AB78 - Revises provisions relating to licenses for the distribution of alcoholic beverages. (BDR 32-283)

A.B. 78 - *AB78* ASSEMBLY BILL NO. 78–COMMITTEE ON REVENUE (ON BEHALF OF THE DEPARTMENT OF TAXATION) PREFILED NOVEMBER 20, 2024 ____________ Referred to Committee on Revenue SUMMARY—Revises provisions relating to licenses for the distribution of alcoholic beverages. (BDR 32-283) FISCAL NOTE: Effect on Local Government: No. Effect on the State: No. ~ EXPLANATION – Matter in bolded italics is new; matter between brackets [omitted material] is material to be omitted. AN ACT relating to alcoholic beverages; revising provisions governing the review and approval of applications for certain licenses related to the distribution of alcoholic beverages; authorizing the Department of Taxation to conduct certain investigations and hearings; revising provisions governing the suspension or revocation of certain licenses related to the distribution of alcoholic beverages; and providing other matters properly relating thereto. Legislative Counsel’s Digest: Existing law requires certain persons and businesses that are importers of 1 liquor, wholesale dealers of beer or wines and liquors, wineries, instructional wine- 2 making facilities, breweries, brew pubs, craft distilleries and estate distilleries to 3 obtain a state license or permit from the Department of Taxation. (NRS 369.180) 4 Under existing law, an applicant for such a license is required to submit an 5 application to: (1) the board of county commissioners of the county in which the 6 applicant maintains his or her principal place of business if the applicant does not 7 maintain his or her principal place of business within the boundaries of an 8 incorporated city; or (2) the governing body of the city in which the applicant 9 maintains his or her principal place of business if the applicant maintains his or her 10 principal place of business within the boundaries of an incorporated city. (NRS 11 369.190) Existing law requires the board of county commissioners or the governing 12 body of the city, as applicable, to approve or disapprove the application and, if the 13 application is approved, forward the application to the Department for review and 14 issuance of the license. (NRS 369.200) 15 Existing law requires the board of county commissioners or the governing body 16 of a city, as applicable, to require satisfactory evidence that an applicant meets 17 – 2 – - *AB78* certain requirements, including that the applicant is not a supplier of alcoholic 18 beverages applying for a license to engage in the business of importing, 19 wholesaling or retailing alcoholic beverages in violation of existing law. (NRS 20 369.190, 369.382) Section 1 of this bill additionally requires the board of county 21 commissioners or the governing body of a city, as applicable, to require satisfactory 22 evidence that an applicant is not an importer or wholesaler of alcoholic beverages 23 applying for a license to engage in another business in violation of existing law 24 governing the distribution of alcoholic beverages. (NRS 597.220) 25 Section 2 of this bill requires the board of county commissioners or the 26 governing body of a city to: (1) determine whether to recommend that an 27 application be approved or disapproved by the Department rather than approve or 28 disapprove applications; and (2) forward to the Department each application, the 29 recommendation and all documents supplied by the applicant which were reviewed 30 by the board or governing body in determining whether to recommend that the 31 application be approved or disapproved. 32 Existing law authorizes the board of county commissioners or the governing 33 body of a city, as applicable, to investigate complaints against a licensee, conduct 34 hearings and recommend to the Department, under certain circumstances, the 35 revocation or suspension of a license. (NRS 369.230-369.290) Sections 3-7 of this 36 bill provide for the Department to also perform these functions in the same manner 37 as a board of county commissioners or governing body of a city and authorize the 38 Department to revoke or suspend a license without receiving a recommendation 39 from a board of county commissioners or governing body of a city. Section 4 40 authorizes the Department, the board of county commissioners or the governing 41 body of a city, as applicable, to extend the time for a licensee to file an answer to a 42 complaint under certain circumstances, and section 6 revises the period within 43 which a decision on the complaint must be rendered if the time for filing an answer 44 is extended. Section 6 also removes the requirement for the Department to suspend 45 or revoke a license upon receiving a recommendation for such action from a board 46 of county commissioners or governing body of a city, and instead authorizes the 47 Department to suspend or revoke a license upon receiving such a recommendation. 