Laws and Rules

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42.12.101 APPLICATION FOR LICENSE
(1) All applications for licenses to sell, manufacture, or distribute alcoholic beverages shall be made to the department upon forms supplied by the department. An abbreviated application may be permissible for license modifications as specified in ARM 42.12.118. In all other cases, the application process specified below shall be followed.
(2) Applications for licenses shall be in the names of all persons who will have an ownership interest in the business to be operated under the license, as required in 16-4-401, MCA.
(3) In addition to the license application, as applicable, the applicant shall submit:
(a) any processing fees required by ARM 42.12.111 and the license fee required by 16-4-420 or 16-4-501, MCA;
(b) a copy of the proposed agreement to transfer an ownership interest;
(c) proof that the applicant has possessory interest in the premises;
(d) any source of funding documents including, but not limited to, loan documents, gifting statements, and finance institution statements;
(e) the premises floor plan;
(f) bank account authorization and signature documents;
(g) proof of assumed business name;
(h) proof that all filings and payments related to Montana income, corporation, withholding, business, and other taxes are current;
(i) two complete sets of fingerprints and a personal history statement for each person identified in 16-4-414, MCA, and ARM 42.12.212; and
(j) for any entity applicant:
(i) proof the business is registered in Montana;
(ii) stock certificates;
(iii) stock ledger or membership units register;
(iv) bylaws; and
(v) organizational meeting minutes.
(4) The department, in its sole discretion, may waive an application requirement set forth in this rule.
(5) The department shall make a thorough investigation as to the qualifications of the applicant and the suitability of the premises proposed for licensing. The disqualification of any applicant to hold the license disqualifies all.
(6) The department, in its sole discretion, may issue a license. If approved, the licensee remains bound by all requirements in statute and rule that apply at the time an application for license or an application for renewal is approved. A licensee’s failure to remain in compliance with a statute or rule shall constitute a violation of that statute or rule and may subject the licensee to administrative action.
History: 16-1-303, MCA; IMP, 16-4-105, 16-4-201, 16-4-204, 16-4-207, 16-4-210, 16-4-401, 16-4-402, 16-4-414, 16-4-420, 16-4-501, 16-4-502, MCA; NEW, Eff. 11/3/75; AMD, 1985 MAR p. 167, Eff. 2/15/85; AMD, 1992 MAR p. 1244, Eff. 6/12/92; AMD, 1998 MAR p. 2088, Eff. 7/31/98; AMD, 2000 MAR p. 1762, Eff. 7/14/00; AMD, 2003 MAR p. 2305, Eff. 10/17/03; AMD, 2012 MAR p. 1846, Eff. 9/21/12; AMD, 2014 MAR p. 1277, Eff. 6/13/14; AMD, 2014 MAR p. 2980, Eff. 12/12/14.
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42.12.102 SUPPORTING DOCUMENTATION — PUBLIC CONVENIENCE AND NECESSITY
This rule has been repealed.
History: Sec. 16-1-303, MCA; IMP, Sec. 16-4-105 and 16-4-203, MCA; NEW, Eff. 11/3/75; AMD, 1985 MAR p. 167, Eff. 2/15/85; AMD, 1993 MAR p. 158, Eff. 1/29/93; REP, 1998 MAR p. 2088, Eff. 7/31/98.
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42.12.103 SUPPORTING DOCUMENTATION — ENTITY APPLICANTS
This rule has been repealed.
History: 16-1-303, MCA; IMP, 16-4-203, 16-4-205, 16-4-401, MCA; NEW, Eff. 11/3/75; AMD, 1985 MAR p. 167, Eff. 2/15/85; AMD, 1993 MAR p. 434, Eff. 1/29/93; AMD, 1993 MAR p. 2423, Eff. 10/15/93; AMD, 2001 MAR p. 449, Eff. 3/23/01; AMD, 2012 MAR p. 1846, Eff. 9/21/12; REP, 2014 MAR p. 2980, Eff. 12/12/14.
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42.12.104 ACTION TAKEN WITH CENSUS UPDATE
(1) Upon receipt of the most recent census taken under the direction of congress, or the most recent population estimates published by the bureau of the census, United States department of commerce, the department of revenue will determine the availability of any alcoholic beverages licenses subject to a quota system. The department will publish notice of increases in the availability of alcoholic beverages licenses subject to a quota limitation if the quota of licenses had previously been filled within 30 days of receipt of both city and county certified census numbers.
(2) In determining the availability of such licenses, the department will:
(a) utilize only those boundaries that are recognized by the bureau of the census; and
(b) consider the distance measurement from an incorporated city to extend in a five-mile radius but, in no case, farther than the county boundary within which the incorporated city is located.
(3) The department will determine whether a license is available for a license applicant based on the verified census data in the department’s possession on the date the department received the application, except when the department has published a notice of availability of a license three months before or after receipt of the application, in which case the verified census data in the department’s possession on the date the notice is published shall be used. Census data is verified when the department has confirmation the federal census bureau has declared the census data to be official, the department has calculated the license quotas from the official census data, and the department has placed the revised quotas on file.
(4) If more lottery applications are received than licenses available within a quota area, the procedure in ARM 42.12.412 is followed.
History: Sec. 16-1-303, MCA; IMP, Sec. 16-4-105, 16-4-106, 16-4-201, 16-4-203, and 16-4-502, MCA; NEW, 1981 MAR p. 689, Eff. 7/17/81; AMD, 1993 MAR p. 158, Eff. 1/29/93; AMD, 1998 MAR p. 3132, Eff. 11/20/98; AMD, 2000 MAR p. 1762, Eff. 7/14/00; AMD, 2003 MAR p. 21, Eff. 1/17/03; AMD, 2004 MAR p. 1972, Eff. 8/20/04.
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42.12.105 ELECTRONIC SUBMISSION OF DOCUMENTS AND ELECTRONIC SIGNATURES
(1) The department may accept electronic submission of certain documents through the licensing portal.
(2) An electronically submitted document is only complete if:
(a) all requested information is provided; and
(b) the submitter is the applicant, licensee, or an authorized representative of the applicant or licensee.
(3) By electronically submitting a document, the submitter declares, under the penalty of false swearing, that:
(a) the information submitted is true, correct, and complete; and
(b) the submitter is the applicant, licensee, or an authorized representative of the applicant or licensee.
(4) An electronically submitted document is subject to the same deadlines as a document submitted in paper form.

History: 16-1-303, MCA; IMP, 16-4-402, 45-7-202, MCA; NEW, 2014 MAR p. 1277, Eff. 6/13/14; AMD, 2017 MAR p. 493, Eff. 4/29/17.
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42.12.106 DEFINITIONS
The following definitions apply to this chapter:
(1) “Adjacent to,” with regard to alcoholic beverage advertising limitations for premises suitability, means:
(a) the premises share a common internal or external wall with the building at issue; or
(b) there is an absence of another building between the premises and the building at issue; and
(c) the distance between the nearest exterior wall of the premises and the building at issue is equal to or less than 100 feet.
(2) “Affiliation” means relationships wherein:
(a) an entity owns or controls another entity;
(b) entities are under common ownership or control; or
(c) an individual has decision-making authority or influence over business decisions for another entity.
(3) “Alteration” means a structural change or modification to the premises other than a cosmetic change. Examples include adding a patio/deck or removing a half wall.
(4) “Associated business” means a business that is not licensed by the state to keep or sell alcoholic beverages, but has an alcoholic beverages licensed business located within or on the premises owned or controlled by the “associated business.” Examples of associated businesses are:
(a) a hotel that is not licensed to keep or sell alcoholic beverages, but leases space in the hotel to a licensee to sell alcoholic beverages; or
(b) a shopping mall that is not licensed to keep or sell alcoholic beverages, but leases space in the mall to a licensee to sell alcoholic beverages.
(5) “Bona fide sale” means a transaction that completely transfers the property to a qualified purchaser for consideration.
(6) “Building” means an enclosed structure with external walls and a roof. Separate structures or structures connected by skyways are not considered one building for licensing purposes.
(7) “Business directly related to the on-premises consumption of alcoholic beverages” means a business that is readily associated with on-site alcoholic beverage consumption, such as a hotel, bowling alley, casino, or restaurant. It does not include alcoholic beverage manufacturers, grocery stores, or off-premises alcoholic beverage businesses.
(8) “Catering” means the act of providing, pursuant to a written contract between a licensee with a valid catering endorsement and an unlicensed individual or entity, alcoholic beverages at an event hosted by the unlicensed individual or entity.
(9) “Complete application” means all information requested on the license application forms and the necessary supporting documentation has been supplied in compliance with the law.
(10) “Concession agreements” are agreements in which an on-premises consumption beer licensee or all-alcoholic beverages licensee provides the sale and service of alcoholic beverages for a non-licensed entity.
(11) “Conditional approval letter” means a letter that is issued upon completion of the license application investigation and public protest period, but prior to approval of the premises. A conditional approval letter precedes issuance of a license, is not an approval to operate, and is not to be confused with a license with conditions written on the face of the license itself pursuant to 16-1-302, MCA. The conditions appearing on the face of the license are permanent and last through the existence of ownership by the current licensee.
(12) “Contiguous” means touching or sharing a common border.
(13) “Cross collateralization” means collateral for one loan also serving as collateral for another loan.
(14) “Drink preparation area” means the bar area on the premises where alcoholic beverages are stored and prepared for on-premises consumption and from which alcoholic beverages may be sold for off-premises consumption.
(15) “Fair” means a county, state, or regional fair that occurs no more than once per year, is held on a publicly owned fairgrounds, and is officially sanctioned by a government entity.
(16) “Family relationship” means a spouse, dependent children, or dependent parents.
(17) “Floor plan” means a diagram with measurements of the premises as seen from above.
(18) “Grocery store” means a self-service retail establishment where a variety of perishable and nonperishable food items and household goods are sold for use off the premises.
(19) “Individual serving” means not more than 16 ounces of beer, not more than 2 ounces of liquor, not more than 7 ounces of wine, or a proportional combination thereof (for example, 1 ounce of liquor mixed with 8 ounces of beer).
(20) “Interior access” means entry that does not impede customer foot traffic from accessing any interior portion of the premises. Interior access is not found where a customer would be required to leave the interior portion of the premises.
(21) “Licensee” means a person, partnership, association, or other entity holding a Montana retail alcoholic beverage license, a retail alcoholic beverage operation located on a U.S. military installation, an alcoholic beverage manufacturer, a table wine distributor, or a beer wholesaler within Montana.
(22) “License fee” means a fee paid at the time a new license application is submitted and upon renewal of an existing license.
(23) “Loan” means a written contract by which one delivers a sum of money to another with the agreement that the money be returned with interest within a specified period of time.
(24) “Manufacturing area” means the portion of a manufacturing premises that is not designated as a sample room.
(25) “Noninstitutional lender” means a person other than a state or federally regulated banking or financial institution, a credit union, an investment company, a development company, or other regulated lender as defined in 31-1-111, MCA, who loans money to the applicant for a license or to the licensee.
(26) “Ownership interest” means the involvement in the business operated under the license by someone who owns some or all of the assets of the business, shares any portion of the profits, or any portion of the losses or liabilities of the business. Someone with an ownership interest in a liquor license shares in the financial risks of the business and is entitled to the profits or suffers the losses. Ownership interest includes the right to control the location or ownership of a license. Examples of ownership interests would include the authority to participate in such business decisions as the sale of the license, relocation of the license, or change or creation of any financial arrangements for loan repayment or funding sources. Participation in business decisions does not include providing advice. A right of first refusal is not an ownership interest.
(27) “Parties” means a:
(a) licensee;
(b) applicant;
(c) secured party;
(d) protestor; or
(e) attorney representing the licensee, applicant, secured party, protestor, or other interested party.
(28) “Patio/Deck” means an outdoor portion of the premises where the preparation, service, and consumption of alcoholic beverages is allowed.
(29) “Perimeter barrier” means a barrier enclosing the perimeter of the patio/deck. The barrier shall be constructed in a manner that impedes foot traffic and clearly defines the boundary of the exterior portion of the premises. The barrier shall be at least three feet high at all points and may have a single six-foot-wide entrance permitting public access from an unlicensed area to the patio/deck. Upon the department’s determination that the barrier accomplishes its intended purpose, the barrier may:
(a) be constructed of materials such as lattice or wrought iron that do not form a solid structure;
(b) have a portion of it be water;
(c) have additional entrances permitting public access to the patio/deck; and
(d) be less than three feet in height.
(30) “Permanent floor-to-ceiling wall” means a continuous structure spanning from floor to ceiling that remains in a fixed position and serves as a solid physical barrier. The wall may be constructed of brick, glass, stone, wood, and other materials as approved by the department. The wall may not be constructed of materials such as lattice or wrought iron that do not form a solid physical barrier.
(31) “Premises” means the area identified in the floor plan approved by the department on which the activities authorized under the license may be conducted.
(32) “Retail alcoholic beverages license” means a license operated by an establishment for the retail sale of alcoholic beverage for either on- or off-premises consumption but does not include brewery, winery, or distillery licenses.
(33) “Sacramental wine” means wine that is manufactured and sold exclusively for use as sacramental wine or for other religious purposes.
(34) “Sample room” means the area of a manufacturer’s premises where the service, sale, and on-premises consumption of alcoholic beverages are permitted.
(35) “Self-service of alcoholic beverages” means allowing persons other than the licensee or its employees to have access to alcoholic beverages prior to the licensee or its employees providing the alcoholic beverage to the person for on-premises consumption.
(36) “Service area” means the area on the premises where the service, sale, and on-premises consumption of alcoholic beverages are permitted. The service area includes any patio/deck and drink preparation area.
(37) “Service bar” means an area on a restaurant beer and wine licensee’s premises where alcoholic beverages are stored and prepared for on-premises consumption.
(38) “Special event,” as it relates to all special permits and catering, means a short, infrequent, out-of-the-ordinary occurrence such as a picnic, fair, festival, reception, seasonal event, or sporting event for which there is an outcome, conclusion, or result.
(39) “Stand-alone beer and/or table wine business” means a business in which 95 percent of the business’s annual gross income comes from the sale of beer, table wine, or both.
(40) “Storage area” means any portion of the premises that is accessible only by the licensee or its employees and where alcoholic beverages are stored in original packaging.
(41) “Substantially different use” means a change great enough to create a new type of business operation at a premises which is easily distinguishable from the business currently operated or previously planned to be operated at the same premises.
(42) “Temporary operating authority” means the authority granted to an applicant to operate a business pending final approval of the application.
(43) “Undisclosed ownership interest” means a person with an ownership interest in a license who is not identified as an applicant, shareholder, or member of an applicant on an application for the license, or as a licensee on the face of the license.

History: 16-1-303, MCA; IMP, 16-1-302, MCA; NEW, 1992 MAR p. 1244, Eff. 6/12/92; AMD, 1993 MAR p. 2423, Eff. 10/15/93; AMD, 1997 MAR p. 1825, Eff. 10/7/97; AMD, 1998 MAR p. 2088, Eff. 7/31/98; AMD, 2000 MAR p. 1762, Eff. 7/14/00; AMD, 2001 MAR p. 449, Eff. 3/23/01; AMD, 2003 MAR p. 21, Eff. 1/17/03; AMD, 2003 MAR p. 2305, Eff. 10/17/03; AMD, 2004 MAR p. 1972, Eff. 8/20/04; AMD, 2012 MAR p. 1846, Eff. 9/21/12; AMD, 2014 MAR p. 1277, Eff. 6/13/14; AMD, 2014 MAR p. 2980, Eff. 12/12/14; AMD, 2017 MAR p. 493, Eff. 4/29/17.
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42.12.107 EDUCATIONAL MATERIALS
(1) The department maintains educational materials for each type of alcoholic beverage license along with the trade practices that are permitted by Montana law and rules. Montana law provides that transactions involving alcoholic beverages are illegal unless specifically permitted by law.
(2) Licensees should seek guidance from the department concerning whether actions not listed in the department materials are allowed before engaging in such transactions. Unless the department provides written guidance citing explicit authority, the licensee should treat all transactions not in the educational materials as prohibited.
(3) Failure of a licensee to follow the guidance in the educational materials will not constitute an additional violation of law or rule.
History: 16-1-303, MCA; IMP, 16-1-301, 16-1-302, 16-1-304, 16-3-101, 16-6-301, MCA; NEW, 2012 MAR p. 1846, Eff. 9/21/12.
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42.12.108 HEARING PROCEDURE
(1) When it is determined that a hearing is necessary, the matter will be forwarded to the department’s office of dispute resolution where the time, date, and place for the hearing will be determined. The date and time of the hearing shall be during regular business hours. The place of the hearing shall be in:
(a) Helena, if other than a public convenience and necessity hearing or a resort determination hearing;
(b) the community nearest the location of the applicant’s proposed premises if it is a public convenience and necessity hearing or a resort determination hearing; or
(c) Helena for a telephonic hearing, when agreed to by all the parties to the hearing. The hearing will be initiated from Helena by the hearing examiner through a conference call to the telephone numbers provided by the parties.
(2) Prior to a hearing date, the office of dispute resolution shall issue a written notice of the date, time, and place of the hearing. At that time, a copy of the notice shall be provided to all interested parties.
History: Sec. 16-1-303, MCA; IMP, Sec. 16-4-105, 16-4-203, 16-4-207, and 16-4-404, MCA; NEW, 1992 MAR p. 1244, Eff. 6/12/92; AMD, 1998 MAR p. 2088, Eff. 7/31/98; AMD, 2001 MAR p. 449, Eff. 3/23/01; AMD, 2003 MAR p. 21, Eff. 1/17/03.
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42.12.109 PROTESTS
(1) A protest letter as described in 16-4-207, MCA, must:
(a) contain statement(s) of the writer’s intent that the letter be considered a protest;
(b) describe the reason for protesting the granting of a license; and
(c) identify the appropriate action by:
(i) providing the license number and accurate trade name or applicant name in a case of a transfer; or
(ii) the trade name and applicant name and stating that it is for a new application for an original Montana all-alcoholic beverages license.
(2) A protest letter containing multiple signatures is considered one protest letter.
(3) If the grounds stated in the letter of protest contain public convenience and necessity issues, the prerequisite number of protest letters required to initiate a public convenience and necessity hearing, as defined in 16-4-207, MCA, must be received.
(4) Any protest letter failing to meet the criteria in (1) , (2) , and (3) by the protest deadline will not be considered.
History: Sec. 16-1-303, MCA; IMP, Sec. 16-4-207, MCA; NEW, 2000 MAR p. 1762, Eff. 7/14/00; AMD, 2003 MAR p. 21, Eff. 1/17/03.
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42.12.110 SERVICE OF NOTICES
(1) A notice of proposed adverse action issued pursuant to 16-4-107, 16-4-406, 16-4-407, or 16-4-1008, MCA, shall be served upon the licensee or registrant of record or, in the case of an application for a new license, on the applicant, by sending a copy of the notice to the licensee, registrant, or applicant by certified mail to the mailing address on file with the department.
(2) Service shall be considered complete three days after mailing the notice. Service shall not be considered incomplete because of refusal to accept delivery of the notice.
(3) The licensee, registrant, or applicant must respond to the department in writing within 20 days of service of the notice of proposed adverse action. Failure to respond will result in the enforcement of the administrative action proposed in the notice.

History: 16-1-303, MCA; IMP, 2-4-601, 16-4-107, 16-4-406, 16-4-407, 16-4-1008; NEW, 2005 MAR p. 269, Eff. 2/11/05; AMD, 2012 MAR p. 1846, Eff. 9/21/12.
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42.12.111 PROCESSING FEES
(1) The fees to be charged for processing applications are as follows:
(a) All-beverages license $400
(b) Beer importer’s license $200
(c) Beer wholesaler and table wine distributor license $200
(d) Beer wholesaler subwarehouse license $100
(e) Beer wholesaler license $200
(f) Brewer’s license $200
(g) Brewery storage depot license $100
(h) Domestic distillery license $200
(i) Domestic distillery storage warehouse license $100
(j) Resort all-beverages license $400
(k) Restaurant beer and wine license $400
(l) Retail off-premises beer and table wine license $200
(m) Retail off-premises beer license $200
(n) Retail off-premises table wine license $200
(o) Retail on-premises beer license with wine amendment $400
(p) Retail on-premises beer license $400
(q) Sacramental wine license $50
(r) Table wine distributor license $200
(s) Table wine distributor subwarehouse license $100
(t) Tour boat endorsement $100
(u) Winery license $200
(2) The fees to be charged for processing requests associated with an existing license are as follows:
(a) Adding a catering endorsement $100
(b) Adding a wine amendment $100
(c) Adding a concession agreement $100
(d) Adding an additional manufacturing location $100
(e) Adding or changing mortgages, secured interests, or liens $50
(f) Transferring ownership as a result of a foreclosure $200
(g) Transferring location $200
(h) Increasing current ownership interest from less than 10 percent to 10 percent or more…………………………… $200
(i) Changing the business entity type $200
(j) Changing the alcohol beverage type $200
(3) The processing fee for determination of resort area is $500.
(4) Processing fees are not refundable.
(5) A fingerprint processing fee, in the amount indicated on the application form, must accompany each application.
History: 16-1-303, MCA; IMP, 16-1-302, 16-1-303, 16-4-313, 16-4-414, 16-4-420, MCA; NEW, Eff. 11/3/75; AMD, 1979 MAR p. 1249, Eff. 10/12/79; AMD, 1985 MAR p. 167, Eff. 2/15/85; AMD, 1985 MAR p. 1155, Eff. 8/16/85; AMD, 1998 MAR p. 2088, Eff. 7/31/98; AMD, 2001 MAR p. 449, Eff. 3/23/01; AMD, 2003 MAR p. 21, Eff. 1/17/03; AMD, 2003 MAR p. 2305, Eff. 10/17/03; AMD, 2012 MAR p. 1846, Eff. 9/21/12; AMD, 2014 MAR p. 1277, Eff. 6/13/14; AMD, 2014 MAR p. 2980, Eff. 12/12/14.
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42.12.112 ADDITIONAL FEE FOR CENSUS
This rule has been repealed.
History: Sec. 16-1-303, MCA; IMP, Sec. 16-4-201 and 16-4-502, MCA; NEW, Eff. 11/3/75; REP, 1985 MAR p. 167, Eff. 2/15/85.
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42.12.113 LICENSE FEES FOR COMBINED POPULATION AREAS
This rule has been repealed.
History: Sec. 16-1-303, MCA; IMP, Sec. 16-4-105, 16-4-201, and 16-4-501, MCA; NEW, 1977 MAR p. 967, Eff. 11/26/77; REP, 1992 MAR p. 1244, Eff. 6/12/92.
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42.12.114 LICENSE FEES
(1) New licenses issued are assessed an annual license fee in accordance with 16-4-501, MCA. All licenses must be renewed and the annual license fee paid on or before the due date of each year. A change in a license designation due to a change in quota area may affect the statutory license fee. Any change of license fee will be reflected on the next renewal application and the new fee will be due at the time of renewal.
History: Sec. 16-1-303, MCA; IMP, Sec. 16-4-201, MCA; NEW, 1985 MAR p. 167, Eff. 2/15/85; AMD, 2000 MAR p. 1762, Eff. 7/14/00.
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42.12.115 ASSESSMENT OF LICENSE RENEWAL LATE-PAYMENT FEE – GROUNDS FOR WAIVER
(1) The department will assess a license renewal late-payment fee in all cases where a licensee fails to pay the license renewal fee on or before the due date. The renewal application and fee are timely filed and paid if mailed in an envelope postmarked by the United States Postal Service on or before the due date. If the due date falls on a Saturday, Sunday, or state legal holiday, a postmark for the following business day or a payment received at the department on the following business day is timely.
(2) The department may waive a license renewal late-payment fee assessment upon receipt of a written request by the licensee. The request must state the reason for late payment and be supported by documentation. A waiver of the license renewal late-payment fee assessment shall be granted under the following conditions:
(a) a department error;
(b) the department mailed a license renewal notice less than two weeks prior to the due date;
(c) a delay in payment caused by the death or serious illness of the licensee;
(d) a United States Postal Service error;
(e) a renewal application and fee was erroneously mailed to the Internal Revenue Service or Alcohol and Tobacco Tax and Trade Bureau;
(f) a delay in payment due to bankruptcy or foreclosure action; or
(g) the late payment is the only late payment within the most recent five consecutive years or since the license was acquired, whichever is less, and payment was received at the department within 30 days after the due date.
(3) A licensee’s neglect, lack of funds, or ignorance of the law are not sufficient reasons for waiver of a license renewal late-payment penalty fee assessment.

History: 16-1-303, MCA; IMP, 16-4-501, MCA; NEW, 1985 MAR p. 1340, Eff. 9/13/85; AMD, 1991 MAR p. 467, Eff. 4/12/91; AMD, 2000 MAR p. 1762, Eff. 7/14/00; AMD, 2003 MAR p. 21, Eff. 1/17/03; AMD, 2012 MAR p. 1846, Eff. 9/21/12.
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42.12.116 CONCURRENT APPLICATIONS
(1) An application received for a premises for which an application is pending, as defined in 16-4-412 , MCA, shall be returned to the applicant with an explanation that the applicant cannot be considered because there is a previous application pending for the same premises.
History: Sec. 16-1-303, MCA; IMP, Sec. 16-4-412, MCA; NEW, 1993 MAR p. 2423, Eff. 10/15/93; AMD, 2001 MAR p. 449, Eff. 3/23/01; AMD, 2003 MAR p. 21, Eff. 1/17/03.
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42.12.117 SUBSTANTIALLY DIFFERENT USE
(1) If an applicant has been denied a license under 16-4-405 , MCA, a new application cannot be considered for five years unless the department determines there has been a change great enough to be easily recognizable. The department will consider applications where the proposed use is noticeably and substantially different from the use that was previously rejected.
(a) The following examples constitute a substantially different use but are not all inclusive of the types of changes the department would consider:
(i) a situation where the new business operation has changed significantly enough to change the primary source of revenue generated by the business or the operation previously planned to be operated on the premises. Such a change would be where a business changed from primarily a casino/bar operation to a restaurant operation with all the necessary facilities to accommodate a restaurant setting and at least 65 percent of the gross revenue is from the sale of food; or
(ii) the zoning designation of the proposed location has changed by local government action.
(b) The following examples do not constitute substantially different use:
(i) a change in business hours;
(ii) a change in the type of alcoholic beverages offered for on-premises consumption; or
(iii) a newly constructed or remodeled building which will be used for the same primary purpose as the proposed use that was rejected.
(2) An applicant who has applied for substantially different use, and is approved under this rule, may not change the applicant’s manner of operation for five years as described in 16-4-413 , MCA.
History: Sec. 16-1-303, MCA; IMP, Sec. 16-4-405 and 16-4-413, MCA; NEW, 2000 MAR p. 1762, Eff. 7/14/00; AMD, 2004 MAR p. 1972, Eff. 8/20/04.
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42.12.118 ABBREVIATED APPLICATION FOR LICENSE MODIFICATION
(1) An abbreviated application may be used to modify a license as set forth in (2) and (3). The application process in ARM 42.12.101 shall be followed in all other cases.
(2) Licensees shall submit an abbreviated application within 90 days of:
(a) removing an existing, previously qualified owner, member, partner, or shareholder from the license without the exchange of funds; or
(b) adding an individual or entity as a less than 10 percent owner.
(3) Licensees shall submit an abbreviated application prior to:
(a) changing the ownership interest between two or more qualified owners, members, partners, or shareholders;
(b) transferring the location of the license;
(c) increasing the current ownership interest of any owner, member, partner, or shareholder from less than 10 percent to 10 percent or more;
(d) changing the entity type of the business; or
(e) changing the license type.
(4) A licensee’s failure to timely submit an abbreviated application shall constitute a violation and may subject the licensee to administrative action.
History: 16-1-303, MCA; IMP, 16-4-401, 16-4-402, 16-4-414, 16-4-415, MCA; NEW, 2000 MAR p. 1762, Eff. 7/14/00; AMD, 2014 MAR p. 2980, Eff. 12/12/14.
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42.12.121 PROCESSING OF APPLICATION
This rule has been repealed.
History: Sec. 16-1-303, MCA; IMP, Title 16, chapter 4, MCA; NEW, Eff. 11/3/75; AMD, 1985 MAR p. 167, Eff. 2/15/85; REP, 2000 MAR p. 1762, Eff. 7/14/00.
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42.12.122 SUITABILITY OF LICENSED PREMISES
This rule has been repealed.
History: 16-1-303, MCA; IMP, 16-3-311, 16-4-402, 16-4-405, MCA; NEW, Eff. 11/3/75; AMD, 1992 MAR p. 2187, Eff. 9/25/92; AMD, 1993 MAR p. 2423, Eff. 10/15/93; AMD, 1997 MAR p. 1825, Eff. 10/7/97; AMD, 2001 MAR p. 449, Eff. 3/23/01; AMD, 2003 MAR p. 21, Eff. 1/17/03; AMD, 2005 MAR p. 269, Eff. 2/11/05; AMD, 2012 MAR p. 1846, Eff. 9/21/12; AMD, 2014 MAR p. 2980, Eff. 12/12/14; REP, 2017 MAR p. 493, Eff. 4/29/17.
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42.12.123 CONDUCT OF OTHER ACTIVITIES ON PREMISES
This rule has been repealed.
History: Sec. 16-1-303, MCA; IMP, Sec. 16-1-303 and 16-4-402, MCA; Eff. 11/3/75; AMD, 1985 MAR p. 167, Eff. 2/15/85; REP, 1985 MAR p. 1155, Eff. 8/16/85.
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42.12.124 REJECTION OF APPLICATION BECAUSE OF NUMBER OFEXISTING LICENSES
(1) Applicants shall be notified that the issuance of a new license or transfer will not be allowed by the department when:
(a) the issuance of an on-premises consumption alcoholic beverages license for premises located within any incorporated city or town or within a distance of five miles from the corporate limits or boundaries of an incorporated city or town and where the number of licenses of each class already issued for the area is equal to or exceeds the limitations specified in 16-4-105 and 16-4-201, MCA; or
(b) the transfer of an on-premises consumption alcoholic beverages license under these circumstances could not be approved under the requirements of the law.
History: Sec. 16-1-303, MCA; IMP, Sec. 16-4-105, 16-4-201, 16-4-204, and 16-4-405, MCA; NEW, Eff. 11/3/75; AMD, 1985 MAR p. 167, Eff. 2/15/85; AMD, 2001 MAR p. 449, Eff. 3/23/01.
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42.12.125 COMBINED AREA QUOTAS
(1) If the corporate boundaries of two or more incorporated cities or towns are within five miles of each other, the total number of on-premises consumption alcoholic beverages licenses that may be issued shall be determined on the basis of their combined populations. The purpose of this provision is to allow the aggregation of the populations of adjacent cities and to determine the quota of the entire populated area.
(2) In order to combine populations both cities and towns must be incorporated and their respective corporate limits must be within five miles of each other at the nearest point. If these requirements are met the populations of both municipalities are to be combined and the total population figures used to determine the number of on-premises consumption alcoholic beverages licenses available under the quota.
History: Sec. 16-1-303, MCA; IMP, Sec. 16-4-105 and 16-4-201, MCA; NEW, 1977 MAR p. 966, Eff. 11/26/77; AMD, 1978 MAR p. 394, Eff. 3/25/78; AMD, 1985 MAR p. 167, Eff. 2/15/85.
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42.12.126 OFF-PREMISES SALE OF BEER OR TABLE WINE
This rule has been repealed.
History: 16-1-303, MCA; IMP, 16-4-115, MCA; NEW, Eff. 11/3/75; AMD, 1979 MAR p. 1249, Eff. 10/12/79; AMD, 1985 MAR p. 167, Eff. 2/15/85; AMD, 1992 MAR p. 1244, Eff. 6/12/92; AMD, 2003 MAR p. 21, Eff. 1/17/03; AMD, 2012 MAR p. 1846, Eff. 9/21/12; AMD, 2014 MAR p. 1277, Eff. 6/13/14; REP, 2017 MAR p. 493, Eff. 4/29/17.
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42.12.127 WINE LICENSE AMENDMENT
This rule has been repealed.
History: Sec. 16-1-303, MCA; IMP, Sec. 16-4-105, MCA; NEW, Eff. 11/3/75; AMD, 1980 MAR p. 431, Eff. 2/1/80; AMD, 1985 MAR p. 167, Eff. 2/15/85; REP, 2000 MAR p. 1762, Eff. 7/14/00.
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42.12.128 CATERING ENDORSEMENT
(1) Any licensee having obtained a catering endorsement under the provisions of 16-4-111 or 16-4-204, MCA, is authorized to sell alcoholic beverages authorized under the license to persons attending a special event at locations not otherwise licensed. Only the licensee or the licensee’s employees are authorized to sell and serve alcoholic beverages at the special event.
(2) The holder of a catering endorsement may sell and serve alcoholic beverages at retail only at a booth, stand, or other fixed place of business within the exhibition enclosure, confined to specified premises or designated areas described in the notice given to the local law enforcement agency that has jurisdiction over the premises where the event is to be catered. Such a licensee, or the licensee’s agents or employees may also sell and serve beer, in the case of an all-beverages licensee, or beer and wine, in the case of a beer/wine licensee, in the grandstand or bleacher.
(3) A catered event may only last for a maximum of three days, except that each licensee may have one special event per year that lasts up to seven days for a fair. A fair is defined in ARM 42.12.106.
(4) Licensees granted approval to cater such special events are subject to the provisions of 16-3-306, 16-4-111, and 16-4-204, MCA, and ARM 42.13.101.
(5) Every licensee holding a catering endorsement shall report, on or before the 15th day of each month, those events the licensee catered in the previous month. The report shall include the date, time, the sponsor of the event, and place of the catered event. This report can be provided to the department in letter format.

History: 16-1-303, MCA; IMP, 16-3-103, 16-4-111, 16-4-204, MCA; NEW, 1979 MAR p. 983, Eff. 8/31/79; AMD, 1985 MAR p. 167, Eff. 2/15/85; AMD, 1987 MAR p. 1491, Eff. 10/1/87; AMD, 1992 MAR p. 1244, Eff. 6/12/92; AMD, 1994 MAR p. 3101, Eff. 12/9/94; AMD, 2003 MAR p. 21, Eff. 1/17/03; AMD, 2012 MAR p. 1846, Eff. 9/21/12.
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42.12.129 DETERMINATION OF PROXIMITY TO PLACE OF WORSHIP OR SCHOOL
(1) In order to apply the provisions of 16-3-306, MCA, the department must find:
(a) the entrance doors of the premises proposed for licensing and the entrance doors of the place of worship or school are situated on the same street; and
(b) the physical address of the premises proposed for licensing is designated as the same street as the physical address of the place of worship or school; and
(c) the distance, measured in a straight line, from the entrance doors of the business proposed for licensing and the entrance doors of the place of worship or school is 600 feet or less.
(2) If the above three-part test is not met in its entirety, the provisions of 16-3-306, MCA, do not apply.
(3) The distance between entrance doors is measured by a geometric straight line, regardless of intervening property and buildings. An entrance is considered to be a means of ingress to the premises generally used by the public. This does not include egress-only doors, delivery, or service entrances.
(4) In the event that a county or city government should enact an ordinance or resolution supplanting the provisions of 16-3-306, MCA, the restriction shall not apply.
(5) A conformed copy of such supplanting ordinance or resolution must be submitted to the department by the applicant.

History: 16-1-303, MCA; IMP, 16-3-306, MCA; NEW, 1980 MAR p. 1086, Eff. 3/28/80; AMD, 1984 MAR p. 325, Eff. 2/17/84; AMD, 2001 MAR p. 449, Eff. 3/23/01; AMD, 2003 MAR p. 21, Eff. 1/17/03; AMD, 2012 MAR p. 1846, Eff. 9/21/12.
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42.12.130 DETERMINATION OF LICENSE QUOTA AREAS
(1) Any applicant applying to the department for a new license or transfer of location of an existing license under the quota limitations provided for under 16-4-105, 16-4-201, and 16-4-420, MCA, must submit to the department a sworn statement or affidavit from the local county or city surveyor or a private licensed land surveyor attesting to the location of the proposed premises.
(2) If the location of the proposed premises is not within the boundaries of an incorporated city or incorporated town, the surveyor must attest to the exact distance from the nearest corporate boundary to the proposed premises as measured from official city or county plats.
(a) The distance must be measured by radial survey method from the nearest corporate city boundary to the nearest entrance of the proposed premises.
(3) The sworn statement or affidavit must be substantially in the following form or on a form provided by the department entitled Certified Survey Affidavit:
(a) Legal description and/or street address of proposed premises:

I (individual’s name), (title) have the knowledge and the authority to attest to the location of the premises known as (trade or business name).
The location of this premises is within the incorporated boundaries of (name of city) or is (less than) five miles from the (name of city) corporate boundary or is more than five miles from any incorporated city within (name) county.

(b) In the case of a location outside the corporate boundary include the following:
The distance was measured by radial survey method from the nearest corporate city boundary to the nearest entrance of the proposed premises. Plat(s)/map(s) verifying the location that indicate the points between which the measurement was made and the distance can be provided upon request.
(c) In the case of a location inside the corporate boundary include the following:
The location of the premises was determined by examination of corporate plats or other official records.
(d) A signature block, title of the parties, and the document must be dated and notarized.
History: 16-1-303, MCA; IMP, 16-4-105, 16-4-201, 16-4-420, 16-4-501, MCA; NEW, 1983 MAR p. 1928, Eff. 12/30/83; AMD, 1992 MAR p. 1244, Eff. 6/12/92; AMD, 2001 MAR p. 449, Eff. 3/23/01; AMD, 2012 MAR p. 1846, Eff. 9/21/12.
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42.12.131 APPLICATIONS FOR AVAILABLE LICENSE(S) IN QUOTA AREA
(1) When the department receives applications after the initial lottery application deadline for the available license(s) in a quota area, the following procedures apply:
(a) When fewer applications than licenses available are received, the applications will be processed;
(b) If there are more applicants than licenses available in a quota area, then the licenses will be awarded on a first-come, first-served basis. The postmark on each application will establish which of the applications will be processed; and
(c) Those applications received by the department with the same postmark for an available license will be considered and will proceed to a lottery process.
History: Sec. 16-1-303, MCA; IMP, Sec. 16-4-105 and 16-4-201, MCA; NEW, 1985 MAR p. 167, Eff. 2/15/85; AMD, 1993 MAR p. 158, Eff. 1/29/93; AMD, 1998 MAR p. 3132, Eff. 11/20/98; AMD, 2001 MAR p. 449, Eff. 3/23/01; AMD, 2003 MAR p. 21, Eff. 1/17/03.
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42.12.132 LOCATION MANAGER
(1) All on-premises retailers, off-premises retailers, manufacturers, and distributors shall designate at least one location manager. If more than one person performs location manager duties, the licensee shall seek the department’s approval for each. The licensee shall initially seek the department’s approval of location managers on the license application. Following initial licensure, the licensee shall seek the department’s approval of location manager as follows:
(a) if the location manager is not an owner vetted pursuant to 16-4-401, MCA, within 30 days of the employee commencing location manager duties, the licensee shall submit the location manager application, the employee’s personal history statement, two complete sets of the employee’s fingerprint cards, and the fingerprint processing fee; or
(b) if the location manager is an owner vetted pursuant to 16-4-401, MCA, on or before the deadline to renew the license in the year the owner commences location manager duties, the licensee shall submit the location manager application but does not need to resubmit the owner’s personal history statement, two complete sets of the owner’s fingerprint cards, or the fingerprint processing fee.
(2) The licensee shall confirm annually, on the license renewal form, who is performing location manager duties. At this time, the licensee shall also identify any location managers who ceased performing managerial duties during the past license year.
(3) A location manager is an employee who provides general oversight of the alcoholic beverage operations and ensures compliance with alcoholic beverage laws and regulations. The location manager designation is based upon the duties performed rather than the job title assigned.
(4) A location manager’s past record and present status as a purveyor of alcoholic beverages and as a business person and citizen must demonstrate that the employee is likely to operate the establishment in compliance with all applicable laws of the state and local governments.
(5) The department shall issue its determination of the location manager application within 15 days of receiving the results of the background investigation.
(6) The licensee shall:
(a) retain ultimate control over the license and premises;
(b) maintain an active participation in the alcoholic beverage operation sufficient to ensure the proper and lawful conduct of the business; and
(c) except for an owner acting as a location manager, provide the location manager compensation commensurate with the duties performed. Compensation shall not be based on a percentage of gross sales or net profits.
(7) Failure to abide by the provisions of this rule, including the failure to disclose the person performing location manager duties, may subject the licensee to administrative action, including revocation of the license.

History: 16-1-303, MCA; IMP, 16-1-302, 16-4-414, MCA; NEW, 1992 MAR p. 2192, Eff. 9/25/92; AMD, 1998 MAR p. 2102, Eff. 7/31/98; AMD, 2001 MAR p. 449, Eff. 3/23/01; AMD, 2003 MAR p. 21, Eff. 1/17/03; AMD, 2003 MAR p. 2305, Eff. 10/17/03; AMD, 2012 MAR p. 1846, Eff. 9/21/12; AMD, 2014 MAR p. 2980, Eff. 12/12/14; AMD, 2017 MAR p. 346, Eff. 3/25/17.
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42.12.133 CONCESSION AGREEMENTS
(1) All new concession agreements must be submitted to the department for review and approval prior to their execution and/or effective date, and must set forth the following:
(a) the nature of the agreement is one that arises from a mutually beneficial situation only;
(b) the agreement gives the licensee authority to operate in the concessioned premises;
(c) a copy of the licensee’s amended floor plan, including the new service area;
(d) the licensee is responsible for the sales and service of all alcoholic beverages;
(e) the parties may share the employees. In the event of shared employees, the licensee must retain the right to discipline or otherwise sanction any employee in relation to the service of alcohol. Any violation of the Montana Alcoholic Beverage Code is the sole responsibility of the licensee;
(f) the compensation to be paid for shared employees. The compensation may not be based on a percentage of alcohol sales;
(g) the nonlicensed entity cannot order, or otherwise purchase, any alcoholic beverage product from a wholesaler or agency liquor store;
(h) the agreement must include language that allows the licensee to terminate the agreement without cause;
(i) that all the proceeds from the sale of alcoholic beverages are the property of the licensee; and
(j) any proceeds of alcoholic beverages sales that are collected by the concessionaire must be returned to the licensee not less than every two weeks.
(2) In addition to the general suitability rule requirements in ARM 42.12.145, and other rules specific to the license type, the premises for any license operated under a concession agreement can only be considered suitable for the retail sale of alcoholic beverages if the existence of a concession agreement and the names of the parties to the concession agreement are plainly disclosed to the public both inside and outside of the licensed premises by signage as follows:
(a) at least one sign inside the licensed premises, measuring not less than 8 1/2 by 11 inches and with printing in a font size not smaller than 72, must be clearly visible to customers, and must plainly disclose:
(i) the existence of a concession agreement;
(ii) the names of the persons or entities which are party to the concession agreement and the assumed business names as filed with the Montana Secretary of State, including which party is the licensee; and
(iii) the fact that the licensee is responsible for the service of alcoholic beverages within the premises; and
(b) at least one sign outside the licensed premises so the public can easily determine that alcoholic beverages are available.
(3) The requirements of (2) regarding signage must be met for all licenses operating under a concession agreement and must be complied with for any such license to be issued or renewed for the license year beginning July 1, 2013, or thereafter.
(4) The licensee must maintain a physical possessory interest as required in ARM 42.12.145.
(5) The department, upon receipt of the concession agreement and any supporting documentation, will advise the licensee within seven working days of approval or denial of the agreement unless further documentation or an audit review is necessary. Upon approval of the agreement, the license will reflect language that the licensee is also serving alcoholic beverages in the establishment.
(6) A licensee must submit any modification or assumption of an existing concession agreement for review and approval by the department. The concessionaire may continue to operate the business pending approval by the department.

History: 16-1-303, MCA; IMP, 16-3-305, 16-3-311, 16-4-401, 16-4-402, MCA; NEW, 2003 MAR p. 21, Eff. 1/17/03; AMD, 2004 MAR p. 1972, Eff. 8/20/04; AMD, 2012 MAR p. 1846, Eff. 9/21/12; AMD, 2017 MAR p. 493, Eff. 4/29/17.
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42.12.134 CONDITIONS AND QUALIFICATIONS SPECIFIC FOR AN ALL-BEVERAGES LICENSE
This rule has been transferred.
History: 16-1-303, MCA; IMP, 16-3-303, 16-3-304, 16-3-305, 16-3-311, 16-4-405, MCA; NEW, 2012 MAR p. 1846, Eff. 9/21/12; AMD, 2014 MAR p. 2980, Eff. 12/12/14; AMD and TRANS, to ARM 42.13.1102, 2017 MAR p. 493, Eff. 4/29/17.
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42.12.135 CONDITIONS AND QUALIFICATIONS SPECIFIC FOR A RESTAURANT BEER AND WINE LICENSE
This rule has been transferred.
History: 16-1-303, MCA; IMP, 16-3-311, 16-4-405, 16-4-420, MCA; NEW, 2012 MAR p. 1846, Eff. 9/21/12; AMD, 2014 MAR p. 2980, Eff. 12/12/14; AMD and TRANS, to ARM 42.13.1103, 2017 MAR p. 493, Eff. 4/29/17.
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42.12.136 CONDITIONS AND QUALIFICATIONS SPECIFIC FOR A BEER LICENSE AND A BEER LICENSE WITH WINE AMENDMENT FOR ON-PREMISES CONSUMPTION
This rule has been transferred.
History: 16-1-303, MCA; IMP, 16-3-303, 16-3-304, 16-3-305, 16-3-311, 16-4-405, MCA; NEW, 2012 MAR p. 1846, Eff. 9/21/12; AMD, 2014 MAR p. 2980, Eff. 12/12/14; AMD and TRANS, to ARM 42.13.1104, 2017 MAR p. 493, Eff. 4/29/17.
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42.12.137 CONDITIONS AND QUALIFICATIONS SPECIFIC FOR AN OFF-PREMISES BEER LICENSE AND/OR WINE LICENSE
This rule has been transferred.
History: 16-1-303, MCA; IMP, 16-4-115, 16-4-402, 16-4-405, MCA; NEW, 2012 MAR p. 1846, Eff. 9/21/12; AMD, 2014 MAR p. 1277, Eff. 6/13/14; AMD and TRANS, to ARM 42.13.1105, 2017 MAR p. 493, Eff. 4/29/17.
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42.12.138 CONDITIONS AND QUALIFICATIONS SPECIFIC FOR A BEER WHOLESALER AND/OR TABLE WINE DISTRIBUTOR LICENSE AND SUBWAREHOUSES
This rule has been transferred.
History: 16-1-303, MCA; IMP, 16-4-103, 16-4-106, 16-4-108, 16-4-402, 16-4-415, MCA; NEW, 2012 MAR p. 1846, Eff. 9/21/12; AMD and TRANS, to ARM 42.13.1202, 2017 MAR p. 493, Eff. 4/29/17.
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42.12.139 CONDITIONS AND QUALIFICATIONS SPECIFIC FOR A MANUFACTURER OF BEER, WINE, OR DISTILLED SPIRITS LICENSE
This rule has been repealed.
History: 16-1-303, MCA; IMP, 16-3-213, 16-3-214, 16-3-411, 16-4-102, 16-4-311, 16-4-312, 16-4-402, MCA; NEW, 2012 MAR p. 1846, Eff. 9/21/12; AMD, 2014 MAR p. 2980, Eff. 12/12/14; REP, 2017 MAR p. 493, Eff. 4/29/17.
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42.12.141 LICENSED ENTITIES
(1) No alcoholic beverages license shall be issued to an entity unless the entity has been authorized to do business in Montana prior to making application for an alcoholic beverages license.
(2) An entity’s application must be accompanied by the following, as issued within the last six months by the Montana Secretary of State:
(a) articles of incorporation or organization, or a certificate of existence for corporations and limited liability companies; or
(b) a certificate of fact or application as filed with the Secretary of State for all other types of entities.
(3) The applicant must be current on all filings and payments related to Montana income, corporation, withholding, business, and other taxes.

