Senate Bill No. 1007
(By Senators Tomblin (Mr. President) and Caruth,
By Request of the Executive)
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[Introduced May 31, 2009; referred to the Committee on the
Judiciary; and then to the Committee on Finance.]
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A BILL to amend and reenact §60-3A-2, §60-3A-2a, §60-3A-4,
§60-3A-6, §60-3A-7, §60-3A-8, §60-3A-10, §60-3A-10b, §60-3A-11
and §60-3A-12 of the Code of West Virginia, 1931, as amended;
and to amend said code by adding thereto a new section,
designated §60-3A-10d, all relating to the issuance of retail
licenses for the sale of liquor; classifying retail licenses
for the sale of liquor; setting forth legislative findings;
defining certain terms; authorizing the Alcohol Beverage
Control Commissioner to issue retail licenses for the sale of
liquor; establishing certain standards for the issuance of
licenses within market zones; limiting the issuance of retail
licenses to operate mixed retail liquor outlets; authorizing
the commissioner to adopt certain standards for retail
outlets; authorizing the Alcohol Beverage Control Board to
consider certain factors when authorizing additional retail outlets; increasing the maximum percentage of retail licenses
a person may own; setting forth bidding procedures; setting
license fees; adding citizenship and character requirements
for license applicants; authorizing credit and background
checks on license applicants; providing a purchase option for
active retail licensees seeking to operate a freestanding
liquor retail outlet; providing for financing for the purchase
of a retail license for a freestanding liquor retail outlet;
and authorizing legislative and emergency rules.
Be it enacted by the Legislature of West Virginia:
That §60-3A-2, §60-3A-2a, §60-3A-4, §60-3A-6, §60-3A-7,
§60-3A-8, §60-3A-10, §60-3A-10b, §60-3A-11 and §60-3A-12 of the
Code of West Virginia, 1931, as amended, be amended and reenacted;
and that said code be amended by adding thereto a new section,
designated §60-3A-10d, all to read as follows:
ARTICLE 3A. SALES BY RETAIL LIQUOR LICENSEES.
§60-3A-2. Legislative findings and declaration; legislative
purpose.
(a) The Legislature hereby finds and declares that the sale of
liquor at retail should no longer be by the state, but rather by
retail licensees; that there is a need for the state to control the
wholesale sales of liquor; that the health and welfare of the
citizens of this state will be adequately protected by the
licensing and control of such retail licensees; that the sale of liquor through retail licensees will satisfy reasonable consumer
concerns of availability and price; and that the operation and
efficiency of state government will be improved by removing the
state from the retail sale of liquor and permitting sales of liquor
by retail licensees under licenses issued by the state together
with strict enforcement of laws and rules relating to the sale of
liquor.
(b) It is the purpose of the Legislature in providing for the
retail sale of liquor to:
(1) Continue revenue to the state from the wholesale sale of
liquor by requiring all retail licensees to purchase all liquor
(other than wine) from the commissioner and by further requiring
all private clubs licensed under the provisions of article seven of
this chapter to purchase all liquor (other than wine) from retail
licensees;
(2) Provide a system of controls, through limitations on the
numbers of retail outlets and application of the police power of
the state, to discourage the intemperate use of liquor;
(3) Preserve and continue the tax base of counties and
municipalities derived from the retail sale of liquor;
and
(4) Obtain
revenue for the state
financial gain from the
issuance of retail licenses;
(5) Facilitate the responsible marketing and growth of
existing retail outlets; and
(6) Encourage the sale of liquor in freestanding liquor retail
outlets that offer a wide variety of liquor at competitive prices.
§60-3A-2a. Further legislative findings, declarations and purpose.
