SB0127

SENATE BILL 127

54th legislature - STATE OF NEW MEXICO - first session, 2019

INTRODUCED BY

Mary Kay Papen

AN ACT

RELATING TO ALCOHOLIC BEVERAGES; ESTABLISHING CONDITIONS AND LIMITATIONS ON IMPORTING ALCOHOLIC BEVERAGES INTO THE STATE; ESTABLISHING PENALTIES.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:

SECTION 1. Section 60-3A-3 NMSA 1978 (being Laws 1981, Chapter 39, Section 3, as amended by Laws 2016, Chapter 73, Section 1 and by Laws 2016, Chapter 76, Section 1) is amended to read:

"60-3A-3. DEFINITIONS.--As used in the Liquor Control Act:

A. "alcoholic beverages" means distilled or rectified spirits, potable alcohol, powdered alcohol, frozen or freeze-dried alcohol, brandy, whiskey, rum, gin and aromatic bitters bearing the federal internal revenue strip stamps or any similar alcoholic beverage, including blended or fermented beverages, dilutions or mixtures of one or more of the foregoing containing more than one-half percent alcohol, but excluding medicinal bitters;

B. "beer" means an alcoholic beverage obtained by the fermentation of any infusion or decoction of barley, malt and hops or other cereals in water, and includes porter, beer, ale and stout;

C. "brewer" means a person who owns or operates a business for the manufacture of beer;

D. "cider" means an alcoholic beverage made from the normal alcoholic fermentation of the juice of sound, ripe apples that contains not less than one-half of one percent alcohol by volume and not more than seven percent alcohol by volume;

E. "club" means:

(1) any nonprofit group, including an auxiliary or subsidiary group, organized and operated under the laws of this state, with a membership of not less than fifty members who pay membership dues at the rate of not less than five dollars ($5.00) per year and who, under the constitution and bylaws of the club, have all voting rights and full membership privileges, and which group is the owner, lessee or occupant of premises used exclusively for club purposes and which group the director finds:

(a) is operated solely for recreation, social, patriotic, political, benevolent or athletic purposes; and

(b) has been granted an exemption by the United States from the payment of the federal income tax as a club under the provisions of Section 501(a) of the Internal Revenue Code of 1986, as amended, or, if the applicant has not operated as a club for a sufficient time to be eligible for the income tax exemption, it must execute and file with the director a sworn letter of intent declaring that it will, in good faith, apply for an income tax exemption as soon as it is eligible; or

(2) an airline passenger membership club operated by an air common carrier that maintains or operates a clubroom at an international airport terminal. As used in this paragraph, "air common carrier" means a person engaged in regularly scheduled air transportation between fixed termini under a certificate of public convenience and necessity issued by the federal aviation administration;

F. "commission" means the secretary of public safety when the term is used in reference to the enforcement and investigatory provisions of the Liquor Control Act and means the superintendent of regulation and licensing when the term is used in reference to the licensing provisions of the Liquor Control Act;

G. "department" means the New Mexico state police division of the department of public safety when the term is used in reference to the enforcement and investigatory provisions of the Liquor Control Act and means the director of the alcohol and gaming division of the regulation and licensing department when the term is used in reference to the licensing provisions of the Liquor Control Act;

H. "director" means the chief of the New Mexico state police division of the department of public safety when the term is used in reference to the enforcement and investigatory provisions of the Liquor Control Act and means the director of the alcohol and gaming division of the regulation and licensing department when the term is used in reference to the licensing provisions of the Liquor Control Act;

I. "dispenser" means a person licensed under the provisions of the Liquor Control Act selling, offering for sale or having in the person's possession with the intent to sell alcoholic beverages both by the drink for consumption on the licensed premises and in unbroken packages, including growlers, for consumption and not for resale off the licensed premises;

J. "distiller" means a person engaged in manufacturing spirituous liquors;

K. "golf course" means a tract of land and facilities used for playing golf and other recreational activities that includes tees, fairways, greens, hazards, putting greens, driving ranges, recreational facilities, patios, pro shops, cart paths and public and private roads that are located within the tract of land;

L. "governing body" means the board of county commissioners of a county or the city council or city commissioners of a municipality;

M. "growler" means a clean, refillable, resealable container that has a liquid capacity that does not exceed one gallon and that is intended and used for the sale of beer, wine or cider for consumption off premises;

N. "hotel" means an establishment or complex having a resident of New Mexico as a proprietor or manager and where, in consideration of payment, meals and lodging are regularly furnished to the general public. The establishment or complex must maintain for the use of its guests a minimum of twenty-five sleeping rooms;

