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HOUSE BILL NO. 326
INTRODUCED BY P. NOONAN
A BILL FOR AN ACT ENTITLED: "AN ACT GENERALLY REVISING ALCOHOL LICENSE LAWS RELATING TO BREWERS AND BREWERIES; ALLOWING LICENSED BREWERS TO HOLD A RETAIL LICENSE; ALLOWING A HOLDER OF A RETAIL LICENSE TO HOLD A BREWER LICENSE; REVISING THE DEFINITION OF "SMALL BREWERY"; REVISING BREWER LICENSE APPLICATION REQUIREMENTS; AMENDING SECTIONS 16-3-213, 16-3-214, 16-3-241, 16-3-242, 16-3-244, 16-4-203, 16-4-207, 16-4-401, 16-4-405, AND 16-4-413, MCA; AND PROVIDING EFFECTIVE DATES AND AN APPLICABILITY DATE."
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MONTANA:
NEW SECTION. Section 1. Additional license allowed. (1) A licensed brewer that manufactures less than 60,000 barrels of beer a year may purchase or hold complete ownership of a license issued pursuant to 16-4-104 or 16-4-201.
(2) A person that holds a license issued pursuant to 16-4-104 or 16-4-201 may purchase or hold complete ownership of a brewer license if that person manufactures less than 60,000 barrels of beer a year.
(3) A person that holds a brewer license and a license issued pursuant to 16-4-104 or 16-4-201 may continue to operate its licenses if brewery production grows to more than 60,000 barrels a year.
(4) A person that holds a brewer license and a license issued pursuant to 16-4-104 or 16-4-201:
(a) shall maintain both licenses on the same premises, as approved by the department, and may hold:
(i) additional brewer licenses; or
(ii) up to two additional licenses issued pursuant to 16-4-104 or 16-4-201.
(b) may not provide samples pursuant to 16-3-213 for the brewery located at the same premises as the license issued pursuant to 16-4-104 or 16-4-201 and all retail sales must be conducted through the license issued pursuant to 16-4-104 or 16-4-201;
(c) may operate pursuant to 16-3-214 with the exception of 16-3-214(1)(b); and
(d) is not subject to the limitations of 16-3-241, 16-3-242, 16-3-244, or 16-4-401 when the prohibited acts are conducted by a brewer in the operation of its license issued pursuant to 16-4-104 or 16-4-201.
Section 2. Section 16-3-213, MCA, is amended to read:
"16-3-213. Brewers or beer importers not to retail beer -- small Small brewery sample room exceptions exception. (1) Except as provided for small breweries in subsection (2), it is unlawful for any brewer or breweries or beer importer to have or own any permit to sell or retail beer at any place or premises. It is the intention of this section to prohibit brewers and beer importers from engaging in the retail sale of beer. This section does not prohibit breweries from selling and delivering beer manufactured by them, in original packages, at either wholesale or retail.
(2) (a)(1) For the purposes of this section, a "small brewery" is a brewery that has an annual nationwide production of not less than 100 barrels or more than 10,000 60,000 barrels.
(b)(2) (a) A small brewery may, at one location for each brewery brewer license, provide samples of beer that were brewed and fermented on the premises in a sample room located on the licensed premises. The samples may be provided with or without charge between the hours of 10 a.m. and 8 p.m. No more than 48 ounces of malt beverage may be sold or given to each individual customer during a business day.
(b) A small brewery that has an annual nationwide production of more than 10,000 barrels but less than 60,000 barrels may operate pursuant to subsection (2)(a) as long as on-premises consumption does not exceed 500 barrels annually."
Section 3. Section 16-3-214, MCA, is amended to read:
"16-3-214. Beer sales by brewers -- sample room exception. (1) Subject to the limitations and restrictions contained in this code, a brewer who that manufactures less than 60,000 barrels of beer a year, upon payment of the annual license fee imposed by 16-4-501 and, upon presenting satisfactory evidence to the department as required by 16-4-101, and upon determination of public convenience and necessity as required by 16-4-203, must be licensed by the department, in accordance with the provisions of this code and rules prescribed by the department, to:
(a) sell and deliver beer from its storage depot or brewery to:
(i) a wholesaler;
(ii) licensed retailers if the brewer uses the brewer's own equipment, trucks, and employees to deliver the beer and if:
(A) individual deliveries, other than draught beer, are limited to the case equivalent of 8 barrels a day to each licensed retailer; and
(B) the total amount of beer sold or delivered directly to all retailers does not exceed 10,000 barrels a year; or
(iii) the public;
(b) provide its own products for consumption on its licensed premises without charge or, if it is a small brewery, provide its own products at a sample room as provided in 16-3-213; or
(c) do any one or more of the acts of sale and delivery of beer as provided in this code.