(a) In addition to the findings and declarations set forth in
subsection (a), section two of this article, the Legislature hereby
finds and declares that:
(1) The provisions of this article as enacted during the
regular session of the Legislature in 1990 were intended to require
that all licenses issued for the retail sale of liquor expire as of
July 1, 2000, and that the issuance of retail licenses for the
ten-year period beginning July 1, 2000, and for each ten-year
period thereafter, be based on sealed competitive bids
except as
provided in section ten-b of this article;
(2) It is the intention of the Legislature to provide that all
retail licenses issued beginning July 1, 2000, expire ten years
from the date of issuance and that every ten years the issuance of
retail licenses be based on competitive bids,
except as provided in
section ten-b of this article;
(3) The purposes set forth in subsection (b), section two of
this article remain the purposes of the Legislature;
(4) Many of those persons who currently hold retail licenses
have not only provided the services to the public contemplated by
this article, but in many instances have provided employment,
invested significant time and money into their businesses and otherwise made substantial contributions to the economic and civic
development of the communities in which they conduct business, and
therefore, current
retail licensees should be afforded special
consideration if their bids for the licenses issued for the
ten-year period beginning July 1, 2000,
and July 1 every ten years
thereafter, be unsuccessful;
(5) Those persons who are issued a retail license for the
ten-year period beginning on July 1, 2000, and for any ten-year
period thereafter should also be afforded special consideration
if
they operate or seek to operate a freestanding liquor retail outlet
or if their bids for a retail license are unsuccessful; and
(6) Further statutory changes are desirable to effect the
purposes set forth in subsection (b), section two of this article.
(b) It is, therefore, the further purposes of the Legislature
in providing for the retail sale of liquor to:
(1) Require that all licenses issued for the ten-year period
beginning July 1, 2000, and for each ten-year period thereafter be
based on sealed competitive bids
except as provided in section
ten-b of this article;
(2) Provide active retail licensees who operate or seek to
operate a freestanding liquor retail outlet the opportunity to pay
a purchase option for a Class A retail license or licenses for the
ten-year period beginning July 1, 2010, and for each ten-year
period thereafter;
(2) (3) Provide current
retail licensees who, having bid in
the manner required by a manner consistent with the provisions of
this article, fail to submit the highest bid for licenses issued
for the ten-year period beginning
July 1, two thousand July 1,
2010, and for each ten-year period thereafter an additional
opportunity to obtain the license; and
(3) (4) Effect statutory changes to further the purposes
provided in this section and section two of this article.
§60-3A-4. Definitions.
(a) "Active retail license" means a current license for a
retail outlet that has been open and in continuous operation for a
period of not less than twelve months prior to July 1, 2010, or
July 1 every ten years thereafter.
(b) "Active retail licensee" means a person who holds an
active retail license at the time of the effective date of the
amendments to this section during the first extraordinary session
of the Legislature in 2009 or that person's successor or any person
who holds an active retail license when it expires at the end of a
ten-year period.
(a) (c) "Applicant" means any person
who elects to pay a
purchase option for a Class A retail license, who bids for a retail
license or who seeks the commissioner's approval to purchase or
otherwise acquire a retail license from a retail licensee, in
accordance with the provisions of this article.
(b) (d) "Application" means the form prescribed by the
commissioner which must be filed with the commissioner by any
person bidding for a retail license.
(c) (e) "Board" means the Retail Liquor Licensing Board
created by this article.
(d) (f) "Class A retail license" means a retail license
permitting the retail sale of liquor at
more than one a retail
outlet a freestanding liquor retail outlet.
(e) (g) "Class B retail license" means a retail license
permitting the sale of liquor at
only one retail outlet a mixed
retail liquor outlet.
(f) (h) "Current
retail licensee" means a person who holds a
retail license at the time of the
reenactment of this section in
the year one thousand nine hundred ninety-nine effective date of
the amendments to this section during the first extraordinary
session of the Legislature in 2009 or that person's successor or
any person who holds a retail license when it expires at the end of
a ten-year period.
(g) (i) "Designated areas" means one or more geographic areas
within a market zone designated as such by the board.
(h) (j) "Executive officer" means the president or other
principal officer, partner or member of an applicant or retail
licensee, any vice president or other principal officer, partner or
member of an applicant or retail licensee in charge of a principal business unit or division, or any other officer, partner or member
of an applicant or retail licensee who performs a policy-making
function.
(k) "Freestanding liquor retail outlet" means a retail outlet
that sells only liquor, beer, nonintoxicating beer and other
alcohol-related products, including tobacco-related products.
(i) (l) "Liquor" means alcoholic liquor as defined in section
five, article one of this chapter and also includes both wine and
fortified wines as those terms are defined in section two, article
eight of this chapter.
(j) (m) "Market zone" means a geographic area designated as
such by the board for the purpose of issuing retail licenses.
(n) "Mixed retail liquor outlet" means a retail outlet that
sells liquor, beer, nonintoxicating beer and other alcohol-related
products, including tobacco-related products, in addition to
convenience and other retail products.
(k) (o) "Person" means an individual, firm, corporation,
association, partnership, limited partnership, limited liability
company or other entity, regardless of its form, structure or
nature.
