Bill Summary – FastDemocracy

67th Legislature                                                                                                 HB 157.1
                                                  HOUSE BILL NO. 157
                                            INTRODUCED BY R. MARSHALL
                          BY REQUEST OF THE ECONOMIC AFFAIRS INTERIM COMMITTEE
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   A BILL FOR AN ACT ENTITLED: “AN ACT GENERALLY REVISING ALCOHOL LICENSING LAWS;
   ALLOWING A BREWERY TO SHARE A LOCATION WITH A RETAIL LICENSE IF THE BREWERY
   MAINTAINS ADEQUATE PHYSICAL SEPARATION; DEFINING ADEQUATE PHYSICAL SEPARATION;
   ALLOWING AN APPLICANT FOR AN ON-PREMISES ALCOHOL LICENSE TO HAVE A SPOUSE THAT IS
   AFFILIATED WITH OR HAS FINANCING FROM A MANUFACTURER OF ALCOHOLIC BEVERAGES;
   AMENDING SECTIONS 16-3-311 AND 16-4-401, MCA; AND PROVIDING AN IMMEDIATE EFFECTIVE
   DATE.”
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   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MONTANA:
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              NEW SECTION. Section 1. Control of brewery premises -- portion of brewery building adjacent
   to licensed retailer. (1) A brewery may use part of a building that is also approved by the department as a
   licensed retail location if the brewery can maintain control of the premises through adequate physical
   separation.
              (2) (a) For purposes of this section, the term "adequate physical separation" means the brewery can
   be secured after business hours from unlawful entry. The separation may include doors, gates, and windows
   that may be left open during business hours.
              (b) The term does not require permanent floor-to-ceiling walls.
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              Section 2. Section 16-3-311, MCA, is amended to read:
              "16-3-311. Suitable premises for licensed retail establishments. (1) A licensed retailer may use a
   part of a building as premises licensed for on-premises consumption of alcoholic beverages. The Except as
   provided in [section 1], the premises must be separated from the rest of the building by permanent walls but
   may have inside access during lawful hours of operation to the rest of the building even if the businesses or
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   uses in the other part of the building are unrelated to the operation of the premises in which the alcoholic
   beverages are served.
              (2) A licensee whose premises did not meet the requirements of this section on September 24, 1992,
   shall meet the requirements when an alteration to the premises has been completed and the department has
   approved the alteration. An alteration is any structural change in a premises. A cosmetic change, such as
   painting, carpeting, or other interior decorating, is not considered an alteration under this section."
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              Section 3. Section 16-4-401, MCA, is amended to read:
              "16-4-401. License as privilege -- criteria for decision on application. (1) A license under this
   code is a privilege that the state may grant to an applicant and is not a right to which any applicant is entitled.
              (2) Except as provided in 16-4-311 and subsection (6) of this section and subject to subsection (8), in
   the case of a license that permits on-premises consumption, the department shall find in every case in which it
   makes an order for the issuance of a new license or for the approval of the transfer of a license that:
              (a) if the applicant is an individual:
              (i) and the application is approved, the applicant will not possess an ownership interest in more than
   three establishments licensed under this chapter for all-beverages sales. However, resort retail all-beverages
   licenses issued under 16-4-213 do not count toward this limit.
              (ii) the applicant does not possess an ownership interest in an agency liquor store as defined in 16-1-
   106;
              (iii) the applicant or any member of the applicant's immediate family is without financing from or any
   affiliation to a manufacturer, importer, bottler, or distributor of alcoholic beverages, except that an applicant's
   spouse may possess an ownership interest in a manufacturer license;
              (iv) the applicant's past record and present status as a purveyor of alcoholic beverages and as a
   business person and citizen demonstrate that the applicant is likely to operate the establishment in compliance
   with all applicable laws of the state and local governments; and
              (v)   the applicant is not under 19 years of age;
              (b) if the applicant is a publicly traded corporation:
              (i) each owner of 10% or more of the outstanding stock meets the requirements for an individual
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67th Legislature                                                                                                       HB 157.1
   applicant listed in subsection (2)(a). If no single owner owns more than 10% of the outstanding stock, the
   applicant shall designate two or more officers or board members, each of whom must meet the requirements
   for an individual applicant listed in subsection (2)(a).
