Bill Text - SB181 (2010)

(New title) repealing the transfer of liquor enforcement to the department of safety and establishing a committee to study the administrative structure and adjudicative process at the liquor commission.


Revision: Jan. 21, 2010, midnight

SB 181-FN-A – AS INTRODUCED

2009 SESSION

09-0853

03/05

SENATE BILL 181-FN-A

AN ACT relative to the liquor commission and alcoholic beverages.

SPONSORS: Sen. D'Allesandro, Dist 20; Sen. Barnes, Jr., Dist 17; Sen. Downing, Dist 22; Sen. Kelly, Dist 10; Rep. Campbell, Hills 24; Rep. Hunt, Ches 7; Rep. Lerandeau, Ches 6; Rep. Ramsey, Hills 8

COMMITTEE: Ways and Means

ANALYSIS

This bill makes various organizational changes to the liquor commission. This bill also modifies various sales and licensing restrictions relating to alcoholic beverages.

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Explanation: Matter added to current law appears in bold italics.

Matter removed from current law appears [in brackets and struckthrough.]

Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.

09-0853

03/05

STATE OF NEW HAMPSHIRE

In the Year of Our Lord Two Thousand Nine

AN ACT relative to the liquor commission and alcoholic beverages.

Be it Enacted by the Senate and House of Representatives in General Court convened:

1 New Subparagraph; General Revenue Exceptions. Amend RSA 6:12, I(b) by inserting after subparagraph (276) the following new subparagraph:

(277) Moneys deposited in the liquor commission fund established in RSA 176:16.

2 Definitions; Direct Shipper. Amend RSA 175:1, XXIX-a to read as follows:

XXIX-a. “Direct shipper” means any licensee outside the state of New Hampshire who accepts orders [placed from] to be shipped into New Hampshire, by mail, telephone, Internet, or any electronic or other means, for [liquor or beverages] wine and who ships, packages for shipment, or facilitates in any way shipment of said [liquor or beverages] wine by a [third party or common] licensed carrier to a New Hampshire location.

3 Advertising. Amend RSA 175:4, II-III to read as follows:

II. The commission is authorized to advertise and regulate the advertisement of liquor and beverages through the medium of newspapers, magazines, periodicals, television and radio broadcasting, sports films, travelogs, electronic or computer media, or other commercially acceptable promotional means and methods which may become available. [All advertising of liquor and beverages within the state through the medium of billboards is hereby prohibited.]

III. Any funds appropriated to the commission for the purposes of paragraph II shall be expended to optimize the profitability of the commission.

[(a) Eighty percent for liquor advertising with out-of-state media; and

(b) Twenty percent for liquor advertising with media in the state.]

4 Transportation of Liquor. Amend RSA 175:6, I to read as follows:

I. No person shall transport liquor in this state in a greater quantity than 3 quarts, unless said liquor was purchased from a state store, from a direct shipper, from a holder of a combination or retail wine license in accordance with RSA 178:18, and RSA 178:19 or from a winery holding a limited winery special sales license in accordance with RSA 178:8. Provided, however, that the commission in its discretion may grant to an individual, upon application, a license to transport for a specific journey liquor not purchased at a state store for the person's own personal use, in a quantity not to exceed 3 gallons. Quantities exceeding 3 gallons may be transferred with a license issued by the commission providing a fee of 25 percent of the entire value of the product is paid to the commission; the commission may waive the 25 percent fee, upon application, for good cause. It shall be lawful for common carriers to transport liquor to state stores, to state warehouses, to licensees under this title, to purchasers of liquor at state stores, and from manufacturers to state warehouses, state stores, and to the state line for transportation outside the state; for licensees under this title to transport liquor from state stores to their place of business; and for manufacturers to transport within the state to state warehouses and state stores and to the state line for transportation outside the state.