(l) (p) "Retail license" means a license issued under the
provisions of this article permitting the sale of liquor at retail.
(m) (q) "Retail licensee" means the holder of a retail
license.
(n) (r) "Retail outlet" means a specific location where liquor
may be lawfully sold by a retail licensee under the provisions of
this article.
§60-3A-6. General powers and duties of board and commissioner.
(a) The board shall create, based on economic and demographic
factors, market zones within the state for the issuance of Class A
and Class B retail licenses.
and, if deemed necessary or desirable
by the board may create one or more designated areas within such
market zones for the issuance of Class B retail licenses
(b) The commissioner shall:
(1) Prescribe application forms for persons desiring to
acquire retail licenses and adopt an orderly procedure and
timetable for investigating, processing and approving applications;
(2) Develop a form of retail license to be issued to each
retail licensee under the provisions of this article;
(3) Disseminate to the public information relating to the
issuance of retail licenses;
(4) Promulgate standards for advertising the sale,
availability, price and selection of liquor;
(5) Set minimum standards for retail outlets regarding the
amount and variety of
alcoholic liquors which they liquor a
licensee must offer for sale at each retail outlet;
the size, space
and design of each retail outlet; the amount of inventory and
displayed inventory of liquor in each retail outlet; order quantities sufficient to qualify for delivery to each retail
outlet; phone, computer and Internet requirements for each retail
outlet; the verification of liquor orders; liquor delivery dates
and routes for each retail outlet; and such other requirements the
commissioner deems necessary;
(6) Set minimum standards for the display of inventory in
retail outlets operating pursuant to a Class A retail license which
shall include, without limitation, the requirement that a minimum
square footage of displayed inventory available for retail purchase
at the retail outlet be composed of liquor, beer and
nonintoxicating beer products and that liquor, beer and
nonintoxicating beer products available for sale are placed for
sale throughout the entire retail area of the retail outlet
including the retail floor space and shelving;
(7) Set minimum standards for the display of inventory in
retail outlets operating pursuant to a Class B retail license which
shall include, without limitation, the requirements that a minimum
square footage of the displayed inventory available for purchase at
the retail outlet be composed of liquor products; that liquor
available for sale in the retail outlet is placed only in an area
of the retail outlet that prominently displays signage identifying
the area as a restricted liquor area and stating that no one under
the age of twenty-one may purchase liquor; and that the area is
separate from and not highly visible to persons outside of the restricted liquor area.
(6) (8) Enforce the provisions of this article;
(7) (9) Impose civil penalties upon retail licensees;
(8) (10) Enter the retail outlet of any retail licensee at
reasonable times for the purpose of inspecting the same, and
determining the compliance of such retail licensee with the
provisions of this article and any rules promulgated by the board
or the commissioner pursuant to the provisions of this article; and
(9) (11) Issue subpoenas and subpoenas duces tecum for the
purpose of conducting hearings under the provisions of section
twenty-six or section twenty-eight of this article, which subpoenas
and subpoenas duces tecum shall be issued in the time, for the
fees, and shall be enforced in the manner specified in section one,
article five, chapter twenty-nine-a of this code with like effect
as if such section was set forth in extenso herein.
(c) The board and the commissioner shall each:
(1) Engage accounting, legal and other necessary professional
consultants to assist them in carrying out their respective duties
under this article;
and
(2) Adopt,
promulgate, amend or repeal such procedural,
interpretive and legislative rules, consistent with the policy and
objectives of this article, as they may deem necessary or desirable
for the public interest in carrying out the provisions of this
article. Such rules shall be adopted, amended and repealed in accordance with the provisions of chapter twenty-nine-a of this
code;
and
(3) Notwithstanding any other provision of this code to the
contrary, proposed legislative rules for this article filed in the
State Register by September 1, 2009, may be filed as emergency
rules.
§60-3A-7. Market zones; Class A and Class B retail licenses.
