HB0296

HOUSE BILL 296

53rd legislature - STATE OF NEW MEXICO - first session, 2017

INTRODUCED BY

Rick Little

AN ACT

RELATING TO LIQUOR; AMENDING DISPENSER'S AND RETAILER'S LICENSE PROVISIONS; REPEALING LIMITATIONS ON NUMBERS OF DISPENSER'S AND RETAILER'S LICENSES; REPEALING INTER-LOCAL OPTION DISTRICT TRANSFERS; REPEALING PROVISIONS FOR RESTAURANT, CLUB AND CANOPY LICENSES; AMENDING OTHER SECTIONS OF THE LIQUOR CONTROL ACT ACCORDINGLY.

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.] E. "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.] F. "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.] G. "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.] H. "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.] I. "distiller" means a person engaged in manufacturing spirituous liquors;

[K.] J. "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.] K. "governing body" means the board of county commissioners of a county or the city council or city commissioners of a municipality;

[M.] L. "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.] M. "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.] N. "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.] O. "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.] P. "manufacturer" means a distiller, rectifier, brewer or winer;

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

[S.] R. "package" means an [immediate] unopened 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.] S. "person" means an individual, corporation, firm, partnership, copartnership, association or other legal entity;

[U.] T. "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.] U. "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.] V. "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.] W. "spirituous liquors" means alcoholic beverages as defined in Subsection A of this section except fermented beverages such as wine, beer and ale;

[Z.] X. "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.] Y. "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.] Z. "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.] AA. "winegrower" means a person who owns or operates a business for the manufacture of wine;

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

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

SECTION 2. Section 60-6A-2 NMSA 1978 (being Laws 1981, Chapter 39, Section 19) is amended to read:

"60-6A-2. RETAILER'S LICENSE.--

A. In any local option district, a person qualified under the provisions of the Liquor Control Act may apply for and be issued a retailer's license for the retail sale of alcoholic beverages.

B. A retailer's license [when issued] shall only be used by the person to whom the license is issued and shall only be used within the licensed premises, pursuant to provisions of the Liquor Control Act.

C. A retailer's license shall only entitle the retailer to sell alcoholic beverages in unbroken packages on the licensed premises. Retailers shall not serve or permit the consumption of alcoholic beverages on the licensed premises unless the retailer also holds a dispenser's license.

D. A retailer's license shall not be transferable from person to person and shall not be leased.

E. A retailer's license shall not be transferable from one location to another, except within the local option district in which the retailer is licensed and in accordance with the provisions of the Liquor Control Act.

F. Nothing in this section shall prevent a retailer from holding other licenses pursuant to the Liquor Control Act."

SECTION 3. Section 60-6A-3 NMSA 1978 (being Laws 1981, Chapter 39, Section 20) is amended to read:

"60-6A-3. DISPENSER'S LICENSE.--

A. In any local option district, a person qualified under the provisions of the Liquor Control Act may apply for and be issued a dispenser's license for the sale of alcoholic beverages.

B. A dispenser's license [when issued] shall only be used by the person to whom the license is issued and shall only be used within the licensed premises, pursuant to provisions of the Liquor Control Act.

C. A dispenser's license shall only entitle the dispenser to sell, serve or permit the consumption of alcoholic beverages by the drink on the licensed premises. Dispensers shall not sell alcoholic beverages in unbroken packages unless the dispenser also holds a retailer's license.

D. A dispenser's license shall not be transferable from person to person and shall not be leased.

E. A dispenser's license shall not be transferable from one location to another, except within the local option district in which the dispenser is licensed and in accordance with the provisions of the Liquor Control Act.

F. Nothing in this section shall prevent a dispenser from holding other licenses pursuant to the Liquor Control Act."

SECTION 4. Section 60-6A-15 NMSA 1978 (being Laws 1981, Chapter 39, Section 32, as amended) is amended to read:

"60-6A-15. LICENSE FEES.--Every application for the issuance or renewal of the following licenses shall be accompanied by a license fee in the following specified amounts:

A. manufacturer's license as a distiller, except a brandy manufacturer, three thousand dollars ($3,000);

B. manufacturer's license as a brewer, three thousand dollars ($3,000);

C. manufacturer's license as a rectifier, one thousand fifty dollars ($1,050);

D. wholesaler's license to sell all alcoholic beverages for resale only, two thousand five hundred dollars ($2,500);

E. wholesaler's license to sell spirituous liquors and wine for resale only, one thousand seven hundred fifty dollars ($1,750);

F. wholesaler's license to sell spirituous liquors for resale only, one thousand five hundred dollars ($1,500);

G. wholesaler's license to sell beer and wine for resale only, one thousand five hundred dollars ($1,500);

H. wholesaler's license to sell beer for resale only, one thousand dollars ($1,000);

I. wholesaler's license to sell wine for resale only, seven hundred fifty dollars ($750);

J. retailer's license, one thousand three hundred dollars ($1,300);

K. dispenser's license, one thousand three hundred dollars ($1,300);

[L. canopy license, one thousand three hundred dollars ($1,300);

M. restaurant license, one thousand fifty dollars ($1,050);

N. club license, for clubs with more than two hundred fifty members, one thousand two hundred fifty dollars ($1,250), and for clubs with two hundred fifty members or fewer, two hundred fifty dollars ($250);

