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HB 255 ALCOHOL DELIVERIES

Current Location: PCH
Referrals: HCEDC/HTRC/SJC

[2] HCEDC/HTRC-HCEDC [3] w/o rec/a-HTRC [6] DNP-CS/DP [7] fl/aaa- PASSED/H (41-27) [9] SJC-SJC [12] DP/a - fl/aaaaaa- PASSED/S (29-11) [11] h/cncrd [14] SGND BY GOV (Mar. 17) Ch. 7.

HB 255 PDF  |  HB 255 FIR


Scheduled on - Date:  Time:   Location:

3/09/2021 [12]SCal - Senate Calendar (SCal)
3/04/2021 [12]HAFC - Do Pass as Amended Senate Calendar (SCal)
2/24/2021 [9]SINT - Sent to location Senate Judiciary (SJC)
2/23/2021 [7]HCAL - Floor three times amended House Calendar (HCAL)
2/23/2021 [7]HCAL - Passed the House of Representatives Senate Introduction (SINT)
2/12/2021 [3]HCEDC - Passed without recommendation as amended House Taxation and Revenue (HTRC)
2/04/2021 [2]HCEDC - Sent to location House Commerce and Economic Development (HCEDC)
Synopsis:

 House Bill 255 (HB255) relates to the Liquor Control Act. It provides for tax deductions for certain license holders, creates a new license, allows for alcohol delivery, and creates new taxes on alcohol. This legislation has an effective date of July 1, 2021.

Analysis:

 Sections 1-3 provide for the following tax deductions for liquor license lessees. Dispensers are not to exceed $50,000 for four taxable years and retailers not to exceed $25,000. 
• A deduction on net income in an amount equal to gross receipts from sales of alcohol
• A deduction on taxable income in an amount equal to gross receipts from sales of alcohol
• A deduction on gross receipts

All deductions apply to licenses prior to January 1, 2026.

Section 4 creates an alcoholic beverage delivery permit and a third-party delivery license. Licenses that apply to restaurants will only provide alcohol delivery if there is a minimum purchase of $25 of food - alcohol shall not be delivered if beverages are more than 25 fluid ounces of wine, 72 of beer, or one locally produced growler. Permits are valid for one year. The section lays out the requirements for delivery and allows the director to establish rules. It allows for contracting with a third-party delivery service.

Section 5 defines alcoholic beverage serving, which is a new definition.

Section 6 is new material that introduces a new alcoholic beverage serving tax. The new excise tax rate is 5 percent and it is applied to the price paid for each alcoholic beverage serving sold.

Section 7 adds alcoholic beverage servings as an exemption of sales to or by the armed forces.

Sections 8 and 9 are cleanup language.

Section 10 is the definitions section and is largely cleanup language.

Section 11 introduces a new restaurant license that allows restaurants in a local option district that has approved the license to sell liquor under the license. This new license is designated as a Type B Restaurant License. This section allows for beer and wine sales on Sundays starting at 7:00 am. The remainder lays out requirements for restaurants to qualify for a type b license.

Section 12 adds language to the Craft Distiller's License. It reduces the amount of liquor that can be produced to receive a license from 1,000 gallons to 500 gallons. The section ads that a person who has a craft distiller's license may buy or otherwise obtain beer from a small brewer or wine or cider from a winegrower.

Section 13 changes language from a municipal baseball park to a governmental facility. It also includes cleanup language to definitions.

Section 14 is cleanup language under the Winegrower's License.

Section 15 imposes fees for the issuance of a Type B Restaurant license as well as fees for the issuance of a Third-Party Delivery License and Alcoholic Beverage Delivery Permit. If a retailer's, dispenser's, or canopy license is held on June 30, 2020, there shall be no renewal fee for applications filed on or before June 30, 2026.

Section 16, Subsection A (2) adds: on or before July 1, 2026, for license transfers.

Section 17 adds wine, cider, and liquor to a Small Brewer's License for the purpose of tastings.

Section 18 adds cider, beer, or liquor to Interstate Wine Tastings and Competitions Permits.

Section 19 largely contains cleanup language. However, Subsection J is new language that reads: Licenses may not be leased, sold, or transferred after June 30, 2026.

Section 20 largely contains cleanup language. It does at a new Subsection E which reads: For purposes of this section, "licensee" includes any person issued an alcoholic beverage delivery permit.

Section 21 adds the business of a person who holds an alcoholic beverage delivery permit to being the potential subject of a hearing on the license.