(a) The market zones established by the board for the retail
sale of liquor within this state under the enactment of this
section in 1990 may not be modified by the board unless authorized
by the Legislature. For each market zone established
by the board,
the commissioner may issue
one Class A retail license and one or
more Class B retail licenses one or more Class A retail licenses
and one or more Class B retail licenses within the market zone:
Provided, That Each Class A retail license shall permit the holder
of the license to operate the number of retail outlets the board
authorized for that market zone the number of Class B retail
licenses to be issued by the commissioner within
each a market zone
shall not exceed
one hundred fifty percent of the number of
Class
A retail outlets authorized
for the Class A retail license for that
market zone, except as otherwise authorized by subsection
(e) (d)
of this section or section twenty-seven-a of this article:
Provided, however, That, except as authorized by subsection
(e) (d)
of this section or section twenty-seven-a of this article, in a market zone where the number of
retail outlets authorized under the
Class A retail license Class A retail licenses issued by the
commissioner is an odd number, the number of Class B retail
licenses which may be issued in that market zone shall be rounded
up to the next highest whole number following that number which is
equal to
one hundred fifty percent of the number of
retail outlets
authorized under the Class A retail license Class A retail licenses
issued by the commissioner.
(b) If the board determines that a market zone is not suited
for the issuance of a Class A retail license, then only Class B
retail licenses may be authorized for that market zone and the
board shall determine the maximum number of Class B retail licenses
which may be issued for that market zone.
(c) (b) When authorizing Class B retail licenses for a market
zone, the board may create one or more designated areas within the
market zone and authorize one Class B retail license for each
designated area. For each market zone, the commissioner may issue
additional Class B retail licenses for retail outlets to be located
outside any designated area, but the number of additional Class B
retail licenses, when added to the total number of Class B retail
licenses issued for all designated areas within the market zone,
shall not exceed the maximum number of Class B retail licenses
permitted under subsection (a) of this section for that market
zone, except as authorized by subsection
(e) (d) of this section or section twenty-seven-a of this article.
(d) (c) A person may hold one or more Class A retail licenses
and one or more Class B retail licenses
in a market zone or zones.
but for the same market zone no person shall hold a Class A retail
license and a Class B retail license or more than one Class B
retail license
(e) (d) Notwithstanding any provision of subsection (a) or
(c)
(b) of this section, no later than
sixty thirty days prior to the
receipt of the bids described in section ten-b of this article, the
board may authorize the commissioner to issue
an additional Class
B
license retail licenses in a market zone for the ten-year period
which begins next following July 1, where the board determines
that:
(1) Each
retail outlet authorized to operate in the market
zone has been open and in operation for not less than one year;
(2)
Changes in Economic and demographic factors
including
substantial population increases within the market zone, clearly
demonstrate the need for an additional retail outlet or outlets
within the market
area zone to meet
an increase in consumer demand;
and
(3) The issuance of an additional Class B license in the
market zone will not significantly impair the efforts to procure
the revenues described in subsection (b), section ten-b of this
article.
(f) (e) The board shall establish the minimum bid for any
additional Class B
retail licenses authorized under subsection
(e)
(d) of this section.
(g) (f) No person may hold a combination of
Class A or Class
B retail licenses that, in the aggregate, authorizes the operation
of more than
twenty-five thirty percent of the total number of
retail outlets authorized under the provisions of this article to
operate in this state.
§60-3A-8. Retail license application requirements; retail licensee
qualifications.
(a) Prior to or simultaneously with the submission of a bid
for a retail license
or the payment of a purchase option for a
Class A retail license, each applicant shall file an application
with the commissioner, stating under oath, the following:
(1) If the applicant is an individual, his or her name and
residence address;
(2) If the applicant is other than an individual, the name and
business address of the applicant; the state of its incorporation
or organization; the names and residence addresses of each
executive officer and other principal officer, partner or member of
the entity; a copy of the entity's charter or other agreement under
which the entity operates; and the names and residence addresses of
any person owning, directly or indirectly, at least twenty percent
of the outstanding stock, partnership or other interests in the applicant;
and
(3) That the applicant has never been convicted in this state
or any other state of any felony or other crime involving moral
turpitude or convicted of any felony in this or any other state
court or any federal court for a violation of any state or federal
liquor law, and if the applicant is other than an individual, that
none of its executive officers, other principal officers, partners
or members, or any person owning, directly or indirectly, at least
twenty percent of the outstanding stock, partnership or other
interests in the applicant, has been convicted;
and
(4) That the applicant is a United States citizen of good
moral character and, if a naturalized citizen, when and where
naturalized; and, if a corporation organized and authorized to do
business under the laws of this state, when and where incorporated,
with the name and address of each officer; that each officer is a
citizen of the United States and a person of good moral character;
and if a firm, association, partnership or limited partnership,
that each member is a citizen of the United States and, if a
naturalized citizen, when and where naturalized, each of whom must
sign the application.
