Senate Bill No. 656
(By Senator Bailey)
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[Introduced February 22, 1999;
referred to the Committee on Finance.]
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A BILL to amend and reenact sections seven, twelve and seventeen,
article three-a, chapter sixty of the code of West Virginia,
one thousand nine hundred thirty-one, as amended, all
relating to providing for a minimum retail mark-up of ten
percent; providing for additional retail outlets; providing
for additional licensing fees for retail outlet sales of
alcoholic liquors; providing that stores shall be opened
within ninety days of license being issued; and setting
forth the bidding procedure if license not extended under
this section or if an initial license issuance.
Be it enacted by the Legislature of West Virginia:
That sections seven, twelve and seventeen, article three-a,
chapter sixty of the code of West Virginia, one thousand nine
hundred thirty-one, as amended, be amended and reenacted, all to
read as follows:
ARTICLE 3A. SALES BY RETAIL LIQUOR LICENSEES.
§60-3A-7. Market zones; Class A and Class B retail licenses.
(a) The board shall determine the number of and establish
market zones for the retail sale of liquor within this state.
For each market zone so established, the commissioner shall be
authorized to issue one Class A retail license and one or more
Class B retail licenses. Each Class A retail license shall
permit the holder thereof to operate such number of retail
outlets as the board shall have authorized for that market zone.
The number of Class B retail licenses to be issued by the
commissioner within each market zone shall not exceed fifty
percent of the number of retail outlets authorized for the Class
A retail license for such the market zone: Provided,
That in a
market zone where the number of retail outlets authorized under
the Class A retail license is an odd number, the number of Class
B retail licenses which may be issued in such the
market zone
shall be rounded up to the next highest whole number following
that number which is equal to fifty percent of the number of retail outlets authorized under such the
Class A retail license:
Provided, That effective on or after the first day of January,
two thousand, the board shall increase the number of total retail
outlet licenses which may be issued by one hundred.
(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 such the
market zone and
the board shall determine the maximum number of Class B retail
licenses which may be issued for such the
market zone.
(c) When authorizing Class B retail licenses for a market
zone, the board may create one or more designated areas within
such the
market zone and authorize one Class B retail license for
each such designated area. For each such market zone, the
commissioner may issue additional Class B retail licenses for
retail outlets to be located outside any such designated area,
but the number of such 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.
(d) A person may hold one or more Class A retail licenses and one or more Class B retail licenses, 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.
§60-3A-12. Annual retail license fee; expiration and renewal of
retail licenses.
(a) The annual retail license period shall be from the first
day of July to the thirtieth day of June of the following year.
The annual retail license fee for a Class A retail license shall
be the sum obtained by multiplying the number of retail outlets
operated by the retail licensee in the market zone to which such
Class A retail license applies by one thousand five hundred one
thousand dollars for each retail outlet operated by the retail
licensee plus the additional license fee provided in subsection
(b) of this section. The annual retail license fee for a Class
B retail license shall be five hundred dollars. The annual
retail license fee for the initial any partial license year of
issuance shall be prorated based on the number of days remaining
between the date of issuance and the following thirtieth day of
June.
(b) Any person holding a retail license for a retail outlet
on the thirtieth day of June, two thousand, shall have the option to extend the retail license for that retail outlet, provided the
retail licensee continues to meet all licensee qualifications and
pays the additional license fees below for that retail outlet: (1) For the license year beginning the first day of July,
two thousand, the additional fee shall be based on total liquor
purchases from the commission during the preceding calendar year
as follows:
(A) For zero sales or license not used, the additional fee
shall be one thousand dollars;
(B) For purchases from one cent to twenty thousand dollars,
the additional fee shall be two thousand dollars;
(C) For purchases from twenty thousand dollars one cent to
fifty thousand dollars, the additional fee shall be four thousand
dollars;
(D) For purchases from fifty thousand dollars one cent to
one hundred thousand dollars, the additional fee shall be five
thousand five hundred dollars;
(E) For purchases of one hundred thousand dollars one cent
to one hundred fifty thousand dollars, the additional fee shall
be seven thousand dollars;
(F) For purchases of one hundred fifty thousand dollars one cent to two hundred thousand dollars, the additional fee shall be
eight thousand five hundred dollars;
(G) For purchases of two hundred thousand dollars one cent
to two hundred seventy-five thousand dollars, the additional fee
shall be ten thousand five hundred dollars;
(H) For purchases of two hundred seventy-five thousand
dollars one cent to three hundred fifty thousand dollars, the
additional fee shall be twelve thousand five hundred dollars;
(I) For purchases of three hundred fifty thousand dollars
one cent to four hundred twenty-five thousand dollars, the
additional fee shall be fourteen thousand five hundred dollars;
(J) For purchases of four hundred twenty-five thousand
dollars one cent to five hundred thousand dollars, the additional
fee shall be sixteen thousand five hundred dollars;
(K) For purchases of five hundred thousand dollars one cent
to six hundred fifty thousand dollars, the additional fee shall
be nineteen thousand dollars;
(L) For purchases of six hundred fifty thousand dollars one
cent to eight hundred thousand dollars, the additional fee shall
be twenty-one thousand five hundred dollars;
(M) For purchases of eight hundred thousand dollars one cent to nine hundred fifty thousand dollars, the additional fee shall
be twenty-four thousand dollars;
(N) For purchases of nine hundred fifty thousand dollars one
cent to one million one hundred thousand dollars, the additional
fee shall be twenty-six thousand five hundred dollars;
(O) For purchases exceeding one million one hundred thousand
dollars one cent, the additional fee shall be twenty-nine
thousand dollars;
(2) For each license year thereafter, an additional fee
which shall equal four percent of liquor purchases from the
commission, payable at the time of purchase: Provided, That if
there were no purchases for an outlet during the preceding
license year the license for that outlet shall expire and be
subject to the bidding procedures otherwise provided in this
article for the initial issuance of retail licenses.