(2) A brewery may not use a common carrier for delivery of the brewery's product to the public or to licensed retailers.
(3) A brewery may import or purchase, upon terms and conditions the department may require, necessary flavors and other nonbeverage ingredients containing alcohol for blending or manufacturing purposes.
(4) An additional license fee may not be imposed on a brewery providing its own products on its licensed premises for consumption on the premises.
(5) This section does not prohibit a licensed brewer from shipping and selling beer directly to a wholesaler in this state under the provisions of 16-3-230."
Section 4. Section 16-3-241, MCA, is amended to read:
"16-3-241. Furnishing of fixtures or interior advertising matter to retailers by brewers, beer importers, and wholesalers unlawful -- exceptions. (1) (a) It Except as provided in [section 1], it is unlawful for any brewer, beer importer, or wholesaler to lease, furnish, give, or pay for any premises, furniture, fixtures, equipment, or any other advertising matter or any other property to a retail licensee, used or to be used in the dispensation of beer in and about the interior of the place of business of the licensed retailer, or to furnish, give, or pay for any repairs, improvements, or painting on or within the premises.
(b) It is lawful for a brewer, beer importer, or wholesaler to furnish, give, or loan to a retail licensee:
(i) bottle openers, can openers, trays, tap handles, menus, apparel, coasters, glassware, cups, napkins, or other functional advertising matter that does not exceed $300 in value in any 1 calendar year to any one retail establishment for display use within the interior of the retail establishment;
(ii) not more than six illuminated or electrical signs, neon signs, lamps, or lighted clocks for each brand of beer in any 1 calendar year to any one retailer for display use within the interior of the retailer's place of business. These signs, displays, lamps, or lighted clocks may bear the name, brand name, trade name, trademark, or other designation indicating the name of the manufacturer of beer and the place of manufacture. Any beer advertised must be available for sale on the retailer's premises at the time the displays are used unless the displays are the property of the retailer or, if supplied by a brewer, beer importer, or wholesaler, a display has been in the retailer's possession for more than 9 months.
(iii) permanent or temporary advertising matter of a decorative nature, excluding items described in subsection (1)(b)(ii) but including nonelectric clocks, mirrors, banners, flags, and pennants; and
(iv) maintenance or repair services on draft beer equipment to keep it sanitary and in good working condition.
(2) A wholesaler may furnish portable equipment used for the temporary cooling, handling, and dispensing of beer to a special permittee or a retailer for use:
(a) in catering an event that is off the permittee's or retailer's regular premises; or
(b) up to three times a year, on a retailer's regular premises, for a period not to exceed 72 hours."
Section 5. Section 16-3-242, MCA, is amended to read:
"16-3-242. Financial interest in retailers prohibited. (1) A Except as provided in [section 1], a brewer, beer importer, or wholesaler may not:
(a) advance, or loan, or furnish money to or furnish money for or pay for or on behalf of any retailer any license or tax that may be required to be paid for any by the retailer. A brewer, beer importer, or wholesaler may not; or
(b) be financially interested, either directly or indirectly, in the conduct or operation of the business of a retailer.
(2) A brewer, beer importer, or wholesaler is considered to have a financial interest within the meaning of this section if:
(1)(a) the brewer, beer importer, or wholesaler owns or holds any interest in or a lien or mortgage against the retailer or the retailer's premises;
(2)(b) the brewer, beer importer, or wholesaler is under any contract with a retailer concerning future purchases or the sale of merchandise by one from or to the other; or
(3)(c) any retailer holds an interest, as a stockholder or otherwise, in the business of the wholesaler."
Section 6. Section 16-3-244, MCA, is amended to read:
"16-3-244. Beer advertising limitations. (1) It Except as provided in subsection (2), it is lawful to advertise beer, as defined and regulated, subject to the restrictions on brewers and beer importers contained in 16-3-241 of this code and subject to the following restrictions on retailers. A retail licensee may not display or permit to be displayed on the exterior portion or surface of the retailer's place of business or on the exterior portion or surface of any building of which the place of business is a part or on any premises adjacent to the place of business, whether any of the premises are owned or leased by the retailer, any sign, poster, or advertisement bearing the name, brand name, trade name, trademark, or other designation indicating the manufacturer, brewer, beer importer, wholesaler, or place of manufacture of any beer, unless it is on a marquee, board, or other space used for temporary advertisements and is not displayed for more than 10 days per display period.
(2) A person that holds a brewer license and a license issued pursuant to 16-4-104 or 16-4-201 under [section 1] is not subject to the restrictions in subsection (1) for products manufactured by the person."