(b) An applicant shall provide the commissioner any additional
information requested by the commissioner
including, but not
limited to, authorization to conduct a criminal background and
credit records check.
(c) Whenever a change occurs in any information provided to
the commissioner, the change shall immediately be reported to the
commissioner in the same manner as originally provided.
(d) The commissioner shall disqualify each bid submitted by an
applicant under section ten of this article and no applicant shall
be issued or eligible to hold a retail license under this article,
if:
(1) The applicant has been convicted in this state of any
felony or other crime involving moral turpitude or convicted of any
felony in this or any other state court or any federal court for a
violation of any state or federal liquor law; or
(2) Any executive officer or other principal officer, partner
or member of the applicant, or any person owning, directly or
indirectly, at least twenty percent of the outstanding stock,
partnership, or other interests in the applicant, has been
convicted in this state of any felony or other crime involving
moral turpitude or convicted of any felony in this or any other
state court or any federal court for a violation of any state or
federal liquor law.
(e) The commissioner shall not issue a retail license to an
applicant which does not hold a license issued pursuant to federal
law to sell liquor at wholesale.
§60-3A-10. Bidding procedure.
(a) Except as provided in section ten-b of this article, bids for licenses shall be governed by the provisions of this section.
(b) The issuance of retail licenses shall be based on sealed
competitive bids in accordance with the provisions of this section.
Bids for the issuance of retail licenses shall be obtained by
public notice published as a Class II-0 legal advertisement in
compliance with the provisions of article three, chapter fifty-nine
of this code, and the publication area for the publication shall be
each market zone within which a retail outlet shall be located.
The second publication of the notice shall appear more than
sixty
thirty days next preceding the final day for submitting bids.
(c) Each bid shall indicate the market zone for which the
retail license is sought, whether the bid is for a Class A retail
license or Class B retail license, and, if the board has created
one or more designated areas for the market zone, whether the bid
is for
the a Class A or Class B retail license to be issued for any
designated area. No bid shall be altered or withdrawn after the
appointed hour for the opening of the bids. Subject to the
provisions of section ten-b of this article, each retail license
shall be awarded to the highest bidder.
In market zones where two
or more Class B retail licenses are authorized (other than for a
designated area or areas), the licenses shall be awarded to those
persons submitting the highest bids. No bid shall be considered
unless the bond required under section eleven of this article is
submitted to the commissioner. All bids for a retail license may be rejected by the board if the board determines that the highest
bid is inadequate, in which event the commissioner shall begin anew
the bidding process for that retail license.
(d) Each person desiring to submit a bid shall file the bid
with the commissioner prior to the specified date and hour for the
bid openings. The failure to deliver or the nonreceipt of a bid
prior to the appointed date and hour constitutes sufficient reason
for the rejection of a bid. After the award of the retail license,
the commissioner shall indicate upon the successful bid that it was
the successful bid. Thereafter, a copy of the bid and the bidder's
application shall be maintained as a public record, shall be open
to public inspection in the commissioner's office and shall not be
destroyed without the written consent of the Legislative Auditor.
(e) Prior to the issuance of the retail license to the
successful bidder, the bid price and the annual retail license fee,
as specified in section twelve of this article, shall be paid to
the commissioner by money order, certified check or cashier's
check. All retail licenses shall be signed by the commissioner in
the name of the state.
(f) If the successful bidder fails to pay to the commissioner
the bid price and the annual retail license fee, at the time
specified by the commissioner, the bond provided in section eleven
of this article shall be forfeited and the bidder shall not be
issued the retail license. The commissioner shall then issue the retail license to the next highest bidder for the retail license or
reject all bids and start anew the bidding procedure for the retail
license.
§60-3A-10b. Bidding procedure for licenses issued for the
ten-year period beginning July 1, 2010; purchase
options for bids beginning July 1, 2010; and
licenses issued for each ten-year period
thereafter.
(a) The issuance of
Class A licenses and Class B retail
licenses for the ten-year period beginning
July 1, two thousand
July 1, 2010, and for each ten-year period thereafter, shall be
based upon sealed competitive bid in accordance with the provisions
of section ten of this article except as provided in this section.
(b) Prior to accepting bids for
Class A licenses and Class B
retail licenses to be issued for the ten-year period beginning
July
1, two thousand July 1, 2010, the board shall determine the minimum
bid for each license based upon a review of the sales at each
retail outlet permitted to operate under the license and such other
factors as the board may determine to generate the revenues from
liquor license renewal projected by the Governor's official revenue
estimates for
fiscal year two thousand fiscal year 2009-2010 as
presented to the regular session of the Legislature in
the year one
thousand nine hundred ninety-nine 2009.