O.] L. wine bottler's license to sell to wholesalers only, five hundred dollars ($500);

[P.] M. public service license, one thousand two hundred fifty dollars ($1,250);

[Q.] N. nonresident licenses, for a total billing to New Mexico wholesalers:

(1) in excess of:

$3,000,000 annually. . . . . . . . . . . . . . . . . . $10,500;

1,000,000 annually. . . . . . . . . . . . . . . . . . . 5,250;

500,000 annually. . . . . . . . . . . . . . . . . . . 3,750;

200,000 annually. . . . . . . . . . . . . . . . . . . 2,700;

100,000 annually. . . . . . . . . . . . . . . . . . . 1,800;

and

50,000 annually. . . . . . . . . . . . . . . . . . . . 900;

and

(2) of $50,000 or less. . . . . . . . . .$300;

[R.] O. wine wholesaler's license, for persons with sales of five thousand gallons of wine per year or less, twenty-five dollars ($25.00), and for persons with sales in excess of five thousand gallons of wine per year, one hundred dollars ($100); and

[S.] P. beer bottler's license, two hundred dollars ($200)."

SECTION 5. Section 60-6A-16 NMSA 1978 (being Laws 2015, Chapter 86, Section 1) is amended to read:

"60-6A-16. PRORATION OF FEES.--

A. License fees for new licenses issued after the beginning of the license year shall be prorated.

B. Dispenser, retailer [restaurant, club] and public service license fees shall be prorated as follows:

(1) licenses issued in the first quarter of the license year for each license type shall be subject to the full amount of the annual license fee;

(2) licenses issued in the second quarter of the license year for each license type shall be subject to three-fourths of the annual license fee;

(3) licenses issued in the third quarter of the license year for each license type shall be subject to one-half of the annual license fee; and

(4) licenses issued in the fourth quarter of the license year for each license type shall be subject to one-fourth of the annual license fee.

C. License fees for all new licenses not provided for in Subsection B of this section, except nonresident licenses and common carrier registrations, shall not be prorated but shall be subject to payment of the full amount of the annual license fee.

D. Nonresident licenses and common carrier registrations shall be issued for a three-year period. The three-year license for nonresident licenses and for common carrier registrations begins July 1, 2013 and every third year subsequently. Nonresident licenses and common carrier registrations issued at any time during the:

(1) first license year shall be subject to payment of the full amount of the three-year license fee;

(2) second license year shall be subject to payment of two-thirds of the three-year license fee; and

(3) third license year shall be subject to payment of one-third of the three-year license fee."

SECTION 6. Section 60-6A-19 NMSA 1978 (being Laws 1981, Chapter 39, Section 36, as amended) is amended to read:

"60-6A-19. NO PROPERTY RIGHT IN LICENSE--EXCEPTION.--[A.] The holder of [any] a license issued under the Liquor Control Act or any former act has no vested property right in the license, which is the property of the state; provided that retailer's licenses and dispenser's licenses [and canopy licenses that were replaced by dispenser's licenses pursuant to Section 60-6B-16 NMSA 1978: (1)] shall be considered property subject to execution, attachment, a security transaction, liens, receivership and [all] other incidents of tangible personal property under the laws of this state, except as otherwise provided in the Liquor Control Act

[(2) may be assigned, transferred from person to person or leased, provided all requirements of the Liquor Control Act and department regulations are fulfilled; and

(3) shall be transferred as personal property upon attachment, execution, repossession by a secured party or lienor, foreclosure by a creditor, appointment of a receiver for the licensee, death of the licensee, filing of a petition of bankruptcy by or for the licensee, incapacity of the licensee or dissolution of the licensee. The director may, by rule or regulation, determine any application or notice requirement for a person who temporarily holds a license pursuant to this subsection.

B. Any license issued under the Liquor Control Act may be transferred to any location not otherwise contrary to law within the same local option district where the license is then located, provided all requirements of the Liquor Control Act and department regulations are fulfilled]."

SECTION 7. Section 60-6B-2 NMSA 1978 (being Laws 1981, Chapter 39, Section 38, as amended) is amended to read:

"60-6B-2. APPLICATIONS FOR NEW LICENSES--APPROVAL OF APPROPRIATE GOVERNING BODY.--

A. Before a new license authorized by the Liquor Control Act may be issued by the director, the applicant for the license shall:

(1) submit to the director a written application for the license under oath, in the form prescribed by and stating the information required by the director, together with a nonrefundable application fee of two hundred dollars ($200);

(2) submit to the director [for approval] a description, including floor plans, in a form prescribed by the director, that shows the proposed licensed premises for which the license application is submitted. The area represented by the approved description shall become the licensed premises;

(3) if the applicant is not an individual, submit the name and street address of a New Mexico resident who is not a felon, who has power of attorney and authority to bind the applicant to matters related to liquor sales and operations and upon whom the director may serve any notice related to ownership or operation of the license, including any notice of charge pursuant to Chapter 60, Article 6C NMSA 1978; and

(4) if the applicant holds or has held a license for sale of alcoholic beverages of any kind or in any form to the public, the application shall include a sworn affidavit by the applicant that all wholesalers who are or were creditors of the applicant have been paid or that satisfactory arrangements have been made between the applicant and the wholesaler for the payment of such debts. An applicant who submits a false affidavit shall be denied a license. When the director determines that a false affidavit has been submitted, the director shall refer the matter to the attorney general or district attorney for prosecution of perjury.