Section 7. Section 16-4-203, MCA, is amended to read:
"16-4-203. Determination of public convenience and necessity. (1) An original license issued pursuant to 16-3-214, 16-4-104, 16-4-201, 16-4-202, or 16-4-208 or the transfer of location of an on-premises retail license these licenses may be approved if the department does not receive the minimum number of protests required for a public convenience and necessity determination pursuant to 16-4-207, in which case the application must be regarded as a prima facie showing of public convenience and necessity and no further determination of public convenience and necessity is allowed.
(2) (a) If the department receives at least the minimum number of protests required for a public convenience and necessity determination, as provided in 16-4-207, an application must be approved when evidence indicates that the issuance of an original license or transfer of location will materially promote the public's ability to engage in the licensed activity.
(b) The issuance of an original license or a transfer of location will materially promote the public's ability to engage in the licensed activity if:
(i) the applicant's history and experience demonstrate the capacity to operate the proposed license in a lawful manner;
(ii) the approval of the application for the premises at the proposed location is consistent with the public's demand or probable demand for the licensed activity that presently exists or is reasonably expected to exist within the next 5 years in the quota area where the proposed premises is located and in quota areas adjacent to the quota area where the proposed premises is located;
(iii) the approval of the application for the premises at the proposed location contributes to the public's ability to participate in the licensed activity throughout the quota area where the proposed premises is located and quota areas adjacent to the quota area where the proposed premises is located;
(iv) the approval of the application for the premises at the proposed location is consistent with adopted or pending planning, annexation, and zoning ordinances of local governments that confer or will confer jurisdiction over business and developments such as the proposed license in the quota area where the proposed premises is located and in quota areas adjacent to the quota area where the proposed premises is located.
(3) When determining whether or not an application is justified by public convenience and necessity, the department may:
(a) receive evidence at the public hearing specified in 16-4-207 only from the applicant, any protestors whose protests the department has accepted pursuant to 16-4-207, and any other person summoned or called by either a protestor or applicant;
(b) find that the application is justified by public convenience and necessity if the applicant has provided substantial credible evidence as provided for in this subsection (3) that shows that the department's approval of the application will materially promote the public's ability to engage in the licensed activity. The substantial credible evidence required must include a consideration of each of the components of materially promoting the public's ability to engage in the licensed activity as provided in subsection (2)(b).
(4) For the purposes of this section, the following definitions apply:
(a) "Confer or will confer jurisdiction" means the power or authority that a local government or an appointed subsidiary of a local government has or may obtain within 1 year from the date of the hearing to consider and adopt planning, annexation, or zoning ordinances.
(b) "Licensed activity" means the purchase of alcoholic beverages for on-premises consumption in a business licensed to sell alcoholic beverages at retail for on-premises consumption.
(c) "Pending planning, annexation, and zoning ordinances" means the ordinances of a local government or an appointed subsidiary of a local government that were publicly considered within the year preceding the date of the hearing or are presently being considered."
Section 8. 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 the location of a retail on-premises license or a brewer license, the department shall review the application for completeness and, based upon review of the application and any other information supplied to the department, determine whether the applicant or the premises to be licensed meets 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 application information requested by the department. When the application is complete, the department of justice shall investigate the application as provided in 16-4-402. When the department determines that an application for a license under this code is complete, the department shall 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 on-premises license or a brewer license or a transfer of location and that protests may be made against the approval of the application by residents of the county from which the application comes, residents of adjoining Montana counties, or residents of adjoining counties in another state if the criteria in subsection (4)(d) are met. Protests must be mailed to the department 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 ownership or location 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 & #160; &# 160;ALL-BEVERAGES LICENSE
Notice is given that on the ........ day of ....., 20..., 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). Residents of ...... counties may protest against the approval of the application. Each protestor is required to mail a letter that contains in legible print the protestor's full name, mailing address, and street address. Each letter must be signed by the protestor. A protest petition bearing the names and signatures of persons opposing the approval of an application may not be considered as a protest. Protests may be mailed to ....., department of revenue, Helena, Montana, on or before the ..... day of ......, 20......
Dated ........................
60; Signed
60; ..............................
(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) (a) If the department receives no written protests, the department may approve the application without holding a public hearing.
(b) A response to a notice of opportunity to protest an application may not be considered unless the response is a letter satisfying all the requirements contained in the notice in subsection (1).
(c) If the department receives sufficient written protests that satisfy the requirements in subsection (1) against the approval of the application, the department shall hold a public hearing as provided in subsection (4).
(4) (a) If the department receives at least one protest but less than the number of protests required for a public convenience and necessity determination as specified in subsection (4)(c), the department shall schedule a public hearing to be held in Helena, Montana, to determine whether the protest presents sufficient cause to deny the application based on the qualifications of the applicant as provided in 16-4-401 or on the grounds for denial of an application provided for in 16-4-405, exclusive of public convenience and necessity. The hearing must be governed by the provisions of Title 2, chapter 4, part 6.