5 Divisions and Directors. RSA 176:8 is repealed and reenacted to read as follows:

176:8 Divisions and Directors. The commission shall have 5 divisions under the direction of unclassified division directors. The directors shall be appointed by the commission and serve at the pleasure of the commission based on good behavior and competence. There shall be a division of marketing, merchandising, and warehousing, division of store operations, division of administration, division of enforcement and licensing, and division of finance. The director of the division of finance shall be known as the chief finance officer. The directors shall be qualified by reason of professional competence, education, and experience.

6 Reference Changed. Amend RSA 176:10 to read as follows:

176:10 Preference Given. Any person who served for not less than 90 days in the armed forces of the United States during “any war in which the United States was engaged, and received an honorable discharge from such service,” shall be given preference in appointment under the provisions of RSA 176:7, RSA 176:9, RSA [177:4] 177:1, and RSA 179:59, if qualified for such positions.

7 Liquor Commission Funds. Amend RSA 176:16, I to read as follows:

I. There is established the liquor commission fund which shall be nonlapsing and continually appropriated to the liquor commission for the purposes of this title. The state treasurer may invest moneys in the fund as provided by law and all interest received on such investment shall be credited to the fund. Except as provided in paragraph II, all gross revenue derived by the commission from the sale of liquor, or from license fees, shall be deposited into the [general funds of the state] liquor commission fund. [The expenses of administration and all other expenditures provided for in this title shall be paid by the state treasurer on warrants of the governor with the advice and consent of council.]

8 State Stores. RSA 177:1 is repealed and reenacted to read as follows:

177:1 State Stores.

I. The commission may lease and purchase and equip, in the name of the state, such stores, warehouses, supplies, materials, products, and other merchandising requirements for the sale or promotion of liquor as are necessary to carry out the provisions of this chapter. The commission may lease, in the name of the state, space in state stores to banks for the purpose of installing automated teller machines. No newly established state store shall be operated within 200 feet of any public or private school, church, chapel, or parish house.

II. The commission may close any state liquor store to improve profitability and efficiency. In determining net operating profit or loss, the commission shall adhere to generally accepted accounting principles for both revenues and expenses and shall include an allocation for indirect costs. All information regarding a decision to close any state liquor store shall be made available, by the commission, to the public upon request. The commission shall provide public notice prior to closing any state liquor store.

III. The commission may in its discretion operate stores for the sale of liquor in such cities and towns as shall have accepted the provisions hereof as hereinafter provided and may employ salespersons to sell liquor in said stores. The commission’s enforcement bureau shall complete background checks on all full-time employees. No salesperson employed to sell liquor under the provisions of this chapter shall sell liquor except such as may be legally obtained under the provisions of this title. If a state liquor store closes, the commission shall make reasonable efforts to provide state employees other positions, if available.

9 New Paragraph; Agency Liquor Stores; Rulemaking. Amend RSA 177:10 by inserting after paragraph I the following new paragraph:

I-a. Application and qualifications.

10 Location of Agency Liquor Stores. RSA 177:11 is repealed and reenacted to read as follows:

177:11 Location of Agency Liquor Stores.

I. The commission shall have the authority to license an agency liquor store at its discretion. An agency liquor store shall only be located in a municipality which has voted in favor of the operation of state liquor stores under RSA 175:7. The commission shall not license any new agency liquor stores after June 30, 2014.

II. The commission shall only issue an agency liquor store license, in accordance with RSA 541-A:39. The commission shall hold a public hearing before issuing an agency liquor store license in any municipality. The license application shall be processed by the director of the division of enforcement and licensing. The director of the division of enforcement and licensing shall recommend in writing approval or denial of any agency liquor store.

III. The commission shall notify any applicant denied a license of the reasons for the denial by certified mail to the mailing address given by the applicant in the application for an agency liquor store license.

IV. Any applicant aggrieved by a decision made by the commission may appeal the decision in accordance with RSA 541.

V. Any retail licensee, whether proprietorship, partnership, limited liability company, or corporation shall only be approved to establish one agency liquor store.