B. Applicants that are not individuals shall submit the following information:

(1) if the applicant is a corporation, [be required to] the applicant shall submit [as part of its application the following]:

(a) a certified copy of its articles of incorporation or, if a foreign corporation, a certified copy of its certificate of authority;

(b) the names and addresses of all officers and directors and those stockholders owning ten percent or more of the voting stock of the corporation and the amounts of stock held by each stockholder; provided, however, a corporation may not be licensed if an officer, manager, director or holder of more than a ten percent interest in the applicant entity would not be eligible to hold a license pursuant to the Liquor Control Act; and

(c) such additional information regarding the corporation as the director may require to assure full disclosure of the corporation's structure and financial responsibility;

[(5)] (2) if the applicant is a limited partnership, the applicant shall submit [as part of its application the following]:

(a) a certified copy of its certificate of limited partnership;

(b) the names and addresses of all general partners and of all limited partners contributing ten percent or more of the total value of contributions made to the limited partnership or entitled to ten percent or more of the profits earned or other income paid by the limited partnership. A limited partnership shall not receive a license if a partner or holder of a ten percent or greater interest in the applicant entity designated in this subsection would not be eligible to hold a license issued pursuant to the Liquor Control Act; and

(c) such additional information regarding the limited partnership as the director may require to assure full disclosure of the limited partnership's structure and financial responsibility;

[(6)] (3) if the applicant is a limited liability company, the applicant shall submit [as part of its application the following]:

(a) a copy of the articles of organization, with a copy of the certificate of filing with the public regulation commission;

(b) the [name] names and addresses of all the managing members and all of the nonmanaging members that own a greater than ten percent interest in the limited liability company. Any direct or indirect parent entity of the limited liability company with an interest of ten percent or more in the applicant entity shall submit application forms and qualify to hold a license; and

(c) such additional information regarding the limited liability company as the director may require to assure full disclosure of the limited liability company's structure and financial responsibility; and

[(7)] (4) if the applicant is a trust, the applicant shall submit [as part of its application]:

(a) the names and addresses of the trustees;

(b) the names and addresses of any beneficiaries having control over the property of the trust or receiving regular and substantial distributions of principal and income from the trust. Any beneficiary receiving regular and substantial distributions from the trust shall qualify to hold a license. The director may request a copy of the trust agreement for review, which trust agreement need not become part of the application. Affidavits as to the operation and distribution of the principal and income may be requested in lieu of, or in addition to, the copy of the trust agreement that is supplied for review by the department; and

(c) such additional information regarding the trust as the director may require to assure full disclosure of the trust's structure and financial responsibility. [and

(8) obtain approval for the issuance from the governing body of the local option district in which the proposed licensed premises are to be located in accordance with the provisions of the Liquor Control Act.

B.] C. Except for individual officers, directors, shareholders, members or partners of entities that are publicly traded on a national stock exchange and for individuals who have been fingerprinted for another New Mexico license and had no prior criminal or arrest record, every applicant for a new license [or for a transfer of ownership of a license] shall [file with the application] submit for each of the following individuals two complete sets of fingerprints taken under the supervision of and certified to by an officer of the New Mexico state police, a county sheriff, a municipal chief of police, a police officer in a foreign country or an individual qualified to take fingerprints by virtue of training or experience, [for each of the following individuals] except that if an applicant is not a resident of New Mexico, fingerprints may be taken under supervision and certification of comparable officers in the state of residence of the applicant:

(1) if the applicant is [a person] an individual, for the applicant;

(2) if the applicant or the holder of a ten percent or greater interest in the applicant entity is a corporation, for each principal officer, for each member of the board of directors and for each stockholder with a ten percent or greater interest in the applicant entity;

(3) if the applicant or the holder of a ten percent or greater interest in the applicant entity is a general partnership, for each partner;

(4) if the applicant or the holder of a ten percent or greater interest in the applicant entity is a limited partnership, for each general partner, for each limited partner holding a ten percent or greater interest in the applicant entity and for any principal officers of the limited partnership;

(5) if the applicant or the holder of a ten percent or greater interest in the applicant entity is a limited liability company, for each managing member, for each member who owns a ten percent or greater interest in the applicant entity and for any principal officer of the limited liability company; and

(6) if the applicant is a trust, for each trustee and for each beneficiary who has control over trust property and income or who receives substantial and regular distributions from the trust.

[C. Upon submission of a sworn affidavit from each person] D. Each individual who is required to [file] submit fingerprints shall submit a sworn affidavit stating that the [person] individual has not been convicted of a felony in any jurisdiction. [and pending the results of background investigations, a temporary license for ninety days may be issued. The temporary license may be extended by the director for an additional ninety days if the director determines there is not sufficient time to complete the background investigation or obtain reviews of fingerprints from appropriate agencies. A temporary license shall be surrendered immediately upon order of the director.

D.] An applicant who files a false affidavit shall be denied a license. When the director determines a false affidavit has been filed, the director shall refer the matter to the attorney general or district attorney for prosecution of perjury.

