Summary:

 House Bill 498 (HB 498) amends the Liquor Control Act to revise the criteria governing the transfer of dispenser’s and retailer’s liquor licenses between local option districts. The bill modifies existing restrictions on inter-local option district transfers, clarifying the conditions under which licenses may be relocated within the state. It adjusts regulations on rural dispenser’s, rural retailer’s, and rural club licenses, specifying that these licenses may be transferred to local option districts within counties that have fewer than the maximum number of licenses permitted under Section 60-6A-18 NMSA 1978. The bill maintains local governing bodies’ authority to approve liquor license transfers and the existing prohibition on transferring licenses to certain class B counties. 

Legislation Overview:

 House Bill 498 (HB 498) updates Section 60-6B-12 NMSA 1978 to modify the rules governing liquor license transfers between local option districts. The bill retains the authority for dispenser’s and retailer’s licenses issued before July 1, 1981, to be transferred to any location in the state, provided that local governing bodies approve the new location and all Liquor Control Act requirements are met. However, it explicitly states that licenses transferred under this section count toward the maximum number of licenses allowed in the receiving district under Section 60-6A-18 NMSA 1978.

The bill preserves existing statutory language prohibiting the transfer of licenses into class B counties with populations between 56,000 and 57,000, according to the 1980 federal decennial census. It also retains the ability of local option districts to prohibit liquor license transfers via election, requiring a petition signed by at least five percent of the district’s registered voters to initiate such an election.

For rural dispenser’s, rural retailer’s, and rural club licenses issued under previous liquor laws, HB 498 allows transfers to any local option district within a county that has not reached the statutory cap on licenses. This modifies prior restrictions, which previously required these licenses to remain in the unincorporated areas of the county in which they were originally issued and prohibited transfers to locations within ten miles of another licensed premises.

The bill also clarifies that licenses transferred to a local option district that has not exceeded its license limit may be used for both on-premises and package sales, including locally produced growlers. However, in districts that have met or exceeded their license cap, transferred licenses will only allow on-premises sales and consumption. The bill does not alter local governing bodies’ authority to approve or deny license transfers within their jurisdiction.

Implications

HB 498 provides additional flexibility for liquor license transfers while preserving local control over the approval process. By allowing rural licenses to be transferred more broadly within eligible counties, the bill may facilitate business growth in areas where demand for licenses exceeds supply. This change could benefit businesses in underserved areas while preventing an oversaturation of licenses in counties that have already reached their statutory limit.

The provision clarifying that transferred licenses count toward local option district license caps ensures that the redistribution of licenses does not result in an unintended increase in the number of alcohol-serving establishments beyond the limits set by law. The allowance for both on-premises and package sales in districts with available license capacity may provide economic benefits to businesses, particularly in areas seeking to expand their hospitality and tourism sectors.

By retaining the requirement for local governing body approval, the bill ensures that municipalities and counties maintain control over liquor license transfers within their jurisdiction. The continued prohibition on transfers into certain class B counties ensures that existing population-based restrictions remain in place.

The bill may lead to an increase in license transfer requests as businesses seek to relocate operations to more favorable market conditions. However, because license transfers remain subject to local approval, the impact on individual communities will depend on the decisions of local governing bodies. The bill does not provide for an increase in the total number of licenses statewide, meaning that the overall supply of liquor licenses remains unchanged. 

Current Law:

 Under current law, dispenser’s and retailer’s licenses issued before July 1, 1981, may be transferred between local option districts, subject to the approval of the receiving district’s governing body. However, certain class B counties are prohibited from accepting license transfers. Rural dispenser’s, rural retailer’s, and rural club licenses have historically been restricted to unincorporated areas of the county in which they were issued, and transfers were subject to a ten-mile distance limitation from existing licensed premises.

Existing law requires that local option districts be notified of proposed license transfers and grants local governing bodies the authority to approve or deny such transfers. Additionally, local option districts may prohibit incoming license transfers through a voter petition process. HB 498 modifies the transfer eligibility criteria by allowing rural licenses to be relocated to any local option district within a county that has not reached its license cap and removes the previous ten-mile restriction. The bill also clarifies how transferred licenses are counted toward local option district license limits and distinguishes between allowable uses for licenses based on district capacity.