History: 16-1-303, MCA; IMP, 16-4-401, MCA; NEW, Eff. 11/3/75; AMD, 1985 MAR p. 167, Eff. 2/15/85; AMD, 1993 MAR p. 158, Eff. 1/29/93; AMD, 1993 MAR p. 2423, Eff. 10/15/93; AMD, 2001 MAR p. 449, Eff. 3/23/01; AMD, 2012 MAR p. 1846, Eff. 9/21/12.
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42.12.142 CHANGE IN CORPORATE STRUCTURE
This rule has been repealed.
History: Sec. 16-1-303, MCA; IMP, Sec. 16-4-205 and 16-4-401, MCA; NEW, Eff. 11/3/75; AMD, 1985 MAR p. 167, Eff. 2/15/85; REP, 2000 MAR p. 1762, Eff. 7/14/00.
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42.12.143 RESTRICTION ON INTEREST IN OTHER LICENSES
(1) For purposes of this rule, any ownership interest in a business that operates a license issued under the Montana Alcoholic Beverage Code is considered to be an ownership interest in the license itself.
(2) A Montana all-beverages licensee may not:
(a) possess a financial or ownership interest in:
(i) a Montana agency liquor store;
(ii) more than two additional Montana all-beverages licenses, for an aggregate number of three licenses, except as provided in 16-4-205, MCA; or
(iii) more than half the total number of Montana all-beverages licenses in any quota area described in 16-4-201, MCA;
(b) through a business or family relationship, share in the profits or liabilities in more than half the total number of Montana all-beverages licenses in the specific quota area in which the licenses will be held; or
(c) individually or through the person’s immediate family, receive financing from or have any affiliation to:
(i) an alcoholic beverage manufacturer or importer of alcoholic beverages; or
(ii) a distributor of alcoholic beverages, including a Montana beer wholesaler, Montana table wine distributor, and a Montana agency liquor store.
(3) A Montana retail alcoholic beverages licensee may not:
(a) possess a financial or ownership interest in a Montana agency liquor store; or
(b) individually or through the person’s immediate family, receive financing from or have any affiliation to:
(i) an alcoholic beverage manufacturer or importer of alcoholic beverages; or
(ii) a distributor of alcoholic beverages, including a Montana beer wholesaler, Montana table wine distributor, and a Montana agency liquor store.
(4) A Montana beer wholesaler may not:
(a) possess a financial or ownership interest in a Montana agency liquor store, a Montana alcoholic beverages retailer, an alcoholic beverages manufacturer, or another Montana beer wholesaler;
(b) have any affiliation with a Montana alcoholic beverages retailer, or the immediate family of a Montana alcoholic beverages retailer; or
(c) be owned or controlled by an alcoholic beverages manufacturer or an importer of alcoholic beverages.
(5) A Montana table wine distributor may not:
(a) possess a financial or ownership interest in a Montana agency liquor store, a Montana alcoholic beverages retailer, an alcoholic beverages manufacturer, or another Montana table wine distributor;
(b) have any affiliation with a Montana alcoholic beverages retailer or the immediate family member of a Montana alcoholic beverages retailer; or
(c) be owned or controlled by an alcoholic beverages manufacturer or an importer of alcoholic beverages.
(6) A Montana alcoholic beverage manufacturer may not possess a financial or ownership interest in:
(a) a distributor of alcoholic beverages, including a Montana beer wholesaler, a Montana table wine distributor, and a Montana agency liquor store; or
(b) a Montana alcoholic beverages retailer.
History: 16-1-303, MCA; IMP, 16-4-201, 16-4-205, 16-4-401, MCA; NEW, Eff. 11/3/75; AMD, 1985 MAR p. 167, Eff. 2/15/85; AMD, 1985 MAR p. 1632, Eff. 11/1/85; AMD, 2012 MAR p. 1846, Eff. 9/21/12; AMD, 2014 MAR p. 1277, Eff. 6/13/14.
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42.12.144 TRANSFERS BETWEEN QUOTA AREAS – PROCEDURES AND DOCUMENTATION
(1) An applicant applying to the department to transfer an all-beverages license under the provisions of 16-4-204, MCA, may negotiate a bona fide sale with the owner of a license, located in a quota area from which that license may be transferred, to purchase a license and, if no lottery drawing is required, submit an application for transfer of ownership and location in compliance with ARM 42.12.209 and 42.12.210.
(2) An applicant applying to the department to transfer an all-beverages license under the provisions of 16-4-204, MCA, whose lottery entry is successful in a lottery drawing, is required to have entered into an agreement to purchase a transferable license within 60 days after the lottery drawing and submit additional documents needed to effect a transfer of ownership and location. However, additional time can be requested and approved by the department when the applicant can demonstrate that the applicant is actively pursuing the purchase of a license, and that failure to purchase a license is through no fault of the applicant. The additional time is not to exceed 60 days. An additional fee is required to cover the costs of republishing the transfer notice in a newspaper within the area from which the license is proposed to be transferred.
(3) Documentation required under (1) and (2) includes:
(a) documents required for the application to be considered a complete application as defined in ARM 42.12.106;
(b) a request for termination of existing secured parties’ interest and the applicable fee ($10 each);
(c) other documents which may be needed or specified on the application form or during the license investigation process; and
(d) the department or hearing examiner may require additional documentation as deemed necessary to reach a final decision.
(4) A fully executed purchase agreement and a request for termination of secured parties’ interests are not required upon initial filing of the application.
(5) If an applicant is unable to enter into an agreement to purchase a transferable license within the time provided in (2) the application will be rejected and the application ranked next in the lottery drawing will be processed. This procedure is not constrained by 16-4-413, MCA.

History: 16-1-303, MCA; IMP, 16-4-204, 16-4-413, MCA; NEW, 1985 MAR p. 167, Eff. 2/15/85; AMD, 1993 MAR p. 2423, Eff. 10/15/93; AMD, 1998 MAR p. 3132, Eff. 11/20/98; AMD, 2000 MAR p. 1762, Eff. 7/14/00; AMD, 2003 MAR p. 21, Eff. 1/17/03; AMD, 2012 MAR p. 1846, Eff. 9/21/12.
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42.12.145 ON-PREMISES CONSUMPTION BEER AND ALL-BEVERAGE LICENSE – PREMISES SUITABILITY REQUIREMENTS
(1) The department shall determine the suitability of the premises where an on-premises consumption beer or all-beverage retailer proposes to operate a license when a party applies to obtain a license, transfer ownership interest in an existing license requiring the vetting of a new party pursuant to 16-4-401, MCA, change the location where a license will be operated, or make alterations to a premises with a floor plan that the department approved.
(2) The premises of an on-premises consumption beer or all-beverage retailer may be considered suitable only if:
(a) the applicant or licensee has possessory interest in the premises;
(b) the applicant or licensee has adequate control over the premises;
(c) a single alcoholic beverage license of any kind will be operated at the premises;
(d) the premises are identified by a unique address;
(e) the premises are located in one building or a specific portion of one building, except that a patio/deck may extend the premises beyond the interior portion of the building. The interior portion of the premises must be a continuous area that is not broken by any area in which the applicant or licensee does not have adequate control, such as another business or a common area shared with other building tenants. Subject to the exception in 16-3-311(2), MCA, if the premises are located in a portion of a building, the premises must be separated by permanent floor-to-ceiling walls from any other business, including any other business operated by the licensee. The only access from the premises to another business may be through a single lockable door, no more than six feet wide, in the permanent floor-to-ceiling wall. Additional lockable doors in the permanent floor-to-ceiling wall may be allowed only upon department approval;
(f) building, health, and fire code approval is obtained;
(g) the premises are located on regular police beats and can be properly policed by local authorities, which includes the premises being located on property to which law enforcement has unrestricted access;
(h) the premises are not located where a local government ordinance prohibits the sale of alcoholic beverages;
(i) the premises are either solely dedicated to the on-premises consumption of alcoholic beverages or are within a business directly related to the on-premises consumption of alcoholic beverages;
(j) the type of business is readily determinable due to indoor and outdoor signage and the premises’ general layout and atmosphere;
(k) alcoholic beverages are advertised and displayed as being available for purchase;
(l) there are no signs, posters, or advertisements displayed on the exterior portion of the premises that identify any brewer, beer importer, or wholesaler in any manner. This prohibition extends to buildings adjacent to the premises only if the retailer has possessory interest in the building. This prohibition does not apply to temporary advertisements allowed under 16-3-244, MCA;
(m) the floor plan accurately states the dimensions of the premises, includes the entity name, alcoholic beverage license number, physical address, and date and identifies any service area, seating required under (o), stationary drink preparation area, storage area, patio/deck, perimeter barrier, and permanent floor-to-ceiling wall required between the premises and another business;
(n) the interior premises include at least one stationary drink preparation area. The premises may have more than one drink preparation area, including drink preparation areas on the patio/deck and moveable drink preparation areas, subject to department approval;
(o) the interior premises include a service area containing not less than twelve seats, exclusive of any seats at gambling machines;
(p) there is interior access to any interior portion of the premises;
(q) all storage areas are located in the interior portion of the premises;
(r) alcoholic beverages will not be sold through a drive-up window;
(s) the physical layout and equipment utilized provide sufficient physical safeguards to prevent the self-service of alcoholic beverages at any drink preparation area; and
(t) self-service devices and vending machines are not used to serve alcoholic beverages.
(3) The premises may have a patio/deck. A patio/deck may be considered suitable only if:
(a) building, health, and fire code approval is obtained;
(b) subject to the exception in (c), the patio/deck is contiguous with and immediately accessible from the interior premises;
(c) any path connecting the interior premises and the patio/deck is under the possessory interest of the licensee, is clearly marked, and the department determines that sufficient physical safeguards are in place to ensure proper service and consumption of alcoholic beverages; and
(d) with the exception of a patio/deck at a golf course, a perimeter barrier clearly marks where the service and consumption of alcoholic beverages are allowed.
(4) The premises must meet and maintain compliance with all suitability standards in place at the time the premises are inspected. The department may, at any time, verify that the premises remain in compliance with all suitability standards in place at the time the suitability of the premises was last determined. Upon determining that the premises do not meet all applicable suitability standards, the department may deny an application or take administrative action against a licensee, including license revocation.
(5) The privileges granted under a license extend only to the premises depicted in the floor plan approved by the department. The licensee shall follow the process in ARM 42.13.106 for a premises alteration.

History: 16-1-303, MCA; IMP, 16-3-244, 16-3-309, 16-3-311, 16-4-402, 16-4-405, MCA; NEW, 2017 MAR p. 493, Eff. 4/29/17.
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42.12.146 RESTAURANT BEER AND WINE LICENSE – PREMISES SUITABILITY REQUIREMENTS
(1) The department shall determine the suitability of the premises where a restaurant beer and wine retailer proposes to operate a license when a party applies to obtain a license, transfer ownership interest in an existing license requiring the vetting of a new party pursuant to 16-4-401, MCA, change the location where a license will be operated, or make alterations to a premises with a floor plan that the department approved.
(2) The premises of a restaurant beer and wine retailer may be considered suitable only if:
(a) the applicant or licensee has possessory interest in the premises;
(b) the applicant or licensee has adequate control over the premises;
(c) a single alcoholic beverage license of any kind will be operated at the premises;
(d) the premises are identified by a unique address;
(e) the premises are located in one building or a specific portion of one building, except that a patio/deck may extend the premises beyond the interior portion of the building. The interior portion of the premises must be a continuous area that is not broken by any area in which the applicant or licensee does not have adequate control, such as another business or a common area shared with other building tenants. Subject to the exception in 16-3-311(2), MCA, if the premises are located in a portion of a building, the premises must be separated by permanent floor-to-ceiling walls from any other business, including any other business operated by the licensee. The only access from the premises to another business may be through a single lockable door, no more than six feet wide, in the permanent floor-to-ceiling wall. Additional lockable doors in the permanent floor-to-ceiling wall may be allowed only upon department approval;
(f) building, health, and fire code approval is obtained;
(g) the premises are located on regular police beats and can be properly policed by local authorities, which includes the premises being located on property to which law enforcement has unrestricted access;
(h) the premises are not located where a local government ordinance prohibits the sale of alcoholic beverages;
(i) the type of business is readily determinable due to indoor and outdoor signage and the premises’ general layout and atmosphere;
(j) alcoholic beverages are advertised and displayed as being available for purchase;
(k) there are no signs, posters, or advertisements displayed on the exterior portion of the premises that identify any brewer, beer importer, or wholesaler in any manner. This prohibition extends to buildings adjacent to the premises only if the retailer has possessory interest in the building. This prohibition does not apply to temporary advertisements allowed under 16-3-244, MCA;
(l) the floor plan accurately states the dimensions of the premises, includes the entity name, alcoholic beverage license number, physical address, and date and identifies any service area, service bar, dining room, kitchen, storage area, patio/deck, perimeter barrier, and permanent floor-to-ceiling wall required between the premises and another business;
(m) there is seating for patrons totaling not more than the seating capacity for which the premises are licensed;
(n) there is an interior service bar. The premises may have more than one service bar, including service bars on the patio/deck, subject to department approval;
(o) there is interior access to any interior portion of the premises;
(p) all storage areas are located in the interior portion of the premises;
(q) the physical layout and equipment utilized provide sufficient physical safeguards to prevent the self-service of alcoholic beverages at any service bar;
(r) self-service devices and vending machines are not used to serve alcoholic beverages; and
(s) the sale of alcoholic beverages will not occur through a drive-up window.
(3) The premises may have a patio/deck. A patio/deck may be considered suitable only if:
(a) building, health, and fire code approval is obtained;
(b) subject to the exception in (c), the patio/deck is contiguous with and immediately accessible from the interior premises;
(c) any path connecting the interior premises and the patio/deck is under the possessory interest of the licensee, is clearly marked, and the department determines that sufficient physical safeguards are in place to ensure proper service and consumption of alcoholic beverages; and
(d) a perimeter barrier clearly marks where the service and consumption of alcoholic beverages are allowed.
(4) The premises must meet and maintain compliance with all suitability standards in place at the time the premises are inspected. The department may, at any time, verify that the premises remain in compliance with all suitability standards in place at the time the suitability of the premises was last determined. Upon determining that the premises do not meet all applicable suitability standards, the department may deny an application or take administrative action against a licensee, including license revocation.
(5) The privileges granted under a license extend only to the premises depicted in the floor plan approved by the department. The licensee shall follow the process in ARM 42.13.106 for a premises alteration.

History: 16-1-303, MCA; IMP, 16-3-244, 16-3-309, 16-3-311, 16-4-402, 16-4-405, 16-4-421, MCA; NEW, 2017 MAR p. 493, Eff. 4/29/17.
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42.12.147 OFF-PREMISES BEER AND TABLE WINE LICENSE – PREMISES SUITABILITY REQUIREMENTS
(1) The department shall determine the suitability of the premises where an off-premises beer and table wine retailer proposes to operate a license when a party applies to obtain a license, transfer ownership interest in an existing license requiring the vetting of a new party pursuant to 16-4-401, MCA, change the location where a license will be operated, or make alterations to a premises with a floor plan that the department approved.
(2) The premises of an off-premises beer and table wine retailer may be considered suitable only if:
(a) the applicant or licensee has possessory interest in the premises;
(b) the applicant or licensee has adequate control over the premises;
(c) a single alcoholic beverage license of any kind will be operated at the premises;
(d) the premises are identified by a unique address;
(e) the premises are located in one building or a specific portion of one building. The interior portion of the premises must be a continuous area that is not broken by any area in which the applicant or licensee does not have adequate control, such as another business or a common area shared with other building tenants. If the premises are located in a portion of a building, the premises must be separated by permanent floor-to-ceiling walls from any other licensed alcoholic beverage business. The only access from the premises to another licensed alcoholic beverage business may be through a single lockable door, no more than six feet wide, in the permanent floor-to-ceiling wall. Additional lockable doors or a doorway larger than six feet wide in the permanent floor-to-ceiling wall may be allowed only upon department approval;
(f) building, health, and fire code approval is obtained;
(g) the premises are located on regular police beats and can be properly policed by local authorities, which includes the premises being located on property to which law enforcement has unrestricted access;
(h) the premises are not located where a local government ordinance prohibits the sale of alcoholic beverages;
(i) the premises are in a stand-alone beer and/or table wine business, a grocery store, or a drugstore licensed as a pharmacy;
(j) the type of business is readily determinable due to indoor and outdoor signage and the premises’ general layout and atmosphere;
(k) alcoholic beverages are advertised and displayed as being available for purchase;
(l) there are no signs, posters, or advertisements displayed on the exterior portion of the premises that identify any brewer, beer importer, or wholesaler in any manner. This prohibition extends to buildings adjacent to the premises only if the retailer has possessory interest in the building. This prohibition does not apply to temporary advertisements allowed under 16-3-244, MCA;
(m) the floor plan accurately states the dimensions of the premises, includes the entity name, alcoholic beverage license number, physical address, and date and identifies any storage area and permanent floor-to-ceiling wall required between the premises and another licensed alcoholic beverage business;
(n) there is interior access to any interior portion of the premises;
(o) all storage areas are located in the interior portion of the premises; and
(p) the sale of alcoholic beverages will not occur through a drive-up window.
(3) The premises must meet and maintain compliance with all suitability standards in place at the time the premises are inspected. The department may, at any time, verify that the premises remain in compliance with all suitability standards in place at the time the suitability of the premises was last determined. Upon determining that the premises do not meet all applicable suitability standards, the department may deny an application or take administrative action against a licensee, including license revocation.
(4) The privileges granted under a license extend only to the premises depicted in the floor plan approved by the department. The licensee shall follow the process in ARM 42.13.106 for a premises alteration.

History: 16-1-303, MCA; IMP, 16-3-244, 16-3-309, 16-4-115, 16-4-402, 16-4-405, MCA; NEW, 2017 MAR p. 493, Eff. 4/29/17.
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42.12.148 BEER WHOLESALER AND TABLE WINE DISTRIBUTOR – PREMISES SUITABILITY REQUIREMENTS
(1) The department shall determine the suitability of the premises of the principal place of business and any subwarehouse where a beer wholesaler and table wine distributor propose to operate a license when a party applies to obtain a license, transfer ownership interest in an existing license requiring the vetting of a new party pursuant to 16-4-401, MCA, change the location where a license will be operated, or make alterations to a premises with a floor plan that the department approved.
(2) The premises of a beer wholesaler and table wine distributor may be considered suitable only if:
(a) the applicant or licensee has possessory interest in the premises;
(b) the applicant or licensee has adequate control over the premises;
(c) a single alcoholic beverage license of any kind will be operated at the premises;
(d) the premises are identified by a unique address;
(e) building, health, and fire code approval is obtained;
(f) the premises are located in one building or a specific portion of one building. The interior portion of the premises must be a continuous area that is not broken by any area in which the applicant or licensee does not have adequate control, such as another business or a common area shared with other building tenants. If the premises are located in a portion of a building, the premises must be separated by permanent floor-to-ceiling walls from any other licensed alcoholic beverage business. The only access from the premises to another licensed alcoholic beverage business may be through a single lockable door, no more than six feet wide, in the permanent floor-to-ceiling wall. Additional lockable doors in the permanent floor-to-ceiling wall may be allowed only upon department approval;
(g) the floor plan accurately states the dimensions of the premises, includes the entity name, alcoholic beverage license number, physical address, and date and identifies any permanent floor-to-ceiling wall required between the premises and another licensed alcoholic beverage business;
(h) the premises include sufficient space for the storage and distribution of beer and/or table wine in large quantities;
(i) there is interior access to any interior portion of the premises; and
(j) all storage areas are located in the interior portion of the premises.
(3) The premises may include more than one building for storage and distribution purposes only if the property on which the buildings are located is contiguous and the licensee has possessory interest in the property on which the buildings are located. To seek approval, the licensee shall submit a form provided by the department. All buildings on the premises are subject to suitability requirements in (2).
(4) The premises must meet and maintain compliance with all suitability standards in place at the time the premises are inspected. The department may, at any time, verify that the premises remain in compliance with all suitability standards in place at the time the suitability of the premises was last determined. Upon determining that the premises do not meet all applicable suitability standards, the department may deny an application or take administrative action against a licensee, including license revocation.
(5) The privileges granted under a license extend only to the premises depicted in the floor plan approved by the department. The licensee shall follow the process in ARM 42.13.106 for a premises alteration.

History: 16-1-303, MCA; IMP, 16-4-103, 16-4-108, 16-4-402, MCA; NEW, 2017 MAR p. 493, Eff. 4/29/17.
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42.12.149 WINERY, BREWERY, AND DISTILLERY – PREMISES SUITABILITY REQUIREMENTS
(1) The department shall determine the suitability of the premises where an alcoholic beverage manufacturer proposes to operate a license when a party applies to obtain a license, transfer ownership interest in an existing license requiring the vetting of a new party pursuant to 16-4-401, MCA, change the location where a license will be operated, or make alterations to a premises with a floor plan that the department approved.
(2) The premises of a manufacturer may be considered suitable only if:
(a) the applicant or licensee has possessory interest in the premises;
(b) the applicant or licensee has adequate control over the premises;
(c) a single alcoholic beverage license of any kind will be operated on the premises, except as authorized under an approved alternating proprietor arrangement;
(d) the premises are identified by a unique address;
(e) building, health, and fire code approval is obtained;
(f) the premises are located in one building or a specific portion of one building, except that a patio/deck may extend the premises beyond the interior portion of the building. The interior portion of the premises must be a continuous area that is not broken by any area in which the applicant or licensee does not have adequate control, such as another business or a common area shared with other building tenants. If the premises are located in a portion of a building, the premises must be separated by permanent floor-to-ceiling walls from any other licensed alcoholic beverage business. The only access from the premises to another licensed alcoholic beverage business may be through a single lockable door, no more than six feet wide, in the permanent floor-to-ceiling wall. Additional lockable doors in the permanent floor-to-ceiling wall may be allowed only upon department approval;
(g) the floor plan accurately states the dimensions of the premises, includes the entity name, alcoholic beverage license number, physical address, and date and identifies any manufacturing area, storage area, sample room, drink preparation area, patio/deck, perimeter barrier, and permanent floor-to-ceiling wall required between the premises and another licensed alcoholic beverage business;
(h) there is interior access to any interior portion of the premises;
(i) all storage areas are located in the interior portion of the premises;
(j) access by unauthorized persons to manufacturing areas is restricted; and
(k) it is readily determinable that a manufacturer operates at the premises due to outdoor signage and the existence of the equipment necessary to undertake the activities for which the premises are licensed.
(3) The premises may include more than one building for manufacturing purposes only if the property on which the buildings are located is contiguous and the licensee has possessory interest in the property on which the buildings are located. To seek approval, the licensee shall submit a form provided by the department and include verification that the Alcohol and Tobacco Tax and Trade Bureau approved the licensee’s registration to operate any additional building under the manufacturer’s existing federal permit or notice. All buildings on the premises are subject to the suitability requirements in (2).
(4) A domestic brewery may operate a warehouse on property that is not contiguous to property on which the manufacturing premises are located only if the warehouse is used exclusively for storage. To seek approval, the licensee shall submit a form provided by the department. A licensee may seek approval for more than one warehouse. Each warehouse must have a separate storage depot license. All warehouses are subject to the suitability requirements in (2) and must be equipped with refrigeration and cooling apparatus.
(5) A domestic distillery may operate a warehouse on property that is not contiguous to property on which the manufacturing premises are located only if the warehouse is used exclusively for storage. To seek approval, the licensee shall submit a form provided by the department and include verification that the Alcohol and Tobacco Tax and Trade Bureau approved the licensee’s registration to operate the warehouse. A licensee may seek approval for more than one warehouse. Each warehouse must have a separate domestic distillery storage warehouse license. All warehouses are subject to the suitability requirements in (2).
(6) In addition to all other requirements, a manufacturer’s premises with a sample room shall be considered suitable only if:
(a) there is a single contiguous sample room;
(b) the sample room is located in the interior portion of the premises;
(c) the sample room is not located in a storage warehouse;
(d) the sample room contains a drink preparation area. The premises may have more than one drink preparation area, including drink preparation areas on the patio/deck, subject to department approval;
(e) the physical layout and equipment utilized provide sufficient physical safeguards to prevent the self-service of alcoholic beverages at any drink preparation area; and
(f) self-service devices and vending machines are not used to serve alcoholic beverages.
(7) A manufacturing premises with a sample room may have a patio/deck. The patio/deck will be considered suitable only if:
(a) building, health, and fire code approval is obtained;
(b) the patio/deck is contiguous with and immediately accessible from the sample room, except where the department approves a path connecting the sample room and the patio/deck. The use of a path may only be approved if the licensee holds possessory interest in the path, the path is clearly marked, and the department determines that sufficient physical safeguards are in place to ensure proper service and consumption of alcoholic beverages;
(c) a perimeter barrier clearly marks where the service and consumption of alcoholic beverages is allowed; and
(d) the physical layout and equipment prevent the self-service of alcoholic beverages. This includes a prohibition against the service of alcoholic beverages through self-service devices and vending machines. Reach-in coolers and open shelving are prohibited unless they are located in a drink preparation area and the department determines that sufficient physical safeguards are in place to prevent the self-service of alcoholic beverages.
(8) The premises must meet and maintain compliance with all suitability standards in place at the time the premises are inspected. The department may, at any time, verify that the premises remain in compliance with all suitability standards in place at the time the suitability of the premises was last determined. Upon determining that the premises do not meet all applicable suitability standards, the department may deny an application or take administrative action against a licensee, including license revocation.
(9) The privileges granted under a license extend only to the premises depicted in the floor plan approved by the department. The licensee shall follow the process in ARM 42.13.106 for a premises alteration.

History: 16-1-303, MCA; IMP, 16-4-102, 16-4-402, MCA; NEW, 2017 MAR p. 493, Eff. 4/29/17.
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42.12.201 ASSIGNMENT OR TRANSFER OF LICENSE
This rule has been repealed.
History: Sec. 16-1-303, MCA; IMP, Sec. 16-4-204, MCA; NEW, Eff. 11/3/75; REP, 1985 MAR p. 167, Eff. 2/15/85.
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42.12.202 TRANSFERS WITHIN COMBINED AREAS
(1) On-premises consumption retail licenses issued within a combined area, as provided for in ARM 42.12.125, as well as within a distance of five miles from the corporate boundaries of each municipality, may be transferred to any point within the corporate limits of both municipalities and the area within five miles of their corporate limits.
History: Sec. 16-1-303, MCA; IMP, Sec. 16-4-105 and 16-4-201, MCA; NEW, 1977 MAR p. 966, Eff. 11/26/77; AMD, 1978 MAR p. 394, Eff. 3/25/78; AMD, 1985 MAR p. 167, Eff. 2/15/85.
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42.12.203 INTER-QUOTA AREA TRANSFERS
This rule has been repealed.
History: Sec. 16-1-303, MCA; IMP, Sec. 16-4-201, MCA; NEW, 1978 MAR p. 727, Eff. 5/26/78; AMD, 1984 MAR p. 326, Eff. 2/17/84; REP, 1992 MAR p. 1244, Eff. 6/12/92.
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42.12.204 TREATMENT OF LICENSE OF DECEASED LICENSEE
(1) Alcoholic beverages licenses may be transferred to the personal representative of the estate of any deceased licensee in accordance with appropriate probate proceedings. In all such cases a certified copy of the death certificate or of administration must be filed with the department. A certified copy of the decree of distribution or order of settlement affecting the license and confirming the transfer of the license must also be filed with the department in connection with the transfer of the license to the distributee or purchaser. The distributee or purchaser of an alcoholic beverages license must comply with all licensing criteria before the transfer of the license will be approved by the department.
(2) If an alcoholic beverages license is owned by joint tenants with right of survivorship, it may be reissued in the name of the surviving joint tenant or tenants, upon presentation of proof of death of the decedent joint tenant or tenants. In all other cases, upon the death of a licensee it is necessary to apply for transfer of ownership of the license as provided by 16-4-204 and 16-4-404 , MCA.
History: Sec. 16-1-303, MCA; IMP, Sec. 16-4-204, MCA; NEW, Eff. 11/3/75; AMD, 1985 MAR p. 167, Eff. 2/15/85; AMD, 2001 MAR p. 449, Eff. 3/23/01; AMD, 2003 MAR p. 21, Eff. 1/17/03.
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42.12.205 REQUIREMENTS WHEN LICENSE SUBJECT TO LIEN
(1) All-beverages and on-premises beer licenses may be subject to a mortgage, security interest, and other valid lien. Upon written request to the department, accompanied by a copy of the note or mortgage, security agreement, or other loan document (in which the license or licenses to be affected are described with common certainty such as inclusion of license number), together with a fee as required in ARM 42.12.111, the department will add the name of the mortgagee, secured party, or other lien holder, which must be endorsed upon the license. All such requests shall be upon forms prescribed by the department and signed in each case by the licensee and the mortgagee, secured party, or other lien holder.
(2) No transfer of any license subject to any mortgage security interest, or other lien shall be approved unless the mortgagee, secured party, or lien holder shall subscribe and acknowledge the instrument of assignment. If the mortgagee, secured party, or lien holder is deceased, or otherwise unavailable, the instrument of assignment may be subscribed and acknowledged by the personal representative, heir, devisee, or other person upon providing sufficient proof that the person has authority to act on behalf of the estate or has otherwise received the right to the security interest or lien.
(3) At such time as any mortgage, security interest, or lien affecting any license has been satisfied and fulfilled, the name of the mortgagee, secured party, or lien holder shall be removed upon written request of all parties in interest. If the mortgagee, secured party, or lien holder is deceased, or otherwise unavailable, the written request may be made by the personal representative, heir, devisee, or other person upon providing sufficient proof that the person has authority to act on behalf of the estate or has otherwise received the right to the security interest or lien. Any name of a mortgagee, secured party, or lien holder may also be removed upon the written request of the licensee or applicant for the license if accompanied by a court order releasing the security interest or lien, or other sufficient proof showing that the security interest or lien has expired, been discharged, or otherwise extinguished.
(4) Alcoholic beverage licenses may be subject to security interests as defined in 30-1-201, MCA, and other valid liens. The perfection of a security interest or other lien in an alcoholic beverages license does not depend upon filing with the department, but rather by the statutory requirements, which apply to the particular security interest or lien. If a secured party or a lien creditor, as defined in 30-9A-102, MCA, desires to give additional public notice, he may do so by filing a claim of security interest or other lien with the department. The department acts only as an additional source of public notice for voluntarily filed claims of security interest and other liens. The licensee must be the debtor. A loan guarantee by a licensee does not establish a valid security interest or lien by the lender under this rule.
(5) The consent of a secured party or a lien creditor is not required by the department to transfer a license. Persons who have filed a claim of a security interest or lien will be given notice by the department of any application for transfer of the license.
(6) Upon written request to the department, together with a fee as required in ARM 42.12.111, the name of a person claiming a security interest shall be endorsed upon the license and shall be kept on file with the department. All such requests shall be upon forms prescribed by the department and signed in each case by the licensee and the person claiming the security interest.
(7) The name of a lien creditor shall not be endorsed upon the license. However, upon written request to the department, the department shall keep the name of the lien creditor on file. The request must be accompanied by sufficient proof of perfection of the lien claimed. No fee is required.
(8) Any notice of security interest or other lien may be deleted from the department’s file upon written request of the secured party or lien creditor on forms prescribed by the department. If the secured party or lien creditor is deceased, or otherwise unavailable, the written request for deletion may be made by a personal representative, heir, devisee, or other person upon providing sufficient proof that the person has authority to act on behalf of the estate or has otherwise received the right to the security interest or lien. Any notice of security interest or other lien may also be deleted from the department’s file upon the written request of the licensee or applicant for the license if accompanied by a court order releasing the security interest or lien, or other sufficient proof showing that the security interest or lien has expired, been discharged, or otherwise extinguished.
(9) A security interest or other lien may be foreclosed upon in any manner provided by law. In nonjudicial foreclosures, the department will require sufficient documentation that the proper foreclosure proceedings were followed, pursuant to 16-4-801, MCA. Purchasers of a license at a foreclosure sale must apply to the department for transfer of the license and are subject to all statutes and rules required of any other applicant.
(10) Sections (1) through (3) will apply to all security interests and liens filed with the department prior to September 1, 1990. Beginning September 1, 1990, (4) through (9) will apply to all new security interests and liens filed with the department.
History: 16-1-303, MCA; IMP, 16-4-204, 16-4-404, 16-4-801, MCA; NEW, Eff. 11/3/75; AMD, 1990 MAR p. 1266, Eff. 6/29/90; AMD, 2001 MAR p. 449, Eff. 3/23/01; AMD, 2003 MAR p. 21, Eff. 1/17/03; AMD, 2004 MAR p. 1972, Eff. 8/20/04; AMD, 2014 MAR p. 2980, Eff. 12/12/14.
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42.12.206 PROHIBITION AND EXCEPTION REGARDING LEASING OF LICENSE
(1) A license issued under the provisions of Title 16, chapter 4, parts 1 through 5, MCA, is a privilege personal to the licensee, and in no case shall the licensee lease the license to any other person.
(2) Golf course beer and wine licenses owned by the state, a unit of the university system, or a local government, fairground complex beer and wine licenses owned by a political subdivision of the state, and airport all-beverages licenses are exempt from this rule.
(3) The lessee of the licenses in (2) are required to qualify under 16-4-401, MCA.
History: 16-1-303, MCA; IMP, 16-4-109, 16-4-208, 16-4-306, 16-4-401, 16-4-404, MCA; NEW, Eff. 11/3/75; AMD, 1985 MAR p. 167, Eff. 2/15/85; AMD, 2001 MAR p. 449, Eff. 3/23/01; AMD, 2004 MAR p. 1972, Eff. 8/20/04; AMD, 2011 MAR p. 165, Eff. 2/11/11.
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42.12.207 APPLICATION APPROVED SUBJECT TO FINAL INSPECTION OF PREMISES
(1) The department will consider and process an application for a new license, transfer of location, or transfer of ownership and location whenever the location of the proposed premises is specified but the building to accommodate the proposed premises has not been constructed or requires substantial remodeling.
(2) If, upon investigation, the department determines the applicant is qualified to own a license and it appears that the proposed premises, based on sufficient evidence provided by the applicant, meets all criteria for suitability, the department shall issue a conditional approval letter. The conditional approval is subject to a final inspection of the completed premises conducted by department investigative personnel, state or local health officials, state or local building codes personnel and state or local fire code officials.
(3) Conditional approval does not constitute the issuance of a license. The department will not issue a license until such time as the conditions, upon which approval was granted, are satisfied. An applicant who has received conditional approval is not authorized to engage in the purchase or sale of alcoholic beverages.
(4) An applicant who receives approval conditioned on the construction or remodeling of a premises is required to complete the premises and arrange for final inspection within a reasonable time. For purposes of this rule, “reasonable time” means 180 days in the case of an unconstructed building and 90 days in the case of a building, which requires substantial remodeling, unless otherwise provided in the final agency decision approving the application. In the case of a major construction project, the final agency decision may provide additional time for completion of construction or remodeling and final inspection.
(5) An applicant granted conditional approval who has applied for a last available license will not be subject to the provisions of ARM 42.12.131. A quota license will remain available for an applicant who has received conditional approval until a final determination either granting or denying the license is made by the department.
(6) In the event an applicant fails to meet the requirements of the conditional approval, the application will be denied. If intervening circumstances beyond an applicant’s control prevent completion of a proposed premises and final inspection within a reasonable time, an applicant must notify the department in writing and provide evidence establishing grounds for extension of time in order to avoid denial of application.
(7) When an applicant applies for either transfer of ownership or location, or both, the license shall remain in the name of the recorded owner of the license until the terms of a conditional approval are satisfied. The recorded owner shall be sent copies of all final agency decisions affecting the license. If the application is denied, the recorded owner must resume operating the license within 90 days or the license may lapse as provided in 16-3-310 , MCA.
(8) An applicant who desires to change the location of the proposed premises after conditional approval has been granted must withdraw the previous application in writing and reapply.
History: Sec. 16-1-303, MCA; IMP, Sec. 16-4-104, 16-4-106, 16-4-201, 16-4-402, and 16-4-404, MCA; NEW, 1985 MAR p. 167, Eff. 2/15/85; AMD, 1993 MAR p. 158, Eff. 1/29/93; AMD, 1998 MAR p. 2088, Eff. 7/31/98; AMD, 2001 MAR p. 449, Eff. 3/23/01.
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42.12.208 TEMPORARY OPERATING AUTHORITY
(1) An applicant may be granted temporary operating authority if the premises were licensed within the last 12 months, the premises were not altered from the last floor plan, and the applicant has submitted an application meeting the requirements of ARM 42.12.101.
(2) The granting of temporary operating authority is neither a temporary license nor a permit. It does not constitute a transfer of ownership, nor does it guarantee that the department will grant the application if it finds, subsequent to receipt of a complete investigation report, that the applicant is not qualified to hold a license or the premises are not suitable for the operation of the business.
(3) Temporary operating authority will be issued for a 45-day period. If the application is not approved within this period, the department shall extend temporary operating authority for another 45-day period only upon determining that the cause of the delay was not attributable to the applicant. The department shall notify the applicant if it requires additional information to make this determination and the applicant shall have seven days to submit written verification documenting to the department’s satisfaction how the delay was beyond the applicant’s control. The department shall notify applicants whether temporary operating authority is extended beyond the initial 45-day window.
(4) In the event liens, attachments, or judgments have attached to the license prior to September 1, 1990, the department will not grant an extension beyond the initial 45 days. Beginning September 1, 1990, new liens, new attachments, or new judgments that have attached to a license do not affect the issuance of temporary operating authority. The recorded owner of the license must resume operation of the business conducted under the license in cases where the temporary operating authority has expired and cannot be extended.
(5) Temporary operating authority will be immediately revoked if the applicant to whom temporary operating authority was granted, or the applicant’s employees, violate any provisions of Title 16, MCA, or department rules. Such violations may affect the final decision of the department.
(6) Any proposed fine, suspension, or revocation arising out of a violation will be assessed against, and is the responsibility of, the recorded owner of the license.
History: 16-1-303, MCA; IMP, 16-4-404, MCA; NEW, 1985 MAR p. 167, Eff. 2/15/85; AMD, 1990 MAR p. 1266, Eff. 6/29/90; AMD, 1992 MAR p. 1244, Eff. 6/12/92; AMD, 2001 MAR p. 449, Eff. 3/23/01; AMD, 2003 MAR p. 21, Eff. 1/17/03; AMD, 2011 MAR p. 165, Eff. 2/11/11; AMD, 2014 MAR p. 2980, Eff. 12/12/14.
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42.12.209 TRANSFER OF A LICENSE TO ANOTHER PERSON
(1) An ownership interest may be transferred to another qualified person only pursuant to means legally authorized for the transfer of personal property in Montana, such as when the person:
(a) is a purchaser upon a bona fide sale;
(b) is the personal representative of the estate of a deceased licensee;
(c) has a security interest in a license being foreclosed;
(d) is gifted the license and the donor completely transfers ownership interest, as provided in Title 70, chapter 3, part 1, MCA; or
(e) is appointed receiver under the license receivership.
(2) An ownership interest may not be transferred to a new owner until an application reflecting the proposed transfer is submitted to the department and the department approves the application.
(3) A current ownership interest of less than 10 percent may not be increased to 10 percent or more until an application reflecting the proposed increase is submitted to the department and the department approves the application.
(4) The application process in ARM 42.12.101 shall be followed unless an abbreviated application is authorized by ARM 42.12.118.
(5) The department shall make a thorough investigation as to the qualifications of the applicant and the suitability of the premises proposed for licensing. The department must determine that the transferred ownership interest will be independently exercised by the new owner and will not remain under the control of the transferor before approving the transfer.
(6) The department shall not approve an application for a transfer of ownership interest where the current owner is not current on the filing or payment of Montana state taxes or liquor fees, fines, or penalties.
(7) Prior to the department granting written approval:
(a) a certificate, stock, or other evidence of the proposed ownership interest may not be registered in the licensee’s records; and
(b) earnest money may be paid to the license seller, not to exceed five percent of the license purchase price, but any additional funds or other consideration for the liquor license may not be exchanged unless:
(i) temporary operating authority or conditional approval is granted, but any consideration other than earnest money must be returned to the buyer in the event the application is not approved; or
(ii) the consideration is held in escrow.
(8) The provisions of this rule do not apply to the:
(a) transfer of a security interest in a licensed liquor operation;
(b) addition of an individual or entity as a less than 10 percent owner;
(c) death of a licensee (ARM 42.12.204 applies); or
(d) foreclosure of an ownership interest (ARM 42.12.211 applies).
(9) Any person or entity that is not a licensee is prohibited from controlling or participating in the licensed operation in any capacity reflecting an ownership interest. A licensee’s allowance of an undisclosed ownership interest shall constitute a violation and may subject the licensee to administrative action, including revocation of the license.
(10) The department, in its sole discretion, may waive an application requirement set forth in this rule.

History: 16-1-303, MCA; IMP, 16-4-401, 16-4-402, MCA; NEW, 1998 MAR p. 2088, Eff. 7/31/98; AMD, 2000 MAR p. 1762, Eff. 7/14/00; AMD, 2001 MAR p. 449, Eff. 3/23/01; AMD, 2003 MAR p. 21, Eff. 1/17/03; AMD, 2004 MAR p. 1972, Eff. 8/20/04; AMD, 2011 MAR p. 165, Eff. 2/11/11; AMD, 2014 MAR p. 2980, Eff. 12/12/14; AMD, 2017 MAR p. 493, Eff. 4/29/17.
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42.12.210 COMPLETED TRANSACTIONS UNDER BONA FIDE SALES
(1) A transaction under a bona fide sale is complete only if the department receives an application for a license submitted pursuant to ARM 42.12.101, and the department approves the application pursuant to 16-4-402, MCA, and this rule.
(2) An application will not be approved if the sale transaction:
(a) provides for a person other than the applicant to have an option to purchase the license;
(b) involves an escrow agent, unless the parties are required to report to the department all changes or assignments to the original escrow agreement within 30 days of the change;
(c) involves a loan from a noninstitutional lender or a loan guarantor, unless the loan from a noninstitutional lender has been approved in writing by the department, but this does not preclude a qualified owner of a license from lending money to the business operated under the license or from individually guaranteeing a debt incurred by the business operated under the license;
(d) involves a lessor of the licensed premises who is not qualified to own the license being applied for, unless the department approves in writing;
(e) involves an applicant who is or will be the manager of an associated business if the associated business is owned or controlled by a person who is not qualified to own the license being applied for, unless the department approves in writing; or
(f) involves any business relationship, with respect to the proposed alcoholic beverages business, with a person who is not qualified to own the license being applied for, unless the department approves in writing.
(3) An option to purchase represents an impermissible interference with the licensee’s ability to control and operate the license. Such an option, with or without conditions, is prohibited because it constitutes an additional ownership interest in the license.
History: 16-1-303, MCA; IMP, 16-4-401, 16-4-402, 16-4-404, MCA; NEW, 1998 MAR p. 2088, Eff. 7/31/98; AMD, 2000 MAR p. 1762, Eff. 7/14/00; AMD, 2003 MAR p. 21, Eff. 1/17/03; AMD, 2011 MAR p. 165, Eff. 2/11/11.
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42.12.211 TRANSFER OF A LICENSE DUE TO FORECLOSURE
(1) A transfer of a license resulting from a foreclosure on a security interest requires an application to transfer the license to the secured party, if the secured party intends to operate the license, pursuant to ARM 42.12.101. This transfer is subject to the department’s approval of the application pursuant to 16-4-402 , MCA, and this rule.
(2) A transfer of a license resulting from a foreclosure on a security interest requires the filing of documents evidencing the foreclosure if the secured party does not intend to operate or does not meet the requirements to hold the license pursuant to 16-4-401 and 16-4-801 , MCA. The documents must include either the defaulting party’s written acknowledgment of default, evidence that a nonjudicial sale by the secured party has been made pursuant to the Uniform Commercial Code, or a court order foreclosing the defaulting party’s interests in the license. Based on the foreclosure documents, the transfer may be approved pursuant to ARM 42.12.205. A foreclosing secured party may retain ownership of the transferred license in nonuse status for a period of no more than 180 days, and may, upon showing of good cause, receive one extension of 180 days. If the license has not transferred to a qualified purchaser within the time allowed, the license will be revoked.
History: Sec. 16-1-303, MCA; IMP, Sec. 16-4-401, 16-4-402, 16-4-404, and 16-4-801, MCA; NEW, 1998 MAR p. 2088, Eff. 7/31/98; AMD, 2000 MAR p. 1762, Eff. 7/14/00; AMD, 2003 MAR p. 21, Eff. 1/17/03; AMD, 2004 MAR p. 1972, Eff. 8/20/04.
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42.12.212 LOAN STANDARDS
(1) The department will further evaluate a designated loan to determine if the transaction is in reality a loan or an ownership interest. A review of the transaction will be conducted by using standards found either in the Uniform Commercial Code, the Internal Revenue Code, or standards which are in accordance with generally accepted commercial lending practices.
(2) The department will decline to find a loan arrangement where the money borrowed has not been returned when due and alternate arrangements have not been memorialized in a written contract. Such an extended financial arrangement must be documented and available to the department.
(3) The department will require any noninstitutional lender to complete documents authorizing examination and release of information, a personal history statement, and fingerprint cards on forms provided by the department, as well as any contract, purchase agreement, or other documents from the lender deemed necessary to assess the suitability of an applicant’s source of funding as required in 16-4-401, MCA.
(a) A loan agreement may not restrict the movement or transfer of a license.
(b) Cross collateralization language is unenforceable as it relates to loans secured by the liquor license as collateral.
(c) In the event of default, the lender’s rights are protected under 16-4-801, MCA. Upon default, the license must be placed on nonuse status pending transfer to a qualified purchaser or temporary operating authority. The lender is prohibited from leasing the collateral.
(4) Institutional lenders may secure loans made to a license applicant or licensee with security interests in assets belonging to the license applicant or licensee. In securing institutional loans with security interests in the assets of a license applicant or licensee, an institutional lender may limit the movement of the assets, including a liquor license.
(5) For loans made to a license applicant or licensee, an institutional lender may require loan guarantees and may secure guarantee agreements with assets of the guarantor.
(6) A guarantor may make a payment on an institutional loan secured by a license, regardless of whether the institutional lender has exhausted its remedies against the licensee, and such payment will not cause an undisclosed ownership violation for the licensee, only if the following are applicable:
(a) the guarantor must be an owner of applicant/licensee, i.e., partner, shareholder, member;
(b) the payment is made with the owner/guarantor’s own funds or funds borrowed from an institutional source or department-approved noninstitutional source;
(c) if the guarantor is not an owner, payment may only be made as a loan to the owners or licensed borrower/entity. Funds used to loan the money for the payment under the guarantee, must be the guarantor’s own funds or funds borrowed from an institutional source. The guarantor must first be found by the department to be suitable as a source of credit as part of the application or loan approval process by submitting to the department a personal history statement and a complete set of fingerprint cards;
(d) a licensee having a loan secured by its license, and for which a loan guarantor has made payments on such loan on behalf of the licensee, must notify the department within 30 days of the guarantor’s payment or on the date on which the licensee’s renewal application is due, whichever occurs first, whether the payments made under a loan guarantee agreement have been elected to be treated as loans, as paid in capital, or as other equity contributions; and
(e) if the guarantor elects to treat the payments as loans to the licensee, the licensee must follow requirements for disclosing noninstitutional lenders.
(7) If the guarantor elects to treat payments as an equity contribution, and such election changes the percentage of ownership in the license, the licensee must notify the department at the time of the election to disclose the change in percentage.
(8) Prior department approval is not required on loans to a licensed entity by an approved (licensed) owner of the entity (shareholder, member, partner) under the following conditions:
(a) the loan is used to meet an obligation of the licensed entity that cannot be met with its existing operating accounts and reserves;
(b) the funds loaned to the licensed entity must be those of the owner or funds borrowed from an institutional source;
(c) the loan must be memorialized by an agreement between the licensed entity and owner. The loan agreement must meet the department’s evaluation standards;
(d) the borrower’s and lender’s financial records must accurately reflect the transaction; and
(e) failure to maintain adequate records of the transaction or source of funds loaned will be considered a violation of this rule.
History: 16-1-303, MCA; IMP, 16-4-401, 16-4-402, 16-4-404, 16-4-801, MCA; NEW, 1998 MAR p. 2088, Eff. 7/31/98; AMD, 2003 MAR p. 21, Eff. 1/17/03; AMD, 2011 MAR p. 165, Eff. 2/11/11.
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42.12.213 DEFINITIONS
This rule has been repealed.
History: 16-1-303, MCA; IMP, 16-4-401, 16-4-402, 16-4-404, 16-4-801, MCA; NEW, 2011 MAR p. 165, Eff. 2/11/11; REP, 2017 MAR p. 493, Eff. 4/29/17.
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42.12.221 PENALTIES FOR VIOLATION OF RULES OR STATUTES
This rule has been repealed.
History: Sec. 16-1-303, MCA; IMP, 16-3-301, 16-4-406, 16-6-305, and 16-6-314, MCA; NEW, Eff. 11/3/75; AMD, 1985 MAR p. 167, Eff. 2/15/85; REP, 1992 MAR p. 1244, Eff. 6/12/92.
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42.12.222 PROCEDURE UPON REVOCATION OR SUSPENSION OF LICENSE
(1) When any alcoholic beverages license is suspended or revoked by the department, the department shall cause a notice to be posted on the inside of the licensed premises so that the notice can be seen from the outside, stating that the license has been suspended or revoked. The notice must identify the number of the license, the name of the licensee, the reason for the suspension or revocation, and the period of suspension. The suspension or revocation notice issued by the department must be dated and signed. The notice must be posted at all times during the period of suspension. In the case of a revocation, the notice must be posted on the premises for a period of 10 days. If the notice is removed or caused to be removed by the licensee or any employee of the licensee during a period of suspension, the license shall be permanently revoked and the licensee must be so notified in writing at the time the notice is posted. The license or licenses suspended will be held by the department during the period of suspension.
History: Sec. 16-1-303, MCA; IMP, Sec. 16-1-303 and 16-4-406, MCA; NEW, Eff. 11/3/75; AMD, 1985 MAR p. 167, Eff. 2/15/85; AMD, 1994 MAR p. 2974, Eff. 11/11/94; AMD, 2001 MAR p. 449, Eff. 3/23/01; AMD, 2003 MAR p. 21, Eff. 1/17/03.
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42.12.301 RESORT LICENSES
(1) The issuance of resort all-beverages licenses pursuant to 16-4-202, MCA, is governed by all other applicable provisions of Title 16, MCA, and the rules of the department.
(2) A resort area, as determined by the department, includes establishments whose business and operation is designed to attract and accommodate visitors to a recreational development. The primary purpose of the recreational development must not be the sale of alcoholic beverages. The department shall consider economic factors in the approval of a proposed “resort area” and whether the recreational development is designed to stimulate and promote the recreational and sporting industry.
(3) Other non-resort licenses are allowed within a defined resort area and such licenses are not considered for purposes of determining the number of allowable resort all-beverages licenses.
(4) For the purposes of 16-4-202, MCA, accommodation units are a type of lodging in which the unit can be separately locked by the occupant and contains sleeping, bathing, and toilet facilities. The primary purpose of such units must be to accommodate visitors.
History: 16-1-303, MCA; IMP, 16-4-201, 16-4-202, MCA; NEW, Eff. 11/3/75; AMD, 1985 MAR p. 167, Eff. 2/15/85; AMD, 2001 MAR p. 449, Eff. 3/23/01; AMD, 2014 MAR p. 2980, Eff. 12/12/14.
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42.12.302 DEFINITIONS
The following definitions apply to this subchapter:
(1) “Conduct” means to develop, direct, manage and control the event.
(2) “Consideration” means the receiving of money or other compensation for providing a service, such as a charge for admission or other refreshments at the event where alcoholic beverages are provided.
(3) “Enclosure” means an area with definable boundaries including, but not limited to, a fair grounds or baseball stadium grounds.
(4) “Fortified wine” means wine that contains more than 16 percent, but not more than 24 percent, of alcohol by volume. Fortified wine constitutes liquor for distribution purposes.
(5) “Ordinary retail price” means the everyday price established by the retailer for the sale of alcoholic beverages to consumers. For distilled spirits and fortified wine, the price cannot be less than the department’s posted price.
(6) “Resort area” means a location in Montana developed for the primary purpose of providing a suitable location and the necessary facilities where the general public may engage in recreational activity. Recreational activity includes hiking, skiing, boating, swimming, horseback riding, and golfing. It does not include such activities as shopping, movie-going, dining, and sight-seeing.
(7) “Structure” means the buildings and facilities constructed within the recreational development to house the alcoholic beverage service, and facilities constructed for use in recreational or sporting activity.