O. "licensed premises" means the contiguous areas or areas connected by indoor passageways of a structure and the outside dining, recreation and lounge areas of the structure and the grounds and vineyards of a structure that is a winery that are under the direct control of the licensee and from which the licensee is authorized to sell, serve or allow the consumption of alcoholic beverages under the provisions of its license; provided that in the case of a restaurant, "licensed premises" includes a restaurant that has operated continuously in two separate structures since July 1, 1987 and that is located in a local option district that has voted to disapprove the transfer of liquor licenses into that local option district, hotel, golf course, ski area or racetrack and all public and private rooms, facilities and areas in which alcoholic beverages are sold or served in the customary operating procedures of the restaurant, hotel, golf course, ski area or racetrack. "Licensed premises" also includes rural dispenser licenses located in the unincorporated areas of a county with a population of less than thirty thousand, located in buildings in existence as of January 1, 2012, that are within one hundred fifty feet of one another and that are under the direct control of the license holder;

P. "local option district" means a county that has voted to approve the sale, serving or public consumption of alcoholic beverages, or an incorporated municipality that falls within a county that has voted to approve the sale, serving or public consumption of alcoholic beverages, or an incorporated municipality of over five thousand population that has independently voted to approve the sale, serving or public consumption of alcoholic beverages under the terms of the Liquor Control Act or any former act;

Q. "manufacturer" means a distiller, rectifier, brewer or winer;

R. "minor" means a person under twenty-one years of age;

S. "package" means an immediate container of alcoholic beverages that is filled or packed by a manufacturer or wine bottler for sale by the manufacturer or wine bottler to wholesalers;

T. "person" means an individual, corporation, firm, partnership, copartnership, association or other legal entity;

U. "rectifier" means a person who blends, mixes or distills alcohol with other liquids or substances for the purpose of making an alcoholic beverage for the purpose of sale other than to the consumer by the drink, and includes all bottlers of spirituous liquors;

V. "restaurant" means an establishment having a New Mexico resident as a proprietor or manager that is held out to the public as a place where meals are prepared and served primarily for on-premises consumption to the general public in consideration of payment and that has a dining room, a kitchen and the employees necessary for preparing, cooking and serving meals; provided that "restaurant" does not include establishments as defined in rules promulgated by the director serving only hamburgers, sandwiches, salads and other fast foods;

W. "retailer" means a person licensed under the provisions of the Liquor Control Act selling, offering for sale or having in the person's possession with the intent to sell alcoholic beverages in unbroken packages, including growlers, for consumption and not for resale off the licensed premises;

X. "ski area" means a tract of land and facilities for the primary purpose of alpine skiing, snowboarding or other snow sports with trails, parks and at least one chairlift with uphill capacity and may include facilities necessary for other seasonal or year-round recreational activities;

Y. "spirituous liquors" means alcoholic beverages as defined in Subsection A of this section except fermented beverages such as wine, beer and ale;

Z. "third party aggregator" means a person that does not hold a license in New Mexico to sell, offer to sell or ship alcoholic beverages, and whose business is to accept and fulfill orders for the sale and delivery of alcoholic beverages, whether or not the person takes possession of the alcoholic beverages, or to offer to sell and ship, or cause to be shipped, directly to New Mexico residents for a purpose other than resale, through a third party internet website, dedicated mobile application or other form of communication;

[Z.] AA. "wholesaler" means a person whose place of business is located in New Mexico and who sells, offers for sale or possesses for the purpose of sale any alcoholic beverages for resale by the purchaser;

[AA.] BB. "wine" includes the words "fruit juices" and means alcoholic beverages obtained by the fermentation of the natural sugar contained in fruit or other agricultural products, with or without the addition of sugar or other products, that do not contain less than one-half percent nor more than twenty-one percent alcohol by volume;

[BB.] CC. "wine bottler" means a New Mexico wholesaler who is licensed to sell wine at wholesale for resale only and who buys wine in bulk and bottles it for wholesale resale;

[CC.] DD. "winegrower" means a person who owns or operates a business for the manufacture of wine;

[DD.] EE. "winer" means a winegrower; and

[EE.] FF. "winery" means a facility in which a winegrower manufactures and stores wine."

SECTION 2. Section 60-6A-11.1 NMSA 1978 (being Laws 2011, Chapter 109, Section 1) is amended to read:

"60-6A-11.1. DIRECT WINE SHIPMENT PERMIT-- AUTHORIZATION--RESTRICTIONS.--

[A. A licensee with a winegrower's license or a person licensed in a state other than New Mexico that holds a winery license may apply to the director for and the director may issue to the applicant a direct wine shipment permit.]