(c) Prior to accepting bids for
Class A licenses and Class B retail licenses to be issued for the ten-year periods beginning
July 1, 2010, and July 1 every ten years thereafter, the board
shall determine the minimum bid for each
retail license based upon
a review of the sales at each retail outlet permitted to operate
under the
retail license and such other factors as the board may
determine to generate the revenues from
liquor retail license
renewal projected by the Governor's official revenue estimates for
the fiscal year preceding the expiration of the retail licenses.
(d)(1) Notwithstanding any provision of this article to the
contrary, prior to accepting bids for retail licenses to be issued
for the ten-year period beginning July 1, 2010, and every ten-year
period thereafter, each active retail licensee operating or seeking
to operate a freestanding liquor retail outlet shall be eligible to
purchase a Class A retail license or licenses as provided in this
subsection.
(2) At least sixty days prior to accepting bids for retail
licenses to be issued for the ten-year period beginning July 1,
2010, and July 1 every ten years thereafter, the board shall
provide notice to each eligible retail licensee of his or her
option to purchase a Class A retail license or licenses as provided
in this subsection. The board shall include with this notice an
explanation of the financing option provided in section ten-d of
this article and a financing application form prepared by the
commissioner.
(3) An eligible retail licensee may elect to pay a purchase
option or options for each retail outlet operating under an active
retail license currently held by the licensee. A retail licensee
may only exercise a purchase option for the lesser of four Class A
retail licenses or the number of active retail licenses currently
held by the licensee.
(4) Each eligible retail licensee who elects to pay a purchase
option shall, within thirty days prior to the acceptance of bids
for the ten-year period beginning July 1, 2010, and July 1 every
ten years thereafter, pay to the commissioner an amount equal to
ten percent over and above the minimum bid as determined by the
board for each Class A retail license the retail licensee wishes to
purchase or, if the retail licensee elects to take the financing
option provided in section ten-d of this article, a down payment,
the amount of which shall be calculated in accordance with the
provisions of that section. A retail licensee shall be awarded a
Class A retail license or licenses upon the commissioner's receipt
of his or her payment or down payment: Provided, That the
commissioner determines that the retail licensee is in good
standing with the state and meets all other requirements imposed by
the provisions of this article for the issuance of a Class A retail
license.
(5) A Class A retail license purchased in accordance with this
subsection shall be issued for the ten-year period beginning July 1, 2010, or July 1 every ten years thereafter, and shall expire on
June 30, 2020, or on June 30 every ten years thereafter.
(6) Nothing in this subsection may be interpreted as affecting
the ability of a retail licensee to bid for a retail license or
licenses as otherwise provided in this article: Provided, That the
retail licensee meets all other requirements imposed by the
provisions of this article for the submission of bids.
(d) (e) All bids for a retail license for the ten-year period
beginning
July 1, two thousand July 1, 2010, or for any ten-year
period thereafter may be rejected by the board if the board
determines that the highest bid fails to meet the minimum bid. The
board may also reject any or all bids for a market zone where, in
the aggregate, the bids for all of the retail licenses in the
market zone fail to meet the minimum aggregate bid for that market
zone. Where the board determines the highest bid meets or exceeds
the minimum bid, the board shall determine whether, at the time of
the bid, the same retail license was held for the period ending
June 30, two thousand June 30, 2010, or for any ten-year period
thereafter, on
the June 30 preceding the expiration of the license.
If the current
retail licensee holding the same retail license at
the time of submission of the bid for the period ending
June 30,
two thousand June 30, 2010, or for any ten-year period thereafter,
on June 30 preceding the expiration of the retail license,
submitted a bid that was not less than the minimum bid and is, after considering any preference applicable under the provisions of
section ten-a of this article, an unsuccessful bidder for the
retail license for the period beginning
July 1, two thousand July
1, 2010, or for any ten-year period thereafter, on July 1 when the
retail license expires, the commissioner shall notify the person
that upon paying the amount of the highest bid, subject to the
provisions of subsection
(e) (f) of this section, and upon
compliance with all other requirements imposed by the provisions of
this article for the issuance of the license, the retail license
for the ten-year period beginning
July 1, two thousand July 1,
2010, or for any ten-year period thereafter, shall be issued to the
current
retail licensee. If, within the time determined by the
commissioner, the current
retail licensee pays the amount to the
commissioner and complies with all other requirements imposed by
the provisions of this article for the issuance of the
retail
license, the retail license for the ten-year period beginning
July
1, two thousand July 1, 2010, or for any ten-year period
thereafter, shall be issued to the current
retail licensee.