History: 16-1-201, 16-1-303, MCA; IMP, 16-1-201, 16-4-201, 16-4-202, 16-4-301, MCA; NEW, Eff. 11/3/75; AMD, 1985 MAR p. 167, Eff. 2/15/85; AMD, 2000 MAR p. 1762, Eff. 7/14/00; AMD, 2001 MAR p. 449, Eff. 3/23/01; AMD, 2010 MAR p. 2227, Eff. 9/24/10; AMD, 2012 MAR p. 1846, Eff. 9/21/12; AMD, 2017 MAR p. 493, Eff. 4/29/17.
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42.12.303 APPRAISAL
(1) When the proposed resort area plat is filed with the department, an appraisal must also be prepared and filed by the resort developer which contains a detailed analysis of the current actual valuation of:
(a) the real property within the proposed resort area; and
(b) the structure or structures within the proposed resort area.
(2) The resort developer shall also submit a sworn statement or affidavit from the appraiser attesting to the accuracy and truthfulness of the appraisal valuation.
(3) The department may, at its discretion, any time prior to its final decision concerning a resort area determination, request that an appraisal be made of the proposed resort development by a qualified appraiser of its own choice. The cost of the appraisal shall be paid by the applicant.
History: Sec. 16-1-303, MCA; IMP, Sec. 16-4-201 and 16-4-202, MCA; NEW, Eff. 11/3/75; AMD, 1985 MAR p. 167, Eff. 2/15/85; AMD, 2000 MAR p. 1762, Eff. 7/14/00.
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42.12.304 PLAT VERIFICATION
This rule has been repealed.
History: Sec. 16-1-303, MCA; IMP, Sec. 16-4-201 and 16-4-202, MCA; NEW, Eff. 11/3/75; AMD, 1985 MAR p. 167, Eff. 2/15/85; REP, 2000 MAR p. 1762, Eff. 7/14/00.
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42.12.305 REQUIRED ACCOMMODATIONS
This rule has been repealed.
History: Sec. 16-1-303, MCA; IMP, Sec. 16-4-201 and 16-4-202, MCA; NEW, Eff. 11/3/75; AMD, 1985 MAR p. 167, Eff. 2/15/85; REP, 2000 MAR p. 1762, Eff. 7/14/00.
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42.12.306 FINANCIAL RESPONSIBILITY
(1) When an application for determination of a resort area is filed with the department, the applicant must be prepared to provide information relating to:
(a) the overall plan for the recreational development;
(b) the financial condition, experience, and name and address of the resort developer and operators of proposed establishments within the resort area; and
(c) any additional information the department may request.
History: Sec. 16-1-303, MCA; IMP, Sec. 16-4-201 and 16-4-202, MCA; NEW, Eff. 11/3/75; AMD, 1985 MAR p. 167, Eff. 2/15/85; AMD, 2000 MAR p. 1762, Eff. 7/14/00.
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42.12.307 RESORT AREA DETERMINATION APPLICATION PROCESS
(1) As required by 16-4-202 , MCA, the department must schedule a hearing within seven days of receipt of the resort plat.
(2) The following plat documents are necessary to determine if the resort area meets the minimum requirements to schedule a hearing:
(a) a completed application for resort determination;
(b) the resort plat verified as accurate by the resort area developer or landowner;
(c) an appraisal of the resort area from an appraiser attesting to the value;
(d) processing fees;
(e) financial statement of resort developer and all known operators of proposed establishments within the resort area; and
(f) overall plan for resort development including a statement from resort developer verifying control of the resort area.
(3) If the documents in (2) above are not provided, the department will notify the applicant of the missing items and request submission by a specific deadline. If the documents are not received timely, the application will be returned and not considered for licensing.
(4) If the documents in (2) above are provided, a hearing will be scheduled and public notice will be provided as required in 16-4-202 , MCA.
History: Sec. 16-1-303, MCA; IMP, Sec. 16-4-202, MCA; NEW, 2000 MAR p. 1762, Eff. 7/14/00.
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42.12.311 PASSENGER CARRIER LICENSE
This rule has been repealed.
History: Sec. 16-1-303, MCA; IMP, Sec. 16-1-402, 16-1-403, 16-4-302, and 16-4-501, MCA; NEW, Eff. 11/3/75; REP, 1985 MAR p. 167, Eff. 2/15/85.
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42.12.312 LIQUOR MANUFACTURER’S LICENSE
This rule has been repealed.
History: 16-1-303, MCA; IMP, 16-1-201, 16-4-312, 16-4-501, MCA; NEW, Eff. 11/3/75; AMD, 1985 MAR p. 167, Eff. 2/15/85; AMD, 2001 MAR p. 449, Eff. 3/23/01; AMD, 2010 MAR p. 2227, Eff. 9/24/10; REP, 2017 MAR p. 493, Eff. 4/29/17.
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42.12.313 PUBLIC WINE OR BEER TASTINGS
(1) Beer or wine tastings must be conducted by an on-premises consumption retail licensee, special permittee, or an on-premises consumption retail licensee with catering endorsement.
(2) In no case can a table wine distributor, a beer wholesaler, a winery/wine importer or a brewer/beer importer sponsor a wine or beer tasting other than at:
(a) a licensed retail premises that permits on-premises consumption except for a domestic winery as allowed under 16-3-411, MCA;
(b) a domestic winery as allowed under 16-3-411, MCA;
(c) a brewery as allowed under 16-3-213, MCA;
(d) a special event with a special permit; or
(e) a catered premise from an on-premises consumption retail licensee with a catering endorsement.
(3) A wine distributor, a beer wholesaler, a wine importer, or a beer importer sponsoring a tasting:
(a) must purchase the products to be used for the tasting from the on-premises consumption retail licensee, special permittee, or an on-premises consumption retail licensee with catering endorsement at the ordinary retail price; and
(b) can participate only by providing advice or information about the products.
(4) A winery or brewer sponsoring a tasting is required to comply with (3). In addition, the winery or brewer can participate in serving the product.
(5) An off-premises retail licensee may only participate in a wine tasting conducted by an on-premises consumption retail licensee by providing advice or information about the products. The off-premises consumption licensee may take orders for products to be picked up and paid for at the off-premises consumption licensee’s premises.
(6) All beer and wine provided to the public at a tasting conducted by an on-premises consumption licensee must be purchased by the on-premises consumption retail licensee from a licensed table wine distributor, beer wholesaler, brewery, or winery. Beer and wine must be served by the on-premises consumption licensee with the exception of beer and wine manufacturers. Beer or wine may not be provided by another retail licensee.
(7) This rule shall not apply to beer or wine tastings which are held in a private home wherein no consideration, remuneration, contribution, donation, gift, or any other money or thing of value is solicited or charged for entry or attendance and which do not violate the provisions of 16-6-306, MCA. In addition, the rule does not apply to industry sampling where alcoholic beverage product samples are provided by the manufacturer or distributor of the products to a licensed distributor or retailer solely for the purpose of soliciting sales of the product to such distributors or retailer.
History: 16-1-303, MCA; IMP, 16-3-213, 16-3-411, 16-4-105, 16-6-306, MCA; NEW, Eff. 11/3/75; AMD, 1993 MAR p. 158, Eff. 1/29/93; AMD, 2010 MAR p. 2227, Eff. 9/24/10.
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42.12.314 RESTAURANT BEER AND WINE SERVICE OPERATIONS
This rule has been repealed.
History: 16-1-303, MCA; IMP, 16-4-420, MCA; NEW, 2010 MAR p. 2227, Eff. 9/24/10; REP, 2017 MAR p. 493, Eff. 4/29/17.
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42.12.315 SACRAMENTAL WINE LICENSE
(1) An establishment desiring to sell sacramental wine pursuant to 16-4-313, MCA, may apply to the department by submitting a license application accompanied by a $100 licensing fee. The license renewal fee every year thereafter is $50 and must be renewed annually by July 1.
(2) An applicant must qualify for licensure under 16-4-401, MCA.
(3) On the application, an applicant operating in Montana must verify that the following requirements are met:
(a) the layout of the premises allows for licensee-only and/or employee-only control over the sale, service, and/or distribution of the sacramental wine;
(b) the floor plan accurately represents the physical layout of the premises and identifies where the sacramental wine will be stored;
(c) the applicant has adequate safeguards in place to prevent the sale, delivery, or giving away of alcoholic beverages to the public; and
(d) the premises is physically separated from any business under separate ownership from the licensed area by permanent walls.
(4) Applicants for a sacramental wine license are not subject to fingerprint or background checks.
(5) This type of license is nontransferable and not subject to the quota system as described in 16-4-105, MCA.
(6) A sacramental wine licensee may purchase sacramental wine from an agency liquor store, licensed foreign winery, licensed domestic winery, or a table wine distributor.
(7) Licensees must adhere to all laws and rules relating to the retail sale of wine for off-premises consumption.
History: 16-1-303, MCA; IMP, 16-4-105, 16-4-313, 16-4-401, MCA; NEW, 2012 MAR p. 1846, Eff. 9/21/12; AMD, 2014 MAR p. 1277, Eff. 6/13/14.
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42.12.316 SACRAMENTAL WINE SALES RESTRICTIONS BY ALCOHOL CONTENT
(1) Sacramental wine may be sold in Montana only in conformity with the guidelines provided in (2) through (6) of this rule.
(2) Sacramental wine licensees may sell sacramental wine containing up to 24 percent alcohol by volume to officials of churches or other religious organizations.
(3) Registered foreign wineries may sell sacramental wine containing up to 24 percent alcohol by volume to licensed table wine distributors.
(4) Licensed foreign wineries may sell sacramental wine containing not more than 16 percent alcohol by volume to licensed retailers and sacramental wine containing not more than 24 percent alcohol by volume to table wine distributors and sacramental wine licensees.
(5) Licensed domestic wineries may sell sacramental wine containing not more than 16 percent alcohol by volume to licensed retailers and sacramental wine containing not more than 24 percent alcohol by volume to table wine distributors and sacramental wine licensees.
(6) Table wine distributors may sell sacramental wine containing not more than 16 percent alcohol by volume to licensed retailers and sacramental wine containing not more than 24 percent alcohol by volume to sacramental wine licensees.
History: 16-1-303, MCA; IMP, 16-4-107, 16-4-108, 16-4-313, MCA; NEW, 2014 MAR p. 1277, Eff. 6/13/14.
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42.12.317 SACRAMENTAL WINE MONTHLY REPORTS AND TAX RETURNS
(1) All licensees that sell sacramental wine to persons or entities in Montana must file the forms provided in (2) through (4) of this rule and pay any tax due on or before the 15th day of each month following the sale of sacramental wine.
(2) The following licensees shall file the Wine Distributors and Wineries Monthly Tax Return (Form WIT):
(a) sacramental wine licensees located outside Montana for sacramental wine sold to officials of churches or other established religious organizations;
(b) licensed foreign wineries for sacramental wine containing not more than 16 percent alcohol by volume sold to licensed retailers and for sacramental wine containing not more than 24 percent alcohol by volume sold to sacramental wine licensees;
(c) licensed domestic wineries for sacramental wine containing not more than 16 percent alcohol by volume sold to licensed retailers and for sacramental wine containing not more than 24 percent alcohol by volume sold to sacramental wine licensees; and
(d) table wine distributors for sacramental wine containing not more than 16 percent alcohol by volume sold to licensed retailers and for sacramental wine containing not more than 24 percent alcohol by volume sold to sacramental wine licensees.
(3) Licensed foreign and domestic wineries that sell sacramental wine directly to licensed retailers or sacramental wine licensees shall file the Monthly Sales Report for Sales to Retailers, Consumers and Sacramental Wine Licensees Located Within Montana (Form WIT-3) to report the amount of sacramental wine sold to each retailer and each sacramental wine licensee. Form WIT-3 is to be filed in conjunction with Form WIT.
(4) Licensed foreign and domestic wineries that sell sacramental wine to a table wine distributor shall report the amount of sacramental wine sold to each table wine distributor on the Monthly Report of Wine Shipments into the State of Montana (Form WSM).
(5) Licensed retailers and in-state sacramental wine licensees that purchase sacramental wine from a licensed foreign or domestic winery shall report the amount of wine purchased from each winery on the Wine Retailer Monthly Report for Purchases from a Winery Located Outside of Montana (Form WIT-2).
History: 16-1-303, MCA; IMP, 16-1-411, 16-4-313, MCA; NEW, 2014 MAR p. 1277, Eff. 6/13/14.
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42.12.321 APPLICATION FOR SPECIAL PERMIT
This rule has been repealed.
History: Sec. 16-1-303, MCA; IMP, Sec. 16-4-301, MCA; NEW, Eff. 11/3/75; REP, 1984 MAR p. 325, Eff. 2/17/84.
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42.12.322 PROCESSING OF SPECIAL PERMIT APPLICATION
This rule has been repealed.
History: Sec. 16-1-303, MCA; IMP, Sec. 16-4-301, MCA; NEW, Eff. 11/3/75; REP, 1984 MAR p. 325, Eff. 2/17/84.
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42.12.323 PERMISSIBLE AND PROHIBITED SPECIAL PERMIT ACTIVITIES
(1) A special permit issued pursuant to 16-4-301, MCA, entitles the holder to sell and serve beer and/or table wine at retail only at a booth, stand, or other fixed place of business within the exhibition enclosure, confined to specified premises or designated areas, described in the application and approved by the department. A holder of any such permit, or his agents or employees may also sell and serve beer in the grandstand or bleacher.
(2) A special event may only last for a maximum of three days except that each permit holder may have one special event per year that lasts up to seven days for a fair if it is a county, state, or regional fair that occurs no more than once per year, is held on a publicly-owned fairgrounds, and is officially sanctioned by a government entity.
(3) Special permits issued under 16-4-301, MCA, entitle the holder to sell and serve liquor, beer, and/or table wine at retail only within the hall or building described in the application. A holder of a special permit, the holder’s agents, or employees may not sell liquor, beer, and/or table wine to persons other than members of the permittee organization and their bona fide guests. Where posts of nationally chartered veterans organizations or lodges of a recognized national fraternal organization do not own or maintain a permanent post, lodge building, or hall, the department may issue a special permit to the organization for use at premises where the post or lodge regularly meet to conduct its meetings or community related events.
(4) Beer wholesalers and table wine distributors shall not:
(a) allow their employees to assist a special permittee or catering permittee in the sale of beer and/or table wine, except for setting up equipment for sale and service of beer or table wine; or
(b) sell beer and/or table wine to a special permittee or catering permittee on a consignment basis.
(5) A special permittee or catering permittee may use portable equipment furnished by a wholesaler in accordance with 16-3-241, MCA.
History: 16-1-303, MCA; IMP, 16-3-103, 16-3-241, 16-4-301, MCA; NEW, Eff. 11/3/75; AMD, 1985 MAR p. 167, Eff. 2/15/85; AMD, 1985 MAR p. 1632, Eff. 11/1/85; AMD, 1987 MAR p. 1491, Eff. 10/1/87; AMD, 2001 MAR p. 449, Eff. 3/23/01; AMD, 2004 MAR p. 1972, Eff. 8/20/04; AMD, 2010 MAR p. 2227, Eff. 9/24/10.
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42.12.324 SPECIAL PERMITS
(1) A special permit application must be completed and approved by the department when requesting the ability to sell beer and wine to patrons attending a special event. The holder of a special permit must abide by all applicable laws governing the retail sale of beer and wine for on-premises consumption.
(2) The length of time for which a special permit can be issued is determined by the fact that there is an outcome, conclusion or result. For example, the winner of a baseball tournament or the end of a concert.
(3) An applicant for a special permit cannot have an ownership interest in a manufacturer, importer, bottler or distributor of alcoholic beverages or ownership in an agency liquor store.
(4) Any on-premises consumption retail licensee entitled to a catering endorsement will not be issued a special permit, except for veteran and fraternal licensees as provided for in 16-4-301, MCA.
(5) Only one permit is required for multiple locations where beer and wine are sold within the enclosure where the event is held. All locations must be described on the permit application. A copy of the permit must be posted at each location.
(6) A special permit cannot be issued to a location where another permit or license is issued.
(7) Private parties where no money or other consideration is exchanged such as weddings or office parties are not required to obtain a special permit.
(8) A special permit is subject to the provisions of 16-3-306, MCA, unless the entities in 16-3-306, MCA, provide the department with advanced written approval.
History: 16-1-303, MCA; IMP, 16-3-306, 16-4-301, MCA; NEW, 2000 MAR p. 1762, Eff. 7/14/00; AMD, 2001 MAR p. 449, Eff. 3/23/01; AMD, 2004 MAR p. 1972, Eff. 8/20/04; AMD, 2014 MAR p. 2980, Eff. 12/12/14.
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42.12.401 DEFINITIONS
The following definitions apply to this subchapter:
(1) “Available license” means a newly created license which can be issued by the department or an existing license that can be transferred between quota areas because of:
(a) a population increase verified by the most recent census population figures; or
(b) a lapse or revocation of an existing license.
(2) “Existing license” means an on-premises or off-premises consumption retail license that is currently being used at the location in question, has been approved for nonuse status, or is a license for which a sale has occurred or is pending but not approved by the department.
(3) “Irrevocable letter of credit” means a letter of credit in which the issuing bank guarantees that it will not withdraw the credit or cancel the letter. A letter of credit may not be modified or revoked without the customer’s consent.
(4) “Lottery” means an objective mechanical process to randomly select persons eligible to submit applications for available licenses.
(5) “Lottery application” means a brief application for an available license stating the applicant’s name, mailing address, type of license, and quota area.
(6) “Person” means any individual, firm, partnership, limited liability company, corporation, or association.
(7) “Preference” means a priority provided to a restaurant beer and wine lottery applicant based upon eligibility.

History: 16-1-303, MCA; IMP, 16-4-105, 16-4-201, 16-4-204, 16-4-420, 16-4-502, MCA; NEW, 1997 MAR p. 2097, Eff. 11/18/97; AMD, 1998 MAR p. 3132, Eff. 11/20/98; AMD, 2000 MAR p. 2708, Eff. 7/14/00; AMD, 2001 MAR p. 449, Eff. 3/23/01; AMD, 2003 MAR p. 21, Eff. 1/17/03; AMD, 2010 MAR p. 2225, Eff. 9/24/10; AMD, 2012 MAR p. 1846, Eff. 9/21/12; AMD, 2017 MAR p. 493, Eff. 4/29/17.
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42.12.404 APPLICATION LIMITATION PER PREMISES
(1) Only one lottery application per person will be accepted. Person is defined in ARM 42.12.401.
History: Sec. 16-1-303, MCA; IMP, Sec. 16-4-420, MCA; NEW, 1997 MAR p. 2097, Eff. 11/18/97; AMD, 1998 MAR p. 3132, Eff. 11/20/98; AMD, 2003 MAR p. 21, Eff. 1/17/03.
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42.12.405 RESTAURANT BEER AND WINE LICENSE APPLICATION FEES
(1) Twenty percent of the one-time-only initial licensing fee based on seating capacity described in 16-4-420, MCA, must be submitted with an original application for a new license.
(2) The department must pay interest on the initial licensing fee if the processing time exceeds four months from receipt of a complete application when that delay is caused by either the Department of Justice’s or Department of Revenue’s failure to act in a timely manner. If the investigation into the application uncovers the necessity to analyze additional information not previously provided by the applicant, the four-month time period stops until the information is provided.
(3) If an application is terminated, the processing fee will be retained by the department.
(4) The balance of the initial licensing fee and any interest accrued during the processing of the application will be refunded.
History: 16-1-303, MCA; IMP, 16-4-420, MCA; NEW, 1998 MAR p. 3221, Eff. 11/20/98; AMD, 2000 MAR p. 1762, Eff. 7/14/00; AMD, 2003 MAR p. 21, Eff. 1/17/03; AMD, 2010 MAR p. 2225, Eff. 9/24/10.
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42.12.406 LOTTERY APPLICATION PROCESS
(1) When an available license within a quota area is determined and public notice of the availability is required, a notice will be promptly published once a week for four consecutive weeks in the newspaper of general circulation in the quota area. There will be a deadline of ten days from the last publication date to apply for an available license. The publication notice will state:
(a) the type of license(s) available;
(b) the reason for the availability;
(c) that applicant(s) will be selected through a lottery process;
(d) the instructions for making an application; and
(e) the deadline to apply.
(2) Procedures making an available license effective require that a person apply to be included in a lottery held for their applicable county or incorporated city or town quota area. Lotteries will be conducted only for those areas that have more lottery applicants than available licenses.
(3) Lottery applications to be included in the available license lotteries can be acquired through the department.
(4) Lottery applications must state the name of the applicant(s). All potential owners with an ownership interest of 10% or more must be noted on the initial lottery application form as required for an applicant in ARM 42.12.101.
(5) For the purposes of 16-4-204, MCA, the previous 12 months is considered the period from previous lottery publications until the new estimated census in July. Only one application per lottery offering per year is allowed for licenses issued by lottery under 16-4-204, MCA.
(6) Answers to questions in the initial lottery application must be identical to answers in the subsequent application for a license. Failure to produce identical information on both documents will cause disqualification of the applicant(s).
(7) Those lottery applicants selected by the lottery process will subsequently be sent application packets to be returned to the department within 30 days of receipt. Applications not returned within the allotted time will be disqualified from the process. An additional 30 days may be granted to an applicant upon the department receiving and approving a written request by the applicant that explains the need for additional time.
(8) The following applies only to restaurant beer and wine lottery applicants:
(a) if any on-premises retail license is currently issued to the location, no restaurant beer and wine license will be considered for this location;
(b) seating capacity will be a factor in determining the allocation of the restaurant beer and wine licenses and the appropriate fees; and
(c) using the following categories, a lottery application for the restaurant beer and wine lottery must state the exact seating capacity of the restaurant:
(i) 60 persons or less;
(ii) 61 to 100 persons; or
(iii) 101 or more persons.
History: 16-1-303, MCA; IMP, 16-4-105, 16-4-201, 16-4-204, 16-4-420, 16-4-502, MCA; NEW, 1997 MAR p. 2097, Eff. 11/18/97; AMD, 1998 MAR p. 3132, Eff. 11/20/98; AMD, 2000 MAR p. 1762, Eff. 7/14/00; AMD, 2001 MAR p. 449, Eff. 3/23/01; AMD, 2003 MAR p. 21, Eff. 1/17/03; AMD, 2010 MAR p. 2225, Eff. 9/24/10.
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42.12.408 FINAL APPLICATION PROCESS FOLLOWING SUCCESSFUL APPOINTMENT UNDER A LOTTERY
(1) The application process for a restaurant beer and wine license is the same as the process outlined in subchapter 1 of this chapter except for the initial licensing fee which ranges from $5,000 to $20,000 depending on the seating capacity of the restaurant.
(2) Applicants must also meet:
(a) premises suitability requirements;
(b) investigation requirements;
(c) public notice requirements; and
(d) eligibility claimed for a preference.
(3) In the case of a new or remodeled restaurant, all the current prerequisites listed in ARM 42.12.122 and 42.13.106 must be met.
(4) For on-premises retail consumption beer license applications with premises that are under construction or are being remodeled, the applicant must complete the premises within a reasonable time as stated in ARM 42.12.207.
History: 16-1-303, MCA; IMP, 16-4-420, MCA; NEW, 1997 MAR p. 2097, Eff. 11/18/97; AMD, 2000 MAR p. 1762, Eff. 7/14/00; AMD, 2010 MAR p. 2225, Eff. 9/24/10.
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42.12.410 WHEN LOTTERY WILL NOT BE HELD
This rule has been repealed.
History: Sec. 16-1-303, MCA; IMP, Sec. 16-4-420, MCA; NEW, 1997 MAR p. 2097, Eff. 11/18/97; AMD, 1998 MAR p. 3132, Eff. 11/20/98; REP, 2001 MAR p. 449, Eff. 3/23/01.
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42.12.412 WHEN LOTTERY WILL BE HELD
(1) When the number of lottery applications exceed the number of new licenses available within a quota area, a public lottery will be held by the department within 30 days from the publication deadline.
(2) Applicants will be notified of the date, time, and place of the lottery.
(3) The lottery process will be verified by a third party, not employed by the department as well as by the public who may attend the lottery drawings.
(4) Applicants do not need to be present to be chosen in the lottery. Those applicants selected to apply for an available license will be notified by mail.
History: 16-1-303, MCA; IMP, 16-4-420, MCA; NEW, 1997 MAR p. 2097, Eff. 11/18/97; AMD, 1998 MAR p. 3132, Eff. 11/20/98; AMD, 2003 MAR p. 21, Eff. 1/17/03; AMD, 2010 MAR p. 2225, Eff. 9/24/10.
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42.12.414 HOW APPLICANT WILL BE CHOSEN
(1) Successful applicants will be chosen based upon rank (the order of being randomly drawn).
(2) The department will construct a list of the applicants in the order in which they were drawn in the lottery.
(a) For a restaurant beer and wine lottery applicant, the department personnel will determine within this ordering, which applicants have claimed a preference.
(b) A preference must be given to any applicant who:
(i) does not have a restaurant beer and wine license or a retail beer license in any quota area; and
(ii) operates a restaurant for at least 12 months immediately prior to filing of an application in that quota area. This preference will be verified at the time of license application.
(c) An applicant with a preference will be given a priority in the final ranking.
(d) A preference will not supersede the limits within any quota area on licenses of restaurants with a seating capacity of 101 or more persons.
(e) A final ranking of applicants will then be made.
(f) The department will not issue to restaurants with a seating capacity greater than 101 more than 25% of the available restaurant beer and wine licenses in any given quota area. This may result in a quota area not being able to immediately award all of its available restaurant beer and wine licenses. This could also result in larger restaurants who have received a preference being unable to receive a restaurant beer and wine license for seating capacity greater than 101 if many larger restaurants apply to the initial lottery in a given area.
(g) A successful lottery applicant that requested to have a restaurant with seating capacity greater than 101 but the seating quota is full may elect to apply for a license with less seating capacity.
(3) A successful applicant cannot sell his ranking nor can the applicant transfer his ranking to another.
History: 16-1-303, MCA; IMP, 16-4-105, 16-4-201, 16-4-204, 16-4-420, 16-4-502, MCA; NEW, 1997 MAR p. 2097, Eff. 11/18/97; AMD, 1998 MAR p. 3132, Eff. 11/20/98; AMD, 2010 MAR p. 2225, Eff. 9/24/10.
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42.12.416 ALTERATION OF PREMISES FOLLOWING RECEIPT OF RESTAURANT BEER/WINE LICENSE – SEATING CAPACITY
(1) All alterations to a premises must be approved by the department. Should a location with one stated seating capacity receive a restaurant beer/wine license and subsequently obtain approval for alteration of the premises to expand its seating, the new expanded capacity will require an additional payment if the expansion causes the restaurant to escalate into a higher category (61 to 100 or 101 or more) . Payment of the difference between the application fee paid and the fee charged for the higher category of seating must be made to the department. Given satisfaction of all other requirements, the department will approve the expansion so long as the quota for licenses within the 101 or more seating capacity for that quota area has not been met.
History: Sec. 16-1-303, MCA; IMP, Sec. 16-4-420, MCA; NEW, 1997 MAR p. 2097, Eff. 11/18/97.
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STATE LAWS

Part 1 General Provisions
16-1-101. Citation — declaration of policy — subject matters of regulation.
(1) Chapters 1 through 4 and 6 of this title may be cited as the “Montana Alcoholic Beverage Code”.
(2) It is the policy of the state of Montana to effectuate and ensure the entire control of the manufacture, sale, importation, and distribution of alcoholic beverages within the state subject to the authority of the state acting through the department.
(3) This code is an exercise of the police power of the state for the protection of the welfare, health, peace, morals, and safety of the people of the state and of the state’s power under the 21st amendment to the United States constitution to control the transportation and importation of alcoholic beverages into the state. The overall purposes of this code under the 21st amendment to the United States constitution are to promote temperance, create orderly markets, and aid in the collection of taxes. The provisions of this code must be broadly construed to accomplish these purposes.
16-1-102. Policy as to sale of beer. It is the policy of the state of Montana that the manufacture, transportation, distribution, sale, and possession of “beer”, as that term is defined in this code, must be controlled and regulated as provided under this code. Unless defined as beer in 16-1-106(5)(a)(ii), beer, porter, ale, stout, and malt liquors containing more than 8.75% alcohol by volume and that are defined as “liquor” are subject to the regulations and controls provided for liquor.
16-1-103. Policy as to retail sale of liquor. It is the policy of the state that it is necessary to further regulate and control the sale and distribution of alcoholic beverages within the state and to ensure that the department has complete regulatory control of the sale of liquor in this state. It is advisable and necessary, in addition to the operation of the agency liquor stores now provided by law, that the department be empowered and authorized to grant licenses to persons qualified under this code to sell liquor purchased by them at agency liquor stores at retail posted price in accordance with this code and under rules promulgated by the department and under its strict supervision and control and to provide severe penalty for the sale of liquor except by and in agency liquor stores and by persons licensed under this code. The restrictions, regulations, and provisions contained in this code are enacted by the legislature for the protection, health, welfare, and safety of the people of the state.
16-1-104. Intent and construction of code. (1) The purpose and intent of this code are to:
(a) establish a state licensing system to control the transportation and importation of alcoholic beverages into Montana and the manufacture, sale, transportation, and distribution of alcoholic beverages within the state of Montana; and
(b) prohibit transactions in alcoholic beverages within the state of Montana except under state control as specifically provided by this code.
(2) Every section and provision of this code must be construed according to subsection (1).
16-1-105. Divisions of code. This code is divided into six chapters. Chapter 1 relates to the authority of the department of revenue to administer this code and the powers and functions of the department. Chapter 2 relates to the establishment of agency liquor stores and the keeping and selling of liquors. Chapter 3 relates to the control of liquor, wine, and beer. Chapter 4 relates to license administration. Chapter 5, now repealed, related to identification cards. Chapter 6 relates to enforcement.
16-1-106. Definitions. As used in this code, the following definitions apply:
(1) “Agency franchise agreement” means an agreement between the department and a person appointed to sell liquor and table wine as a commission merchant rather than as an employee.
(2) “Agency liquor store” means a store operated under an agency franchise agreement in accordance with this code for the purpose of selling liquor at either the posted or the retail price for off‑premises consumption.
(3) “Alcohol” means ethyl alcohol, also called ethanol, or the hydrated oxide of ethyl.
(4) “Alcoholic beverage” means a compound produced and sold for human consumption as a drink that contains more than 0.5% of alcohol by volume.
(5) (a) “Beer” means:
(i) a malt beverage containing not more than 8.75% of alcohol by volume; or
(ii) an alcoholic beverage containing not more than 14% alcohol by volume:
(A) that is made by the alcoholic fermentation of an infusion or decoction, or a combination of both, in potable brewing water, of malted cereal grain; and
(B) in which the sugars used for fermentation of the alcoholic beverage are at least 75% derived from malted cereal grain measured as a percentage of the total dry weight of the fermentable ingredients.
(b) The term does not include a caffeinated or stimulant‑enhanced malt beverage.
(6) “Beer importer” means a person other than a brewer who imports malt beverages.
(7) “Brewer” means a person who produces malt beverages.
(8) “Caffeinated or stimulant‑enhanced malt beverage” means:
(a) a beverage:
(i) that is fermented in a manner similar to beer and from which some or all of the fermented alcohol has been removed and replaced with distilled ethyl alcohol;
(ii) that contains at least 0.5% of alcohol by volume;
(iii) that is treated by processing, filtration, or another method of manufacture that is not generally recognized as a traditional process in the production of beer as described in 27 CFR 25.55; and
(iv) to which is added caffeine or other stimulants, including but not limited to guarana, ginseng, and taurine; or
(b) a beverage:
(i) that contains at least 0.5% of alcohol by volume;
(ii) that is treated by processing, filtration, or another method of manufacture that is not generally recognized as a traditional process in the production of beer as described in 27 CFR 25.55;
(iii) to which is added a flavor or other ingredient containing alcohol, except for a hop extract;
(iv) to which is added caffeine or other stimulants, including but not limited to guarana, ginseng, and taurine;
(v) for which the producer is required to file a formula for approval with the United States alcohol and tobacco tax and trade bureau pursuant to 27 CFR 25.55; and
(vi) that is not exempt pursuant to 27 CFR 25.55(f).
(9) “Community” means:
(a) in an incorporated city or town, the area within the incorporated city or town boundaries;
(b) in an unincorporated city or area, the area identified by the federal bureau of the census as a community for census purposes; and
(c) in a consolidated local government, the area of the consolidated local government not otherwise incorporated.

(10) “Department” means the department of revenue, unless otherwise specified, and includes the department of justice with respect to receiving and processing, but not granting or denying, an application under a contract entered into under 16-1-302.
(11) “Growler” means any refillable, resealable container complying with federal law.
(12) “Hard cider” means an alcoholic beverage that is made from the alcoholic fermentation of the juices of apples or pears and that contains not less than 0.5% of alcohol by volume and not more than 6.9% of alcohol by volume, including but not limited to flavored, sparkling, or carbonated cider.
(13) “Immediate family” means a spouse, dependent children, or dependent parents.
(14) “Import” means to transfer beer or table wine from outside the state of Montana into the state of Montana.
(15) “Liquor” means an alcoholic beverage except beer and table wine. The term includes a caffeinated or stimulant‑enhanced malt beverage.
(16) “Malt beverage” means an alcoholic beverage made by the fermentation of an infusion or decoction, or a combination of both, in potable brewing water, of malted barley with or without hops or their parts or their products and with or without other malted cereals and with or without the addition of unmalted or prepared cereals, other carbohydrates, or products prepared from carbohydrates and with or without other wholesome products suitable for human food consumption.
(17) “Package” means a container or receptacle used for holding an alcoholic beverage.
(18) “Posted price” means the wholesale price of liquor for sale to persons who hold liquor licenses as fixed and determined by the department and in addition an excise and license tax as provided in this code. In the case of sacramental wine sold in agency liquor stores, the wholesale price may not exceed the sum of the department’s cost to acquire the sacramental wine, the department’s current freight rate to agency liquor stores, and a 20% markup.
(19) “Proof gallon” means a U.S. gallon of liquor at 60 degrees on the Fahrenheit scale that contains 50% of alcohol by volume.
(20) “Public place” means a place, building, or conveyance to which the public has or may be permitted to have access and any place of public resort.
(21) “Retail price” means the price established by an agent for the sale of liquor to persons who do not hold liquor licenses. The retail price may not be less than the department’s posted price.
(22) “Rules” means rules adopted by the department or the department of justice pursuant to this code.
(23) “Sacramental wine” means wine that contains more than 0.5% but not more than 24% of alcohol by volume that is manufactured and sold exclusively for use as sacramental wine or for other religious purposes.
(24) “Special event”, as it relates to an application for a beer and wine special permit, means a short, infrequent, out‑of‑the‑ordinary occurrence, such as a picnic, fair, reception, or sporting contest.
(25) “State liquor warehouse” means a building owned or under control of the department for the purpose of receiving, storing, transporting, or selling alcoholic beverages to agency liquor stores.
(26) “Storage depot” means a building or structure owned or operated by a brewer at any point in the state of Montana off and away from the premises of a brewery, which building or structure is equipped with refrigeration or cooling apparatus for the storage of beer and from which a brewer may sell or distribute beer as permitted by this code.
(27) “Subwarehouse” means a building or structure owned or operated by a licensed beer wholesaler or table wine distributor, located at a site in Montana other than the site of the beer wholesaler’s or table wine distributor’s warehouse or principal place of business, and used for the receiving, storage, and distribution of beer or table wine as permitted by this code.
(28) “Table wine” means wine that contains not more than 16% of alcohol by volume and includes cider.
(29) “Table wine distributor” means a person importing into or purchasing in Montana table wine or sacramental wine for sale or resale to retailers licensed in Montana.

(30) “Warehouse” means a building or structure located in Montana that is owned or operated by a licensed beer wholesaler or table wine distributor for the receiving, storage, and distribution of beer or table wine as permitted by this code.
(31) “Wine” means an alcoholic beverage made from or containing the normal alcoholic fermentation of the juice of sound, ripe fruit or other agricultural products without addition or abstraction, except as may occur in the usual cellar treatment of clarifying and aging, and that contains more than 0.5% but not more than 24% of alcohol by volume. Wine may be ameliorated to correct natural deficiencies, sweetened, and fortified in accordance with applicable federal regulations and the customs and practices of the industry. Other alcoholic beverages not defined in this subsection but made in the manner of wine and labeled and sold as wine in accordance with federal regulations are also wine.
Part 2
Scope of Code and Exemptions
16-1-201. Acts not covered by code. (1) Nothing in this code prevents any brewer, distiller, or other person, licensed under the provisions of any statute of the United States of America for the manufacture of alcoholic beverages, from having or keeping alcoholic beverages in a place and in the manner authorized by or under any such statute.
(2) It is the policy of the state of Montana that the manufacture of alcoholic beverages, including the distillation, rectification, bottling, and processing as these terms are defined under the provisions of the laws of the United States, is authorized and permitted by any brewer, distiller, rectifier, or other person licensed under any provision of any statute of the United States of America in a place and in the manner authorized by or under any statute of the United States. The department may adopt rules that the department considers necessary with respect to the manufacture of alcoholic beverages. The rules may not be inconsistent with this code or with the statutes of the United States of America or regulations issued under the provisions of the Federal Alcohol Administration Act, 27 U.S.C. 201 through 212, inclusive, or regulations issued under the provisions of chapter 51 of the Internal Revenue Code.
(3) Nothing in this code prevents:
(a) the sale of liquor or table wine by any person to the department;
(b) the purchase, importation, and sale of liquor and table wine by the department for the purposes of and in accordance with this code.
16-1-202. Preparations not subject to code. (1) Subject to the provisions of this section, nothing in this code, by reason only that a preparation contains alcohol, prevents the manufacture, sale, purchase, or consumption of any:
(a) extract, essence, or tincture or other preparation containing alcohol that is prepared according to a formula of the United States Pharmacopoeia or according to a formula approved of by the department; or

(b) proprietary or patent medicine prepared according to a formula approved of by the department.
(2) The department, if of the opinion that any proprietary or patent medicine, extract, essence, tincture, or preparation that contains alcohol or any other preparation of a solid, semisolid, or liquid nature that contains alcohol can be used or that an extract from the substance can be used as a beverage or as the ingredient of a beverage, may prohibit the retail sale or the possession of the substance for retail sale within the state, except by an agency liquor store or by persons licensed by the department to keep and sell the substance by retail in accordance with this code and the regulations made under this code.
(3) The department shall notify the manufacturer or vendor of the proprietary or patent medicine, extract, essence, tincture, or preparation of the prohibition.
16-1-203. Health professions exemption. A physician, dentist, veterinarian, or pharmacist, acting within the scope of the individual’s professional responsibility and license to practice, who prescribes, prepares, or administers alcohol or substances containing alcohol and sells or charges a fee does not violate the prohibitions of this code.
Licensing and regulation of physicians, dentists, veterinarians, and pharmacists, Title 37, ch. 2 through 7, 18.
16-1-204. Licensed hospital or health care facility. Any person in charge of an institution regularly conducted as a licensed hospital or health care facility may administer alcoholic beverages purchased by the person to any patient or inmate of the institution and may charge for the alcoholic beverages.
16-1-205. Local option. The electors of a county may, by approving an initiative as provided under 7‑5‑131 through 7‑5‑135 and 7‑5‑137, prohibit the sale and consumption ofliquor or of all alcoholic beverages within the county. If the initiative is presented to the board of county commissioners, the board may not approve it but shall submit the proposal to the people as provided in 7‑5‑132.
Part 3 Department of Revenue
Powers, Duties, and Limitations
16-1-301. Administration of code. The department shall have the powers and duties to administer the Montana Alcoholic Beverage Code, including the general control, management, and supervision of all agency liquor stores.
16-1-302. Functions, powers, and duties of department. The department has the following functions, duties, and powers:
(1) to buy, import, have in its possession for sale, and sell liquors;
(2) to control the possession, sale, and delivery of liquors in accordance with the provisions of this code;

(3) to determine the municipalities where agency liquor stores are to be established throughout the state and the situation of the stores within these municipalities;
(4) to lease, furnish, and equip any building or land required to administer its duties under this code;
(5) to buy or lease plants and equipment necessary to administer its duties under this code;
(6) to employ the necessary employees required to administer this code and to dismiss them, assign them their title, and define their respective duties and powers and to contract with the department of justice for investigative services and to receive and process, but not grant or deny, applications or to contract for the services of experts and persons engaged in the practice of a profession, if appropriate. If the department contracts for the receipt and processing of an application by the department of justice, the application must state that it is to be filed with the department of justice.
(7) to determine the nature, form, and capacity of all packages to be used for containing liquor kept or sold under this code;
(8) to grant and issue licenses under this code;
(9) to place special restrictions on the use of a particular license, which must be endorsed upon the face of the license, if the special restrictions are made pursuant to a hearing held in connection with the issuance of the license or if the special restrictions are agreed to by the licensee;
(10) without limiting or being limited by the foregoing, to do all things necessary to administer this code or rules.
City and county licenses — fees, 16-4-503.
Pull tabs and other detachable openings prohibited, 75‑10‑302.
16-1-303. Department rules. (1) The department and the department of justice may make rules not inconsistent with this code necessary to efficiently administer this code.
(2) Rules made by the department may include but are not limited to the following:
(a) regulating the contractual operation of agency liquor stores and warehouses in which liquor is kept or sold and prescribing the books and records to be kept;
(b) prescribing the duties of department employees and regulating their conduct while in the discharge of their duties;
(c) governing the purchase of liquor and the furnishing of liquor to agency liquor stores;
(d) determining the classes, varieties, and brands of liquor to be available for distribution from the state liquor warehouse;
(e) prescribing the minimum hours during which agency liquor stores must be open for the sale of alcoholic beverages;
(f) providing for the issuing and distributing of price lists showing the price to be paid by purchasers for each class, variety, or brand of liquor kept for sale;
(g) prescribing forms to be used for the purpose of this code or the rules and the terms and conditions for permits and licenses issued and granted under this code;
(h) prescribing the form of records of purchase of liquor and the reports to be made to the department and providing for inspection of the records;
(i) prescribing the manner of giving and serving notices required by this code or the rules;
(j) prescribing the fees payable for permits and licenses issued under this code for which fees are not prescribed in this code and prescribing the fees for anything done or permitted to be done under the rules;
(k) prescribing, subject to the provisions of this code, the conditions and qualifications necessary for the obtaining of alcoholic beverage licenses and the books and records to be kept and the returns to be made by the licensees;
(l) specifying and describing the place and the manner in which alcoholic beverages may be lawfully kept or stored;

(m) specifying and regulating the time when and the manner by which vendors and brewers may deliver alcoholic beverages under this code and the time when and the manner by which alcoholic beverages, under this code, may be lawfully conveyed or carried;
(n) governing the conduct, management, and equipment of any premises licensed to sell alcoholic beverages under this code;
(o) providing for the imposition and collection of taxes and making rules respecting returns, accounting, and payment of the taxes to the department.
(3) The department of justice may adopt rules to administer and implement its responsibilities under this title, including but not limited to rules providing for the inspection of licensed premises or premises where the sale of liquor has been proposed.
(4) Whenever this code provides that an act may be done if authorized by rules, the department, subject to the restrictions in subsection (1), may make rules respecting the act.
(5) The department shall use the negotiated rulemaking procedures contained in Title 2, chapter 5, for the purpose of adoption of rules related to the operation of agency liquor stores. However, the department may not be required to pay any expenses of the participants or of any persons engaged in the rulemaking process as provided for in 2‑5‑110.
Adoption and publication of administrative rules, 2‑4‑301. Agency liquor store hours of operation, 16-2-104.
Liquor pricing, 16-2-201.
City and county licenses — fees, 16-4-503.
16-1-304. Prohibited acts. (1) An employee of the department involved in the operation of the state liquor warehouse, the issuance of licenses, or the collection of alcoholic beverages taxes or an employee of the department of justice directly involved with license applications or the investigation of matters concerning the manufacture, sale, and distribution of alcoholic beverages may not be directly or indirectly interested or engaged in any other business or undertaking dealing in liquor, whether as owner, part owner, partner, member of a syndicate, shareholder, agent, or employee for the employee’s own benefit or in a fiduciary capacity for some other person.
(2) An employee of the state, a state agent, or any person having any ownership interest in an agency liquor store may not solicit or receive, directly or indirectly, any commission, remuneration, gift, or other thing tangible or intangible of value from any person or corporation selling or offering liquor for sale to the state pursuant to this code.
(3) A person selling or offering for sale to or purchasing liquor from the state may not directly or indirectly offer to pay any commission, profit, or remuneration or make any gift to any employee of the state, any state agent, or any person having any ownership interest in an agency liquor store or to anyone on behalf of an employee.
(4) The prohibition contained in subsection (3) does not prohibit the state from receiving samples of liquor for the purpose of chemical testing, subject to the following limitations:
(a) Each manufacturer, distiller, compounder, rectifier, importer, or wholesale distributor or any other person, firm, or corporation proposing to sell any liquor to the state of Montana shall submit, without cost to the state prior to the original purchase, an analysis of each brand and may submit a representative sample not exceeding 25 fluid ounces of the merchandise to the state.
(b) When a brand of liquor has been accepted for testing by the state, the state shall forward the sample, unopened and in its entirety, to a qualified chemical laboratory for analysis.
(c) The state shall maintain written records of all samples received. The records must show the brand name, amount and from whom received, date received, the laboratory or chemist to whom forwarded, the state’s action on the brand, and the person to whom delivered or other final disposition of the sample.
(5) Liquor may not be withdrawn from the regular warehouse inventory or from the agency liquor stores for any purpose other than sale to persons who hold liquor licenses at the posted price and sale to the consumer at the retail price established by the agent or for destroying

damaged or defective merchandise. The state shall maintain a written record including the type, brand, container size, number of bottles or other units, signatures of witnesses, and method of destruction or other disposition of damaged or defective warehouse merchandise.
(6) The state may not require a company that manufactured, distilled, rectified, bottled, or processed and sold less than 200,000 proof gallons of liquor nationwide in the previous calendar year to maintain minimum amounts of liquor in the state warehouse while the distiller retains ownership of the product.
Government employee standards of conduct, Title 2, ch. 2, parts 1 and 2. Prohibited gifts to public servants, 45‑7‑104.
16-1-305. Title to property and moneys — administrative expenses. All property, whether real or personal, all moneys acquired, administered, possessed, or received by the department, and all profits earned in the administration of this code shall be the property of the state. All expenses, debts, and liabilities incurred by the department in connection with the administration of this code shall be paid by the department from the moneys received by the department under such administration.
16-1-306. Revenue to be paid to state treasurer. Except as provided in 16-1-404, 16-1-406, and 16-1-411, all fees, charges, taxes, and revenue collected by or under authority of the department must, in accordance with the provisions of 17‑2‑124, be deposited to the credit of the state general fund.
Part 4
Taxation of Alcoholic Beverages
Resort tax, Title 7, ch. 6, part 15.
16-1-401. Liquor excise tax. (1) Except as provided in subsection (3), the department shall collect at the time of the sale and delivery of any liquor as authorized under any provision of the laws of the state of Montana an excise tax at a rate that is the percent of the retail selling price determined in accordance with the following schedule based on all liquor sold and delivered in the state by a company that manufactured, distilled, rectified, bottled, or processed the liquor and sold the specified number of proof gallons of liquor nationwide in the calendar year preceding imposition of the tax pursuant to this section:
Nationwide production Tax rate
Less than 20,000 proof gallons 3%
20,000 to 50,000 proof gallons 8%
50,001 to 200,000 proof gallons 13.8%
Over 200,000 proof gallons 16%
(2) The department shall retain the amount of the excise tax received in a separate account and shall, in accordance with the provisions of 17‑2‑124, deposit, to the credit of the general fund, the amount collected and received not later than the 10th day of each month.
(3) The following are exempt from the tax imposed by this section:
(a) flavors and other nonbeverage ingredients containing alcohol that are imported or purchased by a brewery under conditions set by the department as provided in 16-3-214; and
(b) necessary distilled spirits imported in bulk for use by a distillery or microdistillery under conditions set by the department as provided in 16-4-311 and 16-4-312.

