The Executive Director may revoke or suspend a license or permit that the Executive Director issues in accordance with this subtitle.

Revocation or suspension procedures may be started: by the Executive Director, at the Executive Director’s initiative; on the complaint of a deputy or an inspector that the Executive Director employs to administer this article; on the complaint of a peace officer; if the license holder or permit holder is located in a municipality that is within a county, on the complaint of the mayor and council of the municipality; or on the written complaint of at least 10 residents, real estate owners, or voters of the precinct in which the licensed premises is located. Subject to subsection (c) of this section, a license holder or permit holder against whom proceedings under this section are brought shall: be entitled to a hearing on the charges in the complaint; and receive notice of the hearing at least 10 days before the hearing date. The Executive Director may immediately suspend a license or permit for a violation of record–keeping or reporting requirements under § 1–408 of this article.

The Executive Director may revoke or suspend a license or permit: for any reason to promote the peace or safety of the community in which the premises are located; or for offenses as provided in this article. The Executive Director shall revoke a license or permit or, except as provided in § 3–606 of this subtitle, suspend a license or permit for: conviction of the license holder or permit holder for violation of this article or a provision of the Tax – General Article that relates to the alcoholic beverage tax; willful failure or refusal of the license holder or permit holder to comply with: this article or provisions of the Tax – General Article that relate to the alcoholic beverage tax; or a regulation adopted under this article or under provisions of the Tax – General Article that relate to the alcoholic beverage tax; making a material false statement in an application for a license or permit; two or more convictions within 2 years of an agent or employee of a license holder or permit holder for on–premises violations of this article or provisions of the Tax – General Article that relate to the alcoholic beverage tax; on–premises possession by a retail dealer, other than a holder of a Class E, Class F, or Class G license, of an alcoholic beverage on which the tax imposed by § 5–102 of the Tax – General Article has not been paid; violation of § 2–216 or § 2–315 of this article; willful failure of a license holder or permit holder to: keep the records required under this article or under provisions of the Tax – General Article that relate to the alcoholic beverage tax; or allow inspection of the records by an authorized person; on–premises possession of an alcoholic beverage that a license holder or permit holder, other than a holder of a Class E, Class F, or Class G license, is not licensed to sell; revocation or suspension of a permit issued to a license holder or permit holder by the federal Alcohol and Tobacco Tax and Trade Bureau or for conviction of violating a federal law relating to alcoholic beverages; failure to furnish bond as required by this article within 15 days after notice from the Comptroller; and violation of § 3–604 of this subtitle.

Except as provided in paragraph (2) of this subsection, the Executive Director shall revoke a license or permit if, after a hearing under § 3–602(b) of this subtitle, an activity listed in this section is found to have occurred on the licensed premises. The license or permit of a person may not be revoked under paragraph (1) of this subsection if: the person operates a theater, a concert hall, an art center, a museum, or a similar establishment that is primarily devoted to the arts or theatrical performances; and the performances express matters of serious literary, artistic, scientific, or political value. An individual may not: be employed or used in the sale or service of alcoholic beverages in or on the licensed premises while the individual is unclothed or in attire, costume, or clothing so as to expose to view any portion of the female breast below the top of the areola or any portion of the pubic hair, anus, cleft of the buttocks, vulva, or genitals; be employed or act as a hostess or act in a similar capacity to mingle with the patrons while the hostess or individual acting in a similar capacity is unclothed or in attire, costume, or clothing described in item (1) of this subsection; encourage or allow an individual on the licensed premises to caress or fondle the breasts, buttocks, anus, or genitals of another individual; or allow an employee or other individual to wear or use a device or covering exposed to view that simulates any portion of the breast, genitals, anus, or pubic hair. With respect to entertainment provided, a person may not: allow an individual to perform an act of or an act that simulates: sexual intercourse, masturbation, sodomy, bestiality, oral copulation, flagellation, or a sexual act that is prohibited by law; the caressing or fondling of the breast, buttocks, anus, or genitals; or the display of the pubic hair, anus, vulva, or genitals; subject to item (1) of this subsection, allow an entertainer whose breasts or buttocks are exposed to perform closer than 6 feet from the nearest patron; or allow an individual to use an artificial device or inanimate object to depict, perform, or simulate an activity prohibited under item (1) of this subsection. A person may not show a motion picture, a still picture, an electronic reproduction, or any other visual reproduction depicting: an act or a simulated act of sexual intercourse, masturbation, sodomy, bestiality, oral copulation, flagellation, or a sexual act that is prohibited by law; an individual being caressed or fondled on the breast, buttocks, anus, or genitals; a scene in which an individual displays the vulva, anus, or genitals; or a scene in which an artificial device or inanimate object is used to depict, or a drawing is used to portray, a prohibited act described in this subsection. A person may not allow an individual to remain in or on the licensed premises who exposes to public view any portion of the individual’s genitals or anus. This section does not allow any conduct or form of attire prohibited by any other statute, ordinance, rule, or regulation.

After revoking a license or permit, the Executive Director: may not issue another license or permit to the person whose license or permit is revoked; may not issue any license or permit for the same premises for 6 months after the revocation; and may decide not to issue another license or permit for the same premises. If the license or permit was held on behalf of a corporation, a partnership, or an unincorporated association, another license or permit may not be obtained on behalf of the corporation, partnership, or unincorporated association to sell alcoholic beverages on the same premises for 6 months after the revocation.

Before the effective date of a suspension of a license or permit, the license holder or permit holder may make an offer of compromise consisting of money in lieu of serving the suspension. An offer of compromise may not exceed: $2,000 for retail license holders; and $50,000 for other license holders and permit holders. The Executive Director may accept the offer of compromise if: the public welfare and morals would not be impaired by allowing the license holder or permit holder to operate during the period set for the suspension; and the payment of the money will achieve the desired disciplinary purposes. Money in lieu of suspension shall be paid into the General Fund of the State.