              (ii) each individual who has control over the operation of the license meets the requirements for an
   individual applicant listed in subsection (2)(a);
              (iii) each person who shares in the profits or liabilities of a license meets the requirements for an
   individual applicant listed in subsection (2)(a). This subsection (2)(b)(iii) does not apply to a shareholder of a
   corporation who owns less than 10% of the outstanding stock in that corporation except that the provisions of
   subsection (8) apply.
              (iv) the corporation is authorized to do business in Montana;
              (c)   if the applicant is a privately held corporation:
              (i) each owner of 10% or more of the outstanding stock meets the requirements for an individual
   applicant listed in subsection (2)(a). If no single owner owns more than 10% of the outstanding stock, the
   applicant shall designate two or more officers or board members, each of whom must meet the requirements
   for an individual applicant listed in subsection (2)(a), and the owners of 51% of the outstanding stock must meet
   the requirements of subsection (2)(a).
              (ii) each individual who has control over the operation of the license meets the requirements for an
   individual applicant listed in subsection (2)(a);
              (iii) each person who shares in the profits or liabilities of a license meets the requirements for an
   individual applicant listed in subsection (2)(a). This subsection (2)(c)(iii) does not apply to a shareholder of a
   corporation who owns less than 10% of the outstanding stock in that corporation except that the provisions of
   subsection (8) apply.
              (iv) the corporation is authorized to do business in Montana;
              (d) if the applicant is a general partnership, each partner must meet the requirements of subsection
   (2)(a);
              (e) if the applicant is a limited partnership or a limited liability partnership, each general partner and all
   limited partners whose ownership interest in the partnership equals or exceeds 10% must meet the
   requirements of subsection (2)(a). If no single limited partner's interest equals or exceeds 10%, then 51% of all
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67th Legislature                                                                                                    HB 157.1
   limited partners must meet the requirements of subsection (2)(a).
              (f)   if the applicant is a limited liability company, all managing members and those members whose
   ownership interest in the company equals or exceeds 10% must meet the requirements of subsection (2)(a). If
   no single member's interest equals or exceeds 10%, then 51% of all members must meet the requirements of
   subsection (2)(a).
              (3) In the case of a license that permits only off-premises consumption and subject to subsection (8),
   the department shall find in every case in which it makes an order for the issuance of a new license or for the
   approval of the transfer of a license that:
              (a) if the applicant is an individual:
              (i) and the application is approved, the applicant will not possess an ownership interest in more than
   three establishments licensed under this chapter for all-beverages sales;
              (ii) the applicant does not possess an ownership interest in an agency liquor store as defined in 16-1-
   106;
              (iii) the applicant or any member of the applicant's immediate family is without financing from or any
   affiliation to a manufacturer, importer, bottler, or distributor of alcoholic beverages;
              (iv) the applicant has not been convicted of a felony or, if the applicant has been convicted of a felony,
   the applicant's rights have been restored;
              (v)   the applicant's past record and present status as a purveyor of alcoholic beverages and as a
   business person and citizen demonstrate that the applicant is likely to operate the establishment in compliance
   with all applicable laws of the state and local governments; and
              (vi) the applicant is not under 19 years of age;
              (b) if the applicant is a publicly traded corporation:
              (i) each owner of 10% or more of the outstanding stock meets the requirements for an individual listed
   in subsection (3)(a). If no single owner owns more than 10% of the outstanding stock, the applicant shall
   designate two or more officers or board members, each of whom must meet the requirements for an individual
   applicant listed in subsection (3)(a).
              (ii) the corporation is authorized to do business in Montana;
              (c)   if the applicant is a privately held corporation:
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              (i) each owner of 10% or more of the outstanding stock meets the requirements for an individual
   applicant listed in subsection (3)(a). If no single owner owns more than 10% of the outstanding stock, the
   applicant shall designate two or more officers or board members, each of whom must meet the requirements
   for an individual applicant listed in subsection (3)(a), and the owners of 51% of the outstanding stock must meet
   the requirements of subsection (3)(a).
              (ii) the corporation is authorized to do business in Montana;
              (d) if the applicant is a general partnership, each partner must meet the requirements of subsection
   (3)(a);
              (e) if the applicant is a limited partnership or a limited liability partnership, each general partner and all
   limited partners whose ownership interest in the partnership equals or exceeds 10% must meet the
   requirements of subsection (3)(a). If no single limited partner's interest equals or exceeds 10%, then 51% of all
   limited partners must meet the requirements of subsection (3)(a).