A. The director shall only issue a direct wine shipment permit to a winery holding both a current basic permit to produce wine issued by the alcohol and tobacco tax and trade bureau of the United States department of the treasury and a current license or permit to produce wine issued by this state or another state. The director shall not issue a direct wine shipment permit to a third party aggregator.

B. An application for a direct wine shipment permit shall include:

(1) contact information for the applicant in a form required by the department;

(2) an annual application fee of fifty dollars ($50.00) if the applicant does not hold a winegrower's license;

(3) the number of the applicant's winegrower's license if the applicant is located in New Mexico or a copy of the applicant's winery license if the applicant is located in a state other than New Mexico; [and]

(4) any other information or documents required by the director. Upon approval of an applicant for a permit, the director shall forward to the taxation and revenue department the name of each permittee and the contact information for the permittee; and

(5) a copy of the applicant's basic permit to produce wine issued by the alcohol and tobacco tax and trade bureau of the United States department of the treasury.

[B.] C. A direct wine shipment permit shall be valid for a permit year. A permittee shall renew a direct wine shipment permit annually as required by the department to continue making direct shipments of wine to New Mexico residents.

[C.] D. A permittee may ship:

(1) not more than two nine-liter cases of wine monthly to a New Mexico resident who is twenty-one years of age or older for the recipient's personal consumption or use, but not for resale; [and]

(2) only wine sold under a brand name owned or exclusively licensed to the permittee;

(3) wine ordered by any means, including phone, fax, mail and the internet; and

[(2)] (4) wine directly to a New Mexico resident only in containers that are conspicuously labeled with the words:

"CONTAINS ALCOHOL

SIGNATURE OF PERSON 21 YEARS OR OLDER REQUIRED

FOR DELIVERY".

[D.] E. A permittee shall:

(1) register with the taxation and revenue department for the payment of liquor excise tax and gross receipts taxes due on the sales of wine pursuant to the permittee's activities in New Mexico;

(2) submit to the jurisdiction of New Mexico courts to resolve legal actions that arise from the shipping by the permittee of wine into New Mexico to New Mexico residents;

(3) monthly, by the twenty-fifth day of each month following the month in which the permittee was issued a direct wine shipment permit, pay to the taxation and revenue department the liquor excise tax due and the gross receipts tax due; and

(4) submit to an audit by an agent of the taxation and revenue department of the permittee's records of the wine shipped pursuant to this section to New Mexico residents upon notice and during usual business hours.

F. A permittee may contract with a warehouse or common carrier licensed in another state to act as an agent of the permittee for the fulfillment of orders, shipping and transporting wine to a New Mexico resident, as long as the order is placed through the permittee.

[E.] G. As used in this section:

(1) "permit year" means the period between July 1 and June 30 of a year; and

(2) "permittee" means a person that is the holder of a direct wine shipment permit."

SECTION 3. Section 60-7A-3 NMSA 1978 (being Laws 1981, Chapter 39, Section 49, as amended) is amended to read:

"60-7A-3. TRANSPORTATION INTO STATE WITHOUT PERMIT-- EXPORTATION OF ALCOHOLIC BEVERAGES WITHOUT PERMIT--IMPORTATION FOR PRIVATE USE--[RECIPROCAL SHIPPING] WHEN UNLAWFUL.--

A. Except as provided in Subsections [E and] F and G of this section, it is a violation of the Liquor Control Act for a registered common carrier to knowingly deliver a shipment of alcoholic beverages from another state to a person in this state without receiving at the time of delivery a permit issued by the department covering the quantity and class of alcoholic beverages to be delivered and requiring the shipment be transported from the shipper designated in the permit to the designated consignee and from the designated point of origin to the destination designated in the permit.

B. Except as provided in Paragraph (14) of Subsection B of Section 60-6A-11 NMSA 1978, Section 60-6A-11.1 NMSA 1978 and Subsections F and G of this section, it is a violation of the Liquor Control Act for any person to knowingly deliver alcoholic beverages in this state on behalf of a person that does not hold a New Mexico wholesaler's license unless the person holds a license or permit issued by the director specifically granting that authority.

[B.] C. Except as provided in Subsections [D through F] E, F and G of this section, it is a violation of the Liquor Control Act for a person other than a registered common carrier to knowingly transport from another state and deliver in this state alcoholic beverages, unless the person has in the person's possession on entering New Mexico a permit from the department for the quantity and class of alcoholic beverages to be delivered, designating the name of the shipper and consignee and the point of origin and destination of the alcoholic beverages.

[C.] D. Except as provided in [Subsections D and] Subsection E of this section, it is a violation of the Liquor Control Act for a person to transport out of state alcoholic beverages on which the excise tax has not been paid, unless the shipment is accompanied by a permit issued by the department for the exact quantity and class transported, showing the consignee's federal and state license numbers and the point of origin and destination of the alcoholic beverages.