16-1-402. Payment of excise tax by carriers. (1) Every airline or railroad operating in the state of Montana and selling liquor purchased outside this state for consumption within this state shall pay to the department the excise taxes and state markup that would be applicable to the liquor if purchased from an agency liquor store.
(2) The amount of excise taxes and state markup payable must be determined by multiplying the following factors:
(a) the average liquor used per departure;
(b) the number of departures from Montana on which liquor is served;
(c) the ratio of Montana revenue passenger miles to system revenue passenger miles; and
(d) the applicable excise tax and state markup rates.
(3) From the product, the carrier shall subtract the amount of excise taxes and state markup on purchases of liquor made within this state.
16-1-403. Excise tax accounting methods — report forms — penalty and interest.
(1) Any carrier aggrieved by the application of the method provided in 16-1-402 may petition the department for use of an alternate method. If the department finds that the application of the method will be unjust to the carrier, it may allow the use of the method petitioned for by the carrier or may use another method that fairly reflects the liquor purchased outside this state and served for consumption within this state.
(2) (a) The department shall prescribe report forms that must be used by the carriers in reporting their sales and computing their liability for excise taxes and markup. Report forms must be filed and payment of excise taxes and state markup must be made on a quarterly basis. The filing of report forms and payment of excise taxes and state markup must be made not later than the last day of the month immediately following the close of each quarterly period.
(b) A person who fails to file a required report form or to pay the excise taxes or state markup due under this part is subject to the penalty and interest provisions of 15‑1‑216.
16-1-404. License tax on liquor — amount — distribution of proceeds. (1) Except as provided in subsection (4), the department shall collect at the time of sale and delivery of any liquor under any provisions of the laws of the state of Montana a license tax of:
(a) 10% of the retail selling price on all liquor sold and delivered in the state by a company that manufactured, distilled, rectified, bottled, or processed and that sold more than 200,000 proof gallons of liquor nationwide in the calendar year preceding imposition of the tax pursuant to this section;
(b) 8.6% of the retail selling price on all liquor sold and delivered in the state by a company that manufactured, distilled, rectified, bottled, or processed and that sold more than 50,000 proof gallons but not more than 200,000 proof gallons of liquor nationwide in the calendar year preceding imposition of the tax pursuant to this section;
(c) 2% of the retail selling price on all liquor sold and delivered in the state by a company that manufactured, distilled, rectified, bottled, or processed and that sold not more than 50,000 proof gallons of liquor nationwide in the calendar year preceding imposition of the tax pursuant to this section.
(2) The license tax must be charged and collected on all liquor produced in or brought into the state and taxed by the department. The retail selling price must be computed by adding to the cost of the liquor the state markup of 40.5% for all liquor other than sacramental wine, for which the markup must be 20%, and fortified wine containing more than 16% but not more than 24% alcohol by volume, for which the markup must be 51%. The license tax must be figured in the same manner as the state excise tax and is in addition to the state excise tax. The department

shall retain in a separate account the amount of the license tax received. The department, in accordance with the provisions of 17‑2‑124, shall allocate the revenue as follows:
(a) Thirty‑four and one‑half percent is allocated to the state general fund.
(b) Sixty‑five and one‑half percent must be deposited in the state special revenue fund to the credit of the department of public health and human services for the treatment, rehabilitation, and prevention of alcoholism and chemical dependency.
(3) The license tax proceeds that are allocated to the department of public health and human services for the treatment, rehabilitation, and prevention of alcoholism and chemical dependency must be credited quarterly to the department of public health and human services. The legislature may appropriate a portion of the license tax proceeds to support alcohol and chemical dependency programs. The remainder must be distributed as provided in 53‑24‑206.
(4) The following are exempt from the tax and markup imposed by this section:
(a) flavors and other nonbeverage ingredients containing alcohol that are imported or purchased by a brewery under conditions set by the department as provided in 16-3-214; and
(b) necessary distilled spirits imported in bulk for use by a distillery or microdistillery under conditions set by the department as provided in 16-4-311 and 16-4-312.
16-1-405. Repealed. Sec. 123, Ch. 2, L. 2009.
16-1-406. Taxes on beer. (1) (a) A tax is imposed on each barrel of 31 gallons of beer sold in Montana by a wholesaler. A barrel of beer equals 31 gallons. The tax is based upon the total number of barrels of beer produced by a brewer in a year. A brewer who produces less than 10,000 barrels of beer a year is taxed on the following increments of production:
(i) up to 5,000 barrels, $1.30;
(ii) 5,001 barrels to 10,000 barrels, $2.30.
(b) The tax on beer sold for a brewer who produces over 10,000 barrels is $4.30.
(2) The tax imposed pursuant to subsection (1) is due at the end of each month from the wholesaler upon beer sold by the wholesaler during that month. The department shall compute the tax due on beer sold in containers other than barrels or in barrels of more or less capacity than 31 gallons.
(3) Each quarter, in accordance with the provisions of 17‑2‑124, of the tax collected pursuant to subsection (1), an amount equal to:
(a) 23.26% must be deposited in the state treasury to the credit of the department of public health and human services for the treatment, rehabilitation, and prevention of alcoholism and chemical dependency; and
(b) the balance must be deposited in the state general fund.
2017 Amendment: Chapter 271 in (1)(a) and (1)(b) substituted “10,000 barrels” for “20,000 barrels”; deleted former (1)(a)(iii) that read “10,001 barrels to 20,000 barrels, $3.30”; and made minor changes in style. Amendment effective October 1, 2017.
16-1-407. Repealed. Sec. 3, Ch. 172, L. 1987.

16-1-408. Repealed. Sec. 66, Ch. 422, L. 1997.
16-1-409. Failure to make beer tax returns — penalties and interest. (1) If a brewer or wholesaler subject to the payment of the tax provided for in 16-1-406 fails to make any return required by this code or fails to make payment of the tax within the time provided in this part, the department shall, after the time has expired, determine and fix the amount of tax due the state from the delinquent brewer or wholesaler.
(2) The department shall then proceed to collect the tax with penalties and interest. Upon request of the department, the attorney general shall prosecute in any court of competent jurisdiction an action to collect the tax.
(3) If all or part of the tax imposed upon a brewer or wholesaler by this part is not paid when due, the department may issue a warrant for distraint as provided in Title 15, chapter 1, part 7. The resulting lien has precedence over any other claim, lien, or demand filed or recorded after the warrant is issued.
(4) An action may not be maintained to enjoin the collection of the tax or any part of the tax.
(5) Any tax owed by a brewer or wholesaler under this code not paid within the time provided is delinquent, and penalty and interest must be added to the delinquent tax as provided in 15‑1‑216.
A brewer or wholesaler who fails, neglects, or refuses to make the return to the department provided for in 16-3-211 or 16-3-231 or refuses to allow the examination as provided for in 16-3-211 or 16-3-231 or fails to make an accurate return according to the manner prescribed is guilty of a misdemeanor and upon conviction shall be fined in an amount not exceeding $1,000. Uniform penalty and interest assessments for violation of tax provisions, 15‑1‑216.
16-1-410. Repealed. Sec. 66, Ch. 422, L. 1997.
16-1-411. Tax on wine and hard cider — penalty and interest. (1) (a) A tax of 27 cents per liter is imposed on sacramental wine and table wine, except hard cider, imported by a table wine distributor or the department and on table wine shipped directly by a winery with a direct shipment endorsement.
(b) A tax of 3.7 cents per liter is imposed on hard cider imported by a table wine distributor or the department.
(2) The tax imposed in subsection (1) must be paid by the winery with a direct shipment endorsement or a table wine distributor by the 15th day of the month following shipment by the winery with the direct shipment endorsement or sale of the sacramental wine, table wine, or hard cider from the table wine distributor’s warehouse. Failure to file a tax return or failure to pay the tax required by this section subjects the winery with the direct shipment endorsement or the table wine distributor to the penalties and interest provided for in 15‑1‑216.
(3) The tax paid by a winery with a direct shipment endorsement or by a table wine distributor in accordance with subsection (2) must, in accordance with the provisions of 17‑2‑124, be distributed as follows:
(a) 69% to the state general fund; and
(b) 31% to the state special revenue fund to the credit of the department of public health and human services for the treatment, rehabilitation, and prevention of alcoholism and chemical dependency.

(4) The tax computed and paid in accordance with this section is the only tax imposed by the state or any of its subdivisions, including cities and towns.
(5) For purposes of this section, “table wine” has the meaning assigned in 16-1-106, but does not include hard cider.
Uniform penalty and interest assessments for violation of tax provisions, 15‑1‑216. Hard cider defined, 16-1-106.
Additional tax on table wine sold to agency liquor store, 16-2-301.
16-1-412 through 16-1-420 reserved.
16-1-421. Terminated. Sec. 39, Ch. 15, Sp. L. July 1992.
16-1-422. Terminated. Sec. 39, Ch. 15, Sp. L. July 1992.
16-1-423. Terminated. Sec. 39, Ch. 15, Sp. L. July 1992.
16-1-424. Distillery — reporting — tax payment — penalties. (1) Except as provided in subsection (9), a distillery licensed to do business in this state under 16-4-311 shall, on or before the 15th day of each month, in the manner and form prescribed by the department, make an exact return to the department reporting the total amount of liquor samples provided with or without charge at the distillery in the previous month. The department may at any time make an examination of the distillery’s books and of the premises and may otherwise check the accuracy of the return.
(2) The taxes imposed pursuant to 16-1-401 and 16-1-404 upon a distillery licensed under 16-4-311 are due on or before the 15th day of each month from the distiller for liquor sold during the previous month. The department shall adopt rules and provide forms for the proper allocation of taxes.
(3) If a distiller subject to the payment of the taxes provided for in 16-1-401 and 16-1-404 fails to make any return required by this code or fails to make payment of the taxes within the time provided in this part, the department shall, after the time has expired, determine and fix the amount of taxes due the state from the delinquent distiller.
(4) The department shall then proceed to collect the tax with penalties and interest. Upon request of the department, the attorney general shall prosecute in any court of competent jurisdiction an action to collect the tax.
(5) If all or part of the tax imposed upon a distillery by this part is not paid when due, the department may issue a warrant for distraint as provided in Title 15, chapter 1, part 7. The resulting lien has precedence over any other claim, lien, or demand filed or recorded after the warrant is issued.
(6) An action may not be maintained to enjoin the collection of the tax or any part of the tax.
(7) Any tax owed by a distiller under this code that is not paid within the time provided is delinquent, and penalty and interest must be added to the delinquent tax as provided in 15‑1‑216.
(8) Except as provided in subsection (9), a distiller who fails, neglects, or refuses to make the return to the department provided for in this section, refuses to allow the examinations as provided for in this section, or fails to make an accurate return in the manner prescribed is guilty of a misdemeanor and upon conviction shall be fined an amount not exceeding $1,000.
(9) A distillery for which the tax is less than $10 a month from the sale of samples is not required to file a return or pay the tax for that month under this section.

CHAPTER 2 LIQUOR STORES

Part 1 Operation of Stores
16-2-101. Establishment and closure of agency liquor stores — agency franchise agreement — kinds and prices of liquor. (1) The department shall enter into agency franchise agreements to operate agency liquor stores as the department finds feasible for the wholesale and retail sale of liquor.
(2) (a) The department may from time to time fix the posted prices at which the various classes, varieties, and brands of liquor may be sold, and the posted prices must be the same at all agency liquor stores.
(b) (i) The department shall supply from the state liquor warehouse to agency liquor stores the various classes, varieties, and brands of liquor for resale at the state posted price to persons who hold liquor licenses and to all other persons at the retail price established by the agent.
(ii) (A) According to the ordering and delivery schedule set by the department, an agency liquor store may place a liquor order with the department at its state liquor warehouse in the manner to be established by the department.
(B) The agency liquor store’s purchase price is the department’s posted price less the agency liquor store’s commission rate. The commission rates constitute the only compensation the department provides to agency liquor stores and reflect that agency liquor stores sell at retail and wholesale and must provide the discount in 16-2-201.
(C) All liquor purchased from the state liquor warehouse by an agency liquor store must be paid for within 60 days of the date on which the department invoices the liquor to the agency liquor store.
(c) An agency liquor store may sell table wine at retail for off‑premises consumption.
(3) Agency liquor stores may not be located in or adjacent to grocery stores in communities with populations over 3,000.
(4) (a) Beginning February 1, 2016, each agency liquor store’s commission rate is equal to the agency liquor store’s combined commission rate on December 31, 2015, plus 1/3 of the difference between the agency liquor store’s commission rate as determined in subsection (4)(b) and the agency liquor store’s combined commission rate on December 31, 2015. Beginning February 1, 2017, each agency liquor store’s commission rate is equal to the agency liquor store’s combined commission rate on December 31, 2015, plus 2/3 of the difference between the agency liquor store’s commission rate as determined in subsection (4)(b) and the agency liquor store’s combined commission rate on December 31, 2015. Beginning February 1, 2018, each agency liquor store’s commission rate is determined as in subsection (4)(b).
(b) Agency liquor stores must receive an annual commission rate based on the total posted price of liquor purchased in the previous calendar year, as follows:
(i) 16% commission for stores that purchased not more than $250,000;
(ii) 15.5% commission for stores that purchased more than $250,000 but not more than
$500,000;
(iii) 15% commission for stores that purchased more than $500,000 but not more than
$720,000;
(iv) 14.5% commission for stores that purchased more than $720,000 but not more than
$950,000;
(v) 14% commission for stores that purchased more than $950,000 but not more than $1.525 million;
(vi) 13.5% commission for stores that purchased more than $1.525 million but not more than
$1.85 million;
(vii) 13% commission for stores that purchased more than $1.85 million but not more than
$2.25 million;
(viii) 12.75% commission for stores that purchased more than $2.25 million but not more than $3.25 million;
(ix) 12.5% commission for stores that purchased more than $3.25 million but not more than
$7 million; or
(x) 12.15% commission for stores that purchased more than $7 million.
(c) For commissions determined under subsection (4)(b), the department shall by February 1 of each year:
(i) calculate purchases based on all liquor invoiced to the agency liquor store during the previous calendar year;
(ii) notify agency liquor stores of their commission rate to be applied for the period beginning February 1 and ending January 31; and
(iii) adjust the dollar values for purchase amounts under subsection (4)(b) based on the consumer price index for the prior calendar year and notify all agency liquor stores of the adjustment.
(d) New stores must receive a commission established by competitive bidding, which is guaranteed for 3 calendar years, after which time the agency liquor store’s commission is subject to subsection (4)(b).
(5) An agency franchise agreement must:
(a) be effective for a 10‑year period, renewable for additional 10‑year periods, if the requirements of the agency franchise agreement have been satisfactorily performed;
(b) require the agent to maintain comprehensive general liability insurance and liquor liability insurance throughout the term of the agency franchise agreement in an amount established by the department of administration. The insurance policy must:
(i) declare the department as an additional insured; and
(ii) hold the state harmless and agree to defend and indemnify the state in a cause of action arising from or in connection with the agent’s negligent acts or activities in the execution and performance of the agency franchise agreement.
(c) provide that upon termination by the department for cause or upon mutual termination, the agent is liable for any outstanding liquor purchase invoices. If payment is not made within the appropriate time, the department may immediately repossess all liquor inventory, wherever located.
(d) specify the reasonable service and space requirements that the agent will provide throughout the term of the agency franchise agreement.
(6) The liability insurance requirement may be reviewed every 3 years at the request of either the agent or the department. If the agent concurs, the department may adjust the requirements to be effective during the remaining term of the agency franchise agreement if the adjustments adequately protect the state from risks associated with the agent’s negligent acts or activities in the execution and performance of the agency franchise agreement. The amount of liability insurance coverage may not be less than the minimum requirements of the department of administration.
(7) (a) The department may terminate an agency franchise agreement if the agent has not satisfactorily performed the requirements of the agency franchise agreement because the agent:
(i) charges retail prices that are less than the department’s posted price for liquor, sells liquor to persons who hold liquor licenses at less than the posted price, or sells liquor at case discounts greater than the discount provided for in 16-2-201 to persons who hold liquor licenses;
(ii) fails to maintain sufficient liability insurance;
(iii) has not maintained a quantity and variety of product available for sale commensurate with demand, delivery cycle, repayment schedule, mixed case shipments from the department, and the ability to purchase special orders;
(iv) at an agency liquor store located 35 miles or more from the nearest agency liquor store, has operated the agency liquor store in a manner that makes the premises unsanitary or inaccessible for the purpose of making purchases of liquor; or
(v) fails to comply with the express terms of the agency franchise agreement.
(b) The department shall give an agent 30 days’ notice of its intent to terminate the agency franchise agreement for cause and specify the unmet requirements. The agent may contest the termination and request a hearing within 30 days of the date of notice. If a hearing is requested, the department shall suspend its termination order until after a final decision has been made pursuant to the Montana Administrative Procedure Act.
(c) In the case of failure to make timely payments to the department for liquor purchased, the department may terminate the agency franchise agreement and immediately repossess any liquor purchased and in the possession of the agent. If an agency franchise agreement is terminated, the agent may contest the termination and request a hearing within 30 days of the department’s repossession of the liquor. The agency liquor store shall remain closed until a final decision has been reached following a hearing held pursuant to the Montana Administrative Procedure Act.
(8) An agency franchise agreement may be terminated upon mutual agreement by the agent and the department.
(9) An agent may assign an agency franchise agreement to a person who, upon approval of the department, is named agent in the agency franchise agreement, with the rights, privileges, and responsibilities of the original agent for the remaining term of the agency franchise agreement. The agent shall notify the department of an intent to assign the agency franchise agreement 60 days before the intended effective date of the assignment. The department may not unreasonably withhold approval of an assignment request.
(10) A person or entity may not hold an ownership interest in more than one agency liquor store.
(11) The department shall maintain sufficient inventory in the state warehouse in order to meet a monthly service level of at least 97%.
(12) For the purposes of this section, the term “combined commission rate” means the agency liquor store’s weighted average discount rate plus the discount rate provided for sales volume plus the agency liquor store’s commission rate that existed on December 31, 2015.
Contested case hearings — Montana Administrative Procedure Act, Title 2, ch. 4, part 6. Price of liquor, 16-2-201, 16-2-203.
16-2-102. Repealed. Sec. 4, Ch. 47, L. 1983.

16-2-103. Duplicate invoices of sales required. (1) An agency liquor store shall, upon each sale of liquor or table wine to any licensee, issue a duplicate invoice of the liquor or table wine purchased, as provided by the department, a copy of which must be delivered to the licensee and one copy retained at the store.
(2) The invoice must show the date of purchase, the name of the employee making the sale, the quantity of each kind of liquor or table wine purchased, the price paid for the liquor or table wine, the name of the licensee, and the number of the license, with any other information that may be required by the department.
(3) The licensee shall keep and retain the duplicate invoice of all purchases made from an agency liquor store, which must at all times be subject to inspection by the duly authorized officers, agents, and employees of the department.
16-2-104. Hours. (1) Agency liquor stores may remain open during the period between 8
a.m. and 2 a.m. The stores must be closed for the transaction of business on legal holidays and between the close of normal business Saturday afternoon up to the opening of normal business Tuesday morning.
(2) (a) An agency liquor store may be open on Mondays that are not legal holidays if 51% of the all‑beverages licensees within the agency liquor store’s immediate market area sign a petition agreeing that agency liquor stores located within the immediate market area may be open on Mondays. The petition must be on a form prescribed by the department. The department shall verify the validity of the signatures on the petition. If the department determines that the petition contains sufficient valid signatures, all agency liquor stores within the designated market area must be allowed to transact business on Mondays that are not legal holidays. To determine the number of signatures needed, the department shall round up to the nearest whole number any fractional number of all‑beverages licensees.
(b) For the purposes of subsection (2)(a), immediate market area means:
(i) the city limits for stores located in incorporated cities or towns; and
(ii) the area contained within a 5‑mile radius from a store or stores located in unincorporated cities or towns or in a consolidated local government.
Legal holidays in Montana, 1‑1‑216.
16-2-105. Place and time of selling liquor. A liquor store agent and a person acting as an employee of or in any capacity for any agent may not sell liquor in any other place or at any other time or otherwise than as authorized by this code and the rules implementing this code.
16-2-106. Sales by agent. A liquor store agent may sell to any person any liquor and table wine that the person is entitled to purchase in conformity with the provisions of this code and the rules implementing this code. An agent may, under the terms and conditions that the agent establishes, deliver liquor and table wine purchased from the agent’s agency liquor store.
16-2-107. No open alcoholic beverage container or alcoholic beverage consumption on premises of agency store. An agent and the agent’s employees in an agency store may not allow any alcoholic beverage container to be opened on the premises of an agency liquor store or allow any alcoholic beverage to be consumed on the premises of an agency liquor store, nor may any person open an alcoholic beverage container or consume any alcoholic beverage in an agency liquor store.

16-2-108. Disposition of money received. (1) The department may purchase liquor from money deposited to its account in the enterprise fund. The department shall pay from its account in the enterprise fund its administrative expenses associated with the sale of liquor, subject to the limits imposed by legislative appropriation. An obligation created or incurred by the department may not be a debt or claim against the state of Montana but must be payable by the department solely from funds derived from the operation of state liquor sales. The department shall pay into the state treasury to the credit of the enterprise fund the receipts from the sale of liquor and all taxes collected by it. Taxes and the net proceeds from the operation of state liquor sales must be transferred to the general fund.
(2) All liquor license fees and permit fees collected by the department must be deposited into the department’s liquor enterprise fund.
(3) The department shall pay from its account in the liquor enterprise fund:
(a) expenses associated with administering liquor licensing and fee collection; and
(b) expenses associated with investigations pursuant to its agreement with the department of justice.
The net proceeds of the liquor enterprise fund must be transferred to the general fund. 16-2-109. Number and location of agency liquor stores. (1) (a) In a community with a population of 12,000 or less, there may be one agency liquor store. In communities with populations greater than 12,000, there may be one agency liquor store for the first 12,000 inhabitants and one additional agency liquor store within increments of population of 40,000 inhabitants above 12,000 inhabitants. In determining population, the department shall use the same methods used for determining increases in the retail license quota system as provided in 16-4-201.
(b) In communities that are eligible for more than one agency liquor store, an agency liquor store established after April 25, 1995, may not be located within a 1‑mile radius of any other agency liquor store in the community.
(2) An agency liquor store established after April 25, 1995, may not be located in a community that is closer than 35 miles to another community in which an agency liquor store is presently located, except in the circumstance when the most recent population estimates show a 25% growth in population or a growth of 1,000 inhabitants within a 2‑year period, whichever is greater, and when this population increase is reasonably expected to continue for at least 5 years.
Community defined, 16-1-106.
16-2-110. State lien on liquor in agency liquor stores. The state has a first lien with an absolute first priority to secure any outstanding amounts due the state for liquor purchased on any inventory, including any after‑acquired inventory in the possession of an agent or on the premises of an agency liquor store, to secure payment for the existing inventory. The state has the right to physically recover any inventory from an agency liquor store for any failure to timely make payments.
Liens — general provisions, Title 71, ch. 3, part 1.
Part 2 Price of Liquor
16-2-201. Reduction for quantity sales of liquor. A reduction of 8% of the posted price of liquor sold at an agency liquor store must be made for sales of liquor to a licensee purchasing

liquor in unbroken case lots. No other reduction below the posted price may be made for sales of liquor.
16-2-202. Repealed. Sec. 3, Ch. 690, L. 1985.
16-2-203. Sales to licensees. Agency liquor stores may sell to licensees licensed under this code all kinds of liquor and table wine at the posted price. All sales must be made on a cash basis. 16-2-204 through 16-2-210 reserved.
16-2-211. State liquor markup reduction — Montana‑produced ingredients.
(1) Based upon the percentage of Montana‑produced ingredients that are used in producing a liquor, the department shall reduce the liquor markup charged by the department in determining the wholesale price of the liquor. To qualify for a reduced markup, the liquor must have been manufactured, distilled, rectified, bottled, or processed by a distillery that produces 25,000 proof gallons or less of liquor nationwide annually. The reduction in the markup must be determined as follows:
Percent of Montana‑Produced Reduction in
Ingredients Markup
50% to 64% 50%
65% to 74% 75%
75% to 100% 100%
(2) For the purposes of this section, the liquor markup is the standard markup added to the department’s base case price used in determining the wholesale price of liquor for products other than fortified wine or sacramental wine and does not include the reduced markup that results from the department’s reduced prices for products designated for closeout or inventory reduction. The reduced markup must be applied to the standard liquor markup minus associated agency liquor store commissions and discount rate costs pursuant to 16-2-101 and costs of operating the central liquor warehouse and must be determined by the department on a yearly basis.
(3) (a) The percent of Montana‑produced ingredients is determined as a percentage of the total applicable dry and wet weights of all the fermentable and flavor ingredients used in the production of the liquor as provided by rule adopted by the department.
(b) For the purposes of this section, a Montana‑produced ingredient is an agricultural product, either processed or unprocessed, that in its unprocessed state was grown in Montana or, if it is a processed ingredient, that was processed in Montana from unprocessed agricultural products that were grown in Montana. Water is not an ingredient.

Part 3
Sale of Table Wine

Connoisseur’s licenses, Title 16, ch. 4, part 9.
16-2-301. Retail selling price on table wine — tax on certain table wine. (1) The retail selling price at which table wine is sold at an agency liquor store is as determined by the agent.
(2) In addition to the tax on wine assessed under 16-1-411, there is a tax of 1 cent a liter on table wine sold by a table wine distributor to an agent as described in subsection (1). This additional tax must be paid to the department by the distributor in the same manner as the tax under 16-1-411 is paid. The department shall deposit the tax paid under this section in the general fund.
(3) For the purposes of this section, “table wine” does not include hard cider.

Hard cider defined, 16-1-106.
16-2-302. Repealed. Sec. 41, Ch. 530, L. 1995.
16-2-303. Repealed. Sec. 41, Ch. 530, L. 1995.
Part 4 Conversion of Liquor Stores
(Repealed)
16-2-401. Repealed. Sec. 315, Ch. 42, L. 1997.
16-2-402. Repealed. Sec. 315, Ch. 42, L. 1997.
16-2-403. Repealed. Sec. 315, Ch. 42, L. 1997.
16-2-404. Repealed. Sec. 315, Ch. 42, L. 1997.
16-2-405. Repealed. Sec. 315, Ch. 42, L. 1997.
16-2-406. Repealed. Sec. 315, Ch. 42, L. 1997.
16-2-407. Repealed. Secs. 315(2), 316(2), Ch. 42, L. 1997.
16-2-408. Repealed. Sec. 315, Ch. 42, L. 1997.

CHAPTER 3
CONTROL OF LIQUOR, BEER, AND WINE

Part 1 Official Controls
16-3-101. Alcoholic beverage transactions — only in accordance with code. (1) A person who manufactures, imports, distributes, or sells alcoholic beverages or the person’s agent may not give or sell to any person within the state any alcoholic beverage except as may be permitted by and in accordance with the provisions of this code.
(2) (a) Except as otherwise provided by this code, a person or the person’s agent may not ship, transport, or consign or cause to be shipped, transported, or consigned:

(i) any alcoholic beverage to any person in this state who does not hold a valid wholesaler’s license or connoisseur’s license issued by the department; or
(ii) any liquor except to the state liquor warehouse.
(b) The prohibition in subsection (2)(a) includes alcoholic beverages ordered or purchased by telephone, computer, or other device, except by persons holding a valid connoisseur’s license provided for in 16-4-901.
(3) Except as otherwise provided by this code, alcoholic beverages shipped, transported, or consigned pursuant to subsection (2)(a) and intended for sale to any person not licensed under this code must be distributed by the licensed wholesaler to a licensed retailer for sale to the ultimate consumer.
Rulemaking procedure, Title 2, ch. 4, parts 1 through 3.
16-3-102. Repealed. Sec. 4, Ch. 47, L. 1983.
16-3-103. Unlawful sales solicitation or advertising — exceptions. (1) A person within the state may not:
(a) canvass for, receive, take, or solicit orders for the purchase or sale of any liquor or act as agent or intermediary for the sale or purchase of any liquor or be represented as an agent or intermediary unless permitted to do so under rules that are promulgated by the department to govern the activities;
(b) canvass for or solicit orders for the purchase or sale of any beer or malt liquor except in the case of beer proposed to be sold to beer licensees duly authorized to sell beer under the provisions of this code;
(c) exhibit, publish, or display or permit to be exhibited, published, or displayed any form of advertisement or any other announcement, publication, or price list of or concerning liquor or where or from whom the same may be had, obtained, or purchased unless permitted to do so by the rules of the department and then only in accordance with the rules.
(2) This section does not apply to:
(a) the department, any act of the department, any agency liquor store;
(b) the receipt or transmission of a telegram or letter by any telegraph agent or operator or post‑office employee in the ordinary course of employment as the agent, operator, or employee; or
(c) the sale and serving of beer in the grandstand and bleacher area of a county fairground or public sports arena under a special permit issued pursuant to 16-4-301 or a catering endorsement issued pursuant to 16-4-111 or 16-4-204.
Rulemaking procedure, Title 2, ch. 4, parts 1 through 3.
16-3-104. Common carriers to purchase beer from brewer, beer importer, or wholesaler. It shall be unlawful for the operator of any common carrier or its employees to make sale of or dispose of any beer or malt liquors except such as shall have been lawfully acquired or purchased from a duly licensed brewer, beer importer, or wholesaler.
Regulation of carriers of property, Title 69, ch. 11, part 4.
16-3-105. Restrictions on alcoholic beverages in hotels. Except in the case of alcoholic beverages kept or consumed in premises for which a license has been granted under the law and that form a part of a hotel, a person may not:

(1) keep or consume alcoholic beverages in any part of a hotel other than a private guest room;
(2) keep or have any alcoholic beverage in any room in a hotel unless the person is a bona fide guest of the hotel and is registered in the office of the hotel as an occupant of that room.
Licensing and regulation of hotels and motels, Title 50, ch. 51.
16-3-106. Conveyance of liquors, table wines, and beer — opening alcoholic beverages during transit forbidden. (1) It is lawful to carry or convey liquor or table wine to any agency liquor store and to and from the state liquor warehouse or any depot established by the department for the purposes of this code, and when permitted to do so by this code and the rules promulgated under this code, it is lawful for any common carrier or other person to carry or convey liquor or table wine sold by a vendor from an agency liquor store or to carry or convey beer, when lawfully sold by a brewer, from the premises where the beer was manufactured or from premises where the beer may be lawfully kept and sold to any place to which the liquor, table wine, or beer may be lawfully delivered under this code and the rules promulgated under this code.
(2) A common carrier or any other person may not open, break, or allow to be opened or broken any package or vessel containing an alcoholic beverage or drink or use or allow to be drunk or used any alcoholic beverage while being carried or conveyed.
Rulemaking procedure, Title 2, ch. 4, parts 1 through 3.
16-3-107. Resident representatives required. (1) For the purposes of this section, “vendor” means an individual or a partnership, association, or corporation that sells liquor to the department.
(2) A vendor who desires to promote the sale of the vendor’s product in the state shall employ at least one representative and, except as provided in subsection (3), may employ four additional representatives to promote the sale of the vendor’s product. A representative employed under this section must be a resident of the state or become a resident after employment. A representative may not be under the age of 21. The department may determine further registration requirements by rule.
(3) A vendor may employ an unlimited number of representatives if the representative is a direct employee, an owner, or an officer of the distillery and is not employed through an independent contractor.
Part 2
Regulation of Brewers, Beer Importers, and Beer Wholesalers
16-3-201. Possession, manufacture, importation, or disposal of beer in manner other than prescribed unlawful — personal brewing. (1) It is unlawful to manufacture, import, sell or dispose of, or possess for the purpose of sale beer of any kind or character of an alcoholic content greater than authorized or other than in the manner permitted by this code.
(2) This code does not prohibit the manufacture of beer, for personal or family use and not intended for sale, that meets the exemptions of 26 U.S.C. 5053(e) and regulations implementing that section, including the brewing of beer, for personal or family use, on premises other than those of the person brewing the beer.
Beer defined, 16-1-106.

16-3-202. Beer sale by department prohibited. The sale of beer by the department is hereby prohibited.
16-3-203 through 16-3-210 reserved.
16-3-211. Monthly report of brewer, beer importer, or retailer — inspection of books and premises. (1) Every brewer and every beer importer licensed to do business in this state shall, on or before the 15th day of each month, as prescribed by the department, make an exact return to the department of the amount of beer manufactured or imported by the brewer or importer, the amount sold by the brewer or importer in the previous month, and the inventory of the brewer or importer. The department may make an examination of any brewer’s or beer importer’s books and of the brewer’s or importer’s premises and otherwise check the accuracy of any return or check the alcoholic content of beer manufactured or imported by the brewer or importer.
(2) Every retailer licensed to do business in this state shall, on or before the 15th day of each month, as prescribed by the department, make an exact return to the department of the amount of beer purchased in the previous month directly from any brewery not located in the state of Montana.
Failure to make return — penalty, 16-1-409.
16-3-212. Brewers’ or beer importers’ sales to wholesalers lawful. A licensed brewer may sell or deliver beer manufactured by the brewer to any licensed wholesaler. A licensed beer importer may sell or deliver beer imported by the importer to any licensed wholesaler.
16-3-213. Brewers or beer importers not to retail beer — small brewery exceptions.
(1) Except as provided for small breweries in subsection (2), it is unlawful for any brewer or breweries or beer importer to have or own any permit to sell or retail beer at any place or premises. It is the intention of this section to prohibit brewers and beer importers from engaging in the retail sale of beer. This section does not prohibit breweries from selling and delivering beer manufactured by them, in original packages, at either wholesale or retail.
(2) (a) For the purposes of this section, a “small brewery” is a brewery that has an annual nationwide production of not less than 100 barrels or more than 60,000 barrels, including:
(i) the production of all affiliated manufacturers; and
(ii) beer purchased from any other beer producer to be sold by the brewery.
(b) A small brewery may, at one location for each brewery license and at no more than three locations including affiliated manufacturers, provide samples of beer that were brewed and fermented on the premises in a sample room located on the licensed premises. The samples may be provided with or without charge between the hours of 10 a.m. and 8 p.m. No more than 48 ounces of malt beverage may be sold or given to each individual customer during a business day. No more than 2,000 barrels may be provided annually for on‑premises consumption including all affiliated manufacturers.
(3) For the purposes of this section, “affiliated manufacturer” means a manufacturer of beer:
(a) that one or more members of the manufacturing entity have more than a majority share interest in or that controls directly or indirectly another beer manufacturing entity;
(b) for which the business operations conducted between or among entities are interrelated or interdependent to the extent that the net income of one entity cannot reasonably be determined without reference to operations of the other entity; or
(c) of which the brand names, products, recipes, merchandise, trade name, trademarks, labels, or logos are identical or nearly identical.

2017 Amendment: Chapter 271 in (2)(a) substituted “60,000 barrels, including” for “10,000 barrels” and inserted (2)(a)(i) and (2)(a)(ii) pertaining to affiliated manufacturers and beer purchased from other producer to be sold by the brewery; in (2)(b) near beginning after “each brewery license” inserted “and at no more than three locations including affiliated manufacturers” and inserted third sentence limiting on‑premises consumption to 2,000 barrels annually; inserted (3) defining affiliated manufacturer; and made minor changes in style. Amendment effective October 1, 2017.
16-3-214. Beer sales by brewers — sample room exception. (1) Subject to the limitations and restrictions contained in this code, a brewer who manufactures less than 60,000 barrels of beer a year, upon payment of the annual license fee imposed by 16-4-501 and upon presenting satisfactory evidence to the department as required by 16-4-101, must be licensed by the department, in accordance with the provisions of this code and rules prescribed by the department, to:
(a) sell and deliver beer from its storage depot or brewery to:
(i) a wholesaler;
(ii) licensed retailers if the brewer uses the brewer’s own equipment, trucks, and employees to deliver the beer and if:
(A) individual deliveries, other than draught beer, are limited to the case equivalent of 8 barrels a day to each licensed retailer; and
(B) the total amount of beer sold or delivered directly to all retailers does not exceed 10,000 barrels a year; or
(iii) the public;
(b) provide its own products for consumption on its licensed premises without charge or, if it is a small brewery, provide its own products at a sample room as provided in 16-3-213; or
(c) do any one or more of the acts of sale and delivery of beer as provided in this code.
(2) A brewery may not use a common carrier for delivery of the brewery’s product to the public or to licensed retailers.
(3) A brewery may import or purchase, upon terms and conditions the department may require, necessary flavors and other nonbeverage ingredients containing alcohol for blending or manufacturing purposes.
(4) An additional license fee may not be imposed on a brewery providing its own products on its licensed premises for consumption on the premises.
(5) This section does not prohibit a licensed brewer from shipping and selling beer directly to a wholesaler in this state under the provisions of 16-3-230.
Rulemaking procedure, Title 2, ch. 4, parts 1 through 3.
16-3-215 and 16-3-216 reserved.
16-3-217. Purposes. The legislature finds and declares that the purposes of 16-3-218 through 16-3-226 are to assure continued interbrand competition in malt beverage sales through competing independent wholesalers and to assure breweries the ability to protect the reputations of their products through quality control arrangements.
Malt beverage defined, 16-1-106.
Unfair trade practices generally, Title 30, ch. 14, part 2.
16-3-218. “Distribute” defined. As used in 16-3-219, 16-3-220, 16-4-103, and 16-4-108, “distribute” means to deliver beer or wine to a retailer’s premises licensed to sell beer, table wine, or sacramental wine.

16-3-219. Dock sales restricted. Beer or wine may not be delivered to a licensed retailer at any location other than the retailer’s licensed premises, except that a retailer located within the territory for which a wholesaler has been appointed to distribute a brand may personally or through an employee obtain from the wholesaler’s warehouse quantities of beer not exceeding three barrels in packaged or draft form. An all‑beverages licensee may upon presentation of the licensee’s license or a photocopy of the license personally obtain from any wholesaler’s warehouse the quantities of beer as the licensee and the wholesaler may agree to buy and sell.
16-3-220. Wholesalers’ service obligations — applicability. (1) A wholesaler appointed to distribute a brand of beer within a territory specified by agreement pursuant to 16-3-222 shall call on and offer that brand to at least 75% of the retailers within that territory at least every 3 weeks. However, if the brand of beer for which the wholesaler is appointed is a product of a brewer or beer importer whose products are not generally available, the wholesaler shall, at least every 3 weeks, call on and offer that brand to as many retailers within that territory as is reasonably possible given the amount of that brand that is available to the wholesaler.
(2) If a retailer’s account with a wholesaler is current as required under 16-3-243, the wholesaler may not refuse to sell the retailer any generally available brand of beer for which the wholesaler has been appointed for the territory in which the retailer is located. The wholesaler shall offer to deliver the beer to the retailer at least every 3 weeks.
(3) For the purposes of this section, a brewer or beer importer’s products are not generally available if:
(a) all of the brands of a brewer or beer importer shipped to a wholesaler during the most recent calendar quarter total less than 600 barrels;
(b) all of the brands of a brewer or beer importer shipped into the state total less than 1,200 barrels in each of the 2 consecutive preceding calendar quarters; and
(c) all of the brands produced by the brewer at all of its facilities total less than 150,000 barrels per year.
(4) This section applies to all beer distribution agreements entered into, assigned, or amended after July 1, 1986. It does not apply to a distribution agreement for a named brand entered into before July 1, 1986, but does not prohibit a brewer who is a party to an agreement from requiring the appointed wholesaler to fulfill similar service obligations in the territory.
16-3-221. Illegal acts by brewers or beer importers. (1) It is unlawful for any brewer or beer importer or any officer, agent, or representative of any brewer or beer importer to:
(a) coerce, attempt to coerce, or persuade any person licensed to sell beer at wholesale to enter into any agreement or to take any action that would violate or tend to violate any of the laws of this state or any rules promulgated by the department;
(b) sell its products in the state without a written contract, which conforms to the provisions of 16-3-221 through 16-3-226, with each appointed licensed wholesale distributor;
(c) designate or allow more than one wholesale distributor to sell or distribute a specific brand of the brewer’s or beer importer’s products to retail licensees in the same area, provided that nothing in this part prohibits the brewer or beer importer from designating more than one wholesale distributor to sell or distribute different brands of the same manufacturer to retail licensees in the same area;
(d) fix or maintain the price at which a wholesale distributor resells the brewer’s or beer importer’s products. Without limitation, it is a violation of this section if:
(i) after a wholesale distributor has exceeded a resale price increase recommended by a brewer or beer importer, the brewer or beer importer raises the price that it charges the wholesale distributor for those products within 60 days;
(ii) after a wholesale distributor has exceeded a resale price increase recommended by a brewer or beer importer, the brewer or beer importer raises the price that it charges the wholesale distributor in an amount proportionately larger than the amount that it raised the wholesale distributor’s prices initially when compared to the increase in the resale price that it recommended to the wholesale distributor; or

(iii) the brewer or beer importer links or ties its participation in promotional discounts to the wholesale distributor’s compliance with any recommended resale price.
(e) cancel, terminate, discontinue, or fail to renew, except for just cause and in accordance with the current terms and standards established by the brewer or beer importer then equally applicable to all wholesalers, any agreement or contract, written or oral, or the franchise of any wholesaler existing on January 1, 1974, or entered into after that date to sell beer manufactured by the brewer or imported by the beer importer. A brewer or beer importer may, notwithstanding the preceding sentence, make reasonable classifications among wholesalers. If a brewer or beer importer cancels or terminates a wholesaler’s franchise, the brewer or beer importer has the burden of proving that the classification was reasonable and not arbitrary. The provisions of 16-3-221 through 16-3-226 must be a part of any franchise, contract, agreement, or understanding, whether written or oral, between any wholesaler of beer licensed to do business in this state and any manufacturer or beer importer doing business with the licensed wholesaler just as though the provisions had been specifically agreed upon between the wholesaler and the manufacturer or beer importer. A wholesaler of beer licensed to conduct business in the state may not waive any of the protections or agree to any provision contrary to 16-3-221 through 16-3-226 by any conduct, including but not limited to the signing of any contract or agreement with terms contrary to those provisions.
(2) (a) Just cause as used in subsection (1)(e) means that the wholesaler failed to comply
with the reasonable requirements placed on the wholesaler by the brewer or beer importer as a part of any written franchise, contract, or agreement between the parties.
(b) The sale or purchase or other restructuring of the brewer or beer importer by a successor in the manufacturing tier of the beer industry does not constitute just cause as that term is used in subsection (1)(e).
(c) For the purposes of this subsection (2), a successor means a person or entity who replaces a brewer or beer importer with regard to the right to manufacture, sell, distribute, or import a brand or brands of beer regardless of the character or form of the succession. A successor is obligated to all of the terms and conditions of any franchise, contract, agreement, or understanding, whether written or oral, in effect on the date of succession. A successor has the right to contractually require its wholesalers to comply with operational standards of performance if the standards are uniformly established for all of the successor’s wholesalers and conform to the requirements of this section.
Unfair trade practices generally, Title 30, ch. 14, part 2.
16-3-222. Mandatory provisions of brewer‑wholesaler or beer importer‑wholesaler contracts, agreements, and franchises. All contracts, agreements, or franchises between a brewer and a wholesaler or a beer importer and a wholesaler must specifically set forth or contain the following:
(1) that the brewer or beer importer or any officer, agent, or representative of any brewer or beer importer and the wholesaler involved mutually shall determine the size or extent of the area in which the wholesaler may sell or distribute the products of the brewer or beer importer to the retail licensees. The territory must be the territory agreed upon between the wholesaler and brewer or the wholesaler and beer importer and may not be changed without the mutual consent of both the wholesaler and brewer or the wholesaler and beer importer.
(2) the agreed‑upon brands of the brewer or beer importer to be sold by the wholesaler;
(3) that the brewer or beer importer recognizes that the wholesaler is free to manage the wholesaler’s business in the manner that the wholesaler considers best and that this prerogative vests in the wholesaler the exclusive right to establish selling prices, to select the brands that the wholesaler wishes to handle, and to determine the effort and resources that the wholesaler will exert to develop and promote the sale of the brewer’s or beer importer’s products handled by the wholesaler;
(4) a procedure for the review of alleged wholesaler deficiencies asserted by the brewer or beer importer to constitute just cause as provided in 16-3-221, including the submission in

writing to the wholesaler by the brewer or beer importer of the deficiencies, if the deficiencies are susceptible of correction and if the wholesaler desires to correct the deficiencies, and that a reasonable period of time must be given the wholesaler for rectification of the deficiencies prior to any notice of intent to terminate;
(5) a termination clause providing that the brewer or beer importer shall deliver, in writing, to the wholesaler a 60‑day notice of intent to terminate the agreement, contract, or franchise;
(6) that all agreements between a brewer and a wholesaler are interpreted and governed by the laws of Montana and that those laws must be liberally construed to effectuate the remedial purpose of the protections of the beer franchise law contained in 16-3-221 through 16-3-226;
(7) that in any dispute resulting in litigation between a brewer or a beer importer and a wholesaler, the litigation must occur in a Montana court, either federal or state, unless that forum would create an unreasonable burden on any party, as determined by the court in which the litigation is commenced;
(8) that all agreements between a brewer or a beer importer and a wholesaler must recognize the constitutional right to a jury trial as set forth in Article II, section 26, of the Montana constitution.
16-3-223. Transfer of wholesaler’s interest in business. A wholesaler may sell or transfer the business or an interest in the business to any person or to one or more members of the wholesaler’s family or heirs or legatees, whether the wholesaler operates as an individual, a partnership, or corporation. However, the consent of the brewer or beer importer in writing is required for the transferee to continue as a wholesaler of the brewer or beer importer. The consent must consider the personal, financial, and managerial responsibilities and capabilities of the transferee, and the consent may not unreasonably be withheld.
16-3-224. Contractual or franchise relationship — existence by actions. The doing or accomplishing of any of the following acts constitutes prima facie evidence of a contractual or franchise relationship between a licensed wholesaler and a brewer or beer importer within the contemplation of 16-3-221 through 16-3-226:
(1) the shipment, preparation for shipment, or acceptance of any order by any brewer or beer importer or its agent for any beer to a licensed wholesaler within this state;
(2) the payment by any licensed wholesaler within this state or the acceptance of payment by any brewer or beer importer or its agent for the shipment of an order of beer intended for sale within this state.
16-3-225. Injunction to prevent franchise cancellation. Any court of competent jurisdiction may enjoin the cancellation or termination of a franchise or agreement between a wholesaler and a brewer or between a wholesaler and a beer importer at the instance of a wholesaler who is or would be adversely affected by the cancellation or termination. In granting an injunction, the court shall provide that the brewer or beer importer shall not supply the customers or territory of the wholesaler who is servicing the territory or customers through other distributors or means while the injunction is in effect.
Injunctions, Title 27, ch. 19.
Regulation of carriers of property, Title 69, ch. 11, part 4.
16-3-226. Brewer‑wholesaler or beer importer‑wholesaler agreements filed with department. An exact copy of all agreements, contracts, or franchises between a brewer or beer importer and a wholesaler shall be filed with the department as a public document and shall be available to any of the parties to a dispute. The department, upon the instigation of any action in a court of record, shall file an exact certified copy of the agreement with the court for the court’s

consideration in determining any matter before it. Any contracts, agreements, or franchises not upon record with the department shall not be considered by any court as having any force or effect.
16-3-227 through 16-3-229 reserved.
16-3-230. Beer required to be shipped to wholesaler. Except as provided in 16-3-214, all beer that is to be distributed in Montana, whether manufactured outside of or within the state of Montana, must be consigned to and shipped, either directly or via a licensed storage depot, to a licensed wholesaler and unloaded into the wholesaler’s warehouse in Montana or subwarehouse in Montana. A brewer or beer importer may sell only to wholesalers from a storage depot in Montana and shall maintain records of all beer, including the name or kind received, on hand, and sold. The records may at any time be inspected by a representative of the department. The wholesaler shall distribute the beer from the warehouse or subwarehouse and shall keep records at the wholesaler’s principal place of business of all beer, including the name or kind received, on hand, sold, and distributed. The records may be inspected by a representative of the department at any time.
16-3-231. Monthly report of wholesaler. Every wholesaler licensed to do business in this state shall, on or before the 15th day of each month, in the manner and form prescribed by the department, make an exact return to the department of the amount of beer manufactured in this state sold and delivered by the wholesaler and also of the amount of beer manufactured in places outside of the state sold and delivered by the wholesaler during the previous month and of the wholesaler’s inventory. The department may at any time make an examination of the wholesaler’s books and premises and otherwise check the accuracy of the return or check the alcoholic content of beer on hand.
Penalty for inadequate return or failure to file, 16-1-409.
16-3-232. Beer sales by wholesaler. A wholesaler may sell and deliver beer purchased or acquired by the wholesaler to a wholesaler, retailer, or common carrier licensed under this code. 16-3-233. Sales to public by wholesaler unlawful. A wholesaler may not give, sell, deliver, or distribute any beer purchased or acquired by the wholesaler to the public.
16-3-234. Consumption of beer on wholesalers’ premises unlawful. It shall be unlawful for any wholesaler to sell, serve, or give away any beer to be consumed on such wholesaler’s premises.
16-3-235. Carriers’ reports of beer transported. Every railroad and every motor carrier transporting beer manufactured out of this state from points without this state and delivering the same to points within this state shall, if requested by the department, on or before the 15th day of each month, make an exact return to the department of the amount of such beer so transported and delivered by such railroad or motor carrier during the previous month and shall state in such return the name and address of the consignor, the name and address of the consignee, the date of delivery, and the amount delivered. A carrier shall retain for 30 months

all pertinent and relevant records necessary for the preparation of this report and any other information the department may require.
16-3-236 through 16-3-240 reserved.
16-3-241. Furnishing of fixtures or interior advertising matter to retailers by brewers, beer importers, and wholesalers unlawful — exceptions. (1) (a) It is unlawful for any brewer, beer importer, or wholesaler to lease, furnish, give, or pay for any premises, furniture, fixtures, equipment, or any other advertising matter or any other property to a retail licensee, used or to be used in the dispensation of beer in and about the interior of the place of business of the licensed retailer, or to furnish, give, or pay for any repairs, improvements, or painting on or within the premises.
(b) It is lawful for a brewer, beer importer, or wholesaler to furnish, give, or loan to a retail licensee:
(i) bottle openers, can openers, trays, tap handles, menus, apparel, coasters, glassware, cups, napkins, or other functional advertising matter that does not exceed $300 in value in any 1 calendar year to any one retail establishment for display use within the interior of the retail establishment;
(ii) not more than six illuminated or electrical signs, neon signs, lamps, or lighted clocks for each brand of beer in any 1 calendar year to any one retailer for display use within the interior of the retailer’s place of business. These signs, displays, lamps, or lighted clocks may bear the name, brand name, trade name, trademark, or other designation indicating the name of the manufacturer of beer and the place of manufacture. Any beer advertised must be available for sale on the retailer’s premises at the time the displays are used unless the displays are the property of the retailer or, if supplied by a brewer, beer importer, or wholesaler, a display has been in the retailer’s possession for more than 9 months.
(iii) permanent or temporary advertising matter of a decorative nature, excluding items described in subsection (1)(b)(ii) but including nonelectric clocks, mirrors, banners, flags, and pennants; and
(iv) maintenance or repair services on draft beer equipment to keep it sanitary and in good working condition.
(2) A wholesaler may furnish portable equipment used for the temporary cooling, handling, and dispensing of beer to a special permittee or a retailer for use:
(a) in catering an event that is off the permittee’s or retailer’s regular premises; or
(b) up to three times a year, on a retailer’s regular premises, for a period not to exceed 72 hours.
Beer advertising limits, 16-3-244.
16-3-242. Financial interest in retailers prohibited. A brewer, beer importer, or wholesaler may not advance or loan money to or furnish money for or pay for or on behalf of any retailer any license or tax that may be required to be paid for any retailer. A brewer, beer importer, or wholesaler may not be financially interested, either directly or indirectly, in the conduct or operation of the business of a retailer. A brewer, beer importer, or wholesaler is considered to have a financial interest within the meaning of this section if:
(1) the brewer, beer importer, or wholesaler owns or holds any interest in or a lien or mortgage against the retailer or the retailer’s premises;
(2) the brewer, beer importer, or wholesaler is under any contract with a retailer concerning future purchases or the sale of merchandise by one from or to the other; or
(3) any retailer holds an interest, as a stockholder or otherwise, in the business of the wholesaler.