[E. If an applicant is not a resident of New Mexico, fingerprints may be taken under supervision and certification of comparable officers in the state of residence of the applicant.

F. Before issuing a license] E. Upon receipt of an application, the director shall cause a notice of the application for the license to be posted conspicuously, on a sign not smaller than thirty inches by forty inches, on the outside of the front wall or front entrance of the immediate premises for which the license is sought or, if no building or improvements exist on the premises, the notice shall be posted at the front entrance of the immediate premises for which the license is sought, on a billboard not smaller than five feet by five feet. The contents of the notice shall be in the form prescribed by the department, and such posting shall be over a continuous period of twenty days prior to preliminary approval of the license. The director shall prescribe the manner in which the posting may be accomplished.

F. All costs of publication and posting shall be paid by the applicant.

G. It is unlawful for a person to remove or deface a notice posted in accordance with Subsection E of this section. A person convicted of a violation of this subsection shall be punished by a fine of not more than three hundred dollars ($300) or by imprisonment in the county jail for not more than one hundred twenty days or by both.

H. The department shall hold a public hearing within thirty days after receipt of the application to determine whether to grant preliminary approval of the issuance of a license. [pursuant to Subsection K of this section.

G. An application for transfer of ownership shall be filed with the department no later than thirty days after the date a person acquired an ownership interest in a license. It shall contain the actual date of sale of the license and shall be accompanied by a sworn affidavit from the owner of record of the license agreeing to the sale of the license to the applicant as well as attesting to the accuracy of the information required by this section to be filed with the department. A license shall not be transferred unless it will be placed into operation in an actual location within one hundred twenty days of issuance of the license, unless for good cause shown the director grants an additional extension for a length of time determined by the director.

H. Whenever it appears to the director that there will be more applications for new licenses than the available number of new licenses during any time period, a random selection method for the qualification, approval and issuance of new licenses shall be provided by the director. The random selection method shall allow each applicant an equal opportunity to obtain an available license, provided that all dispenser's and retailer's licenses issued in a calendar year shall be issued to residents of the state. For the purposes of random selection, the director shall also set a reasonable deadline by which applications for the available licenses shall be filed. A person shall not file more than one application for each available license and no more than three applications per calendar year.

I. After the deadline set in accordance with Subsection H of this section, no more than ten applications per available license shall be selected at random for priority of qualification and approval. Within thirty days after the random selection for the ten priority positions for each license, a hearing pursuant to Subsection K of this section shall be held to determine the qualifications of the applicant having the highest priority for each available license. If necessary, such a hearing shall be held on each selected application by priority until a qualified applicant for each available license is approved. Further random selections for priority positions shall also be held pursuant to this section as necessary.

J. All applications submitted for a license shall expire upon the director's final approval of a qualified applicant for that available license.

K.] I. The director shall notify the applicant by certified mail of the date, time and place of the hearing. The hearing shall be held in Santa Fe. The director may designate a hearing officer to take evidence at the hearing. The director or the hearing officer shall have the power to administer oaths.

[L.] J. In determining whether [a license shall be issued] preliminary approval of issuance of a license shall be granted, the director shall take into consideration all requirements of the Liquor Control Act. [In the issuance of a license] The director shall specifically consider the nature and number of prior violations of the Liquor Control Act by the applicant or of any citations issued within the prior five years against a license held by the applicant or in which the applicant had an ownership interest required to be disclosed under the Liquor Control Act. The director shall disapprove the [issuance] application or give preliminary approval of the issuance of the license based upon a review of all documentation submitted and any investigation deemed necessary by the director.

[M. Before a new license is issued for a location, the director shall cause a notice of the application for the license to be posted conspicuously, on a sign not smaller than thirty inches by forty inches, on the outside of the front wall or front entrance of the immediate premises for which the license is sought or, if no building or improvements exist on the premises, the notice shall be posted at the front entrance of the immediate premises for which the license is sought, on a billboard not smaller than five feet by five feet. The contents of the notice shall be in the form prescribed by the department, and such posting shall be over a continuous period of twenty days prior to preliminary approval of the license. The director shall prescribe the manner in which the posting may be accomplished by the licensee, the licensee's representative or the director's designee.

N. A license shall not be issued until the posting requirements of Subsection M of this section have been met.

O. All costs of publication and posting shall be paid by the applicant.

P. It is unlawful for a person to remove or deface a notice posted in accordance with this section. A person convicted of a violation of this subsection shall be punished by a fine of not more than three hundred dollars ($300) or by imprisonment in the county jail for not more than one hundred twenty days or by both.]

K. Upon granting preliminary approval, the director shall notify the governing body of the local option district in which the license will be located of the director's preliminary approval of the issuance of the license. Notice to the governing body shall be by certified mail.

L. A governing body that has received a notice of preliminary approval of the issuance of a license from the department may approve or disapprove the issuance of the license in accordance with the provisions of this section.

M. Within forty-five days after receipt of a notice of preliminary approval from the department, the governing body shall hold a public hearing on the question of whether the department should approve the issuance of the license.

N. The governing body shall give notice of the public hearing, and the notice shall:

(1) be published at least twice, with the initial notice published at least thirty days before the hearing in a newspaper of general circulation within the territorial limits of the governing body;

(2) in addition to the required print publication, be published on a local option district's website, if the district has a website;

(3) set forth:

(a) the date, time and place of the hearing;

(b) the name and address of the applicant;

(d) the location of the applicant's proposed licensed premises; and

(e) such other information as may be required by the department; and

(4) be sent by certified mail to the applicant.