48 (NRS 369.260) 49 Existing law authorizes the board of county commissioners or the governing 50 body of a city, as applicable, to suspend or revoke summarily a license in cases 51 where an aggravated and flagrant violation of law appears to have occurred, subject 52 to review by the Department at a hearing. (NRS 369.280) Section 8 of this bill 53 similarly authorizes the Department to suspend or revoke summarily the license of 54 a person in cases where an aggravated and flagrant violation of law appears to have 55 occurred, subject to the same requirements in existing law for notice and a public 56 hearing. 57 Existing law authorizes counties and incorporated cities to license and regulate 58 persons engaged in a business in their jurisdictions related to the distribution or sale 59 of alcoholic beverages. (NRS 244.350, 268.090) Sections 9 and 10 of this bill 60 prohibit counties and cities from issuing a license to a person who is required to 61 obtain a license from the Department unless the Department has issued such a 62 license and the license is in good standing. 63 THE PEOPLE OF THE STATE OF NEVADA, REPRESENTED IN SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS: Section 1. NRS 369.190 is hereby amended to read as follows: 1 369.190 1. An application for any of the licenses described in 2 NRS 369.180 must be made to: 3 – 3 – - *AB78* (a) The board of county commissioners of the county in which 1 the applicant maintains his or her principal place of business if the 2 applicant does not maintain his or her principal place of business 3 within the boundaries of an incorporated city; or 4 (b) The governing body of the city in which the applicant 5 maintains his or her principal place of business if the applicant 6 maintains his or her principal place of business within the 7 boundaries of an incorporated city. 8 2. Each application must: 9 (a) Be made on such form as the Department prescribes. 10 (b) Include the name and address of the applicant. If the 11 applicant is: 12 (1) A partnership, the application must include the names 13 and addresses of all partners. 14 (2) A corporation, association or other organization, the 15 application must include the names and addresses of the president, 16 vice president, secretary and managing officer or officers. 17 (3) A person carrying on or transacting business in this state 18 under an assumed or fictitious name, the person making the 19 application must attach to the application: 20 (I) A certified copy of the certificate required by NRS 21 602.010 or any renewal certificate required by NRS 602.035. 22 (II) A certificate signed by an officer of the corporation or 23 by each person interested in, or conducting or carrying on such 24 business, or intending so to do, and acknowledged before a person 25 authorized to take acknowledgments of conveyances of real 26 property, indicating the name of the authorized representative whose 27 signature may be required on the license under the provisions of this 28 chapter. 29 (c) Specify the location, by street and number, of the premises 30 for which the license is sought. 31 (d) Be accompanied by the annual license fee required for the 32 particular license for which application is made. 33 3. The board of county commissioners or the governing body 34 of a city, as applicable, shall examine all applications filed with it, 35 and shall require satisfactory evidence that the applicant is: 36 (a) A person of good moral character; 37 (b) Not acting in violation of NRS 369.180; [and] 38 (c) Not applying for a license for a business in which the 39 applicant is prohibited from engaging pursuant to NRS 369.382 [.] ; 40 and 41 (d) Not applying for a license for a business in which the 42 applicant is prohibited from engaging pursuant to NRS 597.220. 43 – 4 – - *AB78* Sec. 2. NRS 369.200 is hereby amended to read as follows: 1 369.200 1. The board of county commissioners or the 2 governing body of a city, as applicable, shall [approve or disapprove 3 applications. If an application is disapproved by the board of county 4 commissioners or the governing body of a city, the board or the 5 governing body, as applicable, forthwith shall return the license fee 6 accompanying the application to the applicant. If the board of 7 county commissioners or the governing body of a city approves an 8 application, the] review an application submitted pursuant to NRS 9 369.190 and determine whether to recommend that the application 10 be approved or disapproved by the Department. The board or the 11 governing body, as applicable, shall forward [it] to the Department 12 [, together with the board’s or the governing body’s] : 13 (a) The application; 14 (b) All documents supplied by the applicant which were 15 reviewed by the board or governing body in determining whether 16 to recommend that the application be approved or disapproved; 17 (c) The written [approval thereof and the] recommendation of 18 the board or governing body; and 19 (d) The license fee accompanying the application. 