16-3-243. Seven‑day credit limitation. No sale or delivery of beer shall be made to any retail licensee except for cash paid within 7 days after the delivery thereof, and in no event shall any brewer, beer importer, or wholesaler extend more than 7 days’ credit on account of such beer to a retail licensee, nor shall any retail licensee accept or receive delivery of such beer without agreement to pay in cash therefor within 7 days from delivery thereof. A correctly dated check which is honored upon presentment shall be considered as cash within the meaning of this code. Any extension or acceptance of credit in violation hereof shall be regarded and construed as rendering or receiving financial assistance, and the licenses of brewers, beer importers, wholesalers, and retail licensees involved in violation hereof shall be suspended or revoked, as determined by the department in its discretion.
16-3-244. Beer advertising limitations. It is lawful to advertise beer, as defined and regulated, subject to the restrictions on brewers and beer importers contained in 16-3-241 of this code and subject to the following restrictions on retailers. A retail licensee may not display or permit to be displayed on the exterior portion or surface of the retailer’s place of business or on the exterior portion or surface of any building of which the place of business is a part or on any premises adjacent to the place of business, whether any of the premises are owned or leased by the retailer, any sign, poster, or advertisement bearing the name, brand name, trade name, trademark, or other designation indicating the manufacturer, brewer, beer importer, wholesaler, or place of manufacture of any beer, unless it is on a marquee, board, or other space used for temporary advertisements and is not displayed for more than 10 days per display period.
Part 3
Retail Sales Restrictions
16-3-301. Unlawful purchases, transfers, sales, or deliveries — presumption of legal age. (1) It is unlawful for a licensed retailer to purchase or acquire beer or wine from anyone except a brewery, winery, or wholesaler licensed under the provisions of this code.
(2) It is unlawful for a licensed retailer to transport beer or wine from one licensed premises or other facility to any other licensed premises owned by the licensee.
(3) It is unlawful for a licensed wholesaler to purchase beer or wine from anyone except a brewery, winery, or wholesaler licensed or registered under this code.
(4) It is unlawful for any licensee, a licensee’s employee, or any other person to sell, deliver, or give away or cause or permit to be sold, delivered, or given away any alcoholic beverage to:
(a) any person under 21 years of age; or
(b) any person actually, apparently, or obviously intoxicated.
(5) Any person under 21 years of age or any other person who knowingly misrepresents the person’s qualifications for the purpose of obtaining an alcoholic beverage from the licensee is equally guilty with the licensee and, upon conviction, is subject to the penalty provided in 45‑5‑624. However, nothing in this section may be construed as authorizing or permitting the sale of an alcoholic beverage to any person in violation of any federal law.
(6) All licensees shall display in a prominent place in their premises a placard, issued by the department, stating fully the consequences for violations of the provisions of this code by persons under 21 years of age.
(7) For purposes of 45‑5‑623 and this title, the establishment of the following facts by a person making a sale of alcoholic beverages to a person under the legal age constitutes prima facie evidence of innocence and a defense to a prosecution for sale of alcoholic beverages to a person under the legal age:
(a) the purchaser falsely represented and supported with documentary evidence that an ordinary and prudent person would accept that the purchaser was of legal age to purchase alcoholic beverages;
(b) the appearance of the purchaser was such that an ordinary and prudent person would believe the purchaser to be of legal age to purchase alcoholic beverages; and

(c) the sale was made in good faith and in reasonable reliance upon the representation and appearance of the purchaser that the purchaser was of legal age to purchase alcoholic beverages. (See compiler’s comments for contingent termination of certain text.)
HContingent Termination Date: Section 9(2), Ch. 217, L. 1987, read: “If the United States congress repeals or removes or a final judgment invalidates the provisions of federal law that require states to raise the legal age for purchasing and possessing alcoholic beverages to 21 as a condition of full receipt of federal highway funds, the governor of Montana shall immediately certify the fact of the repeal, removal, or invalidation to the secretary of state of Montana. This act terminates on the date of such certification.”
Legislative authority to enact age restriction, Art. II, sec. 14, Mont. Const. Giving or receiving liquor as bribe to influence voting, 13‑35‑214, 13‑35‑215. Providing alcoholic beverage to intoxicated person, 16-6-304.
Providing alcoholic beverage to person under 21 years of age, 16-6-305. Penalties, 16-6-314.
Liability for injuries involving alcohol consumption, 27‑1‑710. Bartenders and waitresses to be at least 18 years of age, 39‑2‑306.
Criminal offense — selling or giving alcoholic beverages to minors, 45‑5‑623.
16-3-302. Sale by retailer for consumption on premises. (1) It is lawful for a licensed retailer to sell and serve beer, either on draught or in containers, to the public to be consumed on the premises of the retailer.
(2) It is lawful for a licensee who has an all‑beverages license that the licensee uses at a golf course to sell alcoholic beverages and for a licensee who has a golf course beer and wine license issued under 16-4-109 to sell beer and wine:
(a) in the building or other structural premises constituting the clubhouse or primary indoor recreational quarters of the golf course; and
(b) at any place within the boundaries of the golf course, from a portable satellite vehicle or other movable satellite device that is moved from place to place, whether inside or outside of a building or other structure.
(3) It is lawful to consume alcoholic beverages sold as provided in subsection (2) at any place within the boundaries of the golf course, whether inside or outside of a building or other structure.
16-3-303. Sale of beer by retailer for consumption off premises. It is lawful for an on‑premises retailer to sell or furnish beer to the public in its original package or in growlers, and the beer must be taken away from the premises of the retailer for consumption off the premises of the retailer. Growlers may not be filled in advance of sale and may be furnished by the consumer.
16-3-304. Closing hours for licensed retail establishments. Except as provided in 16-3-305, all licensed establishments wherein alcoholic beverages are sold, offered for sale, or given away at retail shall be closed each day between 2 a.m. and 8 a.m.; provided, however, that when any municipal incorporation has by ordinance further restricted the hours of sale of alcoholic beverages, then the sale of alcoholic beverages is prohibited within the limits of any such city or town during the time such sale is prohibited by this code and in addition thereto during the hours that it is prohibited by such ordinance. During such hours all persons except

the alcoholic beverage licensee and employees of such licensed establishment shall be excluded from the licensed premises.
16-3-305. Sale of alcoholic beverages during closed hours unlawful — lawful business need not be closed. During the hours when the licensed establishments where alcoholic beverages are sold at retail are required by this code to be closed, it shall be unlawful to sell, offer for sale, give away, consume, or allow the consumption of alcoholic beverages. When an establishment licensed to sell alcoholic beverages is operated in conjunction with a hotel, restaurant, bus depot, railway terminal, grocery store, pharmacy, or other lawful business other than that of the sale of alcoholic beverages, then such other lawful business need not be closed. 16-3-306. Proximity to churches and schools restricted. (1) Except as provided in subsections (2) through (4), a retail license may not be issued pursuant to this code to any business or enterprise whose premises are within 600 feet of and on the same street as a building used exclusively as a church, synagogue, or other place of worship or as a school other than a commercially operated or postsecondary school. This distance must be measured in a straight line from the center of the nearest entrance of the place of worship or school to the nearest entrance of the licensee’s premises. This section is a limitation upon the department’s licensing authority.
(2) However, the department may renew a license for any establishment located in violation of this section if the licensee does not relocate an entrance any closer than the existing entrances and if the establishment:
(a) was located on the site before the place of worship or school opened; or
(b) was located in a bona fide hotel, restaurant, or fraternal organization building at the site since January 1, 1937.
(3) Subsection (1) does not apply to licenses for the sale of beer, table wine, or both in the original package for off‑premises consumption.
(4) Subsection (1) does not apply within the applicable jurisdiction of a local government that has supplanted the provisions of subsection (1) as provided in 16-3-309.
Application of this section to sales under catering endorsement, 16-4-204.
16-3-307. Sale of liquor at less than posted price unlawful. Except as provided in 16-2-201, it is unlawful for a licensee under the provisions of this code to resell liquor purchased by the licensee from an agency liquor store for a sum less than the posted price established by the department.
16-3-308. Refilling of liquor bottles prohibited. (1) No person, or the agent or employee of such person, who sells or offers liquor for sale may:
(a) place in any liquor bottle any liquor whatsoever other than that contained in such bottle at the time of stamping by the federal government;
(b) possess any liquor bottle in which any liquor has been placed in violation of subsection (1)(a);
(c) by the addition of any substance whatsoever to any liquor bottle, in any manner alter or increase any portion of the original contents contained in such bottle at the time of stamping by the federal government; or
(d) possess any liquor bottle, any portion of the contents of which has been altered or increased in violation of subsection (1)(c).
(2) This section does not prohibit any reuse of liquor bottles which is permitted under laws or regulations of the federal government.

Consumer Protection Act, Title 30, ch. 14, part 1.
16-3-309. Sales prohibited by ordinance. (1) An incorporated city may enact an ordinance defining certain areas in its incorporated limits where alcoholic beverages may or may not be sold.
(2) A county may enact an ordinance or resolution defining certain areas in the county, not within the incorporated limits of a city, where alcoholic beverages may or may not be sold.
(3) In enacting such an ordinance or resolution, the county or city may provide that the provisions of 16-3-306(1) do not apply within the jurisdictional area of the ordinance or resolution. If a county or city has supplanted the provisions of 16-3-306(1), upon request of the department the governing body of the county or city must certify to the department whether or not the person or individual identified in the request may lawfully sell alcoholic beverages under the terms of the ordinance or resolution. The department is bound by the determination set forth in the certification.
(4) No county or incorporated city may by ordinance restrict the number of licenses that the department may issue.
Denial of license for premises within prohibited zone, 16-4-405. County and municipal planning and zoning, Title 76, ch. 2.
16-3-310. Lapse of license for nonuse. Any retail license issued pursuant to this code (including any retail license to sell beer and table wine for off‑premises consumption) not actually used in a going establishment for 90 days shall automatically lapse. Upon determining the fact of nonuse for such period, the department shall cancel such license of record and no portion of the fee paid therefor shall be refundable. The provisions of this section shall not apply to the license of any licensee whose premises are operated on a seasonal basis in connection with a bona fide dude ranch, resort, park hotel, tourist facility, or like business, provided such licensee has secured written authority from the department to close and has licensed premises for a specified period of greater than 90 days’ duration. Should the department determine that such lapse was reasonably beyond the control of the licensee, then the lapse provision shall not apply.
16-3-311. Suitable premises for licensed retail establishments. (1) A licensed retailer may use a part of a building as premises licensed for on‑premises consumption of alcoholic beverages. The premises must be separated from the rest of the building by permanent walls but may have inside access during lawful hours of operation to the rest of the building even if the businesses or uses in the other part of the building are unrelated to the operation of the premises in which the alcoholic beverages are served.
(2) A licensee whose premises did not meet the requirements of this section on September 24, 1992, shall meet the requirements when an alteration to the premises has been completed and the department has approved the alteration. An alteration is any structural change in a premises. A cosmetic change, such as painting, carpeting, or other interior decorating, is not considered an alteration under this section.
16-3-312 through 16-3-315 reserved.
16-3-316. Fundraising events for nonprofit and tax‑exempt organizations. (1) A nonprofit organization governed under Title 35, chapter 2, or an organization designated as tax‑exempt under the provisions of section 501(c) of the Internal Revenue Code, 26 U.S.C. 501(c), as amended, may raffle or auction alcoholic beverages at fundraising events. Any alcoholic beverage raffled or auctioned must be given by the organization to the raffle or auction winner sealed in its original package.
(2) If the fundraising event is held on the premises of a business licensed under this code or on premises for which a permit has been issued under this code, the alcoholic beverage may not

be consumed on the premises. An alcoholic beverage that is on a licensee’s premises solely for a fundraising event under this section does not constitute a violation by the licensee of 16-3-301(1) or 16-6-303.
(3) A nonprofit or tax‑exempt organization may hold no more than four events per calendar year at which alcoholic beverages are raffled or auctioned. The duration of each event must be announced at the time any raffle tickets are sold or auction bids are received. Raffles and auctions held pursuant to this section must be to directly support bona fide charitable, nonprofit, or tax‑exempt activities.
(4) An alcoholic beverage for raffle or auction must be:
(a) acquired, whether by purchase or donation, by the organization from a retailer licensed under the provisions of this code, excluding a restaurant beer and wine licensee;
(b) purchased by the organization from an agency liquor store at not less than the posted price; or
(c) received by the organization as a donation at no cost to the organization from any other person except one licensed as a wholesaler or distributor under this code.
(5) No proceeds from the raffle or auction of alcoholic beverages may go to anyone who provided the alcoholic beverages to the organization for the raffle or auction.
(6) For a raffle or auction described in subsection (1), raffle tickets may not be sold to, and auction bids may not be solicited or received from, any person under 21 years of age. The organization raffling or auctioning alcoholic beverages may not sell, deliver, or give away any alcoholic beverage to a person under 21 years of age or to any person actually, apparently, or obviously intoxicated.
(7) As used in this section:
(a) “auction” means the sale of an item or items, which may include alcoholic beverages, whereby the item for sale is sold to the highest bidder at the bid price. An auctioned item or items may have a reserve price.
(b) “raffle” means an event in which a nonprofit or tax‑exempt organization sells tickets and each ticket gives the purchaser of the ticket the chance to win a prize, which may include alcoholic beverages, with the winner determined by a random drawing.
16-3-317 through 16-3-320 reserved.
16-3-321. Keg identification tag. (1) A licensee may not sell a keg of beer unless an identification tag is attached to the keg by the licensee.
(2) An identification tag must consist of paper, plastic, metal, or durable material that is not easily damaged or destroyed. An identification tag may be attached to a keg at the time of sale with a nylon tie or cording, wire tie or other metal attachment device, or other durable means of tying or attaching the tag to the keg.
(3) The identification information contained on the tag must include:
(a) the licensee’s name, address, and telephone number; and
(b) a prominently visible warning that intentional removal or defacement of the tag is a criminal offense.
(4) A retailer that accepts the return of a keg that does not have an identification tag attached shall obtain the information required in 16-3-322 on the original purchaser, to the extent possible, and obtain the same information on the person returning the keg. This information must be kept on file with the retailer for not less than 45 days from the date of return.
(5) A person, other than the licensee, the wholesaler of malt beverages, or a law enforcement officer, may not intentionally remove identification placed on a keg in compliance with this section.
(6) For the purposes of 16-3-321 through 16-3-324, the following definitions apply:
(a) “Keg” means a brewery‑sealed, single container that contains not less than 7 gallons of beer.
(b) “Licensee” means a person who is licensed under Title 16, chapter 4, and who sells kegs to a consumer.
(7) The department shall develop and make available the identification tags required by this section.

16-3-322. Recordkeeping. (1) A licensee, at the time of the sale of a keg, shall record the following:
(a) the purchaser’s name, address, and date of birth and the number of the purchaser’s driver’s license, state‑issued or military identification card, tribal identification card, or valid United States or foreign passport;
(b) the date of purchase;
(c) the name of the clerk making the sale; and
(d) the purchaser’s signature and date of purchase.
(2) The licensee shall maintain the record for not less than 45 days after the date of the sale.
(3) A licensee who maintains the records required by this section shall make the records available during regular business hours for inspection by law enforcement pursuant to 16-3-323.
16-3-323. Enforcement. (1) A law enforcement officer may not request information on file about the original purchaser of a keg unless in connection with a violation of 16-6-305, 45‑5‑623, or 45‑5‑624(4). The officer shall return any recovered keg to the licensee and verify the information on file about the original purchaser.
(2) The deposit on the keg and any related deposit to the licensee must be forfeited by the original purchaser.
16-3-324. Violations. (1) A person who knowingly fails to attach a keg tag as provided in 16-3-321 is guilty of a misdemeanor and shall be fined an amount not to exceed $100.
(2) A person may not remove, deface, or damage the identification on a keg purposely to make it unreadable. A person convicted of purposely removing, defacing, or damaging a tag shall be fined an amount not to exceed $500 or be imprisoned in the county jail for not more than 6 months, or both.
Part 4
Sale of Table Wine
Connoisseur’s licenses, Title 16, ch. 4, part 9.
16-3-401. Short title — public policy — purpose. (1) This part may be cited as the “Wine Distribution Act”.
(2) The public policy of the state of Montana is to maintain a system to provide for, regulate, and control the acquisition, importation, and distribution of table wine.
(3) This part governs wineries, table wine distributors, and wine retailers.
16-3-402. Importation of wine — records. (1) Except as provided in 16-3-411, 16-4-313, and Title 16, chapter 4, part 11, all table wine manufactured outside of Montana and shipped into Montana must be consigned to and shipped to a licensed table wine distributor and be unloaded by the distributor into the distributor’s warehouse in Montana or subwarehouse in Montana. The distributor shall distribute the table wine from the warehouse or subwarehouse.
(2) The distributor shall keep records at the distributor’s principal place of business of all table wine, including the name or kind received, on hand, sold, and distributed. The records may at all times be inspected by the department.
(3) Table wine that has been shipped into Montana in violation of this code must be seized by any peace officer or representative of the department and may be confiscated in the manner as provided for the confiscation of intoxicating liquor.
Search, seizure, and forfeiture of liquor, 16-6-102 through 16-6-107.
16-3-403. To whom table wine distributor may sell. (1) A table wine distributor may sell and deliver table wine purchased or acquired by the distributor to:

(a) another table wine distributor, retailer, or common carrier that holds a license issued by the department of revenue; and
(b) an agency liquor store.
(2) It is unlawful for any table wine distributor to sell, deliver, or give away any table wine to be consumed on the distributor’s premises or to give, sell, deliver, or distribute any table wine purchased or acquired by the distributor to the public.
Delivery of wine by table wine distributor at place other than retailer’s licensed premises forbidden, 16-3-219.
16-3-404. Monthly report of table wine distributor and retailer. (1) Each licensed table wine distributor shall, on or before the 15th day of each month, make an exact return to the department of revenue reporting the amount of table wine purchased or acquired by the distributor during the previous month, the amount of table wine sold and delivered by the distributor during the previous month, and the amount of inventory on hand in the manner and form prescribed by the department. The department has the right at any time to make an examination of the table wine distributor’s books and premises and otherwise check the accuracy of the return or check the alcoholic content of table wine that the distributor may have on hand.
(2) Each wine retailer licensed to do business in this state shall, on or before the 15th day of each month, in the manner and form prescribed by the department, make a return to the department reporting the amount of wine purchased directly from any out‑of‑state winery in the previous month.
16-3-405. Carriers’ reports of table wine transported. Every railroad, motor carrier, and airline transporting table wine manufactured out of this state from points outside this state and delivering to points within this state shall, if requested by the department, on or before the fifteenth day of each month, make an exact return to the department of revenue of the amount of such table wine so transported and delivered by such railroad, motor carrier, or airline during the previous month, and shall state in such return the name and address of the consignor and consignee, the date of delivery, and the amount delivered. A carrier shall retain for 30 months all pertinent and relevant records necessary for the preparation of this report and any other information the department may require.
16-3-406. Financial interest in retailers prohibited. (1) A winery or table wine distributor may not advance or loan money to, or furnish money for, or pay for or on behalf of any retailer any license or tax that may be required to be paid by any retailer, and a winery or table wine distributor may not be financially interested, either directly or indirectly, in the conduct or operation of the business of a retailer.
(2) A winery or table wine distributor is considered to have a financial interest if:
(a) the winery or table wine distributor owns or holds any interest in or a lien or mortgage against the retailer or the retailer’s premises; or
(b) the winery or table wine distributor is under any contract with a retailer concerning future purchases or the sale of merchandise by one from or to the other; or
(c) the table wine distributor extends more than 7 days’ credit to a retail licensee or furnishes to any retail licensee any furniture, fixtures, or equipment to be used in the dispensation or sale of table wine; or
(d) any retailer holds an interest as a stockholder, or otherwise, in the business of the table wine distributor.
16-3-407 through 16-3-410 reserved.
16-3-411. Winery. (1) A winery located in Montana and licensed pursuant to 16-4-107 may:
(a) import in bulk, bottle, produce, blend, store, transport, or export wine it produces;
(b) sell wine it produces at wholesale to wine distributors;
(c) sell wine it produces at retail at the winery directly to the consumer for consumption on or off the premises;

(d) provide, without charge, wine it produces for consumption at the winery;
(e) purchase from the department or its licensees brandy or other distilled spirits for fortifying wine it produces;
(f) obtain a special event permit under 16-4-301;
(g) perform those operations and cellar treatments that are permitted for bonded winery premises under applicable regulations of the United States department of the treasury;
(h) sell wine at the winery to a licensed retailer who presents the retailer’s license or a photocopy of the license; or
(i) obtain a direct shipment endorsement to ship table wine as provided in Title 16, chapter 4, part 11, directly to an individual in Montana who is at least 21 years of age.
(2) (a) A winery licensed pursuant to 16-4-107 may sell and deliver wine produced by the winery directly to licensed retailers if the winery:
(i) uses the winery’s own equipment, trucks, and employees to deliver the wine and the wine delivered pursuant to this subsection (2)(a)(i) does not exceed 4,500 cases a year;
(ii) contracts with a licensed table wine distributor to ship and deliver the winery’s wine to the retailer; or
(iii) contracts with a common carrier to ship and deliver the winery’s wine to the retailer and:
(A) the wine shipped and delivered by common carrier is shipped directly from the producer’s winery or bonded warehouse;
(B) individual shipments delivered by common carrier are limited to three cases a day for each licensed retailer; and
(C) the shipments delivered by common carrier do not exceed 4,500 cases a year.
(b) A winery making sales to retail licensees under the provisions of this subsection (2) is considered a table wine distributor for the purposes of collecting taxes on table wine, as provided in 16-1-411.
(c) If a winery uses a common carrier for delivery of the wine to licensed table wine distributors and retailers, the shipment must be:
(i) in boxes that are marked with the words: “Wine Shipment From Montana‑Licensed Winery to Montana Licensee”;
(ii) delivered to the premises of a licensed table wine distributor or licensed retailer who is in good standing; and
(iii) signed for by the wine distributor or retailer or its employee or agent.
(d) In addition to any records required to be maintained under 16-4-107, a winery that distributes wine within the state under this subsection (2) shall maintain records of all sales and shipments. The winery shall, on or before the 15th day of each month, in the manner and form prescribed by the department, make a return reporting the amount of wine that it shipped in the state during the preceding month, names and addresses of consignees or retailers, and other information that the department may determine to be necessary to ensure that distribution of table wines within this state conforms to the requirements of this code.
16-3-412 through 16-3-414 reserved.
16-3-415. Definitions. As used in this part, unless the context requires otherwise, the following definitions apply:
(1) “Agreement of distributorship” means a contract, agreement, commercial relationship, license, or other arrangement for a definite or an indefinite period of time between a supplier and a table wine distributor that provides for the sale of table wine by the supplier to the table wine distributor.
(2) “Good cause” means failure by a table wine distributor to comply with reasonable business requirements imposed, or sought to be imposed, by a supplier under the terms of an agreement of distributorship if the requirements are imposed on other similarly situated distributors either by the terms of their agreements or in the manner of their enforcement by the supplier.
(3) “Person” means a natural person, corporation, partnership, trust, agency, or other entity and includes individual officers, directors, or other persons in active control of the activities of the entity.

(4) “Supplier” means a winery or an importer of table wines that enters into or is a party to an agreement of distributorship with a table wine distributor.
Unfair trade practices generally, Title 30, ch. 14, part 2.
16-3-416. Table wine distributor provisions. (1) A supplier or table wine distributor must have a written agreement of distributorship that provides for purchase of the supplier’s products from the supplier by the table wine distributor.
(2) An agreement of distributorship must provide that:
(a) a supplier shall notify a table wine distributor in writing at least 60 days prior to termination of an agreement of distributorship unless a termination without notice is permitted as provided in 16-3-417. The written notice must state the reasons for termination. Notice of termination is void if within 60 days of the notice, the table wine distributor rectifies the deficiency stated as the reason for termination and if the deficiency was not stated as reason for termination in a notice previously voided under the provisions of this subsection.
(b) a supplier may not unreasonably withhold or delay approval of a sale or transfer of the ownership, management, or control of a table wine distributorship. However, a table wine distributor shall give a supplier no less than 60 days’ prior written notice of any material change in ownership, management, or control.
(3) Within 60 days after entering into an agreement of distributorship, the supplier shall advise the department of the agreement by filing a copy of the agreement that must include the sales area or areas designated for the table wine distributor.
(4) If a supplier terminates an agreement of distributorship under the provisions of subsection (2)(a), the table wine distributor subject to the termination is entitled to compensation for the laid‑in cost of inventory. In the event of any termination of the agreement by the supplier other than termination for good cause or for any reason set forth in 16-3-417(3), the distributor is entitled to compensation for the laid‑in cost of inventory and to liquidated damages based on the sales of the brand or brands involved, as may be provided in the agreement. If the supplier and the distributor are unable to agree on the amount of liquidated damages, the amount of liquidated damages must be determined by an arbitrator appointed under subsection (5) of this section.
(5) If undertaken in good faith by a supplier, a supplier may terminate an agreement of distributorship for a legitimate business reason not within the definition of good cause if an arbitrator appointed by the department finds, after hearing the supplier and the table wine distributor, that the termination is in the best interest of the table wine brand concerned. Arbitration under this section must be conducted under the provisions of Title 27, chapter 5.
(6) All agreements of distributorship are interpreted and governed by the laws of Montana.
(7) In any dispute resulting in litigation between a supplier and a distributor, the litigation must occur in a Montana court, federal or state, unless that forum would create an unreasonable burden on any party, as determined by the court in which the litigation is commenced.
(8) Agreements between a supplier and a distributor must recognize the constitutional right to a jury trial as set forth in Article II, section 26, of the Montana constitution.
(9) A provision in an agreement of distributorship that is inconsistent with the requirements of this section is void.
16-3-417. Supplier provisions. (1) An agreement of distributorship must provide that a table wine distributor shall:
(a) maintain the financial and competitive capability to efficiently and effectively distribute a supplier’s products;
(b) maintain the quality and integrity of a supplier’s products in a manner set forth by the supplier;
(c) exert the table wine distributor’s best efforts to sell the supplier’s wines;
(d) merchandise the products in retail stores as agreed between the table wine distributor and the supplier; and
(e) give a supplier not less than 60 days’ written notice of the table wine distributor’s intent to terminate an agreement of distributorship.

(2) As provided in 16-3-416, a supplier may terminate an agreement of distributorship based on a deficiency or other good cause by giving 60 days’ prior written notice to the table wine distributor.
(3) A supplier may terminate an agreement of distributorship immediately and without notice if the reason for the termination is insolvency, assignment for the benefit of creditors, bankruptcy, or revocation or suspension for more than 14 days of a license to operate that is required by the state or the federal government.
16-3-418. Dual appointments — equal support — alternate supplier — dock sales.
(1) (a) A supplier may appoint one or more table wine distributors to distribute its table wines in a specified territory. If the supplier appoints two or more table wine distributors to sell its table wines in the same or overlapping territories, the supplier shall offer the same prices, delivery, terms, and promotional support to each table wine distributor.
(b) A supplier may not appoint more than one table wine distributor to distribute its hard cider in a specified territory.
(c) For the purposes of this subsection (1), “table wine” has the meaning assigned in 16-1-106, but does not include hard cider.
(2) (a) The holder of an all‑beverages license under chapter 4, part 2, may, upon presentation of the license or a photocopy of the license, personally obtain from any distributor’s warehouse a quantity of table wine that the licensee may agree to buy and that the distributor may agree to sell.
(b) The holder of a license that permits on‑premises consumption of alcoholic beverages under 16-4-401(2) may, upon presentation of the license or a photocopy of the license, personally or through an employee, obtain from a winery, as provided in 16-3-411(1)(h), a quantity of table wine that the licensee may agree to buy and that the winery may agree to sell.
16-3-419. Suppliers’ prohibitions. A supplier may not:
(1) coerce, induce, or attempt to coerce or induce a table wine distributor to engage in an illegal act or course of conduct;
(2) require a table wine distributor to accept delivery of a product or other item or commodity that was not ordered by the wine distributor;
(3) fix or maintain the price at which a distributor shall resell table wine.
16-3-420. Applicability. Within 60 days after October 1, 1991, or within 60 days after the execution of a new agreement by the parties, whichever is later, an agreement of distributorship must be reduced to writing and an exact copy of the agreement must be filed with the department as a public document and must be available to any of the parties to a dispute. Upon filing with the department, the agreement becomes subject to the provisions of 16-1-106, 16-3-401, and 16-3-415 through 16-3-421.
16-3-421. Injunction. A person injured by a violation of this part may bring a civil action in a court of competent jurisdiction to enjoin further violations in addition to other remedies provided by law.
Injunctions generally, Title 27, ch. 19.

CHAPTER 4 LICENSE ADMINISTRATION

Part 1
Beer and Wine Licenses

Security interest in liquor license — definitions, 16-4-801.
Appropriate alcoholic beverage license for certain gambling activities, 23‑5‑119.
16-4-101. Applications for sale, import, or manufacture of beer — qualifications of applicant. (1) Any person desiring to manufacture, import, or sell beer under the provisions of this code shall first apply to the department for a license to do so and pay with such application the license fee prescribed. The department shall require of such applicant satisfactory evidence that the applicant is of good moral character and a law‑abiding person.
(2) Upon being satisfied, from such application or otherwise, that such applicant is qualified, the department shall issue such license to such person, which license shall be at all times prominently displayed in the place of business of such applicant.
(3) If the department shall find that such applicant is not qualified, no license shall be granted and such license fee shall be returned.
16-4-102. Right of brewers to maintain and operate storage depots — annual licenses. It shall be lawful for any brewer duly licensed to manufacture beer, upon the payment to the department of an annual license fee in addition to all other fees and taxes required to be paid by such brewer for each storage depot, to own, lease, maintain, and operate, in any city or town in the state of Montana, a building for use as a storage depot, equipped with refrigeration and cooling apparatus, for receiving, handling, and storing beer therein and distributing and selling beer therefrom, as brewers are permitted to sell and distribute beer under the provisions of this code.
16-4-103. Wholesalers’ licenses — application and issuance — subwarehouses
— imported beer handled through warehouse or subwarehouse — wine storage.
(1) Any person desiring to sell and distribute beer as a wholesaler shall apply to the department

for a license and tender with the application the required license fee. The department shall issue wholesale licenses to qualified applicants in accordance with the provisions of this code. A license must be prominently displayed at all times in the place of business of the wholesaler.
(2) An applicant shall maintain a fixed place of business, sufficient capital, and the facilities, storehouse, receiving house, or warehouse for the receiving of, storage, handling, and moving of beer in large and jobbing quantities for distribution and sale in original packages to other licensed wholesalers or licensed retailers. Each wholesaler is entitled to only one wholesale license, which must be issued for the wholesaler’s principal place of business in Montana. Duplicate licenses may be issued for the wholesaler’s subwarehouses in Montana. The duplicate licenses must be prominently displayed at all times at the subwarehouses.
(3) If the applicant is a foreign corporation, the corporation must be authorized to do business in Montana.
(4) A wholesaler that is also licensed as a table wine distributor may store wine in any of the wholesaler’s warehouses or subwarehouses.
(5) As used in subsection (1), “distribute” has the meaning provided in 16-3-218.
Effect on Existing Licenses: Section 4, Ch. 359, L. 1981, provided: “The provisions of this act do not affect the validity of any alcoholic beverage license that permits on‑premises consumption and that has been issued prior to the effective date of this act [October 1, 1981] or the reissuance of the license.”
16-4-104. Beer retailer’s license — application and issuance — check of alcoholic content by department. (1) Any person desiring to possess and have beer for the purpose of retail sale under the provisions of this code shall first apply to the department for a permit to do so and submit with the application the license fee.
(2) Upon being satisfied, from the application or otherwise, that the applicant is qualified, the department shall issue a license to the person. The license must at all times be prominently displayed in the place of business of the person.
(3) If the department finds that the applicant is not qualified, a license may not be granted and the license fee must be returned by the department.
(4) The department may, at any time, examine the books of account and the premises of any licensed retailer and otherwise check the retailer’s methods of conducting business and the alcoholic content of the beer kept for sale.
(5) A person may not sell beer at retail without a valid license issued under this code.
Keg registration, 16-3-321.
16-4-105. (Temporary) Limit on retail beer licenses — wine license amendments
— limitation on use of license — exceptions —competitive bidding — rulemaking. (1) Except as provided in 16-4-109, 16-4-110, 16-4-115, 16-4-420, and chapter 4, part 3, of this title, a license to sell beer at retail or beer and wine at retail, in accordance with the provisions of this code and the rules of the department, may be issued to any person or business entity that is approved by the department, subject to the following exceptions:
(a) The number of retail beer licenses that the department may issue for premises situated within incorporated cities and incorporated towns and within a distance of 5 miles from the corporate limits of the cities and towns must be determined on the basis of population prescribed in 16-4-502 as follows:
(i) in incorporated towns of 500 inhabitants or less and within a distance of 5 miles from the corporate limits of the towns, not more than one retail beer license;
(ii) in incorporated cities or incorporated towns of more than 500 inhabitants and not over 2,000 inhabitants and within a distance of 5 miles from the corporate limits of the cities or towns, one retail beer license for every 500 inhabitants;

(iii) in incorporated cities of over 2,000 inhabitants and within a distance of 5 miles from the corporate limits of the cities, four retail beer licenses for the first 2,000 inhabitants, two additional retail beer licenses for the next 2,000 inhabitants or major fraction of 2,000 inhabitants, and one additional retail beer license for every additional 2,000 inhabitants.
(b) The number of inhabitants in each incorporated city or incorporated town, exclusive of the number of inhabitants residing within a distance of 5 miles from the corporate limits of the city or town, governs the number of retail beer licenses that may be issued for use within the city or town and within a distance of 5 miles from the corporate limits of the city or town. The distance of 5 miles from the corporate limits of any incorporated city or incorporated town must be measured in a straight line from the nearest entrance of the premises proposed for licensing to the nearest corporate boundary of the city or town.
(c) When the 5‑mile boundary of one incorporated city or incorporated town overlaps the 5‑mile boundary of another incorporated city or incorporated town, the quota area for each city or town terminates in a straight line equidistant between each city or town.
(d) Retail beer licenses of issue on March 7, 1947, and retail beer licenses issued under 16-4-110 that are in excess of the limitations in this section are renewable, but new licenses may not be issued in violation of the limitations.
(e) The limitations do not prevent the issuance of a nontransferable and nonassignable retail beer license to an enlisted persons’, noncommissioned officers’, or officers’ club located on a state or federal military reservation on May 13, 1985, or to a post of a nationally chartered veterans’ organization or a lodge of a recognized national fraternal organization if the veterans’ or fraternal organization has been in existence for a period of 5 years or more prior to January 1, 1949.
(f) The number of retail beer licenses that the department may issue for use at premises situated outside of any incorporated city or incorporated town and outside of the area within a distance of 5 miles from the corporate limits or for use at premises situated within any unincorporated area must be determined by the department in its discretion, except that a retail beer license may not be issued for any premises so situated unless the department determines that the issuance of the license is required by public convenience and necessity pursuant to 16-4-203. Subsection (12) does not apply to licenses issued under this subsection (1)(f). The owner of the license whose premises are situated outside of an incorporated city or incorporated town may offer gambling, regardless of when the license was issued, if the owner and premises qualify under Title 23, chapter 5, part 3, 5, or 6.
(2) (a) For a period of 12 years after November 24, 2017, existing licenses as of November 24, 2017, in either of two quota areas that were established as provided in subsection (1)(c) may be transferred between the two quota areas if they were part of a combined quota area prior to November 24, 2017.
(b) If any new retail beer licenses are allowed by separating a combined quota area that existed as of November 24, 2017, as provided in subsection (1)(c), the department shall publish the availability of no more than one new beer license a year until the quota has been reached.
(3) A license issued under subsection (1)(f) that becomes located within 5 miles of an incorporated city or town because of annexation after April 15, 2005, may not be transferred to another location within the city quota area for 5 years from the date of the annexation.
(4) When the department determines that a quota area is eligible for a new retail beer license under subsection (1) or (2)(b), the department shall use a competitive bidding process to determine the party afforded the opportunity to apply for the new license. The department shall:
(a) determine the minimum bid based on 75% of the market value of retail beer licenses in the quota area;
(b) publish notice that a quota area is eligible for a new license;
(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.
(5) 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.

(6) 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.
(7) 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 a retail beer 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.
(8) 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 (7).
(9) If no bids are received during the competitive bidding process or if a quota area is already eligible for another new license, the department shall process applications for the license in the order received.
(10) (a) The successful applicant is subject to forfeiture of the license and the original license fee if the successful applicant:
(i) transfers the awarded license to another person or business entity after receiving the license unless that transfer is due to a 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.
(11) A person holding a license to sell beer for consumption on the premises at retail may apply to the department for an amendment to the license permitting the holder to sell wine as well as beer. The department may issue an amendment if it finds, on a satisfactory showing by the applicant, that the sale of wine for consumption on the premises would be supplementary to a restaurant or prepared‑food business. Except for beer and wine licenses issued pursuant to 16-4-420, a person holding a beer and wine license may sell wine for consumption on or off the premises. Nonretention of the beer license, for whatever reason, means automatic loss of the wine amendment license.
(12) Except as provided in subsection (1)(f), a license issued pursuant to this section after October 1, 1997, must have a conspicuous notice that the license may not be used for premises where gambling is conducted.
(13) A successful applicant shall pay to the department a $25,000 original license fee and in subsequent years pay the annual fee for the license as provided in 16-4-501.
(14) The department may adopt rules to implement this section. (Terminates December 31, 2023—sec. 17, Ch. 5, Sp. L. November 2017.)
16-4-105. (Effective January 1, 2024) Limit on retail beer licenses — wine license amendments — limitation on use of license — exceptions — lottery — rulemaking. (1) Except as provided in 16-4-109, 16-4-110, 16-4-115, 16-4-420, and chapter 4, part 3, of this title, a license to sell beer at retail or beer and wine at retail, in accordance with the provisions of this code and the rules of the department, may be issued to any person or business entity that is approved by the department, subject to the following exceptions:
(a) The number of retail beer licenses that the department may issue for premises situated within incorporated cities and incorporated towns and within a distance of 5 miles from the corporate limits of the cities and towns must be determined on the basis of population prescribed in 16-4-502 as follows:

(i) in incorporated towns of 500 inhabitants or less and within a distance of 5 miles from the corporate limits of the towns, not more than one retail beer license;
(ii) in incorporated cities or incorporated towns of more than 500 inhabitants and not over 2,000 inhabitants and within a distance of 5 miles from the corporate limits of the cities or towns, one retail beer license for every 500 inhabitants;
(iii) in incorporated cities of over 2,000 inhabitants and within a distance of 5 miles from the corporate limits of the cities, four retail beer licenses for the first 2,000 inhabitants, two additional retail beer licenses for the next 2,000 inhabitants or major fraction of 2,000 inhabitants, and one additional retail beer license for every additional 2,000 inhabitants.
(b) The number of inhabitants in each incorporated city or incorporated town, exclusive of the number of inhabitants residing within a distance of 5 miles from the corporate limits of the city or town, governs the number of retail beer licenses that may be issued for use within the city or town and within a distance of 5 miles from the corporate limits of the city or town. The distance of 5 miles from the corporate limits of any incorporated city or incorporated town must be measured in a straight line from the nearest entrance of the premises proposed for licensing to the nearest corporate boundary of the city or town.
(c) When the 5‑mile boundary of one incorporated city or incorporated town overlaps the 5‑mile boundary of another incorporated city or incorporated town, the quota area for each city or town terminates in a straight line equidistant between each city or town.
(d) Retail beer licenses of issue on March 7, 1947, and retail beer licenses issued under 16-4-110 that are in excess of the limitations in this section are renewable, but new licenses may not be issued in violation of the limitations.
(e) The limitations do not prevent the issuance of a nontransferable and nonassignable retail beer license to an enlisted persons’, noncommissioned officers’, or officers’ club located on a state or federal military reservation on May 13, 1985, or to a post of a nationally chartered veterans’ organization or a lodge of a recognized national fraternal organization if the veterans’ or fraternal organization has been in existence for a period of 5 years or more prior to January 1, 1949.
(f) The number of retail beer licenses that the department may issue for use at premises situated outside of any incorporated city or incorporated town and outside of the area within a distance of 5 miles from the corporate limits or for use at premises situated within any unincorporated area must be determined by the department in its discretion, except that a retail beer license may not be issued for any premises so situated unless the department determines that the issuance of the license is required by public convenience and necessity pursuant to 16-4-203. Subsection (5) does not apply to licenses issued under this subsection (1)(f). The owner of the license whose premises are situated outside of an incorporated city or incorporated town may offer gambling, regardless of when the license was issued, if the owner and premises qualify under Title 23, chapter 5, part 3, 5, or 6.
(2) (a) For a period of 7 years after January 1, 2024, existing licenses as of November 24, 2017, in either of two quota areas that were established as provided in subsection (1)(c) may be transferred between the two quota areas if they were part of a combined quota area prior to November 24, 2017.
(b) If any new retail beer licenses are allowed by separating a combined quota area that existed as of November 24, 2017, as provided in subsection (1)(c), the department shall publish the availability of no more than one new beer license a year until the quota has been reached.
(3) A license issued under subsection (1)(f) that becomes located within 5 miles of an incorporated city or town because of annexation after April 15, 2005, may not be transferred to another location within the city quota area for 5 years from the date of the annexation.
(4) A person holding a license to sell beer for consumption on the premises at retail may apply to the department for an amendment to the license permitting the holder to sell wine as well as beer. The department may issue an amendment if it finds, on a satisfactory showing by the applicant, that the sale of wine for consumption on the premises would be supplementary to a restaurant or prepared‑food business. Except for beer and wine licenses issued pursuant to 16-4-420, a person holding a beer and wine license may sell wine for consumption on or off the premises. Nonretention of the beer license, for whatever reason, means automatic loss of the wine amendment license.

(5) Except as provided in subsection (1)(f), a license issued pursuant to this section after October 1, 1997, must have a conspicuous notice that the license may not be used for premises where gambling is conducted.
(6) (a) When the department determines that a quota area is eligible for an additional retail beer license as provided in this section, the department shall advertise the availability of the license in the quota area for which the license is available. If there are more applicants than number of licenses available, the license must be awarded to an applicant by a lottery.
(b) The department shall numerically rank all applicants in the lottery. Only the successful applicants will be required to submit a completed application and a one‑time processing fee set by the department by rule. An applicant’s ranking may not be sold or transferred to another person or business entity. An applicant’s ranking applies only to the intended license advertised by the department or to the number of licenses determined to be available for the lottery when there are more applicants than licenses available. The department shall determine an applicant’s qualifications for a retail beer license awarded by lottery prior to the award of a license by lottery.
(c) A successful lottery applicant shall pay to the department a $25,000 original license fee and in subsequent years pay the annual fee for the license as provided in 16-4-501.
(d) (i) The successful lottery applicant is subject to forfeiture of the license and the original license fee if the successful lottery applicant:
(A) proposes a location for the license that had the same license type within the previous 12 months;
(B) transfers a license awarded by lottery within 5 years of receiving the license; or
(C) 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 lottery winner provides evidence the delay in use is for reasons outside the applicant’s control.
(ii) In the case of forfeiture, the department shall offer the license to the next eligible ranked applicant in the lottery.
(7) The department may adopt rules to implement this section.
2017 Special Session Amendment: (Temporary version) Chapter 5 inserted (4) through (9) relating to competitive bidding process for existing licenses; inserted (10) relating to license forfeiture; deleted former (5)(a) and (5)(b) that read: “(5) (a) When the department determines that a quota area is eligible for an additional retail beer license as provided in this section, the department shall advertise the availability of the license in the quota area for which the license is available. If there are more applicants than number of licenses available, the license must be awarded to an applicant by a lottery.
(b) The department shall numerically rank all applicants in the lottery. Only the successful applicants will be required to submit a completed application and a one‑time processing fee set by the department by rule. An applicant’s ranking may not be sold or transferred to another person or business entity. An applicant’s ranking applies only to the intended license advertised by the department or to the number of licenses determined to be available for the lottery when there are more applicants than licenses available. The department shall determine an applicant’s qualifications for a retail beer license awarded by lottery prior to the award of a license by lottery”; deleted former (5)(d) that read: “(d) (i) The successful lottery applicant is subject to forfeiture of the license and the original license fee if the successful lottery applicant:
(A) enters into a concession agreement, as defined in rule, for the license awarded by lottery in the first 5 years;
(B) transfers a license awarded by lottery within 5 years of receiving the license; or
(C) 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 lottery winner provides evidence the delay in use is for reasons outside the applicant’s control.
(ii) In the case of forfeiture, the department shall offer the license to the next eligible ranked applicant in the lottery”; in (13) following “successful” deleted “lottery”; and made minor changes in style. Amendment effective November 24, 2017, and terminates December 31, 2023.
(Version effective January 1, 2024) Chapter 5 in (6)(d)(i)(A) substituted “proposes a location for the license that had the same license type within the previous 12 months” for “enters into a concession agreement, as defined in rule, for the license awarded by lottery in the first 5 years”; and made minor changes in style.
(Both versions) Chapter 5 in (1) near end of introductory language substituted “person or business entity that is approved by the department, subject to the following exceptions” for “person, firm, or corporation that is approved by the department as a person, firm, or corporation qualified to sell beer, subject to the provisions in subsections (1)(a) through (1)(e)”; in (1)(b) deleted former second sentence that read: “If two or more incorporated municipalities are situated within a distance of 5 miles from each other, the total number of retail beer licenses that may be issued

for use in both the incorporated municipalities and within a distance of 5 miles from their respective corporate limits must be determined on the basis of the combined populations of both municipalities and may not exceed the limitations in this section”; inserted (1)(c) relating to boundary overlap; in (1)(f) in last sentence before “town” inserted “incorporated”; inserted (2) relating to transfer of existing licenses between quota areas that were part of a combined quota area; inserted (3) relating to licenses located within 5 miles of incorporated city or town because of annexation; deleted former (3)(b) that read: “(b) Subsection (3)(a) does not apply to licenses issued under this section if the department received the application before October 1, 1997. For the purposes of this subsection (3)(b), the application is received by the department before October 1, 1997, if the application’s mail cover is postmarked by the United States postal service before October 1, 1997, or if the application was consigned to a private courier service for delivery to the department before October 1, 1997. An applicant who consigns an application to a private courier shall provide to the department, upon demand, documentary evidence satisfactory to the department that the application was consigned to a private courier before October 1, 1997”; deleted former (4) that read: “(4) A license issued under subsection (1)(e) that becomes located within 5 miles of an incorporated city or town because of annexation after April 15, 2005, may not be transferred to another location within the city quota area for 5 years from the date of the annexation”; and made minor changes in style.
16-4-106. Beer and table wine license transfers. A transfer of any brewer’s, beer wholesaler’s, table wine distributor’s, beer retailer’s, or table wine retailer’s license may be made on application to the department with the consent of the department, provided that the transferee qualifies under this code.
16-4-107. Winery license — winery and importer registration. (1) (a) Wine, other than for personal consumption in conformity with federal exemptions from holding a basic permit as a bonded winery, may be manufactured or directly distributed to retailers within the state only by a licensed winery, and table wine may be shipped directly by a winery with a direct shipment endorsement as provided in 16-4-1101 to an individual in Montana who is at least 21 years of age. An application for a winery license must be accompanied by a fee of
$400, which constitutes the first annual license fee, and a licensee shall in each succeeding year pay an annual fee as provided in 16-4-501. Winery licensees located in Montana must hold the appropriate basic permit required by the United States department of the treasury and be qualified for a license in accordance with the provisions of 16-4-401(4). Winery licensees located in another state must hold the appropriate basic permit required by the United States department of the treasury and the appropriate license to manufacture wine from the state in which the winery is located and shall provide all other information required by the department.
(b) A winery located in Montana that is licensed to do business in the state shall, each quarter and in the manner and form prescribed by the department, report to the department the amount of wine manufactured or imported by the winery in the previous quarter and the winery’s inventory. The department may at any time examine a winery’s books.
(2) (a) A winery that is not located in the state or an importer of table wines that holds the appropriate license from the United States department of the treasury and that desires to distribute its table wines within this state through licensed table wine distributors shall apply to the department of revenue for registration on forms to be prepared and furnished by the department.
(b) Each winery shall furnish the department with a copy of each container label currently used by the winery on its products imported into Montana. The department shall require the winery or importer to agree to furnish monthly and other reports concerning quantities and prices of table wine that it ships into the state, names and addresses of consignees, and any other information that the department may determine to be necessary to ensure that importation and distribution of table wines within this state conform to the requirements of this code.
(c) A winery or importer of table wines may not ship table wines into this state until the registration is granted by the department. The registration may be canceled or suspended by the department upon a finding after notice and hearing that the registrant has not complied with the terms of its registration.
(3) A winery that is not located in Montana, that holds the appropriate license from the United States department of the treasury, that is not already registered with the department, and that desires to sell and ship table wine directly to individuals in Montana who are at least 21 years of age shall apply to the department for registration pursuant to subsection (2) and for a direct shipment endorsement pursuant to 16-4-1101.