Section 22 largely contains cleanup language.

Section 23 removes the no injunction or mandamus permitted under this law.

Section 24 largely contains cleanup language.

Section 25 makes additional penalties that are available in the law mandatory, removing the language that says may be imposed. Other language is largely cleanup.

Sections 26-30 contain cleanup language.

Sections 31 & 32 adds language that states an identification for the purposes of the Liquor Control Act is valid even if it has expired. It makes it unnecessary to ask for identification if the person clearly looks older than 35 years of age.

Sections 33 & 34 are cleanup language.

Section 35 repeals sections of the law.

Amendments:

Senate Floor Amendments:

Amendment #1 -
Lays out the standards for which a delivery license can be obtained, along with the conditions that must be met to hold a license.

Amendment #2 - 
Added different effective dates for the following sections:
Sections 1 through 3, 5 through 13, 15, 15, 28, and 32. Otherwise, the act is effective July 1, 2021. This amendment also added an emergency clause.

Amendment #3 - 
Bans the selling of minis off-premise (anything under three fluid ounces).

Amendment #4 -
Bans the sale of all alcohol other than beer at gas stations. This applies to Class B Counties with between 56,000 and 57,000 people. This amendment is targeted at Gallup.

Amendment #5 - 
Allows for the sale of alcohol in on-premise locations from 7:00am - 2:00am the following day (including on Sundays), removes the prohibition of alcohol package sales on Sundays (7:00am - Midnight), and strikes the remainder of the sections.

Amendment #6 - 
Orders the Department of Health to study the effects of alcohol delivery five years after enactment of this act.



Senate Judiciary Committee Amendments:

The following is a summary of the very lengthy and numerous amendments adopted by SJC. All amendments are below the summary.

·         The amendment adding “spirituous” liquors to the Class B License was REMOVED.

·         The 2% Retailers Tax was REMOVED.

·         The attempt to remove the 30-day wholesaler's credit extension was TABLED.

·         Canopy licenses can move from one county to another was APPROVED.

·         The $100,000 deduction for retailers was STRIPPED.

·         Class A licenses can add “spirits” after 12 months in good standing.

·         The lifetime waiver of fees was REMOVED.

·         The 10:00 pm closure and 3 drink max were REMOVED.


1. Strike all house floor amendments. 

2. On page 1, line 18, after "ACT", insert "; ALLOWING DISPENSER'S LICENSES TO BE TRANSFERRED OUT OF A LOCAL OPTION DISTRICT INTACT". 

3. On page 2, line 4, strike the colon and insert in lieu thereof a comma. 

4. On page 2, line 5, strike the paragraph designation "(1)". 

5. On page 2, line 7, strike "; and" and insert in lieu thereof a period. 

6. On page 2, strike lines 8 through 10 in their entirety. 

7. On page 4, line 1, after "means", strike the remainder of the line and strike line 2 through the comma. 

8. On page 4, line 7, after the semicolon, insert "and". 

9. On page 4, line 9, strike "; and" and insert in lieu thereof a period and closing quotation mark. 

10. On page 4, strike lines 10 through 15 in their entirety. 

11. On page 4, line 24, strike the colon and insert in lieu thereof a comma.

12. On page 4, line 25, strike the paragraph designation "(1)". 

13. On page 5, line 2, strike "; and" and insert in lieu thereof a period. 

14. On page 5, strike lines 3 through 5 in their entirety. 

15. On page 6, line 7, after "means", strike the remainder of the line and strike line 8 through the comma. 

16. On page 6, line 13, after the semicolon, insert "and". 

17. On page 6, line 15, strike "; and" and insert in lieu thereof a period and closing quotation mark. 

18. On page 6, strike lines 16 through 21 in their entirety. 

19. On page 6, line 24, strike "RETAILER'S OR". 

20. On page 7, line 3, strike the colon and insert in lieu thereof a comma. 

21. On page 7, line 4, strike the paragraph designation "(1)". 

22. On page 7, line 6, strike "; and" and insert in lieu thereof a period. 

23. On page 7, strike lines 7 through 10 in their entirety. 

24. On page 8, line 11, after the semicolon, insert "and". 

25. On page 8, line 17, strike "; and" and insert in lieu thereof a period and closing quotation mark. 

26. On page 8, strike lines 18 through 23 in their entirety.

27. On page 12, line 5, after "employees", insert "or independent contractors". 

28. On page 12, line 11, after "occurrence", insert ", which endorsement shall provide coverage for employees or independent contractors of the third-party alcohol delivery service". 