(e) (f) The board shall, in determining the amount a current
retail licensee who is an unsuccessful bidder shall pay as
described in subsection
(d) (e) of this section, afford the
unsuccessful bidder a preference. If the unsuccessful bidder is a
West Virginia resident as defined in section ten-a of this article,
the board shall afford the unsuccessful bidder a five percent preference in addition to the five percent preference afforded
under section ten-a of this article. If the unsuccessful bidder is
not a West Virginia resident, the board shall afford the
unsuccessful bidder a five percent preference. The preference
shall be computed by subtracting the preference percentage of the
highest bid price from the highest bid price:
Provided, That under
no circumstances may the preference bring the price of the bid
below the minimum bid established by the board:
Provided, however,
That a current
retail licensee who is not operating any of the
retail outlets for which he or she is authorized under the license
is not eligible for the preference provided for under this section.
(f) (g) In the event all bids submitted for a
retail license
fail to meet the minimum bid amount for the license as determined
by the board, the board may offer the license for bid again after
it determines a new minimum bid amount for the
retail license.
§60-3A-10d. Financing option for retail licensees purchasing
Class A retail licenses.
(a) The commissioner shall offer financing to each retail
licensee who elects to pay the purchase option for a Class A retail
license or licenses as provided in section ten-b of this article:
Provided, That the retail licensee is approved by the commissioner
for financing and otherwise complies with the requirements of this
section: Provided, however, That the retail licensee agrees to
enter a financing agreement with the commissioner as provided in subsection (d) of this section.
(b) The commissioner shall prepare an application form for
retail licensees who desire to elect the financing option provided
in this section. The commissioner shall make the form available to
retail licensees in paper or electronic format at least sixty days
prior to the acceptance of bids for the ten-year period beginning
July 1, 2010, and July 1 every ten years thereafter. At a minimum,
the application form shall require the following information:
(1) Certification that the applicant elects to pay the
purchase option for a Class A retail license or licenses as
provided in section ten-b of this article;
(2) Certification that the applicant is the current holder and
operator of an active retail license issued by the board;
(3) A description of the retail license or licenses currently
held by the applicant;
(4) Any information the commissioner requires to evaluate the
creditworthiness of the applicant, including without limitation the
applicant's authorization to perform a criminal background and
credit check; and
(5) Any additional information the commissioner requires to
effectuate the purposes of this section.
(c) For an applicant to be considered for financing, the
application required under subsection (b) of this section must be
submitted to the commissioner with a down payment of fifty percent of the total amount due under the financing agreement provided in
subsection (d) of this section no later than May 1, 2010, or, for
subsequent retail license periods, May 1 every ten years
thereafter. The commissioner shall make a determination as to the
eligibility of an applicant for financing and the issuance of a
Class A retail license within fifteen days of his or her receipt of
the application. If the commissioner determines that an applicant
is ineligible for financing, is not in good standing with the state
or does not otherwise meet the requirements of this article for the
issuance of a Class A retail license, the commissioner shall notify
the applicant that his or her application for financing is denied
and shall refund in full any moneys paid to the commissioner as a
down payment. If the applicant's application for financing is
denied for any reason other than the fact that the applicant is not
in good standing with the state or is not otherwise eligible for
the issuance of a Class A retail license, the commissioner shall
provide the applicant the option of paying the full amount of a
purchase option for a Class A retail license or licenses as
provided in subsection (d), section ten-b of this article. At the
request of the applicant, the commissioner may credit any moneys
received as a down payment towards payment of the full amount of a
purchase option for a Class A retail license or licenses.
