SENATE BILL 211

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

INTRODUCED BY

Ron Griggs

AN ACT

RELATING TO ALCOHOLIC BEVERAGES; ENACTING A NEW SECTION OF THE LIQUOR CONTROL ACT TO ALLOW CERTAIN DISPENSER LICENSEES TO LEASE A PRIVILEGE GRANTED BY THEIR LICENSES; ADDRESSING LESSOR AND LESSEE LIABILITY; AMENDING SECTIONS OF THE LIQUOR CONTROL ACT; REQUIRING RULES.

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

     SECTION 1. Section 60-6A-1 NMSA 1978 (being Laws 1981, Chapter 39, Section 18, as amended) is amended to read:

     "60-6A-1. WHOLESALER'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 license as a wholesaler of alcoholic beverages.

          B. No wholesaler shall sell, offer for sale or ship alcoholic beverages not received at and shipped from the premises specified in the wholesaler's license. As used in this section, "received at and shipped from" means that all alcoholic beverages shall be unloaded at the wholesaler's licensed premises and placed into inventory before being sold and shipped to a licensed retailer.

          C. No wholesaler shall sell or offer for sale alcoholic beverages to any person other than the holder of a New Mexico wholesaler's, retailer's, dispenser's, canopy, restaurant or club license, a governmental licensee or its lessee, the lessee or partial lessee of a license as otherwise provided by the Liquor Control Act or an enterprise owned, operated or licensed by an Indian nation, tribe or pueblo within the state in conformity with an ordinance duly adopted by the Indian nation, tribe or pueblo having jurisdiction over the situs of the transaction within the area of Indian country, certified by the secretary of the interior, published in the federal register, according to the laws of the United States."

     SECTION 2. 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] pursuant to the Liquor Control Act may apply for and be issued a dispenser's license for the sale of alcoholic beverages.

          B. Except as provided in Section 60-6A-3.1 NMSA 1978, 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."

     SECTION 3. A new section of the Liquor Control Act, Section 60-6A-3.1 NMSA 1978, is enacted to read:

     "60-6A-3.1. [NEW MATERIAL] DISPENSER'S LICENSE--PARTIAL LEASE OF LICENSE PRIVILEGES--LIABILITY--RULES.--

          A. Except as provided in Subsection B of this section, a dispenser who exercises the privileges conferred by a dispenser's license only to:

                (1) sell alcoholic beverages by the drink for consumption on the licensed premises may lease to one other person the privilege to sell alcoholic beverages in unbroken packages for consumption, but not for resale, off the licensed premises; provided that the location of the lessee's premises, which shall be considered licensed premises, is at a site approved by the director outside the local option district where the dispenser-lessor's licensed premises are located; or

                (2) sell alcoholic beverages in unbroken packages for consumption, but not for resale, off the licensed premises may lease to one other person the privilege to sell alcoholic beverages by the drink for consumption on the licensed premises; provided that the location of the lessee's premises, which shall be considered licensed premises, is at a site approved by the director outside the local option district where the dispenser-lessor's licensed premises are located.

          B. The provisions of Subsection A of this section do not apply to a dispenser's license that has been transferred outside of its local option district pursuant to Section 60-6B-12 NMSA 1978.

          C. A partial lease made pursuant to Subsection A of this section is subject to approval by the governing body where the lessee's licensed premises are to be located pursuant to Section 60-6B-4 NMSA 1978. The licensed premises may be in any location in this state except in class B counties having a population of between seventy-one thousand and seventy-two thousand according to the 2010 federal decennial census, the municipalities located within those class B counties and any municipality or county that prohibits by election the transfer of a license from another local option district.

          D. The lessee and the lessee's privilege to sell and serve alcoholic beverages pursuant to this section are subject to the Liquor Control Act and applicable rules to the same extent as they apply to Liquor Control Act licensees and licenses; provided that the privilege to sell and serve alcoholic beverages shall have no impact on the maximum number of licenses that may be issued pursuant to Section 60-6A-18 NMSA 1978.

          E. No later than November 1, 2017, the director shall promulgate rules the director deems necessary to implement the provisions of this section. These rules shall include a form to be acknowledged by the dispenser-lessor and lessee that sets out the terms of the relationship between the dispenser-lessor, lessee and department as provided by the provisions of this section and the rules.

          F. Notwithstanding any other provision or interpretation of law, unless a preponderance of the evidence for civil suits or substantial evidence for administrative sanctions reveals that a dispenser-lessor had actual knowledge of the violation and took no reasonable action to prevent or mitigate the violation, a violation of the Liquor Control Act or applicable rules by the lessee or at the lessee's licensed premises shall not subject the dispenser-lessor or the dispenser-lessor's license to civil damages or sanctions or to administrative sanctions."

     SECTION 4. 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 OR PARTIAL LEASE OF LICENSE--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 or the partial lease of a dispenser license pursuant to Section 60-6A-3.1 NMSA 1978, the director shall notify the governing body of the director's preliminary approval of the issuance, [or] transfer or partial lease of the license. Notice to the governing body shall be by certified mail.

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

          C. 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 proposed issuance, [or] transfer or partial lease.

          D. 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) the location of the licensee's premises; and

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

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

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

          F. The governing body may disapprove the issuance, [or] transfer or partial lease 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. 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 or partial lease of the license. If the governing body fails to either approve or disapprove the issuance, [or] transfer or partial lease of the license within thirty days after the public hearing, the director may give final approval to the issuance, [or] transfer or partial lease of the license.

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

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

     SECTION 5. 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, GOVERNMENTAL LICENSEES OR THEIR LESSEES AND CLUBS.--It is a violation of the Liquor Control Act for any dispenser, canopy licensee, restaurant licensee, 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;

          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:

                (1) its licensed premises; [or]

                (2) the location permitted pursuant to the provisions of Section 60-6A-12 NMSA 1978; or

                (3) the premises used under a partial lease pursuant to Section 60-6A-3.1 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 6. EFFECTIVE DATE.--The effective date of the provisions of this act is July 1, 2017.

- 10 -