House Bill No. 78
Introduced By simpkins
A Bill for an Act entitled: "An Act generally revising and clarifying the laws governing liquor licenses and license administration; removing the restriction on retail beer licenses used in conjunction with all-beverages licenses; restricting a determination of public convenience and necessity to the transfer of a license to an area outside of the quota area in which the license was issued; revising license application procedures and the processing of applications; providing for conditional approval of a license; providing additional grounds for denying a license; amending sections 16-4-105, 16-4-203, 16-4-207, 16-4-402, 16-4-404, and 16-4-405, MCA; and providing an effective date and an applicability date."
Be it enacted by the Legislature of the State of Montana:
Section 1. Section 16-4-105, MCA, is amended to read:
"16-4-105. Limit on retail beer licenses -- wine license amendments -- off-premises consumption. (1) Except as otherwise provided by law, a license to sell beer at retail or beer and wine at retail, in accordance with the provisions of this code and the rules of the department, may be issued to any person, firm, or corporation that is approved by the department as a fit and proper person, firm, or corporation to sell beer, except that:
(a) the number of retail beer licenses that the department may issue for premises situated within incorporated cities and incorporated towns and within a distance of 5 miles from the corporate limits of the cities and towns must be determined on the basis of population prescribed in 16-4-502 as follows:
(i) in incorporated towns of 500 inhabitants or less and within a distance of 5 miles from the corporate limits of the towns,
not more than one retail beer license
, which may not be used in conjunction with a retail all-beverages license;
(ii) in incorporated cities or incorporated towns of more than 500 inhabitants and not over 2,000 inhabitants and within a
distance of 5 miles from the corporate limits of the cities or towns, one retail beer license for every 500 inhabitants
may not be used in conjunction with retail all-beverages licenses;
(iii) in incorporated cities of over 2,000 inhabitants and within a distance of 5 miles from the corporate limits of the cities,
four retail beer licenses for the first 2,000 inhabitants, two additional retail beer licenses for the next 2,000 inhabitants or
major fraction of 2,000 inhabitants, and one additional retail beer license for every additional 2,000 inhabitants
, which may
not be used in conjunction with retail all-beverages licenses;
(b) the number of the inhabitants in incorporated cities and incorporated towns, exclusive of the number of inhabitants residing within a distance of 5 miles from the corporate limits of the cities or towns, governs the number of retail beer licenses that may be issued for use within the cities and towns and within a distance of 5 miles from the corporate limits of the cities and towns. If two or more incorporated municipalities are situated within a distance of 5 miles from each other, the total number of retail beer licenses that may be issued for use in both the incorporated municipalities and within a distance of 5 miles from their respective corporate limits must be determined on the basis of the combined populations of both municipalities and may not exceed the limitations in this section. The distance of 5 miles from the corporate limits of any incorporated city or incorporated town must be measured in a straight line from the nearest entrance of the premises proposed for licensing to the nearest corporate boundary of the city or town.
(c) retail beer licenses of issue on March 7, 1947, and retail beer licenses issued under 16-4-110 that are in excess of the limitations in this section are renewable, but new licenses may not be issued in violation of the limitations;
(d) the limitations do not prevent the issuance of a nontransferable and nonassignable retail beer license to an enlisted persons', noncommissioned officers', or officers' club located on a state or federal military reservation on May 13, 1985, or to a post of a nationally chartered veterans' organization or a lodge of a recognized national fraternal organization if the veterans' or fraternal organization has been in existence for a period of 5 years or more prior to January 1, 1949;
(e) the number of retail beer licenses that the department may issue for use at premises situated outside of any incorporated
city or incorporated town and outside of the area within a distance of 5 miles from the corporate limits or for use at
premises situated within any unincorporated area must be determined by the department in its discretion
, except that a retail
beer license may not be issued for any premises so situated unless the department determines that the issuance of the
license is required by public convenience and necessity.
(2) A person holding a license to sell beer for consumption on the premises at retail may apply to the department for an
amendment to the license permitting the holder to sell wine as well as beer. The division may issue an amendment if it
finds, on a satisfactory showing by the applicant, that the sale of wine for consumption on the premises would be
supplementary to a restaurant or prepared-food business. A person holding a
beer-and-wine beer and wine license may sell
wine for consumption on or off the premises. Nonretention of the beer license, for whatever reason, means automatic loss
of the wine amendment license."