(d) The commissioner is hereby authorized to enter into a
financing agreement with each retail licensee meeting the requirements of this section. The financing agreement shall
contain such terms and conditions as prescribed by the
commissioner, but at a minimum shall contain the following:
(1) The total amount due, including the required down payment,
which shall equal ten percent over and above the minimum bid as
determined by the board for each Class A retail license the retail
licensee wishes to purchase;
(2) The interest to be charged on the total amount due at a
rate of the adjusted prime lending rate minus one hundred basis
points. The interest rate shall be set on the date the financing
is approved by the commissioner;
(3) The total amount due, not including the required down
payment, to be payable to the commissioner in monthly or quarterly
installments over a period of sixty months. If a retail licensee
elects to pay in monthly installments, his or her first payment is
due on August 1 and successive payments are due on the first day of
each month thereafter until the debt is retired. If a retail
licensee elects to pay in quarterly installments, his or her first
payment is due on October 1 and successive payments are due on the
first day of every third month thereafter until the debt is
retired;
(4) The failure of a retail licensee to make a payment in
accordance with the terms of the financing agreement shall result
in the entire balance of the amount due becoming immediately due and payable to the commissioner and shall result in the forfeiture
of the down payment and any moneys paid to the commissioner in
accordance with this section; and
(5) The failure of a retail licensee to make a payment in
accordance with the terms of the financing agreement within thirty
days of the day on which the payment was due shall result in the
immediate revocation of the Class A retail license held by the
licensee and the commissioner shall reissue the license by sealed
competitive bid in accordance with section ten of this article. A
retail licensee whose retail license is revoked for failure to make
payments as provided in the financing agreement is deemed an
unsuitable retail licensee and shall be permanently prohibited from
bidding on a retail license under this article.
§60-3A-11. Bonding requirements.
Each applicant submitting a bid under section ten of this
article
or electing to pay a purchase option for a Class A license
or licenses as provided in section ten-b of this article shall
furnish to the commissioner a bond at the time of bidding, which
bond shall guarantee the payment of twenty-five percent of the
price bid
or paid for the retail license. The bond required by
this section shall be furnished in cash or negotiable securities or
shall be a surety bond issued by a surety company authorized to do
business with the state or an irrevocable letter of credit issued
by a financial institution acceptable to the commissioner. If furnished in cash or negotiable securities, the principal shall be
deposited without restriction in the State Treasurer's office and
credited to the commissioner, but any income shall inure to the
benefit of the applicant.
For applicants bidding on a retail
license, the bond shall be returned to an applicant following the
bidding if such applicant is not the successful bidder for the
retail license, and, if an applicant is the successful bidder, the
bond shall be released after issuance of the retail license.
§60-3A-12. Annual retail license fee; expiration and renewal of
retail licenses.
(a) The annual retail license period is from July 1 to June 30
of the following year. The annual retail license fee for a Class
A
or Class B retail license is
the sum obtained by multiplying the
number of retail outlets operated by the retail licensee in the
market zone to which the Class A retail license applies by one
thousand dollars. The annual retail license fee for a Class B
retail license is one thousand dollars $2,000. The annual retail
license fee for the initial year of issuance shall be prorated
based on the number of days remaining between the date of issuance
and the following June 30.
(b) All retail licenses expire on June 30 of each year and may
be renewed only upon the submission to the commissioner of the same
information required for the issuance of the license and any
additional information requested by the commissioner on the forms and by the date prescribed by the commissioner, together with the
payment to the commissioner of the applicable annual retail license
fee required under this section.
(c) No person may sell liquor at any retail outlet if the
retail license applicable to the outlet has been suspended or
revoked, or has expired.
(d) All retail licenses issued or renewed under the provisions
of this article for the period ending
June 30, two thousand June
30, 2010, or on June 30 for any ten-year period thereafter, expire
and are of no further force or effect as of
July 1, in the year two
thousand July 1, 2010, or as of July 1 every ten years thereafter.
(e) Notwithstanding any provision of section eighteen, article
four of this chapter to the contrary, a municipality may invoke the
authority granted by section four, article thirteen, chapter eight
of this code to require an annual license from each retail licensee
and require payment for the license in amounts not to exceed the
amounts provided in subsection (a) of this section.
NOTE: The purpose of this bill is to reclassify retail liquor
licenses; to provide for licenses for freestanding liquor stores
and mixed retail liquor outlets; to provide a preference for
freestanding liquor stores; to set forth minimum requirements for
each class of retail liquor license; to provide a purchase option
for current retail licensees purchasing a retail license for a
freestanding liquor retail outlet; and to authorize the commission
to offer financing for the purchase of a retail license for a
freestanding retail liquor outlet.
Strike-throughs indicate language that would be stricken from
the present law, and underscoring indicates new language that would
be added.
§60-3A-10d is new; therefore, underscoring and strike-throughs
have been omitted.