20 2. Upon receipt thereof the Department shall review the 21 application and [approval,] recommendation and, if [no further 22 objections are presented or known,] all requirements of law are 23 met, shall issue the appropriate license to the applicant. If an 24 application is disapproved by the Department, the Department 25 forthwith shall return the license fee accompanying the 26 application to the applicant. 27 [3. In its discretion, the Department may grant an applicant 28 whose application has been disapproved a new hearing before the 29 Department if it shall be made to appear to the Department that the 30 decision of the board of county commissioners or the governing 31 body of a city, as applicable, was arbitrary, unreasonable or unjust.] 32 Sec. 3. NRS 369.230 is hereby amended to read as follows: 33 369.230 The Department, the board of county commissioners 34 or the governing body of a city, as applicable, may, upon its own 35 motion, and shall, upon the verified complaint in writing of any 36 person, investigate the action of any licensee under this chapter . [, 37 and] The Department shall have the power to temporarily suspend 38 or permanently revoke a license and the board of county 39 commissioners or the governing body of a city, as applicable, shall 40 have power to recommend the temporary suspension or permanent 41 revocation of a license for any one of the following acts or 42 omissions: 43 1. Misrepresentation of a material fact by the applicant in 44 obtaining a license under this chapter; 45 – 5 – - *AB78* 2. If the licensee violates or causes or permits to be violated 1 any of the provisions of this chapter; 2 3. If the licensee commits any act which would be sufficient 3 ground for the denial of an application for a license under this 4 chapter; 5 4. If the licensee sells liquor to a wholesaler or retailer who is 6 not a holder of a proper license or permit at such time; or 7 5. If the licensee fails to pay the excise tax or any penalty in 8 connection therewith, in whole or in part, imposed by law, or 9 violates any regulation of the Department respecting the same. 10 Sec. 4. NRS 369.240 is hereby amended to read as follows: 11 369.240 1. Upon the filing with the Department, the board of 12 county commissioners of the county in which a licensee maintains 13 his or her principal place of business or [with] the governing body 14 of the city in which the licensee maintains his or her principal place 15 of business , if the licensee maintains his or her principal place of 16 business within an incorporated city , of a verified complaint 17 charging the licensee with the commission, within 1 year prior to the 18 date of filing the complaint, of any act which is cause for suspension 19 or revocation of a license, the Department, the board of county 20 commissioners or the governing body, as applicable, forthwith shall 21 issue a citation directing the licensee, within 10 days after service 22 thereof upon him or her, to appear by filing with the Department, 23 the board of county commissioners or the governing body, as 24 applicable, a verified answer to the complaint showing cause, if any 25 he or she has, why his or her license should not be suspended or 26 revoked. Service of the citation with a copy of the complaint shall 27 be made upon the licensee as provided by the Nevada Rules of Civil 28 Procedure for the service of process in civil actions. Upon 29 application of a licensee, the Department, the board of county 30 commissioners or the governing body, as applicable, may, for good 31 cause shown, extend by not more than 30 days the time for filing 32 an answer to the complaint. 33 2. Failure of the licensee to timely file an answer [within the 34 time specified] shall be deemed an admission by the licensee of the 35 commission of the act or acts charged in the complaint. Thereupon, 36 if the complaint was filed with the board of county commissioners 37 or the governing body of a city, the board of county commissioners 38 or the governing body, as applicable, shall give written notice of the 39 failure of the licensee to answer to the Department. The Department 40 forthwith shall suspend or revoke the license, as the case may be, 41 and shall give notice of such suspension or revocation by mailing a 42 true copy thereof, by United States registered or certified mail in a 43 sealed envelope with postage thereon fully prepaid, addressed to the 44 – 6 – - *AB78* lic [Text truncated for display. Full text available on LegiScan.]