16-4-108. Table wine distributor’s license. (1) Any person desiring to sell and distribute table wine or sacramental wine at wholesale to retailers under the provisions of this code shall apply to the department of revenue for a license to do so and shall submit with the application the annual license fee of $400. The department may issue licenses to qualified applicants in accordance with the provisions of this code.
(2) All table wine distributors’ licenses issued in any year expire on June 30 of that year at midnight.
(3) A license fee may not be imposed upon table wine distributors by a municipality or any other political subdivision of the state.
(4) The license must be at all times prominently displayed in the place of business of the table wine distributor.
(5) An applicant must have a fixed place of business, sufficient capital, the facilities, storehouse, and receiving house or warehouse for the receiving, storage, handling, and moving of table wine in large and jobbing quantities for distribution and sale in original packages to other licensed table wine distributors or licensed retailers. Each table wine distributor is entitled to only one wholesale table wine license, which must be issued for the distributor’s principal place of business in Montana. A duplicate license may be issued for one subwarehouse only in Montana for each table wine distributor’s license. The duplicate license must at all times be prominently displayed at the subwarehouse. A table wine distributor may also hold a license to sell beer at wholesale but may not hold or have any interest, direct or indirect, in any license to sell beer, table wine, or liquor at retail.
(6) If the applicant is a foreign corporation, the corporation must be authorized to do business in Montana.
(7) As used in subsection (1), “distribute” has the meaning provided in 16-3-218.
Effect on Existing Licenses: Section 4, Ch. 359, L. 1981, provided: “The provisions of this act do not affect the validity of any alcoholic beverage license that permits on‑premises consumption and that has been issued prior to the effective date of this act [October 1, 1981] or the reissuance of the license.”
16-4-109. Golf course beer and wine license. (1) Upon application, the department of revenue shall issue a retail beer and wine license, to be known as a golf course beer and wine license, for use at a golf course. If the owner of the golf course is not the state, a unit of the university system, or a local government, to qualify for a license under this section:
(a) (i) the golf course must consist of at least 9 holes and 2,500 lineal yards;
(ii) the golf course must be either within the limits of an incorporated city or town or within 5 miles of the limits of an incorporated city or town;
(iii) the applicant for a license under this section may not have held a beer and wine or all‑beverages license within 12 months of the date of application; and
(iv) the applicant shall pay an initial application fee of $20,000; or
(b) (i) the golf course must consist of at least 9 holes and 2,500 lineal yards;
(ii) the governing body of the golf course must be incorporated under section 501(c)(3) of the Internal Revenue Code;
(iii) the golf course must be within 5 miles of the limits of an incorporated city or town; and
(iv) the applicant for a license under this section may not have held a beer and wine or all‑beverages license within 12 months of the date of application.
(2) The application must be made by the person or entity that owns and operates the golf course. If the owner of the golf course is not the state, a unit of the university system, or a local government, the owner must be approved by the department as provided in this chapter for the issuance of beer licenses.
(3) (a) Except as provided in subsection (3)(c), a golf course beer and wine license and all retail beer and wine sales under the license are subject to all statutes and rules governing a retail beer license with a wine license amendment.

(b) If the owner of the golf course is not the state, a unit of the university system, or a local government:
(i) retail beer and wine sales may be made only during the time of the year that the golf course is open for business, and sales on days during that time must stop by 1 hour after sunset;
(ii) the seating capacity of the premises where the beer and wine are sold may not exceed 75 persons; and
(iii) gaming or gambling is not authorized under the license issued under this section.
(c) If the owner of a golf course is the state, a unit of the university system, or a local government, the owner may lease the beer and wine license for use at the golf course to an individual or entity approved by the department of revenue.
(4) The department of revenue shall issue a golf course beer and wine license to a qualified applicant regardless of the number of beer and wine licenses already issued within the beer and wine license quota area in which the golf course is situated. A license issued pursuant to this section is nontransferable.
16-4-110. Beer license for tribal alcoholic beverages licensee or enlisted personnel, noncommissioned officers’, or officers’ club. (1) Upon application and qualification, the department shall issue a license to sell beer for consumption on the premises to:
(a) a tribal alcoholic beverages licensee who operates the business within the exterior boundaries of a Montana Indian reservation under a tribal license issued prior to January 1, 1985;
(b) an enlisted personnel, noncommissioned officers’, or officers’ club located on a state or federal military reservation in Montana on May 13, 1985.
(2) A license issued under the provisions of subsection (1) is not subject to the quota limitations of 16-4-105.
(3) Upon application and approval by the department, a license issued under subsection (1)(a) may be transferred to another qualified applicant, but only to a location within the quota area and the exterior boundaries of the Montana Indian reservation for which the license was originally issued.
(4) A license issued under this section is subject to all statutes and rules governing licenses to sell beer at retail for on‑premises consumption.
Effective Date — Applicability: Section 8, Ch. 731, L. 1985, provided: “This act is effective on passage and approval [approved May 13, 1985] and applies only to tribal licensees who hold tribal licenses issued prior to January 1, 1985, and to enlisted men’s, noncommissioned officers’, and officers’ clubs located on state and federal military reservations in Montana on May 13, 1985.”
16-4-111. Catering endorsement for beer and wine licensees. (1) (a) A person who is engaged primarily in the business of providing meals with table service and who is licensed to sell beer at retail or beer and wine at retail for on‑premises consumption may, upon the approval of the department, be granted a catering endorsement to the license to allow the catering and sale of beer or beer and wine to persons attending a special event upon premises not otherwise licensed for the sale of beer or beer and wine for on‑premises consumption. The beer or wine must be consumed on the premises where the event is held.
(b) A person who is licensed pursuant to 16-4-420 to sell beer at retail or beer and wine at retail for on‑premises consumption may, upon the approval of the department, be granted a catering endorsement to the license to allow the catering and sale of beer and wine to persons attending a special event upon premises not otherwise licensed for the sale of beer or beer and wine, along with food equal in cost to 65% of the total gross revenue from the catering contract, for on‑premises consumption. The beer or wine must be consumed on the premises where the event is held.
(2) A written application for a catering endorsement and an annual fee of $200 must be submitted to the department for its approval.
(3) A licensee who holds a catering endorsement 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.

(4) The licensee shall notify the local law enforcement agency that has jurisdiction over the premises that the catered event is to be held. A fee of $35 must accompany the notice.
(5) The sale of beer or beer and wine pursuant to a catering endorsement is subject to the provisions of 16-6-103.
(6) The sale of beer or beer and wine pursuant to a catering endorsement is subject to the provisions of 16-3-306, unless entities named in 16-3-306 give their written approval for the on‑premises sale of beer or beer and wine on premises where the event is to be held.
(7) A catering endorsement issued for the purpose of selling and serving beer or beer and wine at a special event conducted on the premises of a county fairground or public sports arena authorizes the licensee to sell and serve beer or beer and wine in the grandstand and bleacher area of the premises, as well as from a booth, stand, or other fixed place on the premises.
(8) 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.
16-4-112 through 16-4-114 reserved.
16-4-115. Beer and wine licenses for off‑premises consumption. (1) A retail license to sell beer or table wine, or both, in the original packages for off‑premises consumption may be issued only to a person, firm, or corporation that is approved by the department as a person, firm, or corporation qualified to sell beer or table wine, or both. If the premises proposed for licensing are operated in conjunction with another business, that business must be a grocery store or drugstore licensed as a pharmacy. The number of licenses that the department may issue is not limited by the provisions of 16-4-105 but must be determined by the department in the exercise of its sound discretion, and the department may in the exercise of its sound discretion grant or deny an application for any license or suspend or revoke any license for cause.
(2) Upon receipt of a completed application for a license under this section, accompanied by the necessary license fee as provided in 16-4-501, the department shall request that the department of justice make a background investigation of all matters relating to the application.
(3) Based on the results of the investigation or in exercising its sound discretion as provided in subsection (1), the department shall determine whether:
(a) the applicant is qualified to receive a license;
(b) the applicant’s premises are suitable for the carrying on of the business; and
(c) the requirements of this code and the rules promulgated by the department are met and complied with.
(4) License applications submitted under this section are not subject to the provisions of 16-4-203 and 16-4-207.
(5) If the premises proposed for licensing under this section are a new or remodeled structure, the department may issue a conditional license prior to completion of the premises upon reasonable evidence that the premises will be suitable for the carrying on of business.
Keg registration, 16-3-321.

Part 2 All‑Beverages Licenses

Security interest in liquor license — definitions, 16-4-801.
Appropriate alcoholic beverage license for certain gambling activities, 23‑5‑119.
16-4-201. All‑beverages license quota. (1) Except as otherwise provided by law, a license to sell liquor, beer, and table wine at retail, an all‑beverages license, in accordance with the provisions of this code and the rules of the department, may be issued to any person who is approved by the department as a fit and proper person to sell alcoholic beverages, except that the number of all‑beverages licenses that the department may issue for premises situated within

incorporated cities and incorporated towns and within a distance of 5 miles from the corporate limits of those cities and towns must be determined on the basis of population prescribed in 16-4-502 as follows:
(a) in incorporated towns of 500 inhabitants or less and within a distance of 5 miles from the corporate limits of the towns, not more than two retail licenses;
(b) in incorporated cities or incorporated towns of more than 500 inhabitants and not over 3,000 inhabitants and within a distance of 5 miles from the corporate limits of the cities and towns, three retail licenses for the first 1,000 inhabitants and one retail license for each additional 1,000 inhabitants;
(c) in incorporated cities of over 3,000 inhabitants and within a distance of 5 miles from the corporate limits of the cities, five retail licenses for the first 3,000 inhabitants and one retail license for each additional 1,500 inhabitants.
(2) The number of inhabitants in each incorporated city or incorporated town, exclusive of the number of inhabitants residing within a distance of 5 miles from the corporate limits of the city or town, governs the number of retail licenses that may be issued for use within the city or town and within a distance of 5 miles from the corporate limits of the city or town. The distance of 5 miles from the corporate limits of any incorporated city or incorporated town must be measured in a straight line from the nearest entrance of the premises proposed for licensing to the nearest corporate boundary of the city or town.
(3) When the 5‑mile boundary of one incorporated city or incorporated town overlaps the 5‑mile boundary of another incorporated city or incorporated town, the quota area for each city or town terminates in a straight line equidistant between each city or town.
(4) For a period of 12 years after November 24, 2017, existing licenses as of November 24, 2017, in either of two quota areas that were established as provided in subsection (3) may be transferred between the two quota areas if they were part of a combined quota area prior to November 24, 2017.
(5) If any new retail all‑beverages licenses are allowed by separating a combined quota area that existed as of November 24, 2017, as provided in subsection (3), the department shall publish the availability of no more than one new retail all‑beverages license a year until the quota has been reached.
(6) Retail all‑beverages licenses of issue on March 7, 1947, and all‑beverages licenses issued under 16-4-209 that are in excess of the limitations in subsections (1) and (2) are renewable, but new licenses may not be issued in violation of the limitations.
(7) The limitations in subsections (1) and (2) do not prevent the issuance of a nontransferable and nonassignable, as to ownership only, retail license to an enlisted personnel, noncommissioned officers’, or officers’ club located on a state or federal military reservation on May 13, 1985, or to any post of a nationally chartered veterans’ organization or any lodge of a recognized national fraternal organization if the veterans’ or fraternal organization has been in existence for a period of 5 years or more prior to January 1, 1949.
(8) The number of retail all‑beverages licenses that the department may issue for use at premises situated outside of any incorporated city or incorporated town and outside of the area within a distance of 5 miles from the corporate limits of a city or town may not be more than one license for each 750 in population of the county after excluding the population of incorporated cities and incorporated towns in the county.
(9) An all‑beverages license issued under subsection (8) that becomes located within 5 miles of an incorporated city or town because of annexation after April 15, 2005, may not be transferred to another location within the city quota area for 5 years from the date of annexation.
(10) The department may adopt rules to implement this section.
2017 Special Session Amendment: Chapter 5 in (2) in first sentence substituted “inhabitants in each incorporated city or incorporated town” for “inhabitants in cities and towns” and deleted former second sentence that read: “If two or more incorporated municipalities are situated within a distance of 5 miles from each other, the total

number of retail licenses that may be issued for use in both of the municipalities and within a distance of 5 miles from their respective corporate limits must be determined on the basis of the combined populations of both of the municipalities and may not exceed the limitations in subsection (1) or this subsection”; inserted (3), (4), and (5) relating to measurement of overlapping quota areas, transfer of licenses in two quota areas, and creation of new licenses from separating combined quota areas; inserted (10) granting rulemaking authority; and made minor changes in style. Amendment effective November 24, 2017.
16-4-202. Resort retail all‑beverages licenses. (1) It is the intent and purpose of this section to encourage the growth of quality recreational resort facilities in undeveloped areas of the state and to provide for the orderly growth of existing recreational sites by the establishment of resort areas within which retail all‑beverages licenses may be issued by the department under the terms of this section. In addition to the licenses set forth in this code, the department may issue one resort retail all‑beverages license for the first 100 accommodation units and an additional license for each additional 50 accommodation units in a resort area. Regardless of how many resort area all‑beverages licenses are issued, no more than 20 gambling machine permits may be issued for the resort area.
(2) (a) For the purposes of this section, “resort area” means a recreational facility meeting the qualifications determined by the department and as otherwise provided in this section.
(b) The term does not include any land or improvements that lie wholly within the boundaries of a quota area as described in 16-4-201(1).
(3) The department shall determine that the area for which licenses are to be issued is a resort area pursuant to rules.
(4) (a) In addition to the other requirements of this code, a resort area, for the purposes of qualification for the issuance of a resort retail all‑beverages license, must:
(i) have a current actual valuation of resort or recreational facilities, including land and improvements, of not less than $500,000, at least half of which valuation must be for a structure or structures within the resort area;
(ii) be under the sole ownership or control of one person or entity at the time of the filing of the resort area plat referred to in subsection (5);
(iii) contain a minimum of 50 acres of land;
(iv) contain a minimum of 100 overnight guest accommodation units, each unit capable of being separately locked by the occupants and containing sleeping, bath, and toilet facilities; and
(v) provide on the grounds of the resort the recreational facilities that warrant the resort designation being granted.
(b) For the purposes of this section, “control” means land or improvements that are owned or that are held under contract, lease, option, or permit.
(5) The resort area must be determined by the resort area developer or landowner by a plat setting forth the resort area boundaries and designating the ownership of the lands within the resort area. The plat must be verified by the resort area developer or landowner and must be filed with the department prior to the filing of any applications for resort retail all‑beverages licenses within the resort area. The plat must show the location and general design of the buildings and other improvements existing or to be built in the resort area. A master plan for the development of the resort area may be filed by the resort area developer in satisfaction of this section.
(6) Within 7 days after the plat is filed, the department shall schedule a public hearing to be held in the proposed area to determine whether the facility proposed by the resort area developer or landowner is a resort area. At least 30 days prior to the date of the hearing, the department shall publish notice of the hearing in a newspaper published in the county or counties in which the resort area is located, once a week for 4 consecutive weeks. The notice must include a description of the proposed resort area. Each resort area developer or landowner shall, at the time of filing an application, pay to the department an amount sufficient to cover the costs of publication.
(7) Any person may present, in person or in writing, a statement to the department at the hearing in opposition to or support of the plat.
(8) Within 30 days after the hearing, the department shall accept or reject the plat. If the plat is rejected, the department shall state its reasons and set forth the conditions, if any, under which the plat will be accepted. The decision of the department may be reviewed pursuant to the review procedure set forth in 16-4-406.

(9) Once filed with the department, the boundaries of a resort area may not be changed without:
(a) a hearing, noticed and conducted in the same manner as provided in subsections (6) and (7); and
(b) the prior approval of the department, determined according to public convenience and necessity.
(10) (a) When the department has accepted a plat and a given resort area has been determined, applications may be filed with the department for the issuance of resort retail all‑beverages licenses within the resort area.
(b) Each applicant shall submit plans showing the location, appearance, and floor plan of the premises for which application for a resort retail all‑beverages license is made.
(c) If an applicant otherwise qualifies for a resort retail all‑beverages license but the premises to be licensed are still in construction or are otherwise incomplete at the time that application is made, the department shall issue a letter stating that the license will be issued at the time that the qualifications for a licensed premises have been met. The letter must set forth specific time limitations and requirements that the department may establish.
(11) In addition to the restrictions on sale or transfer of a license as provided in 16-4-204 and 16-4-404, a resort retail all‑beverages license may not be sold or transferred for operation at a location outside of the boundaries of the resort area.
(12) A resort retail all‑beverages license is not subject to the quota limitations set forth in 16-4-201, and if the requirements of this section have been met, a resort retail all‑beverages license must be issued by the department on the basis that the department has determined that the license is justified by public convenience and necessity, in accordance with the procedure required in 16-4-207.
Contested cases — Montana Administrative Procedure Act, 2‑4‑102; Title 2, ch. 4, parts 6 and 7. Resort tax, Title 7, ch. 6, part 15.
16-4-203. Determination of public convenience and necessity. (1) An original license issued pursuant to 16-4-104, 16-4-201, 16-4-202, or 16-4-208 or the transfer of location of anon‑premises retail license may be approved if the department does not receive the minimum number of protests required for a public convenience and necessity determination pursuant to 16-4-207, in which case the application must be regarded as a prima facie showing of public convenience and necessity and no further determination of public convenience and necessity is allowed.
(2) (a) If the department receives at least the minimum number of protests required for a public convenience and necessity determination, as provided in 16-4-207, an application must be approved when evidence indicates that the issuance of an original license or transfer of location will materially promote the public’s ability to engage in the licensed activity.
(b) The issuance of an original license or a transfer of location will materially promote the public’s ability to engage in the licensed activity if:
(i) the applicant’s history and experience demonstrate the capacity to operate the proposed license in a lawful manner;
(ii) the approval of the application for the premises at the proposed location is consistent with the public’s demand or probable demand for the licensed activity that presently exists or is reasonably expected to exist within the next 5 years in the quota area where the proposed premises is located and in quota areas adjacent to the quota area where the proposed premises is located;
(iii) the approval of the application for the premises at the proposed location contributes to the public’s ability to participate in the licensed activity throughout the quota area where the proposed premises is located and quota areas adjacent to the quota area where the proposed premises is located;
(iv) the approval of the application for the premises at the proposed location is consistent with adopted or pending planning, annexation, and zoning ordinances of local governments that confer or will confer jurisdiction over business and developments such as the proposed license in

the quota area where the proposed premises is located and in quota areas adjacent to the quota area where the proposed premises is located.
(3) When determining whether or not an application is justified by public convenience and necessity, the department may:
(a) receive evidence at the public hearing specified in 16-4-207 only from the applicant, any protestors whose protests the department has accepted pursuant to 16-4-207, and any other person summoned or called by either a protestor or applicant;
(b) find that the application is justified by public convenience and necessity if the applicant has provided substantial credible evidence as provided for in this subsection (3) that shows that the department’s approval of the application will materially promote the public’s ability to engage in the licensed activity. The substantial credible evidence required must include a consideration of each of the components of materially promoting the public’s ability to engage in the licensed activity as provided in subsection (2)(b).
(4) For the purposes of this section, the following definitions apply:
(a) “Confer or will confer jurisdiction” means the power or authority that a local government or an appointed subsidiary of a local government has or may obtain within 1 year from the date of the hearing to consider and adopt planning, annexation, or zoning ordinances.
(b) “Licensed activity” means the purchase of alcoholic beverages for on‑premises consumption in a business licensed to sell alcoholic beverages at retail for on‑premises consumption.
(c) “Pending planning, annexation, and zoning ordinances” means the ordinances of a local government or an appointed subsidiary of a local government that were publicly considered within the year preceding the date of the hearing or are presently being considered.
Montana Administrative Procedure Act, Title 2, ch. 4.
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.
(f) The sale of alcoholic beverages pursuant to a catering endorsement is subject to the provisions of 16-3-306, unless entities named in 16-3-306 give their written approval.

(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.)
16-4-204. (Effective January 1, 2024) Transfer — catering endorsement — rulemaking. (1) (a) Except as provided in subsection (2), 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; and
(iv) an applicant for the new ownership to be awarded on a lottery basis by the department has met the following criteria:
(A) the applicant had not made another application under this subsection (1)(a) for a lottery‑awarded license within the previous 12 months;
(B) the applicant has provided with the application an irrevocable letter of credit from a financial institution that guarantees the applicant’s ability to pay $100,000; and
(C) the applicant or, if the applicant is not an individual, a person with an ownership interest in the applicant does not have an ownership interest in an all‑beverages license.
(b) A license transferred pursuant to subsection (1)(a) that was issued pursuant to a lottery is not eligible to offer gambling under Title 23, chapter 5, part 3, 5, or 6.
(c) A successful lottery applicant shall commence business within 1 year of the lottery unless the department grants an extension because a delay was caused by circumstances beyond the control of the applicant.
(2) 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.
(3) 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.
(4) (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 (4) 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.
(f) The sale of alcoholic beverages pursuant to a catering endorsement is subject to the provisions of 16-3-306, unless entities named in 16-3-306 give their written approval.
(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.
(5) The department may adopt rules to implement this section.
)()()()(2017 Special Session Amendment: (Temporary version) Chapter 5 deleted former (1)(a)(iv) that read: “(iv) an applicant for the new ownership to be awarded on a lottery basis by the department has met the following criteria:
(A) the applicant had not made another application under this subsection (1)(a) for a lottery‑awarded license within the previous 12 months;
(B) the applicant has provided with the application an irrevocable letter of credit from a financial institution that guarantees the applicant’s ability to pay $100,000; and
(C) the applicant or, if the applicant is not an individual, a person with an ownership interest in the applicant does not have an ownership interest in an all‑beverages license”; in (1)(b) substituted “competitive bidding process” for “lottery”; deleted former (1)(c) that read: “(c) A successful lottery applicant shall commence business within 1 year of the lottery unless the department grants an extension because a delay was caused by circumstances beyond the control of the applicant”; inserted (2) through (8) relating to competitive bidding processes; in (9) near beginning after “transferred to a new” substituted “owner” for “ownership” and near middle substituted “total number of all‑beverages licenses in the current quota area” for “quota of the all‑beverages licenses in the original quota area”; inserted (12) granting rulemaking authority; and made minor changes in style. Amendment effective November 24, 2017, and terminates December 31, 2023.
(Version effective January 1, 2024) Chapter 5 in (2) near beginning after “transferred to a new” substituted “owner” for “ownership” and near middle substituted “total number of all‑beverages licenses in the current quota area” for “quota of the all‑beverages licenses in the original quota area”; inserted (5) granting rulemaking authority; and made minor changes in style.
(Both versions) Chapter 5 in (1)(a) after “transferred to a new” substituted “owner and to a location outside the quota area where the license is currently located” for “ownership and to a location outside the quota area for which it was originally issued”; in (1)(a)(i) substituted “current quota area” for “original quota area”; deleted former (1)(e) and (1)(f) that read: “(e) For 5 years after the transfer of a license between quota areas under subsection (1)(a), the license may not be mortgaged or pledged as security and may not be transferred to another person except for a transfer by inheritance upon the death of the licensee.
(f) Once a license is transferred to a new quota area under subsection (1)(a), it may not be transferred to another quota area or back to the original quota area”; and made minor changes in style.
16-4-205. Limitation on number of licenses — business in name of licensee.
(1) Subject to the provisions of 16-4-401, a person may not be issued more than three all‑beverages licenses, with the exception of a secured party issued an additional all‑beverages license as the result of a default. A secured party shall transfer ownership of any additional all‑beverages license within 180 days of issuance. A business may not be carried on under any license issued under this chapter except in the name of the licensee.
(2) The provisions of this section do not apply to licenses held by the Montana heritage preservation and development commission under the provisions of 16-4-305.
Secured transactions, Title 30, ch. 9A.
16-4-206. Renumbered 16-4-402(1) and (3). Code Commissioner, 1979.

16-4-207. Notice of application — investigation — publication — protest. (1) When an application has been filed with the department for a license to sell alcoholic beverages at retail or to transfer the location of a retail license, the department shall review the application for completeness and, based upon review of the application and any other information supplied to the department, determine whether the applicant or the premises to be licensed meets criteria provided by law. The department may make one request for additional information necessary to complete the application. The application is considered complete when the applicant furnishes the application information requested by the department. When the application is complete, the department of justice shall investigate the application as provided in 16-4-402. When the department determines that an application for a license under this code is complete, the department shall publish in a newspaper of general circulation in the city, town, or county from which the application comes a notice that the applicant has made application for a retail on‑premises license or a transfer of location and that protests may be made against the approval of the application by residents of the county from which the application comes, residents of adjoining Montana counties, or residents of adjoining counties in another state if the criteria in subsection (4)(d) are met. Protests must be mailed to the department within 10 days after the final notice is published. Notice of application for a new license must be published once a week for 4 consecutive weeks. Notice of application for transfer of ownership or location of a license must be published once a week for 2 consecutive weeks. Notice may be substantially in the following form:
NOTICE OF APPLICATION FOR RETAIL ALL‑BEVERAGES LICENSE
Notice is given that on the …….. day of ….., 20…, one (name of applicant) filed an application for a retail all‑beverages license with the Montana department of revenue to be used at (describe location of premises where beverages are to be sold). Residents of …… counties may protest against the approval of the application. Each protestor is required to mail a letter that contains in legible print the protestor’s full name, mailing address, and street address. Each letter must be signed by the protestor. A protest petition bearing the names and signatures of persons opposing the approval of an application may not be considered as a protest. Protests may be mailed to ….., department of revenue, Helena, Montana, on or before the ….. day of ……, 20……
Dated ……………………
Signed
…………………………
(2) Each applicant shall, at the time of filing an application, pay to the department an amount sufficient to cover the costs of publishing the notice.
(3) (a) If the department receives no written protests, the department may approve the application without holding a public hearing.
(b) A response to a notice of opportunity to protest an application may not be considered unless the response is a letter satisfying all the requirements contained in the notice in subsection (1).
(c) If the department receives sufficient written protests that satisfy the requirements in subsection (1) against the approval of the application, the department shall hold a public hearing as provided in subsection (4).
(4) (a) If the department receives at least one protest but less than the number of protests required for a public convenience and necessity determination as specified in subsection (4)(c), the department shall schedule a public hearing to be held in Helena, Montana, to determine whether the protest presents sufficient cause to deny the application based on the qualifications of the applicant as provided in 16-4-401 or on the grounds for denial of an application provided for in 16-4-405, exclusive of public convenience and necessity. The hearing must be governed by the provisions of Title 2, chapter 4, part 6.
(b) If the department receives the number of protests required for a public convenience and necessity determination as specified in subsection (4)(c) and the application is for an original license or for a transfer of location, the department shall schedule a public hearing to be held in the county of the proposed location of the license to determine whether the protest presents sufficient cause to deny the application based on the qualifications of the applicant as provided

in 16-4-401 or on the grounds for denial of an application provided for in 16-4-405 including public convenience and necessity. The hearing must be governed by the provisions of Title 2, chapter 4, part 6.
(c) The minimum number of protests necessary to initiate a public hearing to determine whether an application satisfies the requirements for public convenience and necessity, as specified in 16-4-203, for the proposed premises located within a quota area described in 16-4-201 must be 25% of the quota for all‑beverages licenses determined for that quota area according to 16-4-201(1), (2), and (8) but in no case less than two. The minimum number of protests determined in this manner will apply only to applications for either on‑premises consumption beer or all‑beverages licenses.
(d) A resident of a county in another state that adjoins the county in Montana from which an application comes may protest an application only if the county or state of residence of the person has certified to the department that a similarly situated Montana resident would be able to make formal protest of a liquor license application in that state or county. The department may, by rule, establish how the certification is to be made.
2017 Special Session Amendment: Chapter 5 in (4)(c) substituted “16-4-201(1), (2), and (8)” for “16-4-201(1), (2),
and (5)”. Amendment effective November 24, 2017.
16-4-208. Airport all‑beverages license. (1) The department of revenue shall issue one all‑beverages license, to be known as a public airport all‑beverages license, for use at each publicly owned airport served by scheduled airlines and enplaning and deplaning a minimum total of 20,000 passengers annually when:
(a) application is made;
(b) upon finding that this license is justified by public convenience and necessity, including the convenience and necessity of the public traveling by scheduled airlines; and
(c) following a hearing as provided in 16-4-207.
(2) Application shall be made by the agency owning and operating the airport. The agency owning and operating the airport may lease the airport all‑beverages license to an individual or entity approved by the department.
(3) A public airport all‑beverages license and all retail alcoholic beverage sales thereunder shall be subject to all statutes and rules governing all‑beverages licenses.
(4) The department of revenue shall issue a public airport all‑beverages license to a qualified applicant regardless of the number of all‑beverages licenses already issued within the all‑beverages license quota area in which the airport is situated.
16-4-209. All‑beverages license for tribal alcoholic beverages licensee or enlisted personnel, noncommissioned officers’, or officers’ club. (1) Upon application and qualification, the department shall issue an all‑beverages license to:
(a) a tribal alcoholic beverages licensee who operates the business within the exterior boundaries of a Montana Indian reservation under a tribal license issued prior to January 1, 1985;
(b) an enlisted personnel, noncommissioned officers’, or officers’ club located on a state or federal military reservation in Montana on May 13, 1985.
(2) A license issued under the provisions of subsection (1) is not subject to the quota limitations of 16-4-201.
(3) Upon application and approval by the department, a license issued under subsection (1)(a) may be transferred to another qualified applicant, but the license may be transferred only to a location within the quota area and the exterior boundaries of the Montana Indian reservation for which the license was originally issued.
(4) A license issued under this section is subject to all statutes and rules governing all‑beverages licenses.

Effective Date — Applicability: Section 8, Ch. 731, L. 1985, provided: “This act is effective on passage and approval [approved May 13, 1985] and applies only to tribal licensees who hold tribal licenses issued prior to January 1, 1985, and to enlisted men’s, noncommissioned officers’, and officers’ clubs located on state and federal military reservations in Montana on May 13, 1985.”
16-4-210. Resort license — tour boat endorsement. (1) A holder of a resort all‑beverages license issued under 16-4-202 may be issued a tour boat endorsement to allow the sale of alcoholic beverages to passengers on boats at least 40 feet in length and equipped to carry at least 50 passengers.
(2) The endorsement must be issued upon written application to the department and submission of an annual fee of $200. The applicant must also submit proof:
(a) of compliance with the following requirements:
(i) county health department inspection and approval of food services offered on the boat;
(ii) inspection and approval by the department of fish, wildlife, and parks of boat safety equipment requirements;
(iii) current boat registration; and
(iv) business liability insurance coverage; and
(b) that the registered owner of the tour boat is:
(i) a resort all‑beverages licensee;
(ii) an individual named on a resort all‑beverages license; or
(iii) a stockholder owning 10% or more of any class of stock in a corporate resort all‑beverages license.
(3) Alcoholic beverages may be sold pursuant to the endorsement authorized in subsection
(1) only while the boat is underway within 30 miles of the resort boundary or is in preparation for scheduled departure. Except as provided in this subsection, no alcoholic beverages may be sold or served when the boat is secured at its or any other mooring.
(4) Sale of alcoholic beverages under the endorsement is subject to all other requirements imposed for any all‑beverages license issued under this part.
Boats — certificate of title, 23‑2‑508.
Boat safety equipment requirements, 23‑2‑521.

Part 3 Special Licenses

Security interest in liquor license — definitions, 16-4-801.
16-4-301. Special permits to sell all alcoholic beverages, beer, and table wine
— application and issuance. (1) (a) An organization or institution that has a tax‑exempt designation under the provisions of section 501(c)(3) of the Internal Revenue Code, 26 U.S.C. 501(c)(3), as amended, that is organized and operated to raise funds for a needy person or that is an accredited Montana postsecondary school and that conducts a special event may receive a special permit to sell beer and table wine to the patrons of that special event. An organization may receive up to three special permits a year.
(b) A civic league or organization that has a tax‑exempt designation under section 501(c)(4) of the Internal Revenue Code, 26 U.S.C. 501(c)(4), as amended, or an organization authorized by an accredited Montana postsecondary school to engage in fundraising activities for intercollegiate athletics that has a tax‑exempt designation under the provisions of section 501(c)(3) of the Internal Revenue Code, 26 U.S.C. 501(c)(3), as amended, may receive up to 12 special permits a year to sell beer and table wine. For purposes of fundraising activities for intercollegiate athletics, only one organization for each Montana postsecondary school may be authorized to apply for and receive special permits under this section. All net earnings from the sale of beer and table wine must be contributed to the state of Montana or a political subdivision of the state or must be devoted to purposes required of entities under section 501(c)(3) of the Internal Revenue Code, 26 U.S.C. 501(c)(3), as amended.

(c) An association or corporation engaged in professional sporting contests or junior hockey contests may receive one special permit to sell beer and table wine covering the entire season of play if:
(i) the association or corporation is sanctioned by a sports organization that regulates the specific sport;
(ii) the season of play of the sport is specified in advance;
(iii) an admission fee to the contests is charged; and
(iv) the contest events are held in facilities that provide seating for at least 1,000 patrons.
(d) A chamber of commerce or business league that has a tax‑exempt designation under section 501(c)(6) of the Internal Revenue Code, 26 U.S.C. 501(c)(6), as amended, may receive up to 12 special permits a year to sell beer and table wine. A chamber of commerce may not use one of its special permits for an event conducted by a business league, and a business league may not use one of its permits for an event conducted by a chamber of commerce. The chamber of commerce or business league receiving a special permit shall obtain liquor liability insurance for any event it conducts.
(e) The beer and wine sold under this subsection (1) must be consumed at the time when and within the enclosure where the special event, activity, or sporting contest is held.
(f) An application for a special permit must be presented 3 days in advance, but the department may, for good cause, waive the 3‑day requirement. The application must describe the location of the enclosure where the special event, activity, or sporting contest is to be held, the nature of the special event, activity, or sporting contest, and the period during which it is contemplated that the special event, activity, or sporting contest will be held. An application for a permit for professional sporting contests or junior hockey contests under subsection (1)(c) must provide the inclusive dates of the season of play for the sporting contest. The application must be accompanied by the amount of the permit fee and a written statement of approval of the premises where the special event, activity, or sporting contest is to be held issued by the local law enforcement agency that has jurisdiction over the premises.
(g) A special permit issued under this subsection (1) for the purpose of selling and serving beer at a special event, activity, or sporting contest conducted on the premises of a county fairground or public sports arena authorizes the permitholder 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) For the purposes of this subsection (1), a post of a nationally chartered veterans’ organization or a lodge of a recognized national fraternal organization otherwise licensed under this code is an organization that may receive special permits for three special events a year, as described in subsection (1)(a), to sell beer and table wine. All net proceeds must go to the post or lodge acquiring the special permit.
(2) (a) A post of a nationally chartered veterans’ organization or a lodge of a recognized national fraternal organization not otherwise licensed under this code may receive, without notice or hearing as provided in 16-4-207, a special permit to sell beer and table wine or a special permit to sell all alcoholic beverages at the post or lodge to members and their guests only, to be consumed within the hall or building of the post or lodge.
(b) The application of a nationally chartered veterans’ organization or lodge of a recognized national fraternal organization must describe the location of the hall or building where the special permit will be used and the date it will be used.
(c) The special permit may be issued for a 24‑hour period only, ending at 2 a.m., and the department may not issue more than 12 special permits to any post or lodge during a calendar year.
16-4-302. Passenger carrier licenses. Common carriers serving Montana may serve alcoholic beverages to passengers in aircraft over or railroad cars in the state of Montana upon the issuance of a retail all‑beverages license by the department for that purpose. Such licenses

shall be issued on an annual basis to common carriers making application therefor and shall be effective from July 1 of the current year to July 1 of the following year.
Regulation of carriers of passengers, Title 69, ch. 11, part 2.
16-4-303. Special beer and table wine license for nonprofit arts organizations. (1) A nonprofit arts organization as defined in subsection (4) is entitled to a special beer and table wine license to sell beer and table wine to patrons of exhibitions, productions, performances, or programs sponsored or presented by the organization in a specific theatre or other appropriately designated place for on‑premises consumption.
(2) The proceeds derived from sales of beer and table wine, except for reasonable operating costs, must be used to further the purposes of the organization.
(3) The department shall have access to the organization’s records to determine whether the organization is entitled to a license under this section.
(4) For the purposes of this section, the term “nonprofit arts organization” means an organization governed under Title 35, chapter 2, that is organized and operated for the principal purpose of providing artistic or cultural exhibitions, presentations, or performances for viewing or attendance by the general public. Assets of the corporation must be irrevocably dedicated to the activities for which the license is granted and, on the liquidation, dissolution, or abandonment by the corporation, may not inure directly or indirectly to the benefit of a member or individual except a nonprofit organization, association, or corporation. An artistic or cultural exhibition, presentation, or performance includes:
(a) an exhibition or presentation of works of art or objects of cultural or historical significance, such as those commonly displayed in art or history museums; and
(b) a musical or dramatic performance or series of performances.
(5) A license issued under this section is not subject to the provisions of 16-4-105.
16-4-304. Beer and wine license for Yellowstone airport. (1) Upon application, the department of revenue shall issue a retail beer and wine license to the Yellowstone airport, which is an airport near West Yellowstone, Montana, owned by the state of Montana and operated by the department of transportation.
(2) The application must be made by the department of transportation. The department of transportation may lease the license of use at the airport to an individual or entity approved by the department of revenue.
(3) The license is valid for the retail sale of beer and wine.
(4) The lessee shall pay to the department of revenue an annual license fee as provided in 16-4-501.
(5) The license issued pursuant to this section:
(a) is not subject to the quota provisions of 16-4-105;
(b) is nontransferable;
(c) does not permit gambling activities otherwise allowed under Title 23, part 5.
16-4-305. (Temporary) Montana heritage retail alcoholic beverage licenses — use
— quota. (1) (a) The Montana heritage preservation and development commission may use Montana heritage retail alcoholic beverage licenses within the quota area in which the licenses were originally issued, for the purpose of providing retail alcoholic beverage sales on property acquired by the state under Title 22, chapter 3, part 10. The licenses are to be considered when determining the appropriate quotas for issuance of other retail liquor licenses.
(b) The department may issue a wine amendment pursuant to 16-4-105(11) if the use of a Montana heritage retail alcoholic beverage license for the sale of beer meets all the requirements of that section.
(2) The Montana heritage preservation and development commission may lease a Montana heritage retail alcoholic beverage license to an individual or entity approved by the department.
(3) Montana heritage retail alcoholic beverage licenses are subject to all laws and rules governing the use and operation of retail liquor licenses.

(4) For the purposes of this section, “Montana heritage retail alcoholic beverage licenses” are all‑beverages liquor licenses and retail on‑premises beer licenses that have been transferred to the Montana heritage preservation and development commission under the provisions of section 2, Chapter 251, Laws of 1999. (Terminates December 31, 2023—sec. 17, Ch. 5, Sp. L. November 2017.)
16-4-305. (Effective January 1, 2024) Montana heritage retail alcoholic beverage licenses — use — quota. (1) (a) The Montana heritage preservation and development commission may use Montana heritage retail alcoholic beverage licenses within the quota area in which the licenses were originally issued, for the purpose of providing retail alcoholic beverage sales on property acquired by the state under Title 22, chapter 3, part 10. The licenses are to be considered when determining the appropriate quotas for issuance of other retail liquor licenses.
(b) The department may issue a wine amendment pursuant to 16-4-105(4) if the use of a Montana heritage retail alcoholic beverage license for the sale of beer meets all the requirements of that section.
(2) The Montana heritage preservation and development commission may lease a Montana heritage retail alcoholic beverage license to an individual or entity approved by the department.
(3) Montana heritage retail alcoholic beverage licenses are subject to all laws and rules governing the use and operation of retail liquor licenses.
(4) For the purposes of this section, “Montana heritage retail alcoholic beverage licenses” are all‑beverages liquor licenses and retail on‑premises beer licenses that have been transferred to the Montana heritage preservation and development commission under the provisions of section 2, Chapter 251, Laws of 1999.
2017 Special Session Amendment: (Temporary version) Chapter 5 in (1)(b) substituted “16-4-105(11)” for “16-4-105(2)”. Amendment effective November 24, 2017, and terminates December 31, 2023.
(Version effective January 1, 2024) Chapter 5 in (1)(b) substituted “16-4-105(4)” for “16-4-105(2)”.
16-4-306. (Temporary) Transfer of existing license to political subdivision of state
— rulemaking. (1) A political subdivision of the state of Montana may apply to the department for the transfer of an existing retail beer or beer and wine license and, upon approval by the department, the political subdivision may own and operate the license or lease the license to a person, firm, corporation, or other entity approved by the department.
(2) A license that is transferred to a political subdivision of the state:
(a) may be transferred only to another political subdivision of the state and not to any other person, firm, corporation, or entity;
(b) does not authorize and may not be used in conjunction with gambling activities except for horseracing as authorized in Title 23, chapter 4;
(c) may be authorized only for a fairgrounds complex owned by the political subdivision;
(d) is authorized for use in all facilities contained in the fairgrounds complex;
(e) is not, with respect to the facilities, subject to the provisions of 16-4-204(11);
(f) must be taken into account in determining the license quota restrictions of 16-4-105; and
(g) is subject to all license fees, laws, and rules applicable to retail beer or beer and wine licenses.
(3) The department may adopt rules to implement the provisions of this section. (Terminates December 31, 2023—sec. 17, Ch. 5, Sp. L. November 2017.)
16-4-306. (Effective January 1, 2024) Transfer of existing license to political subdivision of state — rulemaking. (1) A political subdivision of the state of Montana may apply to the department for the transfer of an existing retail beer or beer and wine license and, upon approval by the department, the political subdivision may own and operate the license or lease the license to a person, firm, corporation, or other entity approved by the department.
(2) A license that is transferred to a political subdivision of the state:
(a) may be transferred only to another political subdivision of the state and not to any other person, firm, corporation, or entity;
(b) does not authorize and may not be used in conjunction with gambling activities except for horseracing as authorized in Title 23, chapter 4;
(c) may be authorized only for a fairgrounds complex owned by the political subdivision;
(d) is authorized for use in all facilities contained in the fairgrounds complex;

(e) is not, with respect to the facilities, subject to the provisions of 16-4-204(4);
(f) must be taken into account in determining the license quota restrictions of 16-4-105; and
(g) is subject to all license fees, laws, and rules applicable to retail beer or beer and wine licenses.
(3) The department may adopt rules to implement the provisions of this section.
2017 Special Session Amendment: (Temporary version) Chapter 5 in (2)(e) substituted “16-4-204(11)” for “16-4-204(2)”. Amendment effective November 24, 2017, and terminates December 31, 2023.
(Version effective January 1, 2024) Chapter 5 in (2)(e) substituted “16-4-204(4)” for “16-4-204(2)”.
16-4-307 through 16-4-309 reserved.
16-4-310. Definitions. For the purpose of 16-4-311 and 16-4-312, the following definitions apply:
(1) “Microdistillery” means a distillery located in Montana that produces 25,000 gallons or less of liquor annually.
(2) “Produces” means the distillation of liquor on the premises of the distillery licensee.
16-4-311. (Subsection (3)(c)(i) effective July 1, 2018) Distillery license. (1) The department may, upon receipt of an application, issue a distillery license to a person who is authorized under the provisions of the Federal Alcohol Administration Act, 27 U.S.C. 201 through 212, to distill, rectify, bottle, and process liquor. A licensee may import, manufacture, distill, rectify, blend, denature, and store spirits of an alcoholic content greater than 0.5% alcohol by volume for sale to the department or as provided in 16-4-312 and may transport the liquor out of this state for sale outside this state. Distillery licensees must be permitted to purchase, from and through the department, alcoholic beverages for blending and manufacturing purposes upon terms and conditions that the department may provide. A licensee may not sell any alcoholic beverage within this state except to the department or as provided in 16-4-312.
(2) An agricultural producer or association of agricultural producers or legal agent who manufactures and converts agricultural surpluses, byproducts, or wastes into denatured ethyl and industrial alcohol for purposes other than human consumption is not required to obtain a distillery license from the department.
(3) (a) A distillery producing less than 25,000 gallons of product annually may deliver its product directly to a state agency liquor store if the distillery uses the distillery’s own equipment, trucks, and employees to deliver the product. The amount of product delivered may not be less than a case. The department shall create an electronic reporting system for distilleries to record deliveries made under this subsection (3). Agency liquor stores must be invoiced by the department for product received from a distillery.
(b) A distillery delivering its product pursuant to this subsection (3) shall maintain records of each delivery, subject to inspection by the department.
(c) The department shall pay the distillery for any product delivered to an agency liquor store:
(i) the current freight rate; and
(ii) the distiller’s current quoted price per case. (Subsection (3)(c)(i) effective July 1, 2018— sec. 2, Ch. 375, L. 2015.)
16-4-312. Domestic distillery. (1) A distillery located in Montana and licensed pursuant to 16-4-311 may:
(a) import necessary products in bulk;
(b) bottle, produce, blend, store, transport, or export liquor that it produces;
(c) perform those operations that are permitted for bonded distillery premises under applicable regulations of the United States department of the treasury.
(2) (a) A distillery that is located in Montana and licensed pursuant to 16-4-311 shall sell liquor to the department under this code, and the department shall include the distillery’s liquor as a listed product.
(b) The distillery may use a common carrier for delivery of the liquor to the department.

(c) A distillery that produces liquor within the state under this subsection (2) shall maintain records of all sales and shipments. The distillery shall furnish monthly and other reports concerning quantities and prices of liquor that it ships to the department and other information that the department may determine to be necessary to ensure that distribution of liquor within this state conforms to the requirements of this code.
(3) A microdistillery may:
(a) provide, with or without charge, not more than 2 ounces of liquor that it produces at the microdistillery to consumers for consumption on the premises between 10 a.m. and 8 p.m. A microdistillery may not sell or give more than 2 ounces of liquor to an individual for on‑premises consumption during a business day.
(b) sell liquor that it produces at retail at the distillery directly to the consumer for off‑premises consumption if:
(i) not more than 1.75 liters a day is sold to an individual; and
(ii) the minimum retail price as determined by the department is charged.
16-4-313. Sacramental wine license. (1) The department may issue a sacramental wine license to an establishment whether located in or outside Montana that sells church supplies, including sacramental wine, at retail to rabbis, priests, pastors, ministers, or other officials of churches or other established religious organizations exclusively for use as sacramental wine or for other religious purposes. Sales of sacramental wine may not be made to the public.
(2) An application for a license under this section must be accompanied by a fee of $100, which constitutes the first annual license fee. The annual license renewal fee is $50.
(3) Unless the sacramental wine is purchased onsite, an establishment selling sacramental wine for religious purposes may sell and deliver directly to the religious organization’s premises by:
(a) using the establishment’s own employees and equipment;
(b) contracting with a licensed table wine distributor; or
(c) contracting with a common carrier, which maintains an alcohol shipment program, to ship and deliver the wine. If the wine is shipped and delivered by the common carrier, the shipment must be in boxes marked with the words “Wine Shipment From Sacramental Wine Licensee for Religious Purposes Only” and the boxes must also be conspicuously labeled with the words “Contains Alcohol: Signature of Person 21 Years of Age or Older Required for Delivery”.
(4) A sacramental wine licensee shall maintain records of all wine sales made during the preceding 2 years and shall allow the department access to the records when requested so that the department can ascertain whether the limitations of subsection (1) are being complied with. The required record must include the addresses to which the sacramental wine is delivered and the printed name of the official of the church or other religious organization who signed for delivery.
(5) A sacramental wine licensee located out of state making sales under the provisions of this section is considered a table wine distributor for the purposes of 16-1-411.
(6) Upon receipt of a completed application for a license under this section, the department shall, in exercising its sound discretion, determine whether:
(a) the applicant is qualified under this section to receive a license;
(b) the applicant’s premises are suitable for the carrying on of the business; and
(c) the requirements of this code and the rules promulgated by the department are being met and complied with.
(7) License applications submitted under this section are not subject to the provisions of 16-3-402, 16-4-203, and 16-4-207.
(8) A person licensed under subsection (1) may transport sacramental wine from the licensee’s premises to the religious organization’s premises in any quantity for religious purposes.
(9) A sacramental wine licensee is not subject to the provisions of 16-4-1005 requiring licensees to ensure training.
16-4-314. Academic brewer license under small brewer exception — Flathead valley community college or Montana state university‑Billings — conditions.