VI. Any applicant selected for an agency liquor store license shall pay a one-time background check processing fee of $500. The annual fee for agency liquor stores licensed after December 31, 2008 shall be $1,000 per cash register.

VII. The commission shall collect data on new revenue, alcohol-related violations, social disorder, population growth, alcohol availability, and emergency services relative to use or abuse of alcohol in each municipality were an agency liquor store license has been issued. The commission shall publish its findings in an annual report submitted to the governor and council, the fiscal committee of the general court, the president of the senate, and the speaker of the house of representatives.

11 References Changed. Amend RSA 178:11, V to read as follows:

V. Liquor/wine/beverage warehousers shall submit a monthly report both to the liquor commission enforcement and licensing division and the [warehouse and transportation] marketing, merchandising, and warehousing division of the commission by the tenth day of the following month indicating the quantity, type, size, and brands of all product received, stored, or shipped on their premises.

12 New Section; Conditional License. Amend RSA 178 by inserting after section 17 the following new section:

178:17-a Conditional License.

I. The commission at it discretion may combine any license types or issue with conditions a combination conditional license. The commission shall not issue any license that diverts revenues from the liquor commission fund directly or indirectly. This section shall not be interpreted to create a license category that does not exist in statute.

II. The commission shall issue a combination conditional license in accordance with RSA 541-A:39. The commission may suspend or modify any licensing requirement established under title XIII. The commission may deny, in its discretion, any license under this section that constitutes a risk to public health, safety, or welfare of any community.

13 Corkage Fees. Amend RSA 178:21, II(a)(5) to read as follows:

(5) Except as provided in this paragraph, no beverages or liquor shall be consumed in the licensed areas except those that are sold by the licensee. With the permission of the commission, a licensee may charge a corkage fee for consumption of privately owned table wine stored on the premises and consumed with the purchase of a full-course meal. The licensee shall have a house policy outlining the corkage fee and receiving of corked table wine. This policy shall be available upon request by the division of enforcement and licensing. Any violation of title XIII shall authorize the commission at its discretion to modify or suspend any licensee’s corkage policy.

14 New Subparagraph; One Day Licenses; Donations to Nonprofit Organizations. Amend RSA 178:22, V(l) by inserting after subparagraph (4) the following new subparagraph:

(5) Manufacturers, wholesale distributors, or wine and liquor vendors or their salespersons may donate their products to any nonprofit organization with a one-day license issued by the commission. The division of enforcement and licensing shall be notified 10 days prior to any donation under this subparagraph. The notification shall include the amount and type of products, licensee or organization, and vendor’s or salesperson’s name. All liquor or wine donated under this subparagraph shall be purchased from the commission. The commission may in its discretion fix either generally or specially the discount percentage for this purpose. If the commission determines that revenues are being diverted, the commission may take such action it deems necessary, including sanctions against any manufacturers, wholesale distributors, or wine and liquor vendors or their salespersons. All beverage furnished as donations shall be considered sales for purposes of RSA 178:26.

15 Direct Shippers. RSA 178:27 is repealed and reenacted to read as follows:

178:27 Direct Shippers.

I.(a) Notwithstanding any other provision of law to the contrary, any person currently licensed in its state of domicile as a wine manufacturer, importer, wholesaler, or retailer shall apply for a direct shipper permit from the commission.

(b) Applicants for a direct shipper permit shall be exempt from the provision of RSA 178:1, I requiring registration with the secretary of state, if the applicant is duly organized and registered to do business under the laws of the state in which the applicant is domiciled.

II. A direct shipper may ship directly to New Hampshire consumers over 21 years of age in packages clearly marked “Alcoholic Beverages, adult signature over 21 years of age required.” All shipments from direct shippers into the state shall be made by a licensed carrier and such carriers are required to obtain an adult signature. Direct shippers or carriers shall not ship into areas of the state where alcohol beverages may not be lawfully sold. Wine that has been registered for sale to the commission during the previous 2 months may be direct shipped only if the shipper offers to sell a matching amount to the commission at wholesale. Shipments of any other products shall be considered unlicensed shipments under the provisions of RSA 178:1, I.