29. On page 23, strike lines 5 through 13 in their entirety and insert in lieu thereof the following new subsection: "B. A local option district that has approved the issuance of restaurant licenses for the sale of beer and wine is deemed to have approved the issuance of restaurant licenses for the sale of beer, wine and spirituous liquors in restaurants unless the local option district affirmatively adopts an ordinance prohibiting such licenses, except that a local option district within a class B county having a population of between fifty-six thousand and fifty seven thousand according to the 1980 federal decennial census that has approved the issuance of restaurant licenses for the sale of beer and wine is deemed not to have approved the issuance of restaurant licenses for the sale of beer, wine and spirituous liquors in restaurants unless the local option district affirmatively adopts an ordinance approving such licenses.". 

30. On page 26, line 22, strike the closing quotation mark. 

31. On page 26, between lines 22 and 23, insert the following new subsection: "I. A person that has held a restaurant A license in good standing for a period of at least twelve consecutive months shall, upon payment of a fee of one thousand two hundred dollars ($1,200), be entitled to a restaurant A New Mexico spirituous liquors permit. In addition to being permitted to sell and serve beer and wine as authorized by a restaurant A license, the restaurant A New Mexico spirituous liquors permit shall entitle the licensee to sell and serve beer, wine and spirituous liquors produced or bottled by or for a craft distiller pursuant to Section 60-6A-6.1 NMSA 1978."". 

32. On page 50, between lines 11 and 12, insert the following new section: "SECTION 17. Section 60-6B-12 NMSA 1978 (being Laws 1981, Chapter 39, Section 113, as amended) is amended to read: "60-6B-12. INTER-LOCAL OPTION DISTRICT AND INTER-COUNTY TRANSFERS.-- A. Dispenser's and retailer's licenses originally issued before July 1, 1981, except rural dispenser's and rural retailer's licenses [and canopy licenses] that were replaced by dispenser's licenses pursuant to Section 60-6B-16 NMSA 1978, and except canopy licenses replaced by dispenser's licenses pursuant to Section 60-6B-16 NMSA 1978 before calendar year 2017 or after calendar year 2020, may be transferred to any location within the state, except class B counties having a population of between fifty-six thousand and fifty-seven thousand according to the 1980 federal decennial census, the municipalities located within those class B counties and any municipality or county that prohibits by election the transfer of a license from another local option district, without regard to the limitations on the maximum number of licenses provided in Section 60-6A-18 NMSA 1978, not otherwise contrary to law, subject to the approval of transferring locations of those liquor licenses by the governing body for that location; provided that the requirements of the Liquor Control Act and department regulations for the transfer of licenses are fulfilled; and provided further that: (1) beginning in calendar year 1997, no more than ten dispenser's or retailer's licenses shall be transferred to any local option district in any calendar year; and (2) the dispenser's or retailer's licenses transferred under this section shall count in the computation of the limitation of the maximum number of licenses that may be issued in the future in any local option district as provided in Section 60-6A-18 NMSA 1978 for the purpose of determining whether additional licenses may be issued in the local option district under the provisions of Subsection H of Section 60-6B-2 NMSA 1978. 

B. Transfer of location of a liquor license pursuant to Subsection A of this section shall become effective upon approval of the local governing body, unless within one hundred twenty days after the effective date of the Liquor Control Act a petition requesting an election on the question of approval of statewide transfers of liquor licenses into that local option district is filed with the clerk of the local option district and the petition is signed by at least five percent of the number of registered voters of the district. The clerk of the district shall verify the petition signatures. If the petition is verified as containing the required number of signatures of registered voters, the governing body shall adopt a resolution calling an election on the question of approving or disapproving statewide transfers of liquor licenses into that district. Notice of such election shall be published as provided in [Section 3-8-35 NMSA 1978] the Local Election Act, and the election shall be held within sixty days after the date the petition is verified or it may be held in conjunction with a regular election of the governing body if such election occurs within sixty days after the date of verification. If a majority of the registered voters of the district voting in such election votes to approve statewide transfers of liquor licenses into the local option district, each license proposing to be transferred shall be subject to the approval of the governing body. If the voters of the district voting in the election vote against the approval, then all statewide transfers of liquor licenses pursuant to Subsection A of this section shall be prohibited in that district, unless a petition is filed requesting the question be again submitted to the voters as provided in this subsection. The question of approving or disapproving statewide transfers of liquor licenses into the local option district shall not be submitted again within two years from the date of the last election on the question. 

