16-4-204. (Temporary) Transfer -- catering endorsement -- competitive bidding -- rulemaking. (1) (a) Except as provided in subsection (9), a license may be transferred to a new owner and to a location outside the quota area where the license is currently located only when the following criteria are met:
(i) the total number of all-beverages licenses in the current quota area exceeded the quota for that area by at least 25% in the most recent census prescribed in 16-4-502;
(ii) the total number of all-beverages licenses in the quota area to which the license would be transferred, exclusive of those issued under 16-4-209(1)(a) and (1)(b), did not exceed that area's quota in the most recent census prescribed in 16-4-502:
(A) by more than 33%; or
(B) in an incorporated city of more than 10,000 inhabitants and within a distance of 5 miles from its corporate limits, by more than 43%; or
(iii) the department finds, after a public hearing, that the public convenience and necessity would be served by a transfer.
(b) A license transferred pursuant to subsection (1)(a) that was issued pursuant to a competitive bidding process is not eligible to offer gambling under Title 23, chapter 5, part 3, 5, or 6.
(2) When the department determines that a license may be transferred from one quota area to another under 16-4-201(1) or (4), the department shall use a competitive bidding process to determine the party afforded the opportunity to purchase and transfer a license. The department shall:
(a) determine the minimum bid based on 75% of the market value of all-beverages licenses in the quota area;
(b) publish notice that a quota area is eligible for a license transfer;
(c) notify the bidder with the highest bid; and
(d) keep confidential the identity of bidders, number of bids, and bid amounts until the highest bidder has been approved.
(3) To enter the competitive bidding process, a bidder shall submit:
(a) an application form provided by the department; and
(b) an irrevocable letter of credit from a financial institution establishing the department as the beneficiary of the bid amount.
(4) In the case of a tie for the highest bid, the tied bidders may submit new bids. The minimum bid must be set at the tied bid amount. To submit a new bid, a tied bidder shall submit:
(a) an application form provided by the department; and
(b) an irrevocable letter of credit from a financial institution establishing the department as the beneficiary of the new bid amount.
(5) The highest bidder shall:
(a) submit an application provided by the department and applicable fees for the license within 60 days of the department's notification of being the highest bidder;
(b) pay the bid amount prior to the license being approved;
(c) meet all other requirements to own an all-beverages license; and
(d) commence business within 1 year of the department's notification unless the department grants an extension because commencement was delayed by circumstances beyond the applicant's control.
(6) If the highest bidder is not approved to own the license, the department shall offer the license to the next highest bidder. That bidder shall comply with the requirements of subsection (5).
(7) If no bids are received during the competitive bidding process or if a quota area is already eligible for another license transfer under subsection (1), the department shall process applications to transfer a license in the order received.
(8) (a) The successful applicant is subject to forfeiture of the license and the original license fee if the successful applicant:
(i) transfers an awarded license to another person after receiving the license unless that transfer is due to the death of an owner;
(ii) does not use the license within 1 year of receiving the license or stops using the license within 5 years. The department may extend the time for use if the successful applicant provides evidence that the delay in use is for reasons outside the applicant's control; or
(iii) proposes a location for the license that had the same license type within the previous 12 months.
(b) If a license is forfeited, the department shall offer the license to the next eligible highest bidder in the auction.
(9) A license within an incorporated quota area may be transferred to a new owner and to a new unincorporated location within the same county on application to and with consent of the department when the total number of all-beverages licenses in the current quota area, exclusive of those issued under 16-4-209(1)(a) and (1)(b), exceeds the quota for that area by at least 25% in the most recent census and will not fall below that level because of the transfer.
(10) A license issued under 16-4-209(1)(a) may not be transferred to a location outside the quota area and the exterior boundaries of the Montana Indian reservation for which it was originally issued.
(11) (a) Any all-beverages licensee is, upon the approval and in the discretion of the department, entitled to a catering endorsement to the licensee's all-beverages license to allow the catering and sale of alcoholic beverages to persons attending a special event upon premises not otherwise licensed for the sale of alcoholic beverages for on-premises consumption. The alcoholic beverages must be consumed on the premises where the event is held.
(b) A written application for a catering endorsement and an annual fee of $250 must be submitted to the department for its approval.
(c) An all-beverages licensee who holds an endorsement granted under this subsection (11) may not cater an event in which the licensee is the sponsor. The catered event must be within 100 miles of the licensee's regular place of business.
(d) The licensee shall notify the local law enforcement agency that has jurisdiction over the premises where the catered event is to be held. A fee of $35 must accompany the notice.
(e) The sale of alcoholic beverages pursuant to a catering endorsement is subject to the provisions of 16-6-103.
(g) A catering endorsement issued for the purpose of selling and serving beer at a special event conducted on the premises of a county fairground or public sports arena authorizes the licensee to sell and serve beer in the grandstand and bleacher area of the premises, as well as from a booth, stand, or other fixed place on the premises.
(h) A licensee may not share revenue from the sale of alcoholic beverages with the sponsor of the catered event unless the sponsor is the state of Montana, a political subdivision of the state, or a qualified entity under section 501(c) of the Internal Revenue Code, 26 U.S.C. 501(c), as amended.
(12) The department may adopt rules to implement this section. (Terminates December 31, 2023--sec. 17, Ch. 5, Sp. L. November 2017.)