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F I S C A L I M P A C T R E P O R T

SPONSOR Vigil

ORIGINAL DATE

LAST UPDATED

2/1/08

HB 359

SHORT TITLE Prohibit Alcohol Sales At Gas Stations

SB

ANALYST Wilson

APPROPRIATION (dollars in thousands)

Appropriation

Recurring

or Non-Rec

Fund

Affected

FY08

FY09

$0.1

Recurring

General Fund

(Parenthesis ( ) Indicate Expenditure Decreases)

Relates to HB 359

ESTIMATED ADDITIONAL OPERATING BUDGET IMPACT (dollars in thousands)

FY08

FY09

FY10 3 Year

Total Cost

Recurring

or Non-Rec

Fund

Affected

Total

$0.1

$0.1

Recurring General

Fund

(Parenthesis ( ) Indicate Expenditure Decreases)

SOURCES OF INFORMATION

LFC Files

Responses Received From

Administrative Office of the Courts (AOC)

Attorney General’s Office (AGO)

Bernalillo County Metro Court (BCMC)

Department of Public Safety (DPS)

Regulation & Licensing Department (RLD)

SUMMARY

Synopsis of Bill

House Bill 359

will amend the Liquor Control Act to insert new material related to the definition

of licensed premises. “Licensed premises" will now be defined to exclude the sale of alcohol at

gas stations, or establishments that sell gasoline for public consumption. Specifically, HB 359

provides that licensed premises shall exclude locations where motor fuel or liquefied petroleum

House Bill 359 – Page

2

gases or compressed natural gases are sold for the generation of power in an internal combustion

engine.

HB 359 further provides that licensees who currently hold licenses that are located at gas stations

or establishments that sell gasoline for public consumption may renew the license in an inactive

status, without penalty of cancellation, until July 1, 2010. During the grace period from July 1,

2008 to July 1, 2010, the licensee may seek to transfer, assign, sell or lease the license to a prem-

ise that qualifies as a licensed premise. If the license has not been transferred, sold, leased or

assigned by the end of the grace period, the Director of the Alcohol and Gaming Division may

extend the inactive period for good cause shown

FISCAL IMPLICATIONS

There will be a minimal administrative cost for statewide update, distribution and documentation

of statutory changes. Any additional fiscal impact on the judiciary will be proportional to the

enforcement of this law and commenced prosecutions. New laws, amendments to existing laws

and new hearings have the potential to increase caseloads in the courts, thus requiring additional

resources to handle the increase.

SIGNIFICANT ISSUES

The proposed change will prohibit the package sale of alcohol beverage at convenience stores

where gasoline/fuel for motorized vehicles is sold thereby reducing the immediate availability of

alcoholic beverages to the motoring public.

DPS notes this bill has significant implications for the Special Investigations Division (SID):

•

Agents will be able to concentrate scarce resources on establishments (Bars), special dis-

penser permits, concerts and public celebrations where alcohol is sold, served and con-

sumed by the drink.

•

It will reduce the availability of alcohol to minors by eliminating “Beer Runs" (Minors

grabbing and running from a convenience store with beer).

•

A convenience store clerk will not have to assess the sobriety or age of customers thereby

eliminating illegal alcohol sales to minors or intoxicated persons.

•

SID will not be investigating complaints from neighborhood associations whose quality

of life is impacted by intoxicated persons who have purchased and consumed alcohol in

their neighborhood.

RLD has provided the following:

•

Licenses currently held at gas stations or locations where gas is sold will be required to

pay a $200 fee to transfer the license or a $250 fee to lease the license. When a license is

placed into voluntary temporary suspension, the licensee is required to pay a $20 fee.

House Bill 359 – Page

3

•

Licenses currently operated at gas stations or establishments that sell gas for use in motor

vehicles must place the license into inactive status effective July 1, 2008.

•

The licensee has two years, until July 1, 2010, to sell, transfer, assign, or lease the inac-

tive license.

•

At the end of the two year grace period, the Director has the discretion of canceling the

license or extending the inactive period.

•

The licensee will be responsible for paying license transfer fees.

•

Holders of inactive licenses will be permitted to sell their stock of alcoholic beverages, in

whole or in part, during the inactive period pursuant to Section 60-6B-9 NMSA 1978.

The AGO provided the following:

The Liquor Control Act generally requires that alcoholic beverages be sold at a “licensed

premises". See NMSA Sections 60-7A-1, 60-7A-4.1, 60-7A-22, 60-6A-2(B) (1978). The

bill does not directly prohibit the sale of alcoholic beverages at or near fueling stations.

However, by exempting fueling stations from the definition of “licensed premises", this

bill impliedly prohibits the sale of alcoholic beverages at those locations.

The bill provides that the term “licensed premises" does not include “premises" or a “lo-

cation" where fuel is sold. It does not define the term “location". It is conceivable that

those terms will be subject to interpretation and construction, depending upon the

boundaries of each “licensed premises" on file with the Director. If, for example, li-

censed premises only includes a store, restaurant, bar, club etc. adjacent to the actual fuel-

ing facilities, but does not include the actual facilities themselves, a literal interpretation

of this bill could allow the continued sale of alcoholic beverages at those licensed prem-

ises.

This bill will mostly apply to holders of “retailers" licenses who are authorized to sell

packaged alcoholic beverages for consumption off-premises. See NMSA Section 60-7A-

11 regulating sales by retailers. However, it could apply to restaurant or other licensees

who are allowed to serve alcoholic beverages by the drink if their licensed premises (res-

taurant, bar, club, etc.) is considered to fall within the exemption enacted by this bill.

State law could be changed to directly and specifically prohibit the sale, consumption,

etc. of alcoholic beverages at or within a certain distance of fueling stations, and to pro-

vide that such sale is a violation of the Liquor Control Act. See, for example, NMSA

Section 60-6B-10 (1978) regulating the sale of alcoholic beverages near a church or

school.

ADMINISTRATIVE IMPLICATIONS

The staff of the Alcohol and Gaming Division of RLD will be required to provide close scrutiny

on licenses currently held at locations that sell gasoline.

House Bill 359 – Page

4

CONFLICT, DUPLICATION, COMPANIONSHIP, RELATIONSHIP

Companion to HB 356, No Liquor Licenses Near Interstate Highways

POSSIBLE QUESTIONS

Could this bill be construed to be a “taking" of property.

DW/nt