(c) The alcohol beverage control commission may authorize an
additional Class B license in a zone if present licensee does not
hold a federal wholesale permit, or the population of the zone
increases. A new licensee shall be subjected to the bidding
process otherwise provided in this article relating to the
issuance of retail liquor licenses.
(d) Any retail outlet license which is not extended pursuant
to the provisions of subsection (b) of this section and any new
outlets not licensed as of the effective date of this subsection
shall be subject to the bidding procedures otherwise provided in
this article for the initial issuance of retail licenses, with a
minimum bid of five thousand dollars and a federal wholesale
permit presented at the time of licensing: Provided, That any
successful bidder shall, in addition to, its bid amount be
required to pay the annual license fee, including the additional
fees, if any, provided by subsection (b) of this section. Any
retail outlet not extending a license may not bid for the
forfeited license for a twelve-month period.
(b) (e) All retail licenses shall expire on the thirtieth
day of June 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 such any additional
information as may be requested by the commissioner on
such
forms and by
such a
date as may be prescribed by the
commissioner, together with the payment to the commissioner of
the applicable annual retail license fee required under this
section. All bid amounts for a new license after the first day of July, two thousand, are in addition to the license fees
provided in subsections (a) and (b) of this section.
(c) (f) No person may sell liquor at any retail outlet if
the retail license applicable to such outlet has been suspended
or revoked, or has expired.
(d) All retail licenses issued or renewed under the
provisions of this article shall expire and be of no further
force or effect as of the first day of July, in the year two
thousand, prior to which time new retail licenses shall be issued
by following the bidding and other procedures set forth herein
for the initial issuance of retail licenses.
(g) Upon being granted a license pursuant to this article,
the licensee shall open a store within ninety days of the
issuance of such license. Failure to open a retail liquor outlet
pursuant to any license granted within the ninety-day time period
shall result in an automatic suspension of the license.
(h) Municipalities may charge a retail license fee not to
exceed two hundred fifty dollars annually.
§60-3A-17. Wholesale prices set by commissioner; retail price
minimums; retail licensees to purchase liquor from
state; transportation and storage; method of payment.
(a) The commissioner shall fix wholesale prices for the sale
of liquor, other than wine, to retail licensees. The
commissioner shall sell liquor, other than wine, to retail
licensees according to a uniform pricing schedule: Provided,
That the commissioner may also establish discount prices for the
sale to retail licensees of liquor in inventory at state liquor
stores and agency stores, but such the
discount prices shall only
be available to retail licensees who accept delivery of such
liquor at such stores. The commissioner shall obtain if
possible, upon request, any liquor requested by a retail
licensee.
(b) A retail licensee shall set their retail prices to be at
least ten percent higher than the wholesale price established
pursuant to this section.
(b) (c) Wholesale prices shall be established in order to
yield a net profit for the general fund of not less than six
million five hundred thousand dollars annually on an annual
volume of business equal to the average for the past three years.
The net revenue derived from the sale of alcoholic liquors shall
be deposited into the general revenue fund in the manner provided in section seventeen, article three of this chapter.
(c) (d) On or before the first day of July, one thousand
nine hundred ninety, the commissioner shall specify the maximum
wholesale markup percentage which may be applied to the prices
paid by the commissioner for all liquor, other than wine, in
order to determine the prices at which all liquor, other than
wine, will be sold to retail licensees during the succeeding
three years.
(d) (e) A retail licensee shall purchase all liquor, other
than wine, for resale in this state only from the commissioner,
and the provisions of sections twelve and thirteen, article six
of this chapter shall not apply to the transportation of such
liquor: Provided, That a retail licensee shall purchase wine
from a distributor thereof who is duly licensed under article
eight of this chapter. All liquor, other than wine, purchased by
retail licensees shall be stored in the state at the retail
outlet or outlets operated by the retail licensee: Provided,
however, That the commissioner, in his or her discretion, may
upon written request permit a retail licensee to store liquor at
a site other than the retail outlet or outlets.
(e) (f) The sale of liquor by the commissioner to retail licensees shall be by money order, certified check or cashier's
check only: Provided, That if a retail licensee posts with the
commissioner an irrevocable letter of credit from a financial
institution acceptable to the commissioner guaranteeing payment
of checks, then the commissioner may accept the retail licensee's
checks in an amount up to the amount of the letter of credit.
NOTE: The purpose of this bill is to provide for additional
licensing fees for retail outlet sales of alcoholic liquors; to
provide for an increase in the number of retail stores; to
provide for minimum retail prices; to give existing licensees the
right of first refusal; and to require that licensees open a
store within ninety days of being granted a license.
Strike-throughs indicate language that would be stricken
from the present law, and underscoring indicates new language
that would be added.
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