O. The governing body may designate a hearing officer to conduct the hearing. A record shall be made of the hearing.

P. The governing body may disapprove the issuance of the license if:

(1) the proposed location is within an area where the sale of alcoholic beverages is prohibited by the laws of New Mexico;

(2) the issuance would be in violation of a zoning or other ordinance of the governing body; or

(3) the issuance would be detrimental to the public health, safety or morals of the residents of the local option district.

Q. Within thirty days after the public hearing, the governing body shall notify the department as to whether the governing body has approved or disapproved the proposed issuance of the license. If the governing body fails to either approve or disapprove the issuance of the license within thirty days after the public hearing, the director may give final approval to the issuance of the license.

R. If the governing body disapproves the issuance of the license, it shall notify the department within thirty days setting forth the reasons for the disapproval. A copy of the minutes of the public hearing shall be provided to the department by the governing body with the notice of disapproval. If the governing body disapproves of the issuance of the license, the director shall disapprove the issuance of the license.

S. If the governing body approves the issuance of the license, it shall notify the department within thirty days of its approval. If the governing body approves of the issuance of the license, the director shall approve the issuance of the license.

T. After preliminary approval by the department and approval by the governing body and pending the results of background investigations, a temporary license for ninety days may be issued. The temporary license may be extended by the director for an additional ninety days if the director determines that there is not sufficient time to complete the background investigation or obtain reviews of fingerprints from appropriate agencies. A temporary license shall be surrendered immediately upon order of the director.

[Q.] U. A person aggrieved by a decision made by the director as to the approval or disapproval of the issuance of a license may appeal to the district court pursuant to the provisions of Section 39-3-1.1 NMSA 1978. If the disapproval is based upon local option district disapproval [pursuant to Subsection H of Section 60-6B-4 NMSA 1978], the governing body of the local option district shall be a necessary party to an appeal. The decision of the director shall continue in force, pending a reversal or modification by the district court, unless otherwise ordered by the court."

SECTION 8. Section 60-6B-4 NMSA 1978 (being Laws 1981, Chapter 39, Section 40, as amended) is amended to read:

"60-6B-4. [ISSUANCE OR] TRANSFER OF LOCATION OF A LICENSE WITHIN A LOCAL OPTION DISTRICT--APPROVAL OF APPROPRIATE GOVERNING BODY.--

[A. Prior to the approval of the issuance of a new license, and prior to the approval of a transfer permitted by Section 60-6B-3 or 60-6B-12 NMSA 1978]

A. A retailer or dispenser may apply to the department for transfer of location of a retailer's or dispenser's license within the local option district for which the license is approved by submitting to the director a written application, in the form prescribed by and stating the information required by the director, together with a nonrefundable application fee of two hundred dollars ($200).

B. The application shall include, in addition to such other information required by the director, a description, including floor plans, in a form prescribed by the director, that shows the proposed licensed premises for which the application is submitted. The area represented by the approved description shall become the licensed premises.

C. The application for transfer of location of a retailer's or dispenser's license shall include a sworn affidavit of the licensee that all wholesalers who are creditors of the licensee have been paid or that satisfactory arrangements have been made between the licensee and the wholesaler for the payment of such debts. A licensee who submits a false affidavit shall be denied approval to transfer the location of the license. When the director determines that a false affidavit has been submitted, the director shall refer the matter to the attorney general or district attorney for prosecution of perjury.

D. Upon receipt of a complete application for transfer of location of a license, the director shall cause a notice of the application for the license to be posted conspicuously, on a sign not smaller than thirty inches by forty inches, on the outside of the front wall or front entrance of the immediate premises for which the license is sought or, if no building or improvements exist on the premises, the notice shall be posted at the front entrance of the immediate premises for which the license is sought, on a billboard not smaller than five feet by five feet. The contents of the notice shall be in the form prescribed by the department, and such posting shall be over a continuous period of twenty days prior to preliminary approval of the license. The director shall prescribe the manner in which the posting may be accomplished.

E. All costs of publication and posting shall be paid by the licensee.

F. It is unlawful for a person to remove or deface a notice posted in accordance with Subsection D of this section. A person convicted of a violation of this subsection shall be punished by a fine of not more than three hundred dollars ($300) or by imprisonment in the county jail for not more than one hundred twenty days or by both.

G. Upon receipt of a complete application for transfer of location of a license within a local option district and posting of the notice of the application, the director shall notify the governing body of the local option district of the [director's preliminary approval of] application for the [issuance or] transfer of location of the license. Notice to the governing body shall be by certified mail.

[B.] H. A governing body that has received a notice of [preliminary approval of the issuance or] application for transfer of location of a license from the department may approve or disapprove the [issuance or] transfer of the license. [in accordance with the provisions of this section.

C.] I. Within forty-five days after receipt of a notice [of preliminary approval] from the department of an application for transfer of location of a license, the governing body shall hold a public hearing on the question of whether [the department should] to approve the proposed [issuance or] transfer.