(b) If the department receives the number of protests required for a public convenience and necessity determination as specified in subsection (4)(c) and the application is for an original license or for a transfer of location, the department shall schedule a public hearing to be held in the county of the proposed location of the license to determine whether the protest presents sufficient cause to deny the application based on the qualifications of the applicant as provided in 16-4-401 or on the grounds for denial of an application provided for in 16-4-405 including public convenience and necessity. The hearing must be governed by the provisions of Title 2, chapter 4, part 6.
(c) The minimum number of protests necessary to initiate a public hearing to determine whether an application satisfies the requirements for public convenience and necessity, as specified in 16-4-203, for the proposed premises located within a quota area described in 16-4-201 must be 25% of the quota for all-beverages licenses determined for that quota area according to 16-4-201(1), (2), and (5) but in no case less than two. The minimum number of protests determined in this manner will apply only to applications for either on-premises consumption beer or all-beverages licenses.
(d) A resident of a county in another state that adjoins the county in Montana from which an application comes may protest an application only if the county or state of residence of the person has certified to the department that a similarly situated Montana resident would be able to make formal protest of a liquor license application in that state or county. The department may, by rule, establish how the certification is to be made."
Section 9. Section 16-4-401, MCA, is amended to read:
"16-4-401. License as privilege -- criteria for decision on application -- exceptions. (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;
(ii) the applicant does not possess an ownership interest in an agency liquor store as defined in 16-1-106;
(iii) except as provided in subsections (9) and (10), 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'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 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 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:
(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) except as provided in subsections (9) and (10), 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 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 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 number of licenses in which they share profits or liabilities may not exceed half the total number of allowable all-beverages licenses in the specific quota area in which the all-beverages licenses will be held.
(9) Pursuant to [section1]:
(a) A person licensed as a brewer may also hold a license issued pursuant to 16-4-104 or 16-4-201.
(b) A person who holds a license issued pursuant to 16-4-104 or 16-4-201 may hold a brewer license.
(10) The prohibited acts described in subsections (2)(a)(iii) and (4)(a)(i) are not prohibited if the acts are conducted by an applicant that holds a brewer and retail license pursuant to [section 1]."
Section 10. 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 to sell alcoholic beverages at retail 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 to sell alcoholic beverages at retail may not be issued by the department for a premises situated within a zone of a city, town, or county 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 or of retail licensees located 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 pursuant to 16-4-203;
(c) the applicant or the premises proposed for licensing fail to meet the eligibility or suitability criteria established by this code;
(d) a possible reason for denial listed in a conditional approval letter, as provided in 16-4-402, has been verified; or
(e) the purposes of this code will not be carried out by the issuance of the license."
Section 11. Section 16-4-413, MCA, is amended to read:
"16-4-413. Denial of application -- five-year moratorium. (1) If an application for the issuance of a new license or for the transfer of an existing license has been denied for any reason provided in 16-4-405, the department may not consider an application or issue any retail license to sell alcoholic beverages at retail, special permit, or special license for those premises for 5 years unless the department, using the criteria described in subsection (3), determines that the proposed use is substantially different from the use that was rejected. The prohibition period commences on the date of the final agency decision or, if judicially reviewed, on the date the judicial decision is final.
(2) If an application is withdrawn after a hearing has been held in which testimony is received regarding any reason for denial provided in 16-4-405, the effect of the withdrawal is the same as if a final decision had been made denying the application for any reason provided in 16-4-405. The 5-year prohibition against considering an application or issuing a license for that vicinity commences on the date of the withdrawal.
(3) The department shall determine whether a proposed use is substantially different by considering:
(a) the capacity of the proposed use;
(b) the nature of the establishment;
(c) the presence and character of any entertainment; and
(d) the characteristics of the neighborhood."
NEW SECTION. Section 12. Codification instruction. [Section 1] is intended to be codified as an integral part of Title 16, chapter 3, part 2, and the provisions of Title 16, chapter 3, part 2, apply to [section 1].
NEW SECTION. Section 13. Saving clause. [This act] does not affect rights and duties that matured, penalties that were incurred, or proceedings that were begun before [the effective date of this act].
NEW SECTION. Section 14. Effective dates. (1) Except as provided in subsection (2), [this act] is effective July 1, 2015.
(2) [Sections 3, 7, and 8] are effective January 1, 2017.
NEW SECTION. Section 15. Applicability. [Sections 3, 7, and 8] apply to brewer license applications submitted on or after January 1, 2017.
- END -
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