              (f)   if the applicant is a limited liability company, all managing members and those members whose
   ownership interest in the company equals or exceeds 10% must meet the requirements of subsection (3)(a). If
   no single member's interest equals or exceeds 10%, then 51% of all members must meet the requirements of
   subsection (3)(a).
              (4) Subject to 16-4-311, in the case of a license that permits the manufacture, importing, or
   wholesaling of an alcoholic beverage, the department shall find in every case in which it makes an order for the
   issuance of a new license or for the approval of the transfer of a license that:
              (a) if the applicant is an individual:
              (i)   the applicant has no ownership interest in any establishment licensed under this chapter for retail
   alcoholic beverages sales;
              (ii) the applicant does not possess an ownership interest in an agency liquor store as defined in 16-1-
   106;
              (iii) the applicant has not been convicted of a felony or, if the applicant has been convicted of a felony,
   the applicant's rights have been restored;
              (iv) the applicant's past record and present status as a purveyor of alcoholic beverages and as a
   business person and citizen demonstrate that the applicant is likely to operate the establishment in compliance
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67th Legislature                                                                                                       HB 157.1
   with all applicable laws of the state and local governments;
              (v)   the applicant is not under 19 years of age; and
              (vi) an applicant for a wholesale license is not a manufacturer of an alcoholic beverage or owned or
   controlled by a manufacturer of an alcoholic beverage;
              (b) if the applicant is a publicly traded corporation:
              (i) each owner of 10% or more of the outstanding stock meets the requirements for an individual listed
   in subsection (4)(a). If no single owner owns more than 10% of the outstanding stock, the applicant shall
   designate two or more officers or board members, each of whom must meet the requirements for an individual
   applicant listed in subsection (4)(a).
              (ii) an applicant for a wholesale license is not a manufacturer of an alcoholic beverage or owned or
   controlled by a manufacturer of an alcoholic beverage; and
              (iii) the corporation is authorized to do business in Montana;
              (c)   if the applicant is a privately held corporation:
              (i) each owner of 10% or more of the outstanding stock meets the requirements for an individual
   applicant listed in subsection (4)(a). If no single owner owns more than 10% of the outstanding stock, the
   applicant must designate two or more officers or board members, each of whom must meet the requirements
   for an individual applicant listed in subsection (4)(a) and the owners of 51% of the outstanding stock must meet
   the requirements of subsection (4)(a).
              (ii) an applicant for a wholesale license is not a manufacturer of an alcoholic beverage or owned or
   controlled by a manufacturer of an alcoholic beverage; and
              (iii) the corporation is authorized to do business in Montana;
              (d) if the applicant is a general partnership, each partner must meet the requirements of subsection
   (4)(a);
              (e) if the applicant is a limited partnership or a limited liability partnership, each general partner and all
   limited partners whose ownership interest in the partnership equals or exceeds 10% must meet the
   requirements of subsection (4)(a). If no single limited partner's interest equals or exceeds 10%, then 51% of all
   limited partners must meet the requirements of subsection (4)(a).
              (f)   if the applicant is a limited liability company, all managing members and those members whose
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   ownership interest in the company equals or exceeds 10% must meet the requirements of subsection (4)(a). If
   no single member's interest equals or exceeds 10%, then 51% of all members must meet the requirements of
   subsection (4)(a).
              (5) In the case of a corporate applicant, the requirements of subsections (2)(b), (3)(b), and (4)(b)
   apply separately to each class of stock.
              (6) The provisions of subsection (2) do not apply to an applicant for or holder of a license pursuant to
   16-4-302.
              (7) An applicant's source of funding must be from a suitable source. A lender or other source of
   money or credit may be found unsuitable if the source:
              (a) is a person whose prior financial or other activities or criminal record:
              (i) poses a threat to the public interest of the state;
              (ii) poses a threat to the effective regulation and control of alcoholic beverages; or
              (iii) creates a danger of illegal practices, methods, or activities in the conduct of the licensed business;
   or
              (b) has been convicted of a felony offense within 5 years of the date of application or is on probation
   or parole or under deferred prosecution for committing a felony offense.
              (8) (a) An individual applying for an all-beverages license or having any ownership interest in an
   entity applying for an all-beverages license may not, if the application were to be approved, own an interest in
   more than half the total number of allowable all-beverages licenses in any quota area described in 16-4-201.
              (b) If two or more individuals through business or family relationship share in the profits or liabilities of
   all-beverages licenses, the aggregate