[D.] J. The governing body shall give notice of the public hearing, [as required by Subsection C of this section] and the notice shall:

(1) be published at least twice, with the initial notice published at least thirty days before the hearing, in a newspaper of general circulation within the territorial limits of the governing body;

(2) in addition to required print publication, be published on a local option district's [web site] website, if the district has a [web site] website;

(3) set forth:

(a) the date, time and place of the hearing;

(b) the name and address of the licensee;

[(c) the action proposed to be taken by the department;

(d)] (c) the location of the licensee's current and proposed licensed premises; and

[(e)] (d) such other information as may be required by the [department] governing body; and

(4) be sent by certified mail to the [applicant] licensee.

[E.] K. The governing body may designate a hearing officer to conduct the hearing. A record shall be made of the hearing.

[F.] L. The governing body may disapprove the [issuance or] transfer of location of the license if:

(1) the proposed location is within an area where the sale of alcoholic beverages is prohibited by the laws of New Mexico;

(2) the [issuance or] transfer would be in violation of a zoning or other ordinance of the governing body; or

(3) the [issuance or] transfer would be detrimental to the public health, safety or morals of the residents of the local option district.

[G.] M. Within thirty days after the public hearing, the governing body shall notify the department as to whether the governing body has approved or disapproved the proposed [issuance or] transfer of location of the license. If the governing body fails to either approve or disapprove the [issuance or] transfer of location of the license within thirty days after the public hearing, the director may give final approval to the [issuance or] transfer of location of the license.

[H.] N. If the governing body disapproves the [issuance or] transfer of location of the license, it shall notify the department within [the time required by Subsection G of this section] thirty days setting forth the reasons for the disapproval. A copy of the minutes of the public hearing shall be [submitted] provided to the department by the governing body with the notice of disapproval. If the governing body disapproves of the [issuance or] transfer of location of the license, the director shall disapprove the [issuance or] transfer of location of the license.

[I.] O. If the governing body approves the [issuance or] transfer of location of the license, it shall notify the department within [the time required by Subsection G of this section] thirty days of its approval. If the governing body approves of the [issuance or] transfer of location of the license, the director shall approve the [issuance or] transfer of location of the license."

SECTION 9. Section 60-6B-5 NMSA 1978 (being Laws 2015, Chapter 86, Section 2) is amended to read:

"60-6B-5. EXPIRATION AND RENEWAL OF LICENSES.--

A. All licenses provided for in the Liquor Control Act, except for nonresident licenses and common carrier registrations, shall be issued for a one-year period except for new licenses issued after the beginning of the license year. Nonresident licenses and common carrier registrations shall be issued for a three-year period.

B. The license year for [dispenser, retailer and canopy] dispenser's and retailer's licenses shall end on June 30 of each year. All [dispenser, retailer and canopy] dispenser's and retailer's licenses shall expire on June 30 unless renewed. The annual renewal application and renewal fee are due on April 1 of each year.

C. The license year for [restaurant, club] wholesaler and manufacturer licenses shall end on October 31 of each year. All [restaurant, club] wholesaler and manufacturer licenses shall expire on October 31 unless renewed. The annual renewal application and renewal fee are due on August 1 of each year.

D. All licenses not provided for in Subsections B and C of this section, except nonresident licenses and common carrier registrations, shall expire on February 28 of each year. The annual renewal application and renewal fee are due on December 1 of each year.

E. Nonresident licenses and common carrier registrations shall expire on June 30 every three years. The renewal application and renewal fee are due on April 1 of each third year.

F. A license shall not be issued or renewed if the applicant or licensee is delinquent in payment of any taxes administered by the taxation and revenue department.

G. The renewal of any license shall not be approved until the director is satisfied that all wholesalers who are creditors of the licensee have been paid or that satisfactory arrangements have been made between the licensee and the wholesaler for the payment of such debts. Such debts shall constitute a lien on the license, and the lien shall be deemed to have arisen on the date when the debt was originally incurred.

[G.] H. The director shall also determine whether there exists any other reason why a license should not be renewed.

[H.] I. If the director determines that the license should not be renewed, the director shall enter an order requiring the licensee, after notice, to show cause why the license should be renewed, and the director shall conduct a hearing on the matter. If, after the hearing, the director finds that no reason exists why the license should not be renewed, the director shall renew the license."

SECTION 10. Section 60-6B-9 NMSA 1978 (being Laws 1981, Chapter 39, Section 75) is amended to read:

"60-6B-9. DISCONTINUANCE OF BUSINESS OR DEATH OF LICENSEE--JUDICIAL SALES.--

A. If a retailer, dispenser [canopy licensee, restaurant licensee, club licensee] or governmental licensee [or its lessee] discontinues business for any reason or the licensee dies, the stock of alcoholic beverages owned at the time of the discontinuation of business or the death of the licensee may be sold in whole or in part to any other retailer, dispenser [canopy licensee, restaurant licensee, club licensee] or governmental licensee [or its lessee] or to a New Mexico wholesaler without the seller incurring criminal or civil liability under the provisions of the Liquor Control Act.

B. If the stock of alcoholic beverages is sold under execution or attachment or by order of a court, the stock shall be sold only to other New Mexico retailers, dispensers [canopy licensees, restaurant licensees, club licensees] or governmental licensees [or their lessees] or to a New Mexico wholesaler."