[D.] E. An individual not a minor may transport into or out of the state a reasonable amount of alcoholic beverages for the exclusive purpose of the individual's private use or consumption, and nothing in the Liquor Control Act limits or applies to such private actions.

[E. An individual or licensee, except for a person holding a winery license, in a state that affords New Mexico licensees or individuals an equal reciprocal shipping privilege may ship for personal use and not for resale not more than two cases of wine, each case containing no more than nine liters, per month to an individual not a minor in this state. Delivery of a shipment pursuant to this subsection shall not be deemed to constitute a sale in this state, and nothing in the Liquor Control Act limits or applies to such shipments. The shipping container of wine sent into or out of this state under this subsection shall be labeled clearly to indicate that the package cannot be delivered to a minor or to an intoxicated person.]

F. An individual may ship wine to an individual not a minor in this state, for non-commercial use and not for resale, in an amount not to exceed two cases of wine per month, each case containing no more than nine liters. The shipping container of wine shipped under this subsection shall be labeled clearly to indicate that the package cannot be delivered to a minor or to an intoxicated person.

[F.] G. The holder of a direct wine shipment permit issued pursuant to Section 60-6A-11.1 NMSA 1978 may ship no more than two nine-liter cases of wine per month to a person living in New Mexico who is twenty-one years of age or older for the person's personal consumption and not for resale.

[G.] H. As used in this section, "in this state" means within the exterior boundaries of the state."

SECTION 4. Section 60-7A-4 NMSA 1978 (being Laws 1981, Chapter 39, Section 50, as amended) is amended to read:

"60-7A-4. SALE, SHIPMENT AND DELIVERY UNLAWFUL.--

A. It is unlawful for [any] a person on [his] the person's own behalf or as the agent of another person, except a licensed New Mexico wholesaler or manufacturer or the agent of either, to directly or indirectly sell or offer for sale for shipment into the state or ship into the state, except as provided in Section 60-7A-3 NMSA 1978, [any] alcoholic beverages unless [such] the person or [his] the person's principals [has] have secured a nonresident license as provided in Section [60-7A-7] 60-6A-7 NMSA 1978, unless the person holds a license or permit granted by the director that specifically grants that authority.

B. It is unlawful for a person to take or fulfill an order for the sale of alcoholic beverages directly from a member of the public in this state through an online platform or other form of communication, except as provided in Section 60-6A-11.1 NMSA 1978, Subsections E through G of Section 60-7A-3 NMSA 1978 and Paragraph (14) of Subsection B of Section 60-6A-11 NMSA 1978, unless the person holds a license or permit issued by the director specifically granting that authority.

[B.] C. It is a violation of the Liquor Control Act to deliver any alcoholic beverages transported into the state unless the delivery is made in accordance with Section 60-7A-3 NMSA 1978, or otherwise authorized pursuant to Subsection F of Section 60-6A-11.1 NMSA 1978 or Paragraph (14) of Subsection B of Section 60-6A-11 NMSA 1978, unless the person holds a license or permit issued by the director specifically granting that authority.

[C.] D. As used in this section, "into the state [of New Mexico]" means into the exterior boundaries of the state."

SECTION 5. Section 60-7A-4.1 NMSA 1978 (being Laws 1985, Chapter 179, Section 1, as amended) is amended to read:

"60-7A-4.1. UNLAWFUL SALE OF ALCOHOLIC BEVERAGES--CRIMINAL PENALTY--FORFEITURE.--

A. It is unlawful for [any] a person to sell or attempt to sell alcoholic beverages at any place other than a licensed premises or as otherwise provided by the Liquor Control Act.

B. It is unlawful for a person to take or fulfill an order for the sale of alcoholic beverages directly to a member of the public in this state through an online platform or other form of communication, except as provided in Section 60-6A-11.1 NMSA 1978, Subsection G of Section 60-7A-3 NMSA 1978 and Paragraph (14) of Subsection B of Section 60-6A-11 NMSA 1978, unless the person holds a license or permit issued by the director specifically granting that authority.

[B. Any] C. A person who violates the provisions of Subsection A or B of this section is guilty of a fourth degree felony.

[C. Any] D. A conveyance used or intended to be used for the purpose of unlawful sale of alcoholic beverages or money [which] that is the fruit or instrumentality of the crime is subject to forfeiture, and the provisions of the Forfeiture Act apply to the seizure, forfeiture and disposal of such property."

SECTION 6. EFFECTIVE DATE.--The effective date of the provisions of this act is July 1, 2019.

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