insurance Requirement
Finally, though not as flashy as happy hours and carryout beverages, HB 1086 requires permit holders to maintain liquor liability insurance, or a liquor liability endorsement to a general lability insurance policy, totaling at least $500,000.00. Though most establishments already carry such coverage, others may need to revisit their insurance policies to comply with such minimum requirements.
Conclusion
If you or your business holds a license to sell alcohol and you have questions about HB 1086 requirements and/or restrictions, or have other questions involving your business, Stoll Keenon Ogden’s team of attorneys is here to help. Our attorneys regularly advise clients on matters related to corporate actions, regulatory matters, and other compliance issues, and we look forward to assisting you in navigating such matters.