SECTION 11. Section 60-7A-11 NMSA 1978 (being Laws 1981, Chapter 39, Section 77, as amended) is amended to read:

"60-7A-11. OFFENSES BY RETAILERS.--It is a violation of the Liquor Control Act for [any] a retailer to:

A. allow or permit [any] alcoholic beverages to be consumed on [his] the retailer's licensed premises unless the retailer also holds a dispenser's license;

B. maintain or keep in close proximity to the licensed premises [any] a place for the consumption of alcoholic beverages purchased from [him] the retailer unless the retailer also holds a dispenser's license;

C. sell [any] alcoholic beverages at [any] a place other than [his] the retailer's licensed premises;

D. sell or possess for the purpose of sale or to have, possess or keep on [his] the retailer's licensed premises alcoholic beverages not contained in the unopened, original package unless the retailer also holds a dispenser's license;

E. buy or receive [any] alcoholic beverages from [any] a person other than a [duly] licensed New Mexico wholesaler or wine wholesaler for the purpose of or with the intent of reselling the alcoholic beverages; [or]

F. directly, indirectly or through [any] a subterfuge own, operate or control [any] an interest in [any] a wholesale liquor establishment or liquor manufacturing or wine bottling firm; provided that this subsection shall not prevent a retailer from owning stock in [any] a corporation [which] that wholesales, manufactures or bottles alcoholic beverages when [he] the retailer owns the stock for investment purposes only;

G. employ or engage a person to sell alcoholic beverages if the person has not received alcohol server training within thirty days of employment; or

H. employ or engage a person to sell alcoholic beverages during a period when the server permit of that person is suspended or revoked."

SECTION 12. Section 60-7A-12 NMSA 1978 (being Laws 1981, Chapter 39, Section 78, as amended) is amended to read:

"60-7A-12. OFFENSES BY DISPENSERS [CANOPY LICENSEES, RESTAURANT LICENSEES] OR GOVERNMENTAL LICENSEES [OR THEIR LESSEES AND CLUBS].--It is a violation of the Liquor Control Act for [any] a dispenser [canopy licensee, restaurant licensee] or governmental licensee [or its lessee or club] to:

A. receive any alcoholic beverages for the purpose or with the intent of reselling the alcoholic beverages from any person unless the person is [duly] licensed to sell alcoholic beverages to dispensers for resale;

B. sell, possess for the purpose of sale, or bottle bulk wine for sale other than by the drink for immediate consumption on its licensed premises unless the dispenser also holds a retailer's license;

C. directly, indirectly or through subterfuge, own, operate or control any interest in a wholesale liquor establishment or liquor manufacturing or wine bottling firm; provided that this section shall not prevent:

(1) a dispenser from owning an interest in a legal entity, directly or indirectly or through an affiliate, that wholesales alcoholic beverages and that operates or controls an interest in an establishment operating pursuant to the provisions of Subsection B of Section 60-7A-10 NMSA 1978; or

(2) a small brewer or winegrower licensed pursuant to the Domestic Winery, Small Brewery and Craft Distillery Act from holding an interest in a legal entity, directly or indirectly or through an affiliate, that holds a [restaurant or a] dispenser's license and a small brewer and winegrower limited wholesaler's license issued pursuant to the Liquor Control Act;

D. sell or possess for the purpose of sale any alcoholic beverages at any location or place except its licensed premises or the location permitted pursuant to the provisions of Section 60-6A-12 NMSA 1978;

E. employ or engage a person to sell, serve or dispense alcoholic beverages if the person has not received alcohol server training within thirty days of employment; or

F. employ or engage a person to sell, serve or dispense alcoholic beverages during a period when the server permit of that person is suspended or revoked."

SECTION 13. Section 60-7B-10 NMSA 1978 (being Laws 1981, Chapter 39, Section 90, as amended) is amended to read:

"60-7B-10. MINORS IN LICENSED PREMISES--REGULATIONS.--

A. Any person licensed pursuant to the provisions of the Liquor Control Act or any employee or agent [or lessee] of that person who permits a minor to enter and remain in any area of a licensed premises that is prohibited to the use of minors is guilty of a violation of the Liquor Control Act.

B. A minor shall not enter or attempt to enter any area of a licensed premises that is posted or otherwise identified as being prohibited to the use of minors, except as authorized by regulation or as necessitated by an emergency. A person who violates the provisions of this subsection is guilty of a petty misdemeanor and shall be punished pursuant to the provisions of Section 31-19-1 NMSA 1978.

C. The director of the alcohol and gaming division of the regulation and licensing department shall adopt regulations classifying the types of licensed premises or areas of licensed premises where minors may be present. The director shall require that signs issued by the division be posted by licensees to inform the public, including minors, of the areas in licensed premises that are open to minors. The regulations may allow minors in those areas of licensed premises where:

(1) the consumption of alcoholic beverages is the primary activity, when a minor is accompanied by a parent, adult spouse or legal guardian; or

(2) there is no consumption of alcoholic beverages."

SECTION 14. Section 60-7B-11 NMSA 1978 (being Laws 1981, Chapter 39, Section 91, as amended) is amended to read:

"60-7B-11. EMPLOYMENT OF MINORS.--

A. Except as provided in Subsection B of this section, it is a violation of the Liquor Control Act for any person licensed pursuant to the provisions of the Liquor Control Act or for any employee or agent [or lessee] of that person knowingly to employ or use the service of any minor in the sale and service of alcoholic beverages.