Section 2. Section 16-4-203, MCA, is amended to read:
"16-4-203. Determination of public convenience and necessity. An original license issued pursuant to
16-4-201, or 16-4-202 or 16-4-208 or the transfer of location of a license to a location outside of the quota area in which the
license was issued may be approved only if the department has determined, upon after a public hearing held pursuant to the
Montana Administrative Procedure Act, that the issuance or transfer of the license is justified by public convenience and
necessity. If there is no opposition to the application for issuance or transfer of the license, a hearing is not required. An
applicant is entitled to a hearing prior to the denial of a request for the issuance or transfer of a license."
Section 3. Section 16-4-207, MCA, is amended to read:
"16-4-207. Notice of application -- investigation -- publication -- protest. (1) When an application has been filed with
the department for a license to sell alcoholic beverages at retail or to transfer a retail license, the department shall review
the application for completeness and to determine whether the applicant, the existing premises, or the proposed premises to
meets meet criteria provided by law. The department may make one request for additional information
necessary to complete the application. The application is considered complete when the applicant furnishes the information
requested by the department. The When the application is complete, the department shall request that the department of
justice investigate the application as provided in 16-4-402. If after the investigation the department does not discover a
basis to deny the application Within 60 days after the department requests the investigation by the department of justice, the
department shall promptly publish in a newspaper of general circulation in the city, town, or county from which the
application comes a notice that the applicant has made application for a retail license and that protests against the issuance
of a license to the applicant by a person who has extended credit to the transferor or residents of the county from which the
application comes or adjoining Montana counties may be mailed to a named administrator in the department of revenue
within 10 days after the final notice is published. Notice of application for a new license must be published once a week for
4 consecutive weeks. Notice of application for transfer of a license must be published once a week for 2 consecutive weeks.
Notice may be substantially in the following form:
NOTICE OF APPLICATION FOR RETAIL ALL-BEVERAGES LICENSE
Notice is given that on the .... day of ...., 19.., one (name of applicant) filed an application for a retail all-beverages license with the Montana department of revenue, to be used at (describe location of premises where beverages are to be sold). A person who has extended credit to the transferor and residents of ...... counties may protest against the issuance of the license. Protests may be mailed to ...., department of revenue, Helena, Montana, on or before the .... day of ...., 19...
Dated .................. Signed
(2) Each applicant shall, at the time of filing an application, pay to the department an amount sufficient to cover the costs of publishing the notice.
(3) If the administrator receives no written protests, the department may issue or transfer the license without holding a public hearing. If written protests by a person who has extended credit to the transferor or residents of the county from which the application comes or adjoining Montana counties against the issuance or transfer of the license are received, the department shall hold a public hearing."
Section 4. Section 16-4-402, MCA, is amended to read:
"16-4-402. Application -- investigation. (1) Prior to the issuance of a license under this chapter, the applicant shall file with the department an application in writing, signed by the applicant and containing information and statements relative to the applicant and the premises where the alcoholic beverage is to be sold as required by the department. The application must be verified by the affidavit of the person making it before a person authorized to administer oaths.
(2) (a) Upon receipt of a completed application for a license under this code, accompanied by the necessary license fee or letter of credit as provided in 16-4-501(7)(f), the department shall request that the department of justice make a thorough investigation of all matters relating to the application. Based on the results of the investigation, the department shall determine whether:
(i) the applicant is qualified to receive a license;
(ii) the applicant's premises are suitable for the carrying on of the business; and
(iii) the requirements of this code and the rules promulgated by the department are met and complied with.
(b) This subsection (2) does not apply to a catering endorsement provided in 16-4-111 or 16-4-204(2), a retail beer and wine license for off-premises consumption as provided in 16-4-115, or a special permit provided in 16-4-301.
(c) The department of justice investigation and the department's determination under this subsection (2) must be completed within 90 days of the request from the department to the department of justice. The time period in this subsection (2)(c) may be extended for up to 45 days if information requested within 75 days by either department has not been received by the 75th day. The basis for the extension of time must be documented.
(3) Upon proof that an applicant made a false statement in any part of the original application, in any part of an annual renewal application, or in any hearing conducted pursuant to an application, the application for the license may be denied, and if issued, the license may be revoked.
If, within 30 days of receiving the completed application, the department finds no basis for denying the application, the
department shall proceed to publish the notice of the application as required by 16-4-207. Upon completion of the
investigation and determination provided for in subsection (2), the department shall issue a conditional approval letter if the
department has not received information that would cause the department to deny the issuance or transfer of the license.
The conditional approval letter must state the reasons upon which the future denial of the issuance or transfer of the license
may be based. The reasons for denial of the issuance or transfer of a license after the issuance of the conditional approval
(a) there is false or erroneous information in the application;
(b) the premises are not approved by local building, health, or fire officials; or
(c) physical changes to the premises if not known prior to the issuance of the conditional approval letter would have constituted grounds for the denial of the application or the issuance of the conditional approval letter."