(1) Flathead valley community college or Montana state university‑Billings may apply for an academic brewer license under this section that allows the licensee to brew and sell beer to wholesalers as provided in this section. The academic brewer license:
(a) does not allow for the sale of beer at retail and does not allow for the operation of a sample room as provided in 16-3-213;
(b) is limited to production of 10,000 barrels annually;
(c) allows for distribution only to wholesalers as provided in 16-3-214;
(d) is under the ownership of Flathead valley community college or Montana state university‑Billings;
(e) is not subject to quotas under 16-4-105 or to the provisions of 16-3-306;
(f) may not offer gambling activities;
(g) is otherwise subject to laws applying to brewery licenses as provided in this code; and
(h) must operate in an on‑campus facility operated in conjunction with a beer‑brewing class or curriculum taught at the community college or Montana state university‑Billings.
(2) When Flathead valley community college or Montana state university‑Billings has met the conditions in subsection (3) and has paid the fee specified for a brewer under 16-4-501, the department shall issue the academic brewer license.
(3) To obtain a license under this section, Flathead valley community college or Montana state university‑Billings shall:
(a) document approval by the community college district board of trustees or the board of regents of higher education, as applicable;
(b) identify the on‑campus location of the site where classes in beer making are to be held; and
(c) for criminal background requirements under 16-4-414, designate two or more individuals, each of whom must have responsibility for licensing compliance and each of whom must meet the requirements in 16-4-401(4)(a).
(4) The department may adopt rules to implement this section.
Effective Date: Section 3, Ch. 343, L. 2017, provided: “[This act] is effective on passage and approval.” Approved May 7, 2017.
Codification Change: Section 2, Ch. 343, L. 2017, provided that this section was to be codified as an integral part of Title 16, chapter 3. The code commissioner has codified this section in Title 16, chapter 4, to more closely reflect the subject matter.

Part 4 Licensing Criteria

Video gaming machine licenses for alcoholic beverage licensees, 23‑5‑611. Prohibition against discrimination in issuance of license, 49‑3‑204.
16-4-401. License as privilege — criteria for decision on application. (1) A license under this code is a privilege that the state may grant to an applicant and is not a right to which any applicant is entitled.
(2) Except as provided in 16-4-311 and subsection (6) of this section and subject to subsection (8), in the case of a license that permits on‑premises consumption, the department shall find in every case in which it makes an order for the issuance of a new license or for the approval of the transfer of a license that:
(a) if the applicant is an individual:
(i) and the application is approved, the applicant will not possess an ownership interest in more than three establishments licensed under this chapter for all‑beverages sales;
(ii) the applicant does not possess an ownership interest in an agency liquor store as defined in 16-1-106;
(iii) the applicant or any member of the applicant’s immediate family is without financing from or any affiliation to a manufacturer, importer, bottler, or distributor of alcoholic beverages;
(iv) the applicant’s past record and present status as a purveyor of alcoholic beverages and as a business person and citizen demonstrate that the applicant is likely to operate the establishment in compliance with all applicable laws of the state and local governments; and

(v) the applicant is not under 19 years of age;
(b) if the applicant is a publicly traded corporation:
(i) each owner of 10% or more of the outstanding stock meets the requirements for an individual applicant listed in subsection (2)(a). If no single owner owns more than 10% of the outstanding stock, the applicant shall designate two or more officers or board members, each of whom must meet the requirements for an individual applicant listed in subsection (2)(a).
(ii) each individual who has control over the operation of the license meets the requirements for an individual applicant listed in subsection (2)(a);
(iii) each person who shares in the profits or liabilities of a license meets the requirements for an individual applicant listed in subsection (2)(a). This subsection (2)(b)(iii) does not apply to a shareholder of a corporation who owns less than 10% of the outstanding stock in that corporation except that the provisions of subsection (8) apply.
(iv) the corporation is authorized to do business in Montana;
(c) if the applicant is a privately held corporation:
(i) each owner of 10% or more of the outstanding stock meets the requirements for an individual applicant listed in subsection (2)(a). If no single owner owns more than 10% of the outstanding stock, the applicant shall designate two or more officers or board members, each of whom must meet the requirements for an individual applicant listed in subsection (2)(a), and the owners of 51% of the outstanding stock must meet the requirements of subsection (2)(a).
(ii) each individual who has control over the operation of the license meets the requirements for an individual applicant listed in subsection (2)(a);
(iii) each person who shares in the profits or liabilities of a license meets the requirements for an individual applicant listed in subsection (2)(a). This subsection (2)(c)(iii) does not apply to a shareholder of a corporation who owns less than 10% of the outstanding stock in that corporation except that the provisions of subsection (8) apply.
(iv) the corporation is authorized to do business in Montana;
(d) if the applicant is a general partnership, each partner must meet the requirements of subsection (2)(a);
(e) if the applicant is a limited partnership or a limited liability partnership, each general partner and all limited partners whose ownership interest in the partnership equals or exceeds 10% must meet the requirements of subsection (2)(a). If no single limited partner’s interest equals or exceeds 10%, then 51% of all limited partners must meet the requirements of subsection (2)(a).
(f) if the applicant is a limited liability company, all managing members and those members whose ownership interest in the company equals or exceeds 10% must meet the requirements of subsection (2)(a). If no single member’s interest equals or exceeds 10%, then 51% of all members must meet the requirements of subsection (2)(a).
(3) In the case of a license that permits only off‑premises consumption and subject to subsection (8), the department shall find in every case in which it makes an order for the issuance of a new license or for the approval of the transfer of a license that:
(a) if the applicant is an individual:
(i) and the application is approved, the applicant will not possess an ownership interest in more than three establishments licensed under this chapter for all‑beverages sales;
(ii) the applicant does not possess an ownership interest in an agency liquor store as defined in 16-1-106;
(iii) the applicant or any member of the applicant’s immediate family is without financing from or any affiliation to a manufacturer, importer, bottler, or distributor of alcoholic beverages;
(iv) the applicant has not been convicted of a felony or, if the applicant has been convicted of a felony, the applicant’s rights have been restored;
(v) the applicant’s past record and present status as a purveyor of alcoholic beverages and as a business person and citizen demonstrate that the applicant is likely to operate the establishment in compliance with all applicable laws of the state and local governments; and
(vi) the applicant is not under 19 years of age;
(b) if the applicant is a publicly traded corporation:
(i) each owner of 10% or more of the outstanding stock meets the requirements for an individual listed in subsection (3)(a). If no single owner owns more than 10% of the outstanding

stock, the applicant shall designate two or more officers or board members, each of whom must meet the requirements for an individual applicant listed in subsection (3)(a).
(ii) the corporation is authorized to do business in Montana;
(c) if the applicant is a privately held corporation:
(i) each owner of 10% or more of the outstanding stock meets the requirements for an individual applicant listed in subsection (3)(a). If no single owner owns more than 10% of the outstanding stock, the applicant shall designate two or more officers or board members, each of whom must meet the requirements for an individual applicant listed in subsection (3)(a), and the owners of 51% of the outstanding stock must meet the requirements of subsection (3)(a).
(ii) the corporation is authorized to do business in Montana;
(d) if the applicant is a general partnership, each partner must meet the requirements of subsection (3)(a);
(e) if the applicant is a limited partnership or a limited liability partnership, each general partner and all limited partners whose ownership interest in the partnership equals or exceeds 10% must meet the requirements of subsection (3)(a). If no single limited partner’s interest equals or exceeds 10%, then 51% of all limited partners must meet the requirements of subsection (3)(a).
(f) if the applicant is a limited liability company, all managing members and those members whose ownership interest in the company equals or exceeds 10% must meet the requirements of subsection (3)(a). If no single member’s interest equals or exceeds 10%, then 51% of all members must meet the requirements of subsection (3)(a).
(4) Subject to 16-4-311, in the case of a license that permits the manufacture, importing, or wholesaling of an alcoholic beverage, the department shall find in every case in which it makes an order for the issuance of a new license or for the approval of the transfer of a license that:
(a) if the applicant is an individual:
(i) the applicant has no ownership interest in any establishment licensed under this chapter for retail alcoholic beverages sales;
(ii) the applicant does not possess an ownership interest in an agency liquor store as defined in 16-1-106;
(iii) the applicant has not been convicted of a felony or, if the applicant has been convicted of a felony, the applicant’s rights have been restored;
(iv) the applicant’s past record and present status as a purveyor of alcoholic beverages and as a business person and citizen demonstrate that the applicant is likely to operate the establishment in compliance with all applicable laws of the state and local governments;
(v) the applicant is not under 19 years of age; and
(vi) an applicant for a wholesale license is not a manufacturer of an alcoholic beverage or owned or controlled by a manufacturer of an alcoholic beverage;
(b) if the applicant is a publicly traded corporation:
(i) each owner of 10% or more of the outstanding stock meets the requirements for an individual listed in subsection (4)(a). If no single owner owns more than 10% of the outstanding stock, the applicant shall designate two or more officers or board members, each of whom must meet the requirements for an individual applicant listed in subsection (4)(a).
(ii) an applicant for a wholesale license is not a manufacturer of an alcoholic beverage or owned or controlled by a manufacturer of an alcoholic beverage; and
(iii) the corporation is authorized to do business in Montana;
(c) if the applicant is a privately held corporation:
(i) each owner of 10% or more of the outstanding stock meets the requirements for an individual applicant listed in subsection (4)(a). If no single owner owns more than 10% of the outstanding stock, the applicant must designate two or more officers or board members, each of whom must meet the requirements for an individual applicant listed in subsection (4)(a) and the owners of 51% of the outstanding stock must meet the requirements of subsection (4)(a).
(ii) an applicant for a wholesale license is not a manufacturer of an alcoholic beverage or owned or controlled by a manufacturer of an alcoholic beverage; and
(iii) the corporation is authorized to do business in Montana;
(d) if the applicant is a general partnership, each partner must meet the requirements of subsection (4)(a);

(e) if the applicant is a limited partnership or a limited liability partnership, each general partner and all limited partners whose ownership interest in the partnership equals or exceeds 10% must meet the requirements of subsection (4)(a). If no single limited partner’s interest equals or exceeds 10%, then 51% of all limited partners must meet the requirements of subsection (4)(a).
(f) if the applicant is a limited liability company, all managing members and those members whose ownership interest in the company equals or exceeds 10% must meet the requirements of subsection (4)(a). If no single member’s interest equals or exceeds 10%, then 51% of all members must meet the requirements of subsection (4)(a).
(5) In the case of a corporate applicant, the requirements of subsections (2)(b), (3)(b), and (4)(b) apply separately to each class of stock.
(6) The provisions of subsection (2) do not apply to an applicant for or holder of a license pursuant to 16-4-302.
(7) An applicant’s source of funding must be from a suitable source. A lender or other source of money or credit may be found unsuitable if the source:
(a) is a person whose prior financial or other activities or criminal record:
(i) poses a threat to the public interest of the state;
(ii) poses a threat to the effective regulation and control of alcoholic beverages; or
(iii) creates a danger of illegal practices, methods, or activities in the conduct of the licensed business; or
(b) has been convicted of a felony offense within 5 years of the date of application or is on probation or parole or under deferred prosecution for committing a felony offense.
(8) (a) An individual applying for an all‑beverages license or having any ownership interest in an entity applying for an all‑beverages license may not, if the application were to be approved, own an interest in more than half the total number of allowable all‑beverages licenses in any quota area described in 16-4-201.
(b) If two or more individuals through business or family relationship share in the profits or liabilities of all‑beverages licenses, the aggregate number of licenses in which they share profits or liabilities may not exceed half the total number of allowable all‑beverages licenses in the specific quota area in which the all‑beverages licenses will be held.
Effect on Existing Licenses: Section 4, Ch. 359, L. 1981, provided: “The provisions of this act do not affect the validity of any alcoholic beverage license that permits on‑premises consumption and that has been issued prior to the effective date of this act [October 1, 1981] or the reissuance of the license.”
Age of majority, Art. II, sec. 14, Mont. Const.
Criminal justice policy — rights of convicted, Art. II, sec. 28, Mont. Const. Rules for determining residence, 1‑1‑215.
Voter qualifications, 13‑1‑111.
16-4-402. (Temporary) Application — investigation. (1) Prior to the issuance of a license under this chapter, the applicant shall file with the department an application containing information and statements relative to the applicant and the premises where the alcoholic beverage is to be sold as required by the department.
(2) (a) Upon receipt of a completed application for a license under this code, accompanied by the necessary license fee or letter of credit as provided in 16-4-501(7)(f), the department of justice shall make a thorough investigation of all matters relating to the application. Based on the results of the investigation or on other information, the department shall determine whether:
(i) the applicant is qualified to receive a license;
(ii) the applicant’s premises are suitable for the carrying on of the business; and
(iii) the requirements of this code and the rules promulgated by the department are met and complied with.

(b) This subsection (2) does not apply to a catering endorsement provided in 16-4-111 or 16-4-204(11), a retail beer and wine license for off‑premises consumption as provided in 16-4-115, or a special permit provided in 16-4-301.
(c) For an original license application and an application for transfer of location of a license, the department of justice’s investigation and the department’s determination under this subsection
(2) must be completed within 90 days of the receipt of a completed application. If information is requested from the applicant by either department, the time period in this subsection (2)(c) is tolled until the requested information is received by the requesting department. The time period is also tolled if the applicant requests and is granted a delay in the license determination or if the license is for premises that are to be altered, as provided in 16-3-311, or newly constructed. The basis for the tolling of the deadline must be documented.
(3) (a) Upon proof that an applicant made a false statement in any part of the original application, in any part of an annual renewal application, or in any hearing conducted pursuant to an application, the application for the license may be denied, and if issued, the license may be revoked.
(b) A statement on an application or at a hearing that is based upon a verifiable assertion made by a governmental officer, employee, or agent that an applicant relied upon in good faith may not be used as the basis of a false statement for a denial or revocation of a license.
(4) The department shall issue a conditional approval letter upon the last occurrence of either:
(a) completion of the investigation and determination provided for in subsection (2) if the department has not received information that would cause the department to deny the application; or
(b) a final agency decision that either denies or dismisses a protest against the approval of an application pursuant to 16-4-207.
(5) The conditional approval letter must state the reasons upon which the future denial of the application may be based. The reasons for denial of the application after the issuance of the conditional approval letter are as follows:
(a) there is false or erroneous information in the application;
(b) the premises are not approved by local building, health, or fire officials;
(c) there are physical changes to the premises that if known prior to the issuance of the conditional approval letter would have constituted grounds for the denial of the application or denial of the issuance of the conditional approval; or
(d) a final decision by a court exercising jurisdiction over the matter either reverses or remands the department’s final agency decision provided for in subsection (4). (Terminates December 31, 2023—sec. 17, Ch. 5, Sp. L. November 2017.)
16-4-402. (Effective January 1, 2024) Application — investigation. (1) Prior to the issuance of a license under this chapter, the applicant shall file with the department an application containing information and statements relative to the applicant and the premises where the alcoholic beverage is to be sold as required by the department.
(2) (a) Upon receipt of a completed application for a license under this code, accompanied by the necessary license fee or letter of credit as provided in 16-4-501(7)(f), the department of justice shall make a thorough investigation of all matters relating to the application. Based on the results of the investigation or on other information, the department shall determine whether:
(i) the applicant is qualified to receive a license;
(ii) the applicant’s premises are suitable for the carrying on of the business; and
(iii) the requirements of this code and the rules promulgated by the department are met and complied with.
(b) This subsection (2) does not apply to a catering endorsement provided in 16-4-111 or 16-4-204(4), a retail beer and wine license for off‑premises consumption as provided in 16-4-115, or a special permit provided in 16-4-301.
(c) For an original license application and an application for transfer of location of a license, the department of justice’s investigation and the department’s determination under this subsection
(2) must be completed within 90 days of the receipt of a completed application. If information is requested from the applicant by either department, the time period in this subsection (2)(c) is tolled until the requested information is received by the requesting department. The time period

is also tolled if the applicant requests and is granted a delay in the license determination or if the license is for premises that are to be altered, as provided in 16-3-311, or newly constructed. The basis for the tolling of the deadline must be documented.
(3) (a) Upon proof that an applicant made a false statement in any part of the original application, in any part of an annual renewal application, or in any hearing conducted pursuant to an application, the application for the license may be denied, and if issued, the license may be revoked.
(b) A statement on an application or at a hearing that is based upon a verifiable assertion made by a governmental officer, employee, or agent that an applicant relied upon in good faith may not be used as the basis of a false statement for a denial or revocation of a license.
(4) The department shall issue a conditional approval letter upon the last occurrence of either:
(a) completion of the investigation and determination provided for in subsection (2) if the department has not received information that would cause the department to deny the application; or
(b) a final agency decision that either denies or dismisses a protest against the approval of an application pursuant to 16-4-207.
(5) The conditional approval letter must state the reasons upon which the future denial of the application may be based. The reasons for denial of the application after the issuance of the conditional approval letter are as follows:
(a) there is false or erroneous information in the application;
(b) the premises are not approved by local building, health, or fire officials;
(c) there are physical changes to the premises that if known prior to the issuance of the conditional approval letter would have constituted grounds for the denial of the application or denial of the issuance of the conditional approval; or
(d) a final decision by a court exercising jurisdiction over the matter either reverses or remands the department’s final agency decision provided for in subsection (4).
2017 Special Session Amendment: (Temporary version) Chapter 5 in (2)(b) substituted “16-4-204(11)” for “16-4-204(2)”. Amendment effective November 24, 2017, and terminates December 31, 2023.
(Version effective January 1, 2024) Chapter 5 in (2)(b) substituted “16-4-204(4)” for “16-4-204(2)”.
16-4-403. Repealed. Sec. 11, Ch. 110, L. 2003.
16-4-404. Protest period — contents of license — posting — privilege — transfer.
(1) A license may not be issued until on or after the date set in the notice for hearing protests.
(2) Every license issued under this code must state the name of the person to whom it is issued, the location, by street and number or other appropriate specific description of location if no street address exists, of the premises where the business is to be carried on under the license, and other information the department considers necessary. If the licensee is a partnership or if more than one person has an interest in the business operated under the license, the names of all persons in the partnership or interested in the business must appear on the license. Every license must be posted in a conspicuous place on the premises in which the business authorized under the license is conducted, and the license must be exhibited upon request to any authorized representative of the department or the department of justice or to any peace officer of the state of Montana.
(3) A license issued under the provisions of this code is a privilege personal to the licensee named in the license and is valid until the expiration of the license unless sooner revoked or suspended.

(4) A license may be transferred to the executor or administrator of the estate of a deceased licensee when the estate consists in whole or in part of the business of selling alcoholic beverages under a license. The license may descend or be disposed of with the licensed business under appropriate probate proceedings.
(5) (a) A licensee may apply to the department for a transfer of the license to different premises within the quota area if:
(i) there has been major loss or damage to the licensed premises by unforeseen natural causes;
(ii) the lease of the licensed premises has expired;
(iii) in case of rented licensed premises, there has been an eviction or increase of rent by the landlord; or
(iv) the licensee has proposed removal of the license to premises that are as substantially suited for the retail alcoholic beverages business as the premises proposed to be vacated.
(b) The department may, after notice and opportunity for protest, permit a transfer in the cases specified in subsection (5)(a) if it appears to the department that a transfer is required to do justice to the licensee applying for the transfer and the transfer is justified by public convenience and necessity, pursuant to 16-4-203, unless a public convenience and necessity hearing is required by 16-4-207. The department may not allow a transfer to different premises where the sanitary, health, and service facilities are less satisfactory than facilities that exist or had existed at the premises from which the transfer is proposed to be made.
(6) Upon a bona fide sale of the business operated under a license, the license may be transferred to a qualified purchaser. A transfer of a license to a person or location is not effective unless approved by the department. A licensee or transferee or proposed transferee who operates or attempts to operate under a supposedly transferred license prior to the approval of the transfer by the department, endorsed upon the license in writing, is considered to be operating without a license and the license affected may be revoked or suspended by the department. The department may, within its discretion, permit a qualified purchaser to operate the business to be transferred pending final approval if there has not been a change in location and the application for transfer has been filed with the department.
(7) Except as provided in 16-4-204 and subsections (2) through (6) of this section, a license may not be transferred or sold or used for any place of business not described in the license. A license may be subject to mortgage and other valid liens, in which event the name of the mortgagee, upon application to and approval of the department, must be endorsed on the license. Beer or wine sold to a licensee on credit pursuant to 16-3-243 or 16-3-406 does not create a lien upon a license, but a subsequent licensee has the obligation to pay for the beer or wine.
Mortgages generally, Title 71, ch. 1.
Liens generally, Title 71, ch. 3, part 1.
16-4-405. Denial of license. (1) The department may deny the issuance of a retail alcoholic beverages license if it determines that the premises proposed for licensing are off regular police beats and cannot be properly policed by local authorities.
(2) A retail license may not be issued by the department for a premises situated within a zone of a city, town, or county where the sale of alcoholic beverages is prohibited by ordinance, a certified copy of which has been filed with the department.
(3) A license under this code may not be issued if the department finds from the evidence at the hearing held pursuant to 16-4-207(3) that:
(a) the welfare of the people residing or of retail licensees located in the vicinity of the premises for which the license is desired will be adversely and seriously affected;
(b) if required, there is not a public convenience and necessity justification pursuant to 16-4-203;

(c) the applicant or the premises proposed for licensing fail to meet the eligibility or suitability criteria established by this code;
(d) a possible reason for denial listed in a conditional approval letter, as provided in 16-4-402, has been verified; or
(e) the purposes of this code will not be carried out by the issuance of the license.
Sales prohibited by ordinance, 16-3-309. Nuisances and their abatement, Title 27, ch. 30. Disorderly conduct, 45‑8‑101.
Maintaining public nuisance, 45‑8‑111.
16-4-406. Renewal — suspension or revocation — penalty — mitigating and aggravating circumstances. (1) The department shall upon a written, verified complaint of a person request that the department of justice investigate the action and operation of a brewer, winery, wholesaler, domestic distillery, table wine distributor, beer or wine importer, retailer, or any other person or business licensed or registered under this code.
(2) Subject to the opportunity for a hearing under the Montana Administrative Procedure Act, if the department, after reviewing admissions of the licensee or receiving the results of the department of justice’s or a local law enforcement agency’s investigation, has reasonable cause to believe that a licensee has violated a provision of this code or a rule of the department, it may, in its discretion and in addition to the other penalties prescribed:
(a) reprimand a licensee;
(b) proceed to revoke the license of the licensee;
(c) suspend the license for a period of not more than 3 months;
(d) refuse to grant a renewal of the license after its expiration; or
(e) impose a civil penalty not to exceed $1,500.
(3) The department shall consider mitigating circumstances and may adjust penalties within penalty ranges based on its consideration of mitigating circumstances. Examples of mitigating circumstances are:
(a) there have been no violations by the licensee within the past 3 years;
(b) there have been good faith efforts by the licensee to prevent a violation;
(c) written policies exist that govern the conduct of the licensee’s employees;
(d) there has been cooperation in the investigation of the violation that shows that the licensee or an employee or agent of the licensee accepts responsibility;
(e) the investigation was not based on complaints received or on observed misconduct, but was based solely on the investigating authority creating the opportunity for a violation; or
(f) the licensee has provided responsible alcohol server training to all of its employees.
(4) The department shall consider aggravating circumstances and may adjust penalties within penalty ranges based on its consideration of aggravating circumstances. Examples of aggravating circumstances are:
(a) prior warnings about compliance problems;
(b) prior violations within the past 3 years;
(c) lack of written policies governing employee conduct;
(d) multiple violations during the course of the investigation;
(e) efforts to conceal a violation;
(f) the intentional nature of the violation; or
(g) involvement of more than one patron or employee in a violation.
Hearing under Montana Administrative Procedure Act, Title 2, ch. 4, part 6.

16-4-407. Suspension or revocation of licenses. Each July 1 or, when applicable, on the licensee’s anniversary date, the department shall issue licenses to brewers, wineries, beer importers, wholesalers, or retailers or for the retail sale of alcoholic beverages on an annual basis upon payment of the fees prescribed by law. The licenses are subject to suspension or revocation under 16-4-406 after midnight of June 30 of the succeeding year or 1 year after the anniversary if the annual renewal fees required by 16-4-501 are not paid. The department shall notify each applicant for an original license or renewal that it is the applicant’s responsibility to determine if applicable provisions of federal law require the applicant to obtain a permit from a federal agency.
16-4-408. Renewal of suspended licenses. After suspension or revocation of a license, the department shall have the power to renew the same if in its discretion a proper showing therefor has been made.
16-4-409. Repealed. Sec. 5, Ch. 595, L. 1983.
16-4-410. Repealed. Sec. 5, Ch. 595, L. 1983.
16-4-411. Appeals concerning alcoholic beverages laws. (1) Any interested party shall have the right to appeal any decision of the department of revenue concerning the issuance, transfer, suspension, or revocation of alcoholic beverages licenses to the district court in the county in which the issuance, transfer, suspension, or revocation occurred or, at the appellant’s option, in the district court of the first judicial district.
(2) The appeal must be in conformity with the provisions of Title 2, chapter 4, part 7.
Contested cases — Montana Administrative Procedure Act, Title 2, ch. 4, parts 6 and 7.
16-4-412. Limits on concurrent applications. (1) An application for the issuance of a new license or for the transfer of an existing license may not be considered by the department if a previous application for the same premises is pending. An application is considered pending if a final decision:
(a) has not been made by the department; or
(b) has been made by the department but:
(i) a petition for judicial review can still be filed or has been filed; or
(ii) an appeal to the Montana supreme court can still be filed or has been filed.
(2) This section does not prevent the department from considering more than one application for the same location pursuant to competition for a last available license.
16-4-413. Denial of application — five‑year moratorium. (1) If an application for the issuance of a new license or for the transfer of an existing license has been denied for any reason provided in 16-4-405, the department may not consider an application or issue any retail license, special permit, or special license for those premises for 5 years unless the department, using the criteria described in subsection (3), determines that the proposed use is substantially different from the use that was rejected. The prohibition period commences on the date of the final agency decision or, if judicially reviewed, on the date the judicial decision is final.
(2) If an application is withdrawn after a hearing has been held in which testimony is received regarding any reason for denial provided in 16-4-405, the effect of the withdrawal is the same as if a final decision had been made denying the application for any reason provided in 16-4-405. The 5‑year prohibition against considering an application or issuing a license for that vicinity commences on the date of the withdrawal.

(3) The department shall determine whether a proposed use is substantially different by considering:
(a) the capacity of the proposed use;
(b) the nature of the establishment;
(c) the presence and character of any entertainment; and
(d) the characteristics of the neighborhood.
16-4-414. Fingerprints required of applicants — exceptions. (1) Except as provided in subsections (2) and (3), an applicant for a license under this code, any person employed by the applicant as a manager, and, if the applicant is a corporation, each person holding 10% or more of the outstanding stock and each officer and director shall submit their fingerprints with the application to facilitate a fingerprint and background check by the department of justice and the federal bureau of investigation. The results of the investigation must be used by the department in determining the applicant’s eligibility for a license.
(2) (a) When the applicant is seeking a license for off‑premises consumption, the following persons are subject to the fingerprint and background check described in subsection (1):
(i) the applicant;
(ii) a person designated by the applicant as responsible for operating the licensed establishment on behalf of the licensee; or
(iii) if the applicant is a corporation, each person holding 10% or more of the outstanding stock and each officer and director responsible for operating the licensed establishment.
(b) Additional fingerprint and background checks may be required at renewal only for new persons described in subsection (2)(a).
(c) A change in the form of a licensee’s business entity that does not result in any person having a new ownership interest in the business is not grounds for the department to require a fingerprint or background check.
(3) When the applicant is seeking a license for off‑premises consumption, a person employed by the applicant as a manager is not subject to the fingerprint and background check described in subsection (1).
16-4-415. Changes in business entity ownership — department approval required.
(1) In the case of corporate licensees, a person or entity that does not own stock or owns less than 10% of the stock in the corporation may not receive stock that results in the person or entity’s share of stock in the corporation being 10% or greater unless the department reviews and determines that the person or entity qualifies for ownership of a liquor license as provided in 16-4-401.
(2) In the case of all other business entities, when a proposed transfer of ownership would result in a party who prior to the transfer owned no interest in the license owning an interest in the license, the proposed transfer must be submitted to the department for review. The proposed new party must qualify for ownership of a liquor license as provided in 16-4-401.
(3) In the case of a proposed change in business entity, the proposed new business entity shall apply for a transfer of ownership of the license with the department prior to changing the business entity. The proposed new business entity must qualify for ownership of a liquor license as provided in 16-4-401.
16-4-416. Ownership of liquor license by United States. (1) Whenever right, title, and interest in a liquor license vests in the United States, the United States shall promptly give notice to the department of its interest and must have the license placed on nonuse status. The United States shall transfer ownership of the license to a qualified applicant within 200 days from the date on which it obtained an interest in the license. Upon receipt of an application to transfer the license, the department may, pursuant to 16-4-404, grant the applicant temporary authority to operate the license.
(2) The department, upon a showing of good cause, may in its discretion extend the time for sale of the license for an additional period of up to 180 days.

16-4-417 through 16-4-419 reserved.
16-4-420. (Temporary) Restaurant beer and wine license — competitive bidding
— rulemaking. (1) The department shall issue a restaurant beer and wine license to an applicant whenever the department determines that the applicant, in addition to satisfying the requirements of this section, meets the following qualifications and conditions:
(a) the applicant complies with the licensing criteria provided in 16-4-401 for an on‑premises consumption license;
(b) the applicant operates a restaurant at the location where the restaurant beer and wine license will be used or satisfies the department that:
(i) the applicant intends to open a restaurant that will meet the requirements of subsection
(6) and intends to operate the restaurant so that at least 65% of the restaurant’s gross income during its first year of operation is expected to be the result of the sale of food;
(ii) the restaurant beer and wine license will be used in conjunction with that restaurant, that the restaurant will serve beer and wine only to a patron who orders food, and that beer and wine purchases will be stated on the food bill; and
(iii) the restaurant will serve beer and wine from a service bar, as service bar is defined by the department by rule;
(c) the applicant understands and acknowledges in writing on the application that this license prohibits the applicant from being licensed to conduct any gaming or gambling activity or operate any gambling machines and that if any gaming or gambling activity or machine exists at the location where the restaurant beer and wine license will be used, the activity must be discontinued or the machines must be removed before the restaurant beer and wine license takes effect; and
(d) the applicant states the planned seating capacity of the restaurant, if it is to be built, or the current seating capacity if the restaurant is operating.
(2) (a) A restaurant that has an existing retail license for the sale of beer, wine, or any other alcoholic beverage may not be considered for a restaurant beer and wine license at the same location.
(b) (i) An on‑premises retail licensee who sells the licensee’s existing retail license may not apply for a license under this section for a period of 1 year from the date that license is transferred to a new purchaser.
(ii) A person, including an individual, with an ownership interest in an existing on‑premises retail license that is being transferred to a new purchaser may not attain an ownership interest in a license applied for under this section for a period of 1 year from the date that the existing on‑premises retail license is transferred to a new purchaser.
(3) A completed application for a license under this section and the appropriate application fee, as provided in subsection (11), must be submitted to the department. The department shall investigate the items relating to the application as described in subsections (3)(a) through (3)(d). Based on the results of the investigation and the exercise of its sound discretion, the department shall determine whether:
(a) the applicant is qualified to receive a license;
(b) the applicant’s premises are suitable for the carrying on of the business;
(c) the requirements of this code and the rules promulgated by the department are complied with; and
(d) the seating capacity stated on the application is correct.
(4) An application for a beer and wine license submitted under this section is subject to the provisions of 16-4-203, 16-4-207, and 16-4-405.
(5) If a premises proposed for licensing under this section is a new or remodeled structure, then the department may issue a conditional license prior to completion of the premises based on reasonable evidence, including a statement from the applicant’s architect or contractor confirming that the seating capacity stated on the application is correct, that the premises will be suitable for the carrying on of business as a bona fide restaurant, as defined in subsection (6).
(6) (a) For purposes of this section, “restaurant” means a public eating place:
(i) where individually priced meals are prepared and served for on‑premises consumption;
(ii) where at least 65% of the restaurant’s annual gross income from the operation must be from the sale of food and not from the sale of alcoholic beverages. Each year after a license

is issued, the applicant shall file with the department a statement, in a form approved by the department, attesting that at least 65% of the gross income of the restaurant during the prior year resulted from the sale of food.
(iii) that has a dining room, a kitchen, and the number and kinds of employees necessary for the preparation, cooking, and serving of meals in order to satisfy the department that the space is intended for use as a full‑service restaurant; and
(iv) that serves an evening dinner meal at least 4 days a week for at least 2 hours a day between the hours of 5 p.m. and 11 p.m. The provisions of subsection (6)(b) and this subsection (6)(a)(iv) do not apply to a restaurant for which a restaurant beer and wine license is in effect as of April 9, 2009, or to subsequent renewals of that license.
(b) The term does not mean a fast‑food restaurant that, excluding any carry‑out business, serves a majority of its food and drink in throw‑away containers not reused in the same restaurant.
(7) (a) A restaurant beer and wine license may be transferred, on approval by the department, from the original applicant to a new owner of the restaurant only after 1 year of use by the original owner.
(b) A license issued under this section may be jointly owned, and the license may pass to the surviving joint tenant upon the death of the other tenant. However, the license may not be transferred to any other person or entity by operation of the laws of inheritance or succession or any other laws allowing the transfer of property upon the death of the owner in this state or in another state.
(c) An estate may, upon the sale of a restaurant that is property of the estate and with the approval of the department, transfer a restaurant beer and wine license to a new owner.
(8) (a) The department shall issue a restaurant beer and wine license to a qualified applicant:
(i) except as provided in subsection (8)(c), for a restaurant located in a quota area with a population of 5,000 persons or fewer, as the quota area population is determined in 16-4-105, if the number of restaurant beer and wine licenses issued in that quota area is equal to or less than 80% of the number of beer licenses that may be issued in that quota area pursuant to 16-4-105;
(ii) for a restaurant located in a quota area with a population of 5,001 to 20,000 persons, as the quota area population is determined in 16-4-105, if the number of restaurant beer and wine licenses issued in that quota area is equal to or less than 160% of the number of beer licenses that may be issued in that quota area pursuant to 16-4-105;
(iii) for a restaurant located in a quota area with a population of 20,001 to 60,000 persons, as the quota area population is determined in 16-4-105, if the number of restaurant beer and wine licenses issued in that quota area is equal to or less than 100% of the number of beer licenses that may be issued in that quota area pursuant to 16-4-105;
(iv) for a restaurant located in a quota area with a population of 60,001 persons or more, as the quota area population is determined in 16-4-105, if the number of restaurant beer and wine licenses issued in that quota area is equal to or less than 80% of the number of beer licenses that may be issued in that quota area pursuant to 16-4-105; and
(v) for a restaurant located in a quota area that is also a resort community, as defined in 7‑6‑1501, if the number of restaurant beer and wine licenses issued in the quota area that is also a resort community is equal to or less than 200% of the number of beer licenses that may be issued in that quota area pursuant to 16-4-105.
(b) In determining the number of restaurant beer and wine licenses that may be issued under this subsection (8) based on the percentage amounts described in subsections (8)(a)(i) through (8)(a)(v), the department shall round to the nearer whole number.
(c) If the department has issued the number of restaurant beer and wine licenses authorized for a quota area under subsection (8)(a)(i), there must be a one‑time adjustment of four additional licenses for that quota area.
(9) If any new restaurant beer and wine licenses are allowed by separating a combined quota area, pursuant to 16-4-105 as of November 24, 2017, the department shall publish the availability of no more than one new restaurant beer and wine license a year until the quota has been reached.
(10) When a restaurant beer and wine license becomes available by the initial issuance of licenses under this section or as the result of an increase in the population in a quota area, the

nonrenewal of a restaurant beer and wine license, or the lapse or revocation of a license by the department, then the department shall advertise the availability of the license in the quota area for which it is available.
(11) When the department determines that a quota area is eligible for a new restaurant beer and wine license under subsection (9) or (10), the department shall use a competitive bidding process to determine the party afforded the opportunity to apply for a new license. The department shall:
(a) determine the minimum bid based on 75% of the market value of all restaurant beer and wine licenses in the quota area;
(b) publish notice that a quota area is eligible for a new license;
(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.
(12) 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.
(13) 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 a restaurant beer and wine 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.
(14) 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.
(15) 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 (13).
(16) If no bids are received during the competitive bidding process or if a quota area is already eligible for another new license, the department shall process applications for the license in the order received.
(17) (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.
(18) Under a restaurant beer and wine license, beer and wine may not be sold for off‑premises consumption.
(19) An application for a restaurant beer and wine license must be accompanied by a fee equal to 20% of the initial licensing fee. If the department does not make a decision either granting or denying the license within 4 months of receipt of a complete application, the department shall pay interest on the application fee at the rate of 1% a month until a license is issued or the application is denied. Interest may not accrue during any period that the processing of an application is delayed by reason of a protest filed pursuant to 16-4-203 or 16-4-207. If the department denies an application, the application fee, plus any interest, less a processing

fee established by rule, must be refunded to the applicant. Upon the issuance of a license, the licensee shall pay the balance of the initial licensing fee. The amount of the initial licensing fee is determined according to the following schedule:
(a) $5,000 for restaurants with a stated seating capacity of 60 persons or less;
(b) $10,000 for restaurants with a stated seating capacity of 61 to 100 persons; or
(c) $20,000 for restaurants with a stated seating capacity of 101 persons or more.
(20) The annual fee for a restaurant beer and wine license is $400.
(21) If a restaurant licensed under this part increases the stated seating capacity of the licensed restaurant or if the department determines that a licensee has increased the stated seating capacity of the licensed restaurant, then the licensee shall pay to the department the difference between the fees paid at the time of filing the original application and issuance of a license and the applicable fees for the additional seating.
(22) The number of beer and wine licenses issued to restaurants with a stated seating capacity of 101 persons or more may not exceed 25% of the total licenses issued.
(23) Possession of a restaurant beer and wine license is not a qualification for licensure of any gaming or gambling activity. A gaming or gambling activity may not occur on the premises of a restaurant with a restaurant beer and wine license.
(24) The department may adopt rules to implement this section. (Terminates December 31, 2023—sec. 17, Ch. 5, Sp. L. November 2017.)
16-4-420. (Effective January 1, 2024) Restaurant beer and wine license — rulemaking. (1) The department shall issue a restaurant beer and wine license to an applicant whenever the department determines that the applicant, in addition to satisfying the requirements of this section, meets the following qualifications and conditions:
(a) the applicant complies with the licensing criteria provided in 16-4-401 for an on‑premises consumption license;
(b) the applicant operates a restaurant at the location where the restaurant beer and wine license will be used or satisfies the department that:
(i) the applicant intends to open a restaurant that will meet the requirements of subsection
(6) and intends to operate the restaurant so that at least 65% of the restaurant’s gross income during its first year of operation is expected to be the result of the sale of food;
(ii) the restaurant beer and wine license will be used in conjunction with that restaurant, that the restaurant will serve beer and wine only to a patron who orders food, and that beer and wine purchases will be stated on the food bill; and
(iii) the restaurant will serve beer and wine from a service bar, as service bar is defined by the department by rule;
(c) the applicant understands and acknowledges in writing on the application that this license prohibits the applicant from being licensed to conduct any gaming or gambling activity or operate any gambling machines and that if any gaming or gambling activity or machine exists at the location where the restaurant beer and wine license will be used, the activity must be discontinued or the machines must be removed before the restaurant beer and wine license takes effect; and
(d) the applicant states the planned seating capacity of the restaurant, if it is to be built, or the current seating capacity if the restaurant is operating.
(2) (a) A restaurant that has an existing retail license for the sale of beer, wine, or any other alcoholic beverage may not be considered for a restaurant beer and wine license at the same location.
(b) (i) An on‑premises retail licensee who sells the licensee’s existing retail license may not apply for a license under this section for a period of 1 year from the date that license is transferred to a new purchaser.
(ii) A person, including an individual, with an ownership interest in an existing on‑premises retail license that is being transferred to a new purchaser may not attain an ownership interest in a license applied for under this section for a period of 1 year from the date that the existing on‑premises retail license is transferred to a new purchaser.
(3) A completed application for a license under this section and the appropriate application fee, as provided in subsection (11), must be submitted to the department. The department shall investigate the items relating to the application as described in subsections (3)(a) through (3)(d).

Based on the results of the investigation and the exercise of its sound discretion, the department shall determine whether:
(a) the applicant is qualified to receive a license;
(b) the applicant’s premises are suitable for the carrying on of the business;
(c) the requirements of this code and the rules promulgated by the department are complied with; and
(d) the seating capacity stated on the application is correct.
(4) An application for a beer and wine license submitted under this section is subject to the provisions of 16-4-203, 16-4-207, and 16-4-405.
(5) If a premises proposed for licensing under this section is a new or remodeled structure, then the department may issue a conditional license prior to completion of the premises based on reasonable evidence, including a statement from the applicant’s architect or contractor confirming that the seating capacity stated on the application is correct, that the premises will be suitable for the carrying on of business as a bona fide restaurant, as defined in subsection (6).
(6) (a) For purposes of this section, “restaurant” means a public eating place:
(i) where individually priced meals are prepared and served for on‑premises consumption;
(ii) where at least 65% of the restaurant’s annual gross income from the operation must be from the sale of food and not from the sale of alcoholic beverages. Each year after a license is issued, the applicant shall file with the department a statement, in a form approved by the department, attesting that at least 65% of the gross income of the restaurant during the prior year resulted from the sale of food.
(iii) that has a dining room, a kitchen, and the number and kinds of employees necessary for the preparation, cooking, and serving of meals in order to satisfy the department that the space is intended for use as a full‑service restaurant; and
(iv) that serves an evening dinner meal at least 4 days a week for at least 2 hours a day between the hours of 5 p.m. and 11 p.m. The provisions of subsection (6)(b) and this subsection (6)(a)(iv) do not apply to a restaurant for which a restaurant beer and wine license is in effect as of April 9, 2009, or to subsequent renewals of that license.
(b) The term does not mean a fast‑food restaurant that, excluding any carry‑out business, serves a majority of its food and drink in throw‑away containers not reused in the same restaurant.
(7) (a) A restaurant beer and wine license may be transferred, on approval by the department, from the original applicant to a new owner of the restaurant only after 1 year of use by the original owner.
(b) A license issued under this section may be jointly owned, and the license may pass to the surviving joint tenant upon the death of the other tenant. However, the license may not be transferred to any other person or entity by operation of the laws of inheritance or succession or any other laws allowing the transfer of property upon the death of the owner in this state or in another state.
(c) An estate may, upon the sale of a restaurant that is property of the estate and with the approval of the department, transfer a restaurant beer and wine license to a new owner.
(8) (a) The department shall issue a restaurant beer and wine license to a qualified applicant:
(i) except as provided in subsection (8)(c), for a restaurant located in a quota area with a population of 5,000 persons or fewer, as the quota area population is determined in 16-4-105, if the number of restaurant beer and wine licenses issued in that quota area is equal to or less than 80% of the number of beer licenses that may be issued in that quota area pursuant to 16-4-105;
(ii) for a restaurant located in a quota area with a population of 5,001 to 20,000 persons, as the quota area population is determined in 16-4-105, if the number of restaurant beer and wine licenses issued in that quota area is equal to or less than 160% of the number of beer licenses that may be issued in that quota area pursuant to 16-4-105;
(iii) for a restaurant located in a quota area with a population of 20,001 to 60,000 persons, as the quota area population is determined in 16-4-105, if the number of restaurant beer and wine licenses issued in that quota area is equal to or less than 100% of the number of beer licenses that may be issued in that quota area pursuant to 16-4-105;
(iv) for a restaurant located in a quota area with a population of 60,001 persons or more, as the quota area population is determined in 16-4-105, if the number of restaurant beer and wine

licenses issued in that quota area is equal to or less than 80% of the number of beer licenses that may be issued in that quota area pursuant to 16-4-105; and
(v) for a restaurant located in a quota area that is also a resort community, as defined in 7‑6‑1501, if the number of restaurant beer and wine licenses issued in the quota area that is also a resort community is equal to or less than 200% of the number of beer licenses that may be issued in that quota area pursuant to 16-4-105.
(b) In determining the number of restaurant beer and wine licenses that may be issued under this subsection (8) based on the percentage amounts described in subsections (8)(a)(i) through (8)(a)(v), the department shall round to the nearer whole number.
(c) If the department has issued the number of restaurant beer and wine licenses authorized for a quota area under subsection (8)(a)(i), there must be a one‑time adjustment of four additional licenses for that quota area.
(d) If there are more applicants than licenses available in a quota area, then the license must be awarded by lottery as provided in subsection (10).
(9) If any new restaurant beer and wine licenses are allowed by separating a combined quota area, pursuant to 16-4-105 as of November 24, 2017, the department shall publish the availability of no more than one new restaurant beer and wine license a year until the quota has been reached.
(10) (a) When a restaurant beer and wine license becomes available by the initial issuance of licenses under this section or as the result of an increase in the population in a quota area, the nonrenewal of a restaurant beer and wine license, or the lapse or revocation of a license by the department, then the department shall advertise the availability of the license in the quota area for which it is available. If there are more applicants than number of licenses available, the license must be awarded to an applicant by a lottery.
(b) A preference must be given to an applicant who does not yet have in any quota area a restaurant beer and wine license or a retail beer license and who operates a restaurant that is in the quota area described in subsection (8) in which the license has become available and that meets the qualifications of subsection (6) for at least 12 months prior to the filing of an application. An applicant with a preference must be awarded a license before any applicant without a preference.
(c) The department shall numerically rank all applicants in the lottery. Only the successful applicants will be required to submit a completed application and a one‑time required fee. An applicant’s ranking may not be sold or transferred to another person or entity. The preference and an applicant’s ranking apply only to the intended license advertised by the department or to the number of licenses determined under subsection (8) when there are more applicants than licenses available. The applicant’s qualifications for any other restaurant beer and wine license awarded by lottery must be determined at the time of the lottery.
(d) If a successful lottery applicant does not use a license within 1 year of notification by the department of license eligibility, the applicant shall forfeit the license. The department shall refund any fees paid except the application fee and offer the license to the next eligible ranked applicant in the lottery.
(11) Under a restaurant beer and wine license, beer and wine may not be sold for off‑premises consumption.
(12) An application for a restaurant beer and wine license must be accompanied by a fee equal to 20% of the initial licensing fee. If the department does not make a decision either granting or denying the license within 4 months of receipt of a complete application, the department shall pay interest on the application fee at the rate of 1% a month until a license is issued or the application is denied. Interest may not accrue during any period that the processing of an application is delayed by reason of a protest filed pursuant to 16-4-203 or 16-4-207. If the department denies an application, the application fee, plus any interest, less a processing fee established by rule, must be refunded to the applicant. Upon the issuance of a license, the licensee shall pay the balance of the initial licensing fee. The amount of the initial licensing fee is determined according to the following schedule:
(a) $5,000 for restaurants with a stated seating capacity of 60 persons or less;
(b) $10,000 for restaurants with a stated seating capacity of 61 to 100 persons; or
(c) $20,000 for restaurants with a stated seating capacity of 101 persons or more.

(13) The annual fee for a restaurant beer and wine license is $400.
(14) If a restaurant licensed under this part increases the stated seating capacity of the licensed restaurant or if the department determines that a licensee has increased the stated seating capacity of the licensed restaurant, then the licensee shall pay to the department the difference between the fees paid at the time of filing the original application and issuance of a license and the applicable fees for the additional seating.
(15) The number of beer and wine licenses issued to restaurants with a stated seating capacity of 101 persons or more may not exceed 25% of the total licenses issued.
(16) Possession of a restaurant beer and wine license is not a qualification for licensure of any gaming or gambling activity. A gaming or gambling activity may not occur on the premises of a restaurant with a restaurant beer and wine license.
(17) The department may adopt rules to implement this section.
2017 Special Session Amendment: (Temporary version) Chapter 5 deleted (8)(d) that read: “(d) If there are more applicants than licenses available in a quota area, then the license must be awarded by lottery as provided in subsection (9)”; in (10) deleted former second sentence that read: “If there are more applicants than number of licenses available, the license must be awarded to an applicant by a lottery”; deleted former (9)(b), (9)(c), and (9)(d) that read: “(b) A preference must be given to an applicant who does not yet have in any quota area a restaurant beer and wine license or a retail beer license and who operates a restaurant that is in the quota area described in subsection (8) in which the license has become available and that meets the qualifications of subsection (6) for at least 12 months prior to the filing of an application. An applicant with a preference must be awarded a license before any applicant without a preference.
(c) The department shall numerically rank all applicants in the lottery. Only the successful applicants will be required to submit a completed application and a one‑time required fee. An applicant’s ranking may not be sold or transferred to another person or entity. The preference and an applicant’s ranking apply only to the intended license advertised by the department or to the number of licenses determined under subsection (8) when there are more applicants than licenses available. The applicant’s qualifications for any other restaurant beer and wine license awarded by lottery must be determined at the time of the lottery.
(d) If a successful lottery applicant does not use a license within 1 year of notification by the department of license eligibility, the applicant shall forfeit the license. The department shall refund any fees paid except the application fee and offer the license to the next eligible ranked applicant in the lottery”; inserted (11) through (17) relating to competitive bidding processes; inserted (24) granting rulemaking authority; and made minor changes in style. Amendment effective November 24, 2017, and terminates December 31, 2023.
(Version effective January 1, 2024) Chapter 5 inserted (17) granting rulemaking authority; and made minor changes in style.
(Both versions) Chapter 5 inserted (9) relating to new licenses resulting from separating combined quota areas; and made minor changes in style.
16-4-421. Denial of restaurant beer and wine license. (1) A restaurant beer and wine license may not be issued by the department for a premises situated within a zone of a city, town, or county where the sale of alcoholic beverages is prohibited by ordinance, a certified copy of which has been filed with the department.
(2) A restaurant beer and wine license may not be issued or renewed if the department finds, subject to the opportunity for a hearing pursuant to Title 2, chapter 4, part 6, that the applicant or the premises proposed for licensing fail to meet the eligibility or suitability criteria provided by law.
16-4-422. Sale of beer and wine prohibited during certain hours. Except as provided in 16-3-305, restaurants licensed pursuant to 16-4-420 in which beer and wine are sold, offered for sale, or given away at retail may not serve beer and wine between the hours of 11 p.m. and 11 a.m. However, if an incorporated city or town has by ordinance further restricted the hours of sale of beer and wine, then the sale of beer and wine in restaurants licensed to sell beer and wine, pursuant to 16-4-420, is prohibited within the limits of the city or town during the time that the sale is prohibited by this section and in addition to the hours that the sale is prohibited by ordinance.
16-4-423. Restaurant beer and wine license — prohibited practices. A restaurant licensed for the sale of beer and wine pursuant to 16-4-420 may not convey to any person by any means that a person may either purchase or consume beer or wine on the premises without being required to purchase food.