B. A person holding a dispenser's [restaurant or club] license may employ persons nineteen years of age or older to sell or serve alcoholic beverages in an establishment that is held out to the public as a place where meals are prepared and served and the primary source of revenue is food, and where the sale or consumption of alcoholic beverages is not the primary activity, except that a person under [the age of 21] twenty-one years of age shall not be employed as a bartender."

SECTION 15. Section 60-8A-1 NMSA 1978 (being Laws 1981, Chapter 39, Section 60, as amended) is amended to read:

"60-8A-1. UNFAIR COMPETITION--EXCLUSIVE OUTLET--TIED HOUSE--CONSIGNMENT SALES.--It is unlawful for an importer, manufacturer, nonresident licensee or any kind or class of wholesaler, directly or indirectly, or through an affiliate:

A. to require by agreement or otherwise that a wholesaler, retailer, dispenser [canopy licensee, restaurant licensee, club licensee] or governmental licensee [or its lessee engaged in the sale of alcoholic beverages in the state] purchase alcoholic beverages from that person to the exclusion in whole or in part of alcoholic beverages sold or offered for sale by other persons;

B. to induce through any of the following means, a wholesaler, retailer, dispenser [canopy licensee, restaurant licensee, club licensee] or governmental licensee [or its lessee engaged in the sale of any kind or class of alcoholic beverages] to purchase alcoholic beverages from that person to the exclusion in whole or in part of alcoholic beverages sold or offered for sale by other persons:

(1) by acquiring or holding, after the expiration of an existing license, an interest in a license with respect to the premises of the wholesaler, retailer, dispenser [canopy licensee, restaurant licensee, club licensee] or governmental licensee [or its lessee];

(2) by acquiring an interest in real or personal property owned, occupied or used by a wholesaler, retailer, dispenser [restaurant licensee or club] or governmental licensee in the conduct of the buying wholesaler's, retailer's, dispenser's [canopy licensee's, restaurant licensee's, club licensee's] or governmental licensee's [or its lessee's] business, subject to exceptions that the director may prescribe, having due regard for the free flow of commerce, the purposes of this subsection and established trade customs not contrary to the public interest;

(3) by furnishing, giving, renting, lending or selling to a wholesaler, retailer, dispenser [canopy licensee, restaurant licensee, club licensee] or governmental licensee [or its lessee] equipment, fixtures, signs, supplies, money, services or other thing of value, subject to exceptions that the director may by regulation prescribe, having due regard for public health and welfare, the quantity and value of the articles involved and established trade customs not contrary to the public interest and the purposes of this subsection;

(4) by paying or crediting the wholesaler, retailer, dispenser [canopy licensee, restaurant licensee, club licensee] or governmental licensee [or its lessee] for advertising, display or distribution services;

(5) by requiring a wholesaler, retailer, dispenser [canopy licensee, restaurant licensee, club licensee] or governmental licensee [or its lessee] to take and dispose of a certain quota or combination of alcoholic beverages; or

(6) by commercial bribery by offering or giving a bonus, premium or compensation to an officer, employee, agent or representative of a wholesaler, retailer, dispenser [canopy licensee, restaurant licensee, club licensee] or governmental licensee [or its lessee]; or

C. to sell, offer for sale or contract to sell to a retailer, dispenser [canopy licensee, restaurant licensee, club licensee] or governmental licensee [or its lessee] alcoholic beverages of any kind or class on consignment or under a conditional sale or on a basis other than a bona fide sale; provided that this subsection shall not apply to transactions involving solely the bona fide return of alcoholic beverages for ordinary and usual commercial reasons arising after the alcoholic beverages have been sold, including a return of alcoholic beverages that are at or near spoilage or expiration date or that were damaged by the wholesaler, but not including a return of alcoholic beverages that were damaged by any other licensee or any other licensee's employees or customers."

SECTION 16. Section 60-8A-3 NMSA 1978 (being Laws 1981, Chapter 39, Section 70) is amended to read:

"60-8A-3. INVOICES.--Whenever a New Mexico wholesaler delivers [any item of] alcoholic beverages to a New Mexico retailer, dispenser [canopy licensee, restaurant licensee, club licensee] or governmental licensee [or its lessee], the delivery shall be accompanied by an invoice [which] that accurately and clearly shows the date of the sale and the quantity of each item of merchandise delivered. The retailer, dispenser [canopy licensee, restaurant licensee, club licensee] or governmental licensee [or its lessee] receiving the alcoholic beverages shall retain the invoice for a period of two years. The invoices shall be open for inspection and examination by [any] an employee of the department or the taxation and revenue department during all usual business hours."

SECTION 17. REPEAL.--Sections 60-6A-4, 60-6A-5, 60-6A-18, 60-6B-3, 60-6B-12, 60-6B-14 through 60-6B-16 and 60-7A-13 NMSA 1978 (being Laws 1981, Chapter 39, Sections 21, 22 and 35, Laws 1991, Chapter 257, Section 2, Laws 1981, Chapter 39, Section 113, Laws 1988, Chapter 12, Sections 2 through 4 and Laws 1981, Chapter 39, Section 79, as amended) are repealed.

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