III. No direct shipper shall ship more than 12 – 9 liter cases or equivalent of wine to any address in New Hampshire in any calendar year. Furthermore, in the event any direct shipper wishes to ship more than a total of 1,200 liters of any particular wine directly to any combination of addresses in New Hampshire, the shipper shall offer to sell a matching amount to the commission at the lowest price delivered into New Hampshire.

IV. Direct shippers shall file a monthly report with the division of enforcement and licensing which shall arrive at the division no later than the tenth of the month following shipment regardless of activity. Each report shall contain an invoice for each shipment showing the retail price of the product, and shall pay a fee of 10 percent of the retail price for the shipments of wine. Direct shippers shall maintain records for at least 3 years which will permit the commission to ascertain the truthfulness of the information filed and permit the commission to perform an audit of the direct shipper’s filings upon reasonable request. Wholesale shipments of any wine shall be permitted only in accordance with RSA 175:6.

V. Upon written notification, a carrier shall turn over to the commission all information requested to identify who shipped the package including, but not limited to, the shipping address, mailing address, phone number, and contact person. Any carrier that violates this paragraph shall be fined or have its license suspended until the carrier complies with the request.

VI. The liquor commission shall adopt rules, pursuant to RSA 541-A, relative to:

(a) The application procedures and form for the direct shipper permit authorized under paragraph I.

(b) The signature form or other identification procedures to be used by direct shippers to ensure that consumers to which wine is being shipped are over 21 years of age.

(c) Filings of direct shippers under paragraph IV.

VII. Notwithstanding RSA 179:58, any person holding a direct shipper’s permit under this section who ships wine to a person under 21 years of age, shall be guilty of a class B felony and shall have such permit permanently revoked.

VIII. Upon notification by authorities in another state which imposes a reciprocal enforcement policy, a New Hampshire licensee proved to be making illegal direct shipments to consumers and licensees in said state shall be subject to action by the liquor commission. Such actions may include fines and suspension and revocation of New Hampshire liquor licenses.

16 New Paragraph; Direct Shipper Fees. Amend RSA 178:29 by inserting after paragraph V-a the following new paragraph:

V-b. Direct shippers shall pay the following fees annually:

(a) Wine manufacturers, $120.

(b) Importers, retailers, and wholesalers $336.

17 New Paragraph; Probationary License Fees. Amend RSA 178:29 by inserting after paragraph VIII the following new paragraph:

IX. An additional probationary license fee of $300 shall be paid by all licensees during the initial licensing period.

18 Prohibited Sales. Amend RSA 179:5 to read as follows:

179:5 Prohibited Sales.

I. No licensee, salesperson, direct shipper, common carrier, delivery agent, nor any other person, shall sell or give away or cause or allow or procure to be sold, delivered or given away any liquor or beverage to a person under the age of 21 or to an intoxicated individual. [For all deliveries of packages by common carrier or delivery agent marked “alcoholic beverages” or “alcoholic products,” the addressee shall sign a delivery receipt.] In no case shall any section of this title be so construed as to permit sale of liquor or beverages in any so-called saloon or speakeasy.

II. No licensee, manager, or person in charge of a licensed premises shall allow or permit any individual, who is under the age of 21, to possess or consume any liquor or beverage on the licensed premises.

III. For all deliveries of packages that contain alcohol by common carrier marked “alcoholic beverages” or “alcoholic products,” the carrier shall obtain the signature of a person 21 years of age or older.

19 New Section; Sales to Intoxicated Persons. Amend RSA 179 by inserting after section 7 the following new section:

179:7-a Sales to Intoxicated Person.