C. Any dispenser's license transferred pursuant to this section outside its local option district shall only entitle the licensee to sell, serve or permit the consumption of alcoholic beverages by the drink on the licensed premises. This subsection shall not apply to any license transferred out of a class B county having a population of between fifty-six thousand and fifty-seven thousand according to the 1980 federal decennial census. 

D. Rural dispenser's, rural retailer's and rural club licenses issued under any former act may be transferred to any location, subject to the restrictions as to location contained in the Liquor Control Act, within the unincorporated area of the county in which they are currently located; provided that they shall not be transferred to any location within ten miles of another licensed premises; and provided further that all requirements of the Liquor Control Act and department regulations for the transfer of licenses are fulfilled."". 

33. On page 64, between lines 24 and 25, insert the following new section: "SECTION 28. Section 60-7A-13 NMSA 1978 (being Laws 1981, Chapter 39, Section 79, as amended) is amended to read: "60-7A-13. SALES BY CLUBS.-- A. Any club licensed pursuant to the provisions of the Liquor Control Act shall only have the right to sell alcoholic beverages by the drink and wine by the bottle for consumption on the premises. 

B. Except as otherwise provided in this section, it is unlawful and grounds for suspension or revocation of its license for a club to: (1) solicit by advertising or any other means public patronage of its alcoholic beverage facilities. In the event the club solicits public patronage of its other facilities, alcoholic beverages shall not be sold, served or consumed on the premises while the other facilities are being used by or operated for the benefit of the general public, unless the alcoholic beverage facilities are separate from the other facilities and the general public is not permitted to enter any part of the facilities where alcoholic beverages are being sold, served or consumed; or (2) serve, sell or permit the consumption of alcoholic beverages to persons other than members and their bona fide guests. 

C. A club licensed pursuant to the provisions of the Liquor Control Act may allow its facilities, including its licensed premises, to be used, for activities other than its own, no more than [two] four times in a calendar year for fundraising events held by other nonprofit organizations. 

D. For the purposes of this section: (1) "bona fide guest" means a person whose presence in the club is in response to a specific invitation by a member and for whom the member assumes responsibility; and (2) "member" includes the adult spouse and the children of a member who pays membership dues or of a deceased member who paid membership dues or a member of an official auxiliary or subsidiary group of the club who has been issued a personal identification card in accordance with the rules and regulations of the club."". 34. On page 68, between lines 16 and 17, insert the following new section: "SECTION 35. DELAYED REPEAL.--Section 5 of this act is repealed effective July 1, 2025.".

House Floor Amendments
1. On page 26, between lines 8 and 9, insert the following new paragraphs:
"(5) all sales and service of beer, wine and spirituous liquors authorized by a restaurant B license shall cease at the time food sales and services cease or at 10:00 p.m., whichever time is earlier;

(6) a restaurant B licensee shall serve a single patron no more than three drinks containing not more than one and one-half ounces of spirituous liquor during any one visit to the restaurant;".

1. On page 1, line 18, after "ACT", insert "; DECLARING AN EMERGENCY".

2. On page 68, strike lines 17 and 18 in their entirety and insert the following:
"SECTION 33. EFFECTIVE DATE.--The effective date of the provisions of Sections 1 through 3, 5 through 13, 15, 16, 28 and 32 of this act is July 1, 2021.

SECTION 34. EMERGENCY.--It is necessary for the public peace, health and safety that this act take effect immediately.".

1. On page 43, line 18, strike "and".

2. On page 43, line 22, strike the period and the closing quotation mark and insert in lieu thereof "; and".

3. On page 43, between lines 22 and 23, insert the following new subsection:
"X. For individuals who held a dispenser's license transferred pursuant to Subsection C of Section 60-6B-12 NMSA 1978 on June 30, 2021, the director shall waive all license renewal fees for the life of the license holder and for successors in interests of the license holder if they are the spouse, a sibling or a child of the license holder."".

Amendments from the House Commerce and Economic Development Committee
1. On page 1, line 15, after the semicolon, strike the remainder of the line, strike line 16 through "HOLDERS" and insert in lieu thereof "PROVIDING DEDUCTIONS FROM THE INCOME TAX, CORPORATE INCOME TAX AND GROSS RECEIPTS TAX FOR CERTAIN LICENSE HOLDERS; IMPOSING A RETAILER'S TAX ON RETAILERS PURSUANT TO THE LIQUOR EXCISE TAX ACT".

