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HB 8 LIQUOR DELIVERY & LICENSES

Current Location: HCEDC
Referrals: HCEDC/HJC

[2] HCEDC/HJC-HCEDC

HB 8 PDF  |  HB 8 FIR


Scheduled on - Date:  Time:   Location:

1/19/2021 [2] - Sent to location House Commerce and Economic Development (HCEDC)
Synopsis:

 House Bill 8 (HB 8) amends and enacts sections of the Liquor Control Act to permit certain persons to deliver alcoholic beverages. It adds a new type of restaurant license that allows sale of alcoholic beverages in restaurants and imposes license issuance fees. HB 8 allows dispenser's licenses to be transferred out of a local option district intact and allows certain dispenser's licenses to reinstate retail privileges.

Analysis:

 House Bill 8 (HB 8) enacts a new section of the Liquor Control Act that creates an alcoholic beverage delivery permit that may be issued to a person who already holds certain liquor licenses. These permits are valid for one year and may be renewed. HB 8 limits the amount of alcoholic beverages that may be delivered and makes it conditional on the concurrent delivery of food costing at a minimum twenty-five dollars. The permit may not be transferred from person to person or from one location to another. HB 8 requires the director to promulgate rules to implement this section, detailing twelve specific requirements and restrictions that will be included in the rules (for example, delivery only within the county; delivery only within the hours the licensee is allowed to sell alcoholic beverages; no delivery to minors or those already intoxicated)

It allows a licensee to contract with a third-party alcohol delivery service licensed by the state. It creates separate liability for the licensee, the server and the alcohol delivery service. HB 8 directs the department to create a third-party alcohol delivery license by rule. It specifies conditions for such a license including requiring all of the delivery employees to hold a valid state alcohol server permit; proof of general liability insurance coverage; no indemnification agreements among the licensee, the delivery service and the servers. These third-party delivery licenses are valid for one year and may be renewed.

HB 8 changes the word meals to food in the definitions for hotel and restaurant in Section 60-3A-3 NMSA 1978.

HB 8 amends Section 60-6A-4 NMSA 1978 to allow a local option district that already approves restaurant licenses for beer and wine to issue a restaurant license for beer, wine and alcoholic beverages upon adoption of such an ordinance by the local governing body within the local option district.  It creates a two-tier restaurant license system: a type A restaurant license that sells only beer and wine and a type B restaurant license that sells beer, wine and alcoholic beverages. The existing requirements and restrictions apply to a type A restaurant license and type B.  It makes a technical change from meals to food where applicable. It allows both types of licenses to be transferable from one location to another within the same local option district but not from one person to another.

HB 8 adds license and permit fees to Section 60-6A-15 NMSA 1978 for type B restaurants ($3,000); third-party alcohol delivery license (up to $300) and alcohol beverage delivery permit (up to $300).

It deletes the transfer of a dispenser’s license outside the local option district in Section 60-6B-12 NMSA 1978, but allows a dispenser who lost the privilege of selling alcoholic beverages in unbroken packages as a result of this transfer to have the privilege reinstated by paying fifty thousand dollars ($50,000) to the department.

HB 8 makes technical changes in Section 60-6C-1 NMSA 1978 and adds required notice of the disposition of charges against a licensee to be reported to the department of public safety and the local law enforcement within whose jurisdiction the licensee has an address of record. It defines licensee as a person issued an alcoholic beverage delivery permit.

It conforms Section 60-6C-2 NMSA 1978 to require public hearings for an alcohol beverage delivery permit in the county in which that business is located. 

HB 8 conforms Section 60-6C-4 NMSA 1978 concerning administrative complaints to include permits. It specifies that licensee includes a person issued an alcohol beverage delivery permit.  

It expands the definition of licensee to conform to the changes in this bill in Section 60-6C-6 NMSA 1978 (appeal). 

HB 8 expands the definition of server to include a person who delivers alcoholic beverages in Section 60-6E-3 NMSA 1978.

HB 8 adds delivery as a regulated activity in Sections 60-6E-8 (server permits) and Section 60-6E-9 NMSA 1978 (required server education) It clarifies that the penalties in the former section are in addition to other penalties available.

HB 8 adds provisions to Section 60-6E-10 NMSA 1978 (server suspension-revocation hearing) that allows the director to revoke or suspend an alcoholic beverage delivery permit and impose a fine not to exceed ten thousand dollars of a combination of these penalties despite other restrictions on these penalties in this section.

HB 8 conforms  Sections 60-7A-4, 60-7A-12, 60-7A-16, 60-7B-5, 60-7B-6 NMSA 1978 to the provisions of this act concerning delivery of alcoholic beverages.

HB 8 makes technical changes throughout the sections in this bill where necessary.

HB 8 would be effective 1 July 2021. 

Amendments:

Current Law:There is no separate permit for alcoholic beverage deliveries.

Bill Comments:
Position: Serious Concerns   Priority: High
ICBA/NM has serious concerns regarding any actions taken by local or state officials that could impact the value of licenses held by New Mexico Community Banks as collateral for commercial loans.

It is only logical to assume that a sudden devaluation of the value of liquor licenses would cause New Mexico banks (and other lenders) to seek alternative or additional collateral to shore-up commercial loans that have been made. In extreme cases of under-collateralized loans, it is conceivable that loans could be called (the borrower asked to pay the debt in full) due to the bank’s asset to debt ratio requirements for commercial loans being out of alignment.

While ICBA/NM takes no position on the public policy issue surrounding reform of New Mexico Liquor Laws, we urge extreme caution due to financial impact that will surely occur in the marketplace.