I. In this section, “standard size serving” means a drink containing not more than 1.5 ounces of liquor, 4 ounces of wine, or 12 ounces of beverage other than wine.

II. The establishment of all the following facts by a person making a sale of liquor or beverage to a person under the influence of alcohol constitutes prima facie evidence of innocence and a defense to any prosecution for such sale:

(a) That the person receiving the liquor or beverage consumed only one standard size serving of liquor or beverage and became intoxicated;

(b) That the signs and symptoms of the person receiving the liquor or beverage were such that an ordinary and prudent person would not believe him or her to be intoxicated; and

(c) That no more than one standard size serving per hour and no more than four standard size servings in a sitting were sold to the person.

20 Samples. RSA 179:31, II is repealed and reenacted to read as follows:

II. Manufacturers, wholesale distributors, or wine and liquor vendors or their salespersons may distribute samples of their products to any licensee for purposes of tasting. No licensee shall add any samples to its inventory for resale. The division of enforcement and licensing shall be notified 10 days prior to any distribution of samples or donations. The notification shall include the amount and type of products, licensee or organization, and vendor’s or salesperson’s name. All liquor or wine distributed under this paragraph shall be purchased from the commission. The commission may in its discretion fix either generally or specially the discount percentage for this purpose. If the commission determines that revenues are being diverted, the commission may take such action it deems necessary, including sanctions against any manufacturers, wholesale distributors, or wine and liquor vendors or their salespersons. All beverage furnished as samples shall be considered sales for the requirements of RSA 178:26.

21 Advertising Restrictions. Amend RSA 179:31, VIII-XII to read as follows:

VIII. Coupon offers shall be redeemed by the vendor or the vendor’s agent as specified in the offer. [No redemptions shall be made by state stores.]

IX. [Advertising of liquor or beverages shall not be inconsistent with the spirit of safety or safe driving.] Advertising or promotion of alcohol by the use of a billboard, sound trucks, or outdoor internally illuminated screen displays is prohibited. On-premises and off-premises licensees may advertise their liquor and beverage prices. Advertising of liquor or beverages shall not be inconsistent with the spirit of public health or safety. Any violation of title XIII by a licensee shall authorize the commission at its discretion to suspend the advertising and promotion of happy hours or regulate drink prices charged by the licensee.

X. It shall be the responsibility of the advertiser to insure that all advertising copy is in complete conformity with the New Hampshire laws and rules.

XI. [No advertising or promotion shall be done by the use of a billboard. Advertising shall not contain any reference to a “happy hour” except that a “happy hour schedule” may be posted within the licensed premises, not in view of any public way, and an on-premises licensee may advertise or promote the holding of a “champagne brunch” or similar package.

XII.] No holder of a beverage manufacturer license, wholesale distributor license, or beverage vendor license shall advertise, either directly or indirectly, in any booklet, program, program book, yearbook, magazine, newspaper, periodical, brochure, circular, or other similar publication published by, for, or in behalf of any religious, fraternal, educational, patriotic, social, or civic group. No on-premises licensee or off-premises licensee, any group thereof, or any holder of a beverage manufacturer license, wholesale distributor license, or vendor license, through any control, ownership, interlocking ownership, interlocking directors, or otherwise shall advertise or cause any manner or form of advertising to be inserted in such publications.

22 Purchase of Supplies. Amend RSA 179:32 to read as follows:

179:32 Purchase of Supplies.

I. All licensees shall purchase their supplies of liquor and wine from the commission or [as provided by law] licensed New Hampshire wine manufacturers.

II. All on-premises or off-premises licensees shall purchase their supplies of beverages from licensed wholesale distributors, manufacturers, brew pubs, or as otherwise specifically provided by law.

III. The commission may, upon request, grant licensees permission to purchase product not otherwise available in New Hampshire from direct shipper permittees or other sources. The commission shall collect a fee established by the commission no less than equal to that paid by direct shippers for all such purchases from other sources.