Section 5. Section 16-4-404, MCA, is amended to read:
"16-4-404. Protest period -- contents of license -- posting -- privilege -- transfer. (1) A license may not be issued until on or after the date set in the notice for hearing protests. The department shall approve or deny the issuance or transfer of a license or issue a conditional approval letter within 7 days after the date set for notice and hearing and, if required, after notification from local building, health, and fire officials has been received by the department.
(2) Every license issued under this code must state the name of the person to whom it is issued, the location, by street and number or other appropriate specific description of location if no street address exists, of the premises where the business is to be carried on under the license, and other information that the department considers necessary. If the licensee is a partnership or if more than one person has an interest in the business operated under the license, the names of all persons in the partnership or interested in the business must appear on the license. Every license must be posted in a conspicuous place on the premises in which the business authorized under the license is conducted, and the license must be exhibited upon request to any authorized representative of the department or the department of justice or to any peace officer of the state of Montana.
(3) A license issued under the provisions of this code is a privilege personal to the licensee named in the license and is valid until the expiration of the license unless sooner revoked or suspended.
(4) A license may be transferred to the executor or administrator of the estate of a deceased licensee when the estate consists in whole or in part of the business of selling alcoholic beverages under a license. The license may descend or be disposed of with the licensed business under appropriate probate proceedings.
(5) (a) A licensee may apply to the department for a transfer of the license to different premises within the quota area if:
(i) there has been major loss or damage to the licensed premises by unforeseen natural causes;
(ii) the lease of the licensed premises has expired;
(iii) in case of rented licensed premises, there has been an eviction or increase of rent by the landlord; or
(iv) the licensee has proposed removal of the license to premises that are as substantially suited for the retail alcoholic beverages business as the premises proposed to be vacated.
(b) The department may, after notice and opportunity for protest, permit a transfer in the cases specified in subsection
(5)(a) if it appears to the department that a transfer is required to do justice to the licensee applying for the transfer
justified by public convenience and necessity. The department may not allow a transfer to different premises where the
sanitary, health, and service facilities are less satisfactory than facilities that exist or had existed at the premises from which
the transfer is proposed to be made.
(6) Upon a bona fide sale of the business operated under a license, the license may be transferred to a qualified purchaser. A transfer of a license to a person or location is not effective unless approved by the department. A licensee or transferee or proposed transferee who operates or attempts to operate under a supposedly transferred license prior to the approval of the transfer by the department, endorsed upon the license in writing, is considered to be operating without a license, and the license affected may be revoked or suspended by the department. The department may, within its discretion, permit a qualified purchaser to operate the business to be transferred pending final approval if there has not been a change in location and the application for transfer has been filed with the department.
(7) Except as provided in 16-4-204 and subsections (2) through (6)
and 16-4-204 of this section, a license may not be
transferred or sold or used for any place of business not described in the license. A license may be subject to mortgage and
other valid liens, in which event the name of the mortgagee, upon application to and approval of the department, must be
endorsed on the license. Beer or wine sold to a licensee on credit pursuant to 16-3-243 or 16-3-406 does not create a lien
upon a license, but a subsequent licensee has the obligation to pay for the beer or wine."
Section 6. Section 16-4-405, MCA, is amended to read:
"16-4-405. Denial of license. (1) The department may deny the issuance of a retail alcoholic beverages license if it determines that the premises proposed for licensing are off regular police beats and cannot be properly policed by local authorities.
(2) A retail license may not be issued by the department for a premises situated within a zone of a city or town where the sale of alcoholic beverages is prohibited by ordinance, a certified copy of which has been filed with the department.
(3) A license under this code may not be issued if the department finds from the evidence at the hearing held pursuant to 16-4-207(3) that:
(a) the welfare of the people residing in the vicinity of the premises for which the license is desired will be adversely and seriously affected;
(b) if required, there is not a public convenience and necessity justification;
(c) the applicant or the premises proposed for licensing fail to meet the eligibility or suitability criteria established by this
(d) a possible reason for denial listed in a conditional approval letter, as provided in 16-4-402, has been verified; or
(d)(e) the purposes of this code will not be carried out by the issuance of the license."
NEW SECTION. Section 7. Applicability. [This act] applies to applications for the issuance or transfer of a license received on or after [the effective date of this act].
NEW SECTION. Section 8. Effective date. [This act] is effective July 1, 1997.