2. On page 9, strike lines 7 and 8 in their entirety and insert in lieu thereof "and if the indoor retail space is less than ten thousand square feet in size".

3. On page 9, line 12, strike "twenty-five dollars ($25.00)"
and insert in lieu thereof "ten dollars ($10.00)".

4. On page 9, line 14, strike "twenty-five fluid ounces" and
insert in lieu thereof "seven hundred fifty milliliters".

5. On page 9, line 15, strike "seventy-two fluid ounces of
beer" and insert in lieu thereof "six twelve-ounce containers of
pre-packaged wine, beer, cider or spirituous liquors".

6. On pages 13 through 15, strike Section 5 in its entirety.

7. On page 15, line 24, strike "ALCOHOLIC BEVERAGE SERVING"
and insert in lieu thereof "RETAILER'S".

8. On page 16, line 2, strike "beverage servings" and insert
in lieu thereof "beverages".

9. On page 16, lines 4 and 5, strike "alcoholic beverage
serving" and insert in lieu thereof "retailer's".

10. On page 16, line 6, strike "alcoholic beverage serving"
and insert in lieu thereof "retailer's".

11. On page 16, line 7, strike "each".

12. On page 16, line 8, strike "beverage serving sold" and
insert in lieu thereof "beverages sold by the retailer".

13. On page 16, line 9, strike "serving" and insert in lieu
thereof "sold".

14. On page 16, line 11, strike "serving".

15. On page 16, lines 14 and 15, strike "beverage servings"
and insert in lieu thereof "beverages".

16. On page 16, line 20, strike "Section 7-17-5" and insert
in lieu thereof "Sections 7-17-5 and 7-17-5.2".

17. On page 16, line 21, strike "and alcoholic beverage
servings".

18. On page 25, line 20, strike "may approve" and insert in
lieu thereof "is deemed to have approved".

19. On page 25, line 21, strike "alcoholic beverages" and
insert in lieu thereof "spirituous liquors" and strike "by
adoption".

20. On page 25, strike line 22 in its entirety and insert in
lieu thereof "unless the local option district affirmatively adopts
an opt-out ordinance.".

21. On page 25, line 25, strike "type A restaurant" and
insert in lieu thereof "restaurant A".

22. On page 26, line 5, strike "alcoholic beverages" and
insert in lieu thereof "spirituous liquors" and strike "type B
restaurant" and insert in lieu thereof "restaurant B".

23. On page 26, line 13, strike "type A restaurant" and
insert in lieu thereof "restaurant A".

24. On page 27, line 9, strike "type A restaurant" and insert
in lieu thereof "restaurant A". 

25. On page 27, line 17, strike "type A restaurant" and
insert in lieu thereof "restaurant A".

26. On page 27, line 23, strike "2020" and insert in lieu
thereof "2021" and strike "upon the adoption of an" and insert in
lieu thereof "barring the adoption of an opt-out".

27. On page 28, line 1, strike "type B restaurant" and insert
in lieu thereof "restaurant B".

28. On page 28, line 2, strike "alcoholic beverages" and
insert in lieu thereof "spirituous liquors".

29. On page 28, line 10, strike "alcoholic beverages" and
insert in lieu thereof "spirituous liquors".

30. On page 28, line 18, strike "alcoholic beverages" and
insert in lieu thereof "spirituous liquors".

31. On page 28, line 20, strike "type B restaurant" and
insert in lieu thereof "restaurant B".

32. On page 28, line 21, strike "and" and insert in lieu
thereof a comma and after "wine", insert "and spirituous liquors".

33. On page 28, line 24, strike "type B restaurant" and
insert in lieu thereof "restaurant B".

34. On page 44, line 3, strike "license type A" and insert in
lieu thereof "A license".

35. On page 44, line 5, strike "license type B" and insert in
lieu thereof "B license".

36. On page 45, line 18, after "exceed", strike the remainder
of the line and insert in lieu thereof "one thousand dollars
($1,000);".

37. On page 45, line 22, strike "2020" and insert in lieu
thereof "2021".

38. On pages 45 through 47, strike Section 16 in its entirety.

39. On pages 53 through 56, strike Section 19 in its
entirety.

40. On page 74, line 23, strike "60-6A-28,".

41. On page 74, line 25, strike "Sections" and insert in lieu
thereof "Section" and strike "and 9".

Current Law:

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.