23 Repeal. The following are repealed:

I. RSA 177:2, relative to closing of state stores.

II. RSA 177:4, relative to operation of state stores and salespersons.

III. RSA 179:31, I, relative to sound trucks and outdoor illuminated screen displays.

24 Divisions of the Liquor Commission; Transitional Provisions.

I. Pursuant to RSA 94:1-d, the liquor commission shall submit a recommendation relative to the appropriate letter grade in RSA 94:1-a I(b) for 8 unclassified positions to the commissioner of administrative services who shall submit the recommendation to an outside consultant for the purpose of assessing the appropriate letter grade for the unclassified positions. The commissioner of administrative services shall submit the consultant’s report to the joint committee on employee classification established in RSA 14:14-c, for its review and temporary letter grade allocation.

II. The liquor commission shall report to the director of personnel classified position numbers to be abolished upon filling each of the division director positions established in RSA 176:8. The funds budgeted to fund the abolished positions shall not lapse and shall be used towards the compensation of the 5 unclassified positions.

III. Any classified employee of the liquor commission who is appointed to an unclassified position shall retain all annual leave, sick leave, and bonus time already accumulated in the classified system. Such annual leave, sick leave, and bonus time shall not be used until the employee’s cessation of employment or until the employee transfers to the classified service.

IV. Any classified employee of the liquor commission who is appointed to an unclassified position shall accrue terminal pay pursuant to RSA 94:9 from the date of appointment to the unclassified position.

25 Effective Date. This act shall take effect July 1, 2009.

LBAO

09-0853

02/03/09

SB 181-FN-A - FISCAL NOTE

AN ACT relative to the liquor commission and alcoholic beverages.

FISCAL IMPACT:

      The Liquor Commission states this bill will decrease state general fund revenue and expenditures and increase liquor commission fund revenue and expenditures by an indeterminable amount in FY 2010 and each year thereafter. There is no fiscal impact on county and local revenue or expenditures.

METHODOLOGY:

    The Liquor Commission states this bill makes various organizational changes to the Liquor Commission and modifies various sales and licensing restrictions relating to alcoholic beverages. This bill creates the liquor commission fund, a nonlapsing continually appropriated fund, for Liquor Commission revenue and expenditures. As a result, the Commission states general fund revenue will decrease and liquor commission fund revenue will increase by approximately $124 million in FY 2010 and $129 million in FY 2011 and state general fund expenditures will decrease and liquor commission fund expenditures will increase by $41,004,259 in FY 2010 and by $42,996,341 in FY 2011. The Commission did not estimate expenditures or revenue beyond FY 2011.

    The bill will establish five unclassified director positions and as each position is filled, the Commission will report to the director of personnel classified position numbers to be abolished. The Commission assumes the unclassified positions will be group HH for the director of finance and group GG for the director of marketing, merchandise, and warehousing, director of store operations, director of administration, and director of enforcement and licensing. The Commission also assumes the current division directors will move into the new positions and assumes no cost of living increase for the five unclassified positions in FY 2011. The Commission states changing the five classified positions to unclassified positions may increase liquor commission fund expenditures by $18,172 in FY 2010 and by $22,338 in FY 2011.

    This bill also establishes that any contracts or purchases less than $200,000 do not need governor and council or fiscal committee approval, allows the Commission to close any store to improve profitability and efficiency, and provides the Commission the discretion where to operate stores. The fiscal impact of these parts of the bill cannot be determined.

    The Commission states the bill makes changes to existing fees or adds new fees. The Commission assumes 500 probationary licenses will be issued at $300 per license for an estimated increase in liquor commission fund revenue of $150,000. The Commission also assumes the direct ship charge will result in $1,100 licenses being issued at $120 per license for an estimated increase in liquor commission fund revenue of $132,000. The Commission is not able to determine increases in liquor commission fund revenue associated with the one-time background check processing fee of $500 for new stores or the annual license fee of $1,000 per cash register for new stores.

None