Part 5 Licensing Fees
16-4-501. License and permit fees. (1) Each beer licensee licensed to sell either beer or table wine only or both beer and table wine under the provisions of this code shall pay a license fee. Unless otherwise specified in this section, the fee is an annual fee and is imposed as follows:
(a) (i) each brewer and each beer importer, wherever located, whose product is sold or offered for sale within the state, $500;
(ii) for each storage depot, $400;
(b) (i) each beer wholesaler, $400; each winery, $200; each table wine distributor, $400;
(ii) for each subwarehouse, $400;
(c) each beer retailer, $200;
(d) (i) for a license to sell beer at retail for off‑premises consumption only, the same as a retail beer license;
(ii) for a license to sell table wine at retail for off‑premises consumption only, either alone or in conjunction with beer, $200;
(e) any unit of a nationally chartered veterans’ organization, $50.
(2) The permit fee under 16-4-301(1) is computed at the following rate:
(a) $10 a day for each day that beer and table wine are sold at events, activities, or sporting contests, other than those applied for pursuant to 16-4-301(1)(c); and
(b) $1,000 a season for professional sporting contests or junior hockey contests held under the provisions of 16-4-301(1)(c).
(3) The permit fee under 16-4-301(2) is $10 for the sale of beer and table wine only or $20 for the sale of all alcoholic beverages.
(4) Passenger carrier licenses must be issued upon payment by the applicant of an annual license fee in the sum of $300.
(5) The annual license fee for a license to sell wine on the premises, when issued as an amendment to a beer‑only license pursuant to 16-4-105, is $200.
(6) The annual renewal fee for:
(a) a brewer producing 10,000 or fewer barrels of beer, as defined in 16-1-406, is $200; and
(b) resort retail all‑beverages licenses within a given resort area is $2,000 for each license.
(7) Except as provided in this section, each licensee licensed under the quotas of 16-4-201 shall pay an annual license fee as follows:
(a) for each license outside of incorporated cities and incorporated towns or in incorporated cities and incorporated towns with a population of less than 2,000, $250 for a unit of a nationally chartered veterans’ organization and $400 for all other licensees;
(b) for each license in incorporated cities with a population of more than 2,000 and less than 5,000 or within a distance of 5 miles, measured in a straight line from the nearest entrance of the premises to be licensed to the nearest boundary of the city, $350 for a unit of a nationally chartered veterans’ organization and $500 for all other licensees;
(c) for each license in incorporated cities with a population of more than 5,000 and less than 10,000 or within a distance of 5 miles, measured in a straight line from the nearest entrance of the premises to be licensed to the nearest boundary of the city, $500 for a unit of a nationally chartered veterans’ organization and $650 for all other licensees;
(d) for each license in incorporated cities with a population of 10,000 or more or within a distance of 5 miles, measured in a straight line from the nearest entrance of the premises to be licensed to the nearest boundary of the city, $650 for a unit of a nationally chartered veterans’ organization and $800 for all other licensees;
(e) the distance of 5 miles from the corporate limits of any incorporated cities and incorporated towns is measured in a straight line from the nearest entrance of the premises to be licensed to the nearest boundary of the city or town; and where the premises of the applicant to be licensed are situated within 5 miles of the corporate boundaries of two or more incorporated cities or incorporated towns of different populations, the license fee chargeable by the larger incorporated city or incorporated town applies and must be paid by the applicant. When the premises of the applicant to be licensed are situated within an incorporated town or incorporated city and any portion of the incorporated town or incorporated city is without a 5‑mile limit, the license fee

chargeable by the smaller incorporated town or incorporated city applies and must be paid by the applicant.
(f) an applicant for the issuance of an original license to be located in areas described in subsections (6) and (7)(d) shall provide an irrevocable letter of credit from a financial institution that guarantees that applicant’s ability to pay a $20,000 license fee. A successful applicant shall pay a one‑time original license fee of $20,000 for a license issued. The one‑time license fee of
$20,000 may not apply to any transfer or renewal of a license issued prior to July 1, 1974. However, all licenses are subject to the specified annual renewal fees.
(8) The fee for one all‑beverages license to a public airport is $800. This license is nontransferable.
(9) The annual fee for a retail beer and wine license to the Yellowstone airport is $400.
(10) The annual fee for a special beer and table wine license for a nonprofit arts organization under 16-4-303 is $250.
(11) The annual fee for a distillery is $600.
(12) The license fees provided in this section are exclusive of and in addition to other license fees chargeable in Montana for the sale of alcoholic beverages.
(13) In addition to other license fees, the department of revenue may require a licensee to pay a late fee of 331/3% of any license fee delinquent on July 1 of the renewal year or 1 year after the licensee’s anniversary date, 662/3% of any license fee delinquent on August 1 of the renewal year or 1 year and 1 month after the licensee’s anniversary date, and 100% of any license fee delinquent on September 1 of the renewal year or 1 year and 2 months after the licensee’s anniversary date.
(14) All license and permit fees collected under this section must be deposited as provided in 16-2-108.
2017 Amendment: Chapter 271 in (6)(a) substituted “10,000” for “20,000”. Amendment effective October 1,
2017.
16-4-502. Census. The census taken under the direction of congress shall be the basis upon which the respective populations of the counties and incorporated cities or towns shall be determined. However, in the interim between censuses, the department shall use as such basis the most recent population estimates published by the bureau of the census, United States department of commerce.
16-4-503. City and county licenses — fees. The city council of any incorporated town or city or the county commissioners outside of any incorporated town or city may provide for the issuance of licenses to persons to whom a retail license has been issued under the provisions of this code and may fix license fees, not to exceed a sum equal to five‑eighths of the fee for an all‑beverages license or 100% of the fee for a beer or beer and wine license collected by the department from such licensee under this code.
Functions, powers, and duties of Department, 16-1-302.
Department rules governing conduct, management, and equipment of licensed premises, 16-1-303.

Parts 6 and 7 reserved
Part 8
Liquor License Security Interest
16-4-801. Security interest in liquor license — definitions. (1) (a) A security interest in a liquor license is an interest in the liquor license that secures payment or performance of an obligation. A contract for the sale of a liquor license, including a provision allowing the seller to retain an ownership interest in the license solely for the purpose of guaranteeing payment for the license, may, for the purposes of this section, be treated as a security interest.
(b) For the purposes of this section:
(i) “default” means that:
(A) the defaulting party has acknowledged in writing pursuant to the terms of a written security agreement or contract for sale that the defaulting party no longer has any ownership interest or any other rights to possess or control the liquor license;
(B) a court of competent jurisdiction has made an order foreclosing all of the defaulting party’s interests in the license; or
(C) there has been a nonjudicial sale by the secured party made pursuant to the Uniform Commercial Code and the secured party has provided written proof of the sale to the department; and
(ii) “liquor license” means a license issued under this chapter.
(2) The department, after review of the underlying documents creating the security interest, may approve a transfer of ownership of a liquor license subject to a security interest as provided in subsection (1). A person holding a security interest may not have any control in the operation of the business operated under a license subject to a security interest nor may that person share in the profits or the liabilities of the business other than the payment or performance of the licensee’s obligation under a security agreement.
(3) (a) Within 7 days of a default by a licensee, the person holding the security interest shall give notice to the department of the licensee’s default and either apply to have the license transferred to that person, subject to that person meeting the requirements of 16-4-401 and all other applicable provisions of this code, or the person shall place the license on nonuser status. Upon receipt of an application to transfer the license, the department may, pursuant to 16-4-404, grant the applicant temporary authority to operate the license. If the person holding the license places the license on nonuser status, the person shall transfer ownership of the license within 180 days from the date on which the notice of the default was given to the department. The operation of a business under a license by a person holding a security interest for more than 7 days after default of the licensee or without temporary authority issued by the department must be considered to be a violation of this code and constitutes grounds for the department to either deny an application for transfer of the license or for the revocation of the license pursuant to 16-4-406.
(b) If the person holding the security interest does not qualify for or cannot qualify for
ownership of a liquor license under 16-4-401, the secured party shall transfer ownership of the liquor license within 180 days of the notice of the default of the licensee.
(c) The department, upon a showing of good cause, may in its discretion extend the time for sale of the license for an additional period of up to 180 days.
(4) (a) A regulated lender, as defined in 31‑1‑111, may obtain a security interest in a liquor license or in other assets of a business operating a liquor license to secure a loan or a guaranty of a loan. A regulated lender may use loan and collateral documentation and loan and collateral structure consistent with that used by the regulated lender in commercial loans generally, and the documentation and structure used by the lender do not create an undisclosed ownership interest in the liquor license or the licensee’s business by a coborrower or guarantor if the department determines the borrower, coborrower, guarantor, and owner or owners of the assets pledged as collateral meet the requirements of 16-4-401. As used in this subsection (4), permissible loan and collateral structuring includes but is not limited to permitting owners and nonowners of a liquor license to:
(i) be coborrowers of a borrower’s loan;

(ii) be guarantors of a borrower’s loan, with or without a requirement that the regulated lender exhaust remedies against the borrower before collecting from the guarantor; or
(iii) pledge assets as collateral for a borrower’s loan or for a guaranty of a borrower’s loan.
(b) A person claiming a security interest in a liquor license may submit to the department copies of documents evidencing the security interest, the license number, and a $30 notification fee. The department shall deposit the fee as provided in 16-2-108. The department may create and provide a form to be used for this purpose.
(c) The department shall notify by certified mail those that have filed information provided in subsection (4)(b):
(i) at least 20 days prior to issuance of an order of default for revocation, nonrenewal, or lapse of a license; or
(ii) immediately after the department’s office of dispute resolution has issued a decision to uphold the department’s revocation or nonrenewal of a license under 16-4-406 or lapse of a license under 16-3-310.
(5) When a licensee is the borrower, an owner of the licensee may make a payment on the institutional loan. If a payment is made under this subsection (5):
(a) the party making the payment must be vetted and approved prior to making the payment;
(b) the licensee must notify the department within 90 days that the payment was made and designate whether the payment will be treated as a loan or an equity investment as follows:
(i) for a payment treated as a loan, the licensee must memorialize the loan by a written agreement, which must be provided to the department; or
(ii) for a payment treated as an equity investment, if a change in ownership percentage occurs as a result, the licensee must follow department requirements for disclosing changes in ownership percentages; and
(c) the funds used for the payment must be the party’s own funds or funds borrowed from an institutional lender.
(6) If a borrower, coborrower, or guarantor is not the licensee or an owner of the licensee, the coborrower or guarantor may make a payment on the institutional loan, and the payment does not create an undisclosed ownership interest in the liquor license by the borrower, coborrower, or guarantor only if:
(a) the licensee notifies the department within 90 days that the payment was made;
(b) the payment is made as a loan that is memorialized by a written agreement; and
(c) the funds used for the payment are the coborrower’s or guarantor’s own funds or funds borrowed from an institutional lender.
(7) A regulated lender that obtains a security interest in a liquor license or in other assets of a business operating a liquor license has no duty to ensure a coborrower’s or guarantor’s compliance with the requirements of subsection (5) or (6) in connection with loan or guaranty payments it may receive from the coborrower or guarantor.
(8) For the purposes of subsections (5) and (6), the term “borrower” means the party that is primarily responsible for making payments and that receives the funds or on whose behalf the funds were paid.
2017 Amendment: Chapter 301 in (4) substituted current text concerning a regulated lender obtaining a security interest in a liquor license or the assets of a business operating a liquor license without creating an undisclosed ownership interest and concerning documentation of a security interest and notification of revocation, nonrenewal, or lapse of a license for former text that read: “(4) A regulated lender, as defined in 31‑1‑111, may obtain a security interest in a liquor license in order to secure a loan or a guaranty of a loan. This section does not prohibit or limit the ability of a regulated lender to use loan and security documentation consistent with that used by the regulated lender generally, and the documentation does not constitute control of the operation of the business or the licensee operating the business that is subject to the security interest”; inserted (5) concerning requirements for payments on an institutional loan made by the owner of the licensee borrower; inserted (6) concerning requirements for not creating an undisclosed ownership interest in a liquor license by a borrower, coborrower, or guarantor; inserted (7) concerning a regulated lender’s absence of duty to ensure a coborrower’s or guarantor’s compliance with certain requirements; inserted (8) defining borrower; and made minor changes in style. Amendment effective May 4, 2017.

Part 9 Connoisseur’s Licenses

Sale of table wine — liquor stores, Title 16, ch. 2, part 3. Sale of table wine, Title 16, ch. 3, part 4.
16-4-901. Connoisseur’s licenses — application — fees. (1) A person in this state desiring to receive direct shipments of beer from an out‑of‑state brewery for the person’s own consumption and not for resale shall file with the department an application for a connoisseur’s license. The application must be accompanied by a registration fee in the amount of $50 for a beer connoisseur’s license.
(2) Each application for a license must be on a form prescribed by the department and must set forth the name of the applicant, the applicant’s home or business address, proof that the applicant is at least 21 years of age, and other information that the department may require.
(3) A connoisseur’s license expires on June 30 of each calendar year. A licensee may annually renew a license with the department by paying a $25 renewal fee for a beer connoisseur’s license.
(4) The holder of a connoisseur’s license may not sell beer to the public.
(5) The department shall adopt rules to provide procedures for the application for and the provision of a connoisseur’s license.
16-4-902. Payment of taxes — authority of department. (1) A person holding a connoisseur’s license shall pay, on June 30 and December 31, the beer taxes imposed by Title 16, chapter 1, part 4, on beer that is received by direct shipment from an out‑of‑state brewery during the previous 6‑month period.
(2) Each holder of a connoisseur’s license shall file with the department a return, on a form provided by the department, and pay the tax for shipments received.
16-4-903. Direct shipment of beer — limitations. (1) Subject to the provisions of 16-4-901, the holder of a connoisseur’s license may receive up to 288 bottles or 12 cases of beer from an out‑of‑state brewery during a 12‑month period for personal use and not for resale.
(2) A licensee under this section shall forward to the out‑of‑state brewery a distinctive address label, provided by the department, clearly identifying any package that is shipped as a legal direct‑shipment package to the holder of a connoisseur’s license.
(3) A licensee shall report to the department, on June 30 and December 31, the total amount of beer received from an out‑of‑state brewery and pay all applicable excise taxes, as provided for in Title 16, chapter 1, part 4, imposed on the receipt of beer during the previous 6 months.
16-4-904 and 16-4-905 reserved.
16-4-906. Out‑of‑state brewery registration — limitation on shipping — penalty.
(1) Each out‑of‑state brewery desiring to ship beer to a person holding a connoisseur’s license shall register with the department on forms provided by the department.
(2) The annual limit on out‑of‑state shipments to all connoisseur’s license holders is 1,440 bottles or 60 cases of beer.
(3) For any shipment into the state that exceeds the limits provided for in subsection (2), the out‑of‑state brewery may:
(a) distribute the brewery’s product through a licensed wholesale distributor; or
(b) distribute as a brewery in accordance with the provisions of 16-3-214.
(4) An out‑of‑state brewery that violates the provisions of this section is subject to the penalties provided for in 16-6-302.
16-4-907 through 16-4-909 reserved.
16-4-910. Penalty for noncompliance. (1) Except as provided in 16-4-906, a person who violates the provisions of this part commits a civil offense.
(2) A person convicted under subsection (1):

(a) for a first offense, must be mailed a certified letter by the department ordering that person to cease and desist committing the violation;
(b) for a second offense, shall be fined a civil penalty not to exceed $500; and
(c) for a third or subsequent offense, shall be fined a civil penalty not to exceed $2,500.
Part 10
Responsible Alcohol Sales and Service
16-4-1001. Short title. This part may be cited as the “Responsible Alcohol Sales and Service Act”.
16-4-1002. Legislative intent. It is the intent of this part that retail establishments and manufacturers licensed to sell or serve alcoholic beverages to the public ensure that all licensees and their employees that sell or serve alcoholic beverages are appropriately trained to comply with state law prohibiting the sale or service of alcoholic beverages to persons under 21 years of age and to persons who are intoxicated. This part does not apply to special permits issued under 16-4-301.
16-4-1003. Definition. As used in this part, “licensee” means a person or entity licensed by the department to sell alcoholic beverages at retail for either on‑premises or off‑premises consumption.
16-4-1004. Notification — violation — penalty. (1) A licensee shall certify annually on its license renewal form that the licensee is in compliance with the provisions of this part.
(2) A license renewal form that falsely includes information that the licensee and all employees have been trained pursuant to this part is a violation of this code.
(3) If, after an investigation under 16-4-406, a licensee is determined to have violated subsection (2) of this section, the licensee must be assessed an administrative penalty under 16-4-406 or the penalty for false swearing under 45‑7‑202.
16-4-1005. Licensees required to ensure training. A licensee shall:
(1) require each employee who is authorized to sell or serve alcoholic beverages in the normal course of employment and the employee’s immediate supervisor to successfully complete training to ensure compliance with state law regarding the sale and service of alcoholic beverages. The training must be completed within 60 days of the employee’s date of hire and every 3 years after the employee’s initial training.
(2) maintain employment records verifying employee completion of the training required in subsection (1).
16-4-1006. Responsible server and sales training program. (1) The department shall certify all server and sales training programs that include the following:
(a) effects of alcohol on the human body;
(b) information, including criminal, civil, and administrative penalties, related to 27‑1‑710 and this code;
(c) procedures for checking identification;
(d) procedures for gathering proper documentation that may affect the licensee’s liability;
(e) training for skills to handle difficult situations and to learn evaluation techniques regarding intoxicated persons or others that pose potential liability;
(f) a final test; and
(g) a certificate of completion, which must be provided to participants who pass the final test.
(2) The department may not provide a responsible server and sales training program.

16-4-1007. Jurisdiction. The implementation and enforcement of any mandatory server and sales training programs in this state is under the exclusive authority and jurisdiction of the department.
16-4-1008. Penalty. (1) A licensee found as a result of a routine check for compliance with 16-3-301, 16-6-304, or 16-6-305 to be out of compliance with 16-4-1005 shall pay a $50 penalty for a first offense, a $200 penalty for a second offense, and a $350 penalty for a third offense in a 3‑year period. The fine must be paid to the department and deposited in the enterprise fund to the credit of the department for administration of this part.
(2) The department shall consider the following as mitigating circumstances before taking an action pursuant to 16-4-406 against a licensee who is not in compliance with the provisions of this part:
(a) the licensee’s prior violation history;
(b) the licensee’s good faith effort to prevent a violation;
(c) the existence of written policies governing employee conduct; and
(d) whether the evidence of a violation was based solely on the investigating authority creating an opportunity for the violation rather than on complaints received or observed misconduct.
16-4-1009. Rulemaking. The department shall adopt rules to implement the provisions of this part.
Part 11
Direct Shipment Endorsements — Table Wine
16-4-1101. Direct shipment endorsement for wineries — definition. (1) A winery licensed or registered in Montana under 16-4-107 may sell and ship under a direct shipment endorsement up to 18 9‑liter cases of table wine annually to an individual in Montana who is at least 21 years of age for the individual’s personal use and not for resale.
(2) The shipment of table wine directly to an individual in Montana from a winery that does not possess a current direct shipment endorsement is prohibited, and penalties may be assessed as provided in 16-4-1103.
(3) The shipment of table wine directly to an individual in Montana under a direct shipment endorsement that is not conspicuously labeled as required under 16-4-1102(2) is prohibited and subject to penalties as provided in 16-4-1103.
(4) For the purposes of this part, a “direct shipment endorsement” is permission issued by the department to a winery licensed or registered pursuant to 16-4-107 under which the winery is allowed to sell and ship table wine directly to an individual in Montana.
16-4-1102. Requirements for direct shipment endorsements — fee — labeling
— taxes — recordkeeping. (1) A winery licensed or registered under 16-4-107 shall before shipping table wine directly to an individual in Montana:
(a) remit an annual direct shipment endorsement fee of $50;
(b) submit to the department a written statement acknowledging that the winery will contract only with common carriers that agree that any delivery of table wine will be made only to an individual in Montana who is at least 21 years of age and who signs a form acknowledging receipt of the table wine; and
(c) receive from the department a direct shipment endorsement.
(2) A shipment of table wine under this part must be conspicuously labeled with the words “Contains Alcohol: Signature of Person Age 21 or Older Required for Delivery”.
(3) (a) In addition to maintaining records required under 16-3-411 or 16-4-107, a winery with a direct shipment endorsement shall maintain records of any sales or shipments to an individual in Montana.
(b) The winery shall, by the 15th day of each month following a month in which a shipment was made, report to the department in the manner and form prescribed by the department

information on direct shipments in the preceding month and pay the tax required under 16-1-411(1)(a). The information reported to the department must include the names and addresses of the individual to whom the table wine was shipped and any other information that the department determines is necessary to verify that direct shipment of table wine conforms to the requirements of Title 16. Failure to pay taxes or file the information required in this subsection (3)(b) subjects the winery holding the direct shipment endorsement to the penalties and interest provided for in 15‑1‑216.
(4) A winery with a direct shipment endorsement shall allow the department to perform an audit of the record of shipments made under 16-4-1101. The shipment records must be retained for 3 years.
(5) If a winery with a direct shipment endorsement uses a bonded wine warehouse to fill table wine orders shipped to an individual in Montana, the winery shall provide written notice to the department of the name and the address of the bonded wine warehouse. The winery is responsible for compliance with this part.
16-4-1103. Enforcement — penalty — rulemaking. (1) Subject to a right to a hearing and the appeal process provided by the Montana Administrative Procedure Act in Title 2, chapter 4, the department may enforce the requirements of this part by suspending or revoking the direct shipment endorsement or imposing a civil penalty not to exceed $1,500.
(2) A winery that has a direct shipment endorsement is considered to have consented to the jurisdiction of the department or any other state agency and the Montana courts concerning enforcement of this part and related rules or regulations.
(3) The owner of a winery is guilty of a misdemeanor if the winery makes a direct shipment without having a direct shipment endorsement.
(4) The department may adopt rules to implement this part.

CHAPTER 6 ENFORCEMENT

Part 1 Investigations
16-6-101. Employment of investigators and prosecuting officers. (1) The department of justice may appoint one or more investigators or prosecuting officers who, under its direction, shall perform the duties it may require.
(2) When requested by the department, the department of justice shall:
(a) investigate the character of an applicant applying for the issuance or transfer of a liquor license and, if applicable, the suitability of a premises or proposed premises to be used in connection with a liquor license;
(b) investigate all matters relating to the purchase, sale, importation, exportation, possession, and delivery of alcoholic beverages; and
(c) serve as a liaison to local law enforcement authorities in matters relating to alcoholic beverage law enforcement.
16-6-102. Search warrants. Upon information on oath by a department of justice investigator appointed under this code or by a peace officer showing reasonable cause to believe that alcoholic beverages are unlawfully kept, or kept for unlawful purposes, in any premises, a court may issue a warrant to authorize the investigator or peace officer or any other person named in the warrant to enter and search the entire premises, including to break open any door,

lock, fastening, closet, cupboard, box, or other receptacle on the premises that might contain alcoholic beverages.
Unreasonable searches and seizures, Art. II, sec. 11, Mont. Const. Searches and seizures generally, Title 46, ch. 5.
16-6-103. Examination of retailer’s premises and carriers’ cars and aircraft. The department of justice or its representative or a peace officer may at any time examine the premises of a retail licensee to determine whether the law of Montana and the rules of the department or the department of justice are being complied with and also may inspect cars or aircraft of any common carrier system licensed under this code.
Regulation of carriers of property, Title 69, ch. 11, part 4.
16-6-104. Unlawful alcoholic beverage — seizure — forfeiture. (1) An investigator or peace officer who finds an alcoholic beverage and who has reasonable cause to believe that the alcoholic beverage was obtained or kept by any person in violation of the provisions of this code may seize and remove the alcoholic beverage and the packages in which the alcoholic beverage is kept, and upon conviction of the person, the alcoholic beverage and all packages containing the alcoholic beverages are, in addition to any other penalty prescribed by this code, forfeited to the state of Montana.
(2) Any beer or wine that has been shipped into Montana in violation of this code must be seized by any peace officer or representative of the department and may be confiscated in the manner as provided for the confiscation of alcoholic beverages.
Procedure in regard to seized property, Title 46, ch. 5, part 3.
16-6-105. Seizure and forfeiture of alcoholic beverage and conveyance. Whenever an investigator or any peace officer in making or attempting to make a search under and in pursuance of authority of law finds in any motor vehicle, vessel, boat, canoe, or conveyance of any description an alcoholic beverage that is unlawfully kept or had or kept or held for unlawful purposes contrary to the provisions of this code, the investigator or peace officer may seize the alcoholic beverage and packages in which the alcoholic beverage is contained and the motor vehicle, vessel, boat, canoe, or conveyance in which the alcoholic beverage is found. Upon the conviction of the occupant or person in charge of the motor vehicle, vessel, boat, canoe, or conveyance, or of any other person, for having or keeping the alcoholic beverages contrary to any of the provisions of this code in any vehicle, vessel, boat, canoe, or conveyance, the court in which the person is convicted may, in addition to the sentence imposed under authority of law, declare the alcoholic beverage or any part seized and the package in which the alcoholic beverage is contained to be forfeited to the state of Montana. The court may in and by decree further declare the motor vehicle, vessel, boat, canoe, or conveyance seized to be forfeited to the state of Montana.
Procedure in regard to seized property, Title 46, ch. 5, part 3.
16-6-106. When force may be used in seizure of alcoholic beverages — forfeiture
— hearing. (1) If an alcoholic beverage is found by a department of justice investigator or a peace officer in any place in quantities that satisfy the investigator or peace officer that the alcoholic beverage is being kept contrary to this code, the investigator or peace officer may seize

and remove, by force if necessary, any alcoholic beverage found and the packages in which the alcoholic beverage was kept and immediately turn the alcoholic beverage over to the department.
(2) The department shall determine if the seized alcoholic beverage is suitable for resale in an agency liquor store. If the department has determined that the seized alcoholic beverage is suitable for resale, the department shall commence an administrative action against the owner of the alcoholic beverage. All seized alcoholic beverages found to be unsuitable for sale in an agency liquor store must be destroyed by the department.
(3) A notice and opportunity for hearing must be given in accordance with the Montana Administrative Procedure Act, except that the notice must be published in the county where the alcoholic beverage was seized if a newspaper is published in the county.
(4) The notice must show the date and place of seizure, the name of the person or persons actually or apparently in possession or control of the alcoholic beverage if the person was present at the time of the seizure, and the reasons the department claims the right to the possession of the alcoholic beverage. The notice must also demand that all persons who claim any right to the possession of the alcoholic beverage show the nature of their claim or claims, that the hearing examiner declare the alcoholic beverage contraband, and that the hearing examiner order that the alcoholic beverage be forfeited to the state.
16-6-107. Disposal of forfeited alcoholic beverages — report. (1) If a court or hearing examiner orders the forfeiture of alcoholic beverages under this code or if a claimant to an alcoholic beverage under 16-6-105 or 16-6-106 fails to establish the claimant’s right to the alcoholic beverage, the alcoholic beverage in question and the packages in which the alcoholic beverage is kept must be delivered to the department. The department shall determine the market value of each forfeited alcoholic beverage found to be suitable for sale in agency liquor stores and shall pay the amount determined to the state treasurer after deducting any expenses incurred by the department for transporting the forfeited alcoholic beverage to the state liquor warehouse. The alcoholic beverage suitable for sale in an agency liquor store must be taken into stock by the department and sold under the provisions of this code. All alcoholic beverages found to be unsuitable for sale in agency liquor stores must be destroyed by the department.
(2) If an alcoholic beverage is seized by a peace officer, the officer shall report to the
department in writing the particulars of the seizure.
16-6-108. Inspection of carriers’ records. For the purpose of obtaining information concerning any matter relating to the administration or enforcement of this code, the department or the department of justice or any person appointed by either department in writing for the purpose may inspect the freight and express books and records and all waybills, bills of lading, receipts, and documents in the possession of any railway company, express company, or other common carrier doing business within the state containing any information or record relating to any goods shipped or carried or consigned or received for shipment or carriage within the state.
Regulation of carriers of property, Title 69, ch. 11, part 4.
16-6-109. Unlawful for carrier to refuse inspection of records. Every railway company, express company, or common carrier and every officer or employee of a company or common carrier who neglects or refuses to produce and submit for inspection any book, record, or document referred to in 16-6-108 when requested to do so by the department or the department of justice or by a person appointed by either department is guilty of an offense against this code.
Penalty, 16-6-314.

Part 2 Prosecutions
16-6-201. Jurisdiction of courts. (1) As to misdemeanor actions, the district courts of this state have concurrent jurisdiction with justice of the peace courts in all prosecutions under the Montana Alcoholic Beverage Code described in 16-1-101.
(2) The jurisdiction provided for in subsection (1) is in addition to the jurisdiction of:
(a) justices’ courts, as provided in 3‑10‑303;
(b) municipal courts, as provided in 3‑6‑103; and
(c) city courts, as provided in 3‑11‑102.
16-6-202. Appeal. An appeal shall lie from any conviction or order made in the prosecution of any offense against any of the provisions of this code, and the practice and procedure on any appeal from any such conviction or order and all proceedings thereon shall be governed by the law applicable to appeal in criminal cases.
Independent tax appeal procedures to be provided, Art. VIII, sec. 7, Mont. Const. Criminal appeals and postconviction hearings, Title 46, ch. 20, 21.
16-6-203. Description of offense. In describing the offense respecting the sale or keeping for sale or other disposal of alcoholic beverages or the having, keeping, giving, purchasing, or consumption of alcoholic beverages in any information, summons, conviction, warrant, or proceeding under this code, it shall be sufficient to state simply the sale or keeping for sale or disposal, having, keeping, giving, purchasing, or consumption of alcoholic beverages, without stating:
(1) the name or kind of such alcoholic beverage or the price thereof;
(2) the name of any person to whom it was sold or disposed of or by whom it was taken or consumed or from whom it was purchased or received; or
(3) the quantity of alcoholic beverage, except in the case of offenses where the quantity is essential, and then it shall be sufficient to allege the sale or disposal of more or less than such quantity.
Complaints, indictments, and informations generally, Title 46, ch. 11.
16-6-204. Defense need not be negatived. The description of any offense under this code, in the words of this code or in any words of like effect, shall be sufficient in law; and any exception, exemption, provision, excuse, or qualification, whether it occurs by way of proviso or in the description of the offense in this code, may be proved by the defendant but need not be specified or negatived in the information or complaint; but if it is so specified or negatived, no proof in relation to the matter so specified or negatived shall be required on the part of the informant or complainant.
16-6-205. Sufficiency of evidence. In any prosecution under this code for the sale or keeping for sale or other disposal of alcoholic beverages or the having, keeping, giving, purchasing, or consuming of alcoholic beverages, it is not necessary that any witness testify to the precise description or quantity of the alcoholic beverages sold, disposed of, kept, had, given, purchased, or consumed or the precise consideration, if any, received for the alcoholic beverages. It is also unnecessary to testify to the fact of the sale or other disposal having taken place with the witness’s participation or to the witness’s own personal or certain knowledge. However, a conviction may be based upon circumstantial evidence reasonably tending to establish the guilt of the accused beyond a reasonable doubt.

Montana evidence statutes, Title 26, ch. 1, 2.
16-6-206. Proof of violation. In proving the sale, disposal, gift, or purchase, gratuitous or otherwise, or consumption of an alcoholic beverage, it shall not be necessary in any prosecution to show that any money actually passed or any alcoholic beverage was actually consumed if the court hearing the case is satisfied that a transaction in the nature of a sale, disposal, gift, or purchase actually took place or that any consumption of an alcoholic beverage was about to take place. Proof of consumption or intended consumption of an alcoholic beverage on premises on which such consumption is prohibited by some person not authorized to consume an alcoholic beverage thereon shall be evidence that such alcoholic beverage was sold, given to, or purchased by the person consuming or being about to consume or carrying away the same, as against the occupant of the premises.
16-6-207. Analyst’s report as prima facie evidence of contents. In any prosecution under this code or the rules adopted to implement this code, production by a police officer, constable, inspector, or peace officer of a certificate or report signed or purporting to be signed by a United States or state analyst as to the analysis or ingredients of any alcoholic beverage or other fluid or any preparation, compound, or substance, the certificate or report is prima facie evidence of the facts stated in the certificate or report and of the authority of the person giving or making the certificate or report without any proof of appointment or signature.
16-6-208. Inference of intoxicating beverage. The court trying a case shall, in the absence of proof to the contrary, be at liberty to infer that the alcoholic beverage in question is intoxicating from the fact that a witness described it as intoxicating or by a name which is commonly applied to an intoxicating beverage.
Definition and requisites of inference, 26‑1‑501, 26‑1‑502.
16-6-209. Inferences of fact from evidence found. Upon the hearing of any charge of selling or purchasing an alcoholic beverage or of unlawfully having or keeping an alcoholic beverage contrary to any of the provisions of this code, the court trying the case may draw inferences of fact from the kind and quantity of alcoholic beverage found in the possession of the person accused or in any building, premises, vehicle, motorcar, automobile, vessel, boat, canoe, conveyance, or place occupied or controlled by the accused and from the frequency with which the alcoholic beverage is received at or in or is removed from the location and from the circumstances under which the alcoholic beverage is kept or dealt with.
Definition and requisites of inference, 26‑1‑501, 26‑1‑502.
Part 3
Miscellaneous Prohibitions and Penalties
16-6-301. Transfer, sale, and possession of alcoholic beverages — when unlawful.
(1) Except as provided by this code, a person or the person’s agents or employees may not:
(a) expose or keep an alcoholic beverage for sale;
(b) directly or indirectly or upon any pretense or upon any device, sell or offer to sell an alcoholic beverage; or
(c) in consideration of the purchase or transfer of any property or for any other consideration or at the time of the transfer of any property, give to any other person an alcoholic beverage.

(2) A person may not have or keep any alcoholic beverage that has not been purchased within the state of Montana.
(3) This code does not prohibit:
(a) a person entering this state from another state or foreign country from having in the person’s actual physical possession an amount not to exceed 3 gallons of alcoholic beverage that was purchased in another state or foreign country;
(b) possession of beer produced for personal or family use and not intended for sale that meets the exemptions of 26 U.S.C. 5053(e) and regulations implementing that section, including the brewing of beer, for personal or family use, on premises other than those of the person brewing the beer;
(c) possession of beer purchased from an out‑of‑state brewery if the person possessing the beer holds a connoisseur’s license as provided for in 16-4-901 or possession of table wine purchased from a winery that has a direct shipment endorsement as provided in 16-4-1101;
(d) possession of alcoholic beverages by brewers, distillers, and other persons duly licensed by the United States for the manufacture of those alcoholic beverages;
(e) possession of proprietary or patent medicines or of any extracts, essences, tinctures, or preparations if the possession is authorized by this code; or
(f) possession by a sheriff or bailiff of alcoholic beverages seized under execution or other judicial or extrajudicial process or sales under executions or other judicial or extrajudicial process to the department or a licensee.
(4) Except as provided in this code, a person or the person’s agents or employees may not:
(a) attempt to purchase any alcoholic beverage;
(b) directly or indirectly or upon any pretense or device, purchase any alcoholic beverage; or
(c) in consideration of the sale or transfer of any property or for any other consideration or at the time of the transfer of any property, take or accept from any other person any alcoholic beverage.
16-6-302. Sale of alcoholic beverage without license — sale or importation in violation of code — penalty. (1) For the purposes of this section “person” means an individual, partnership, corporation, company, firm, society, association, joint‑stock company, trust, or other entity capable of holding a legal or beneficial interest in property, but does not include a state or agency of a state.
(2) A person who has not been issued a license under this code who sells or keeps for sale in Montana any alcoholic beverage commits a criminal offense and upon conviction is punishable by a fine not to exceed $5,000 or by imprisonment in the state prison for not less than 1 or more than 5 years or by both the fine and imprisonment.
(3) A person in the business of selling alcoholic beverages in another state or country who imports or distributes alcoholic beverages in violation of this code commits a civil offense.
(4) A person convicted under subsection (3):
(a) for a first offense, must be mailed a certified letter by the department ordering that person to cease and desist any shipments of alcoholic beverages to any person in Montana;
(b) for a second offense, shall be fined a civil penalty not to exceed $5,000;
(c) for a third offense, shall be fined a civil penalty not to exceed $10,000; and
(d) for a fourth or subsequent offense, shall be fined a civil penalty not to exceed $50,000.
16-6-303. Sale of liquor not purchased from agency liquor store forbidden — penalty. It is unlawful for any licensee to sell or keep for sale or have on the licensee’s premises for any purpose whatever any liquor except that purchased from an agency liquor store, and any licensee found in possession of or selling and keeping for sale any liquor that was not purchased from an agency liquor store shall, upon conviction, be punished by a fine of not less than $500 or more than $1,500, by imprisonment for not less than 3 months or more than 1 year, or by

both fine and imprisonment. If the department is satisfied that the liquor was knowingly sold or kept for sale within the licensed premises by the licensee or by the licensee’s agents, servants, or employees, the department shall immediately revoke the license.
Place of imprisonment when none specified — sentence for 1 year or less, 46‑18‑211.
16-6-304. Providing alcoholic beverage to intoxicated person prohibited. (1) No store manager, retail licensee, or any employee of a store manager or retail licensee may sell any alcoholic beverage or permit any alcoholic beverage to be sold to any person apparently under the influence of an alcoholic beverage.
(2) No person may give an alcoholic beverage to a person apparently under the influence of alcohol.
Age restriction, Art. II, sec. 14, Mont. Const.
Unlawful to sell or give alcoholic beverages — persons actually or apparently intoxicated, 16-3-301.
16-6-305. Age limit for sale or provision of alcoholic beverages — liability of provider. (1) (a) Except in the case of an alcoholic beverage provided in a nonintoxicating quantity to a person under 21 years of age by the person’s parent or guardian, physician or dentist for medicinal purposes, a licensed pharmacist upon the prescription of a physician, or an ordained minister or priest in connection with a religious observance, a person may not sell or otherwise provide an alcoholic beverage to a person under 21 years of age.
(b) A parent, guardian, or other person may not knowingly sell or otherwise provide an alcoholic beverage in an intoxicating quantity to a person under 21 years of age.
(c) For the purposes of this section, “intoxicating quantity” means a quantity of an alcoholic beverage that is sufficient to produce:
(i) a blood, breath, or urine alcohol concentration in excess of 0.05; or
(ii) substantial or visible mental or physical impairment.
(2) A person is guilty of a misdemeanor who:
(a) invites a person under the age of 21 years into a public place where an alcoholic beverage is sold and treats, gives, or purchases an alcoholic beverage for the person;
(b) permits the person in a public place where an alcoholic beverage is sold to treat, give, or purchase alcoholic beverages for the person; or
(c) holds out the person to be 21 years of age or older to the owner of the establishment or to the owner’s employee.
(3) It is unlawful for any person to fraudulently misrepresent the person’s age to any dispenser of alcoholic beverages or to falsely procure any identification card or to alter any of the statements contained in any identification card, including a tribal identification card.
(4) A person 21 years of age or older who violates the provisions of subsection (1)(b) is, in addition to applicable criminal penalties, subject to civil liability for damages resulting from a tortious act committed by the person to whom the intoxicating substance was sold or provided if the act is judicially determined to be the result of the intoxicated condition created by the violation. (See compiler’s comments for contingent termination of certain text.)
HContingent Termination Date: Section 9(2), Ch. 217, L. 1987, read: “If the United States congress repeals or removes or a final judgment invalidates the provisions of federal law that require states to raise the legal age for purchasing and possessing alcoholic beverages to 21 as a condition of full receipt of federal highway funds, the governor of Montana shall immediately certify the fact of the repeal, removal, or invalidation to the secretary of state of Montana. This act terminates on the date of such certification.”

Age restrictions, Art. II, sec. 14, Mont. Const.
Unlawful to sell or give alcoholic beverages — persons under 21 years old, 16-3-301. Keg registration, 16-3-321.
Penalty, 16-6-314.
Adults giving or selling alcoholic beverage to children or encouraging its use, 45‑5‑622, 45‑5‑623. Possession of alcoholic beverages by children, 45‑5‑624.
16-6-306. Bottle clubs prohibited. The operation of alcoholic beverage bottle clubs is hereby prohibited by any person, persons, partnership, firm, corporation, or association. A bottle club is defined as any person, persons, partnership, firm, corporation, or association maintaining premises not licensed for the sale of alcoholic beverages, for a fee or other consideration, including the sale of food, mixes, ice, or any other fluids for alcoholic beverages, or otherwise furnishing premises for such purposes and from which they would derive revenue.
16-6-307. Consumption of alcoholic beverage on druggists’ premises prohibited. No person within the state of Montana shall consume any alcoholic beverage on any premises where an alcoholic beverage is kept for sale by a druggist, nor shall any druggist permit any alcoholic beverage to be consumed on such premises.
Regulation of pharmacists, Title 37, ch. 7.
16-6-308. Patent medicine prohibition. From and after the date of notification under 16-1-202(3), any person within the state selling or keeping for sale any such proprietary or patent medicine, extract, essence, tincture, or preparation so prohibited shall be guilty of an offense under this code.
Penalty, 16-6-314.
16-6-309. Alcoholic beverages administered to institution inmates. An alcoholic beverage may not be administered by any person under 16-1-204 except to bona fide patients or inmates of the institution of which the person is in charge, and every person in charge of an institution who administers alcoholic beverages in evasion or violation of this code is guilty of an offense against this code.
Penalty, 16-6-314.
Distribution to patients or inmates at state custodial institutions — misdemeanor, 53‑1‑103.
16-6-310. Officer or agent of corporation deemed party to offense. Where an offense against this code is committed by a corporation, the officer or agent of the corporation in charge of the premises in which the offense is committed shall prima facie be deemed to be a party to the offense so committed and shall be personally liable to the penalties prescribed for the offense as a principal offender. Nothing in this section shall relieve the corporation or the person who actually committed the offense from liability therefor.
Criminal liability for acts committed by or for another, Title 45, ch. 2, part 3.
16-6-311. Occupant of premises deemed party to offense. Upon proof of the fact that an offense against this code has been committed by any person in the employ of the occupant of any house, shop, room, or other premises in which the offense is committed or by any person who is suffered by the occupant to be or remain in or upon such house, shop, room, or premises or to act in any way for the occupant, the occupant shall prima facie be deemed to be a party to the offense so committed and shall be liable to the penalties prescribed for the offense as a principal

offender, notwithstanding the fact that the offense was committed by a person who is not proved to have committed it under or by the direction of the occupant. Nothing in this section shall relieve the person actually committing the offense from liability therefor.
Criminal liability for acts committed by or for another, Title 45, ch. 2, part 3.
16-6-312. Premises where alcoholic beverages illegally sold — public nuisance. Any room, house, building, boat, vehicle, structure, or place where alcoholic beverages are knowingly manufactured, sold, or bartered in violation of this code or 45‑8‑111 and all property knowingly kept and used in maintaining the same is hereby declared to be a public nuisance, and any person who maintains such a nuisance shall be guilty of a misdemeanor and upon conviction thereof shall be fined not less than $100 or more than $500 and be imprisoned not less than 30 days or more than 6 months.
Public nuisances, Title 27, ch. 30, part 2.
Place of imprisonment when none specified — sentence for 1 year or less, 46‑18‑211.
16-6-313. Injunction actions. An action to enjoin any nuisance defined in this code may be brought in the name of the state of Montana by the attorney general of the state or by any county attorney. The action must be brought and tried as an action in equity and may be brought in any court having jurisdiction to hear and determine equity cases. If it appears, by affidavits or otherwise, to the satisfaction of the judge that the nuisance exists, a temporary writ of injunction must be issued restraining the defendant from conducting or permitting the continuance of the nuisance until the conclusion of the trial. If a temporary injunction is sought, the court may issue an order restraining the defendant and all other persons from removing or in any way interfering with the fixtures or other things used in connection with the violation of this code constituting the nuisance. A bond may not be required in instituting the proceedings. The court is not required to find that the property involved was being unlawfully used at the time of the hearing, but on finding that the material allegations of the petition are true, the court shall order that alcoholic beverages may not be manufactured, sold, or bartered in the room, house, building, boat, vehicle, structure, or place or any part of those locations. Upon judgment of the court ordering the nuisance to be abated, the court may order that the room, house, building, boat, vehicle, structure, or place may not be occupied or used for 1 year. The court may permit the location to be occupied or used if the owner, lessee, tenant, or occupant gives a bond with sufficient surety, to be approved by the court making the order, in the sum of not less than $500 or more than $1,000, payable to the state of Montana and conditioned that alcoholic beverages will not be manufactured, sold, or bartered at the location and that the person will pay all fines, costs, and damages that may be assessed for any violations of this code upon the property.
Injunctions generally, Title 27, ch. 19. Injunction against nuisance, 27‑30‑103. Action to abate public nuisance, 45‑8‑112.
16-6-314. Penalty for violating code — revocation of license — penalty for violation by underage person. (1) A person who violates a provision of this code is guilty of a misdemeanor punishable as provided in 46‑18‑212, except as otherwise provided in this section.
(2) If a retail licensee is convicted of an offense under this code, the licensee’s license must be immediately revoked or, in the discretion of the department, another sanction must be imposed as provided under 16-4-406.
(3) A person under 21 years of age who violates 16-3-301(5) or 16-6-305(3) is subject to the penalty provided in 45‑5‑624(2) or (3). (See compiler’s comments for contingent termination of certain text.)
Contingent Termination Date: Section 9(2), Ch. 217, L. 1987, read: “If the United States congress repeals or removes or a final judgment invalidates the provisions of federal law that require states to raise the legal age for purchasing and possessing alcoholic beverages to 21 as a condition of full receipt of federal highway funds, the governor of Montana shall immediately certify the fact of the repeal, removal, or invalidation to the secretary of state of Montana. This act terminates on the date of such certification.”
Unlawful possession of intoxicating substance — interference with sentence or court order, 45‑5‑624. Place of imprisonment when none specified — sentence for 1 year or less, 46‑18‑211.
Commutation of juvenile’s sentence — transfer to juvenile correctional facility, 52‑5‑111.

61-2-302. Establishment of driver rehabilitation and improvement program — participation by offending drivers. (1) The department may establish by administrative rules a driver rehabilitation and improvement program or programs. The programs may consist of classroom instruction in rules of the road, driving techniques, defensive driving, driver attitudes and habits, actual on-the-road driver’s training, and other subjects or tasks designed to contribute to proper driving attitudes, habits, and techniques and must include the requirements for obtaining a restricted probationary driver’s license.
(2) Except when otherwise provided or restricted by statute, a person whose driver’s license is suspended or revoked by the department, unless the suspension or revocation was for an offense under 61-8-401, 61-8-406, or 61-8-411, may participate in any driver rehabilitation and improvement program established under this section if the person’s license is:
(a) suspended as a result of a violation of the traffic laws of this state, unless the suspension was imposed under the authority provided in Title 61, chapter 8, part 8; or
(b) revoked and the person has:
(i) completed at least 3 months of a 1-year revocation; or
(ii) completed 1 year of a 3-year revocation; and
(iii) met the requirements for reobtaining a Montana driver’s license.
(3) Notwithstanding any provision of this part inconsistent with any other law of the state of Montana, the enforcement of any suspension or revocation order that constitutes the basis for any person’s participation in the driver rehabilitation and improvement program provided for in this section may be stayed if that person complies with the requirements established for the driver rehabilitation and improvement program and meets the eligibility requirements of subsection (2).
(4) If a person’s driver’s license has been surrendered before the person’s selection for participation in the driver rehabilitation and improvement program, the license may be returned upon receipt of the person’s agreement to participate in the program.
(5) The stay of enforcement of any suspension or revocation action must be terminated and the suspension or revocation action must be reinstated if a person declines to participate in the driver rehabilitation and improvement program or fails to meet the attendance or other requirements established for participation in the program.
(6) This part does not create a right to be included in any program established under this part.
(7) The department may establish a schedule of fees that may be charged to those persons participating in the driver improvement and rehabilitation program. The fees must be used to help defray costs of maintaining the program.
(8) A person may be referred to this program by a driver improvement analyst, city judge, justice of the peace, youth court judge, judge of a district court of the state, or hearing examiner of the department.
(9) (a) Except as provided in subsection (9)(b), the department may issue a restricted probationary license to any person who enrolls and participates in the driver rehabilitation and improvement program. Upon issuance of a probationary license under this section, the licensee is subject to the restrictions set forth on the license.
(b) The department may not issue a restricted probationary license that would permit an individual to drive a commercial motor vehicle during a period in which:
(i) the individual is disqualified from operating a commercial motor vehicle under state or federal law; or
(ii) the individual’s driver’s license or driving privilege is revoked, suspended, or canceled.
(10) It is a misdemeanor for a person to operate a motor vehicle in any manner in violation of the restrictions imposed on a restricted license issued to the person under this section.
61-5-208. Period of suspension or revocation — limitation on issuance of probationary license — notation on driver’s license. (1) The department may not suspend or revoke a driver’s license or privilege to drive a motor vehicle on the public highways, except as permitted by law.
(2) (a) Except as provided in 44-4-1205 and 61-2-302 and except as otherwise provided in this section, a person whose license or privilege to drive a motor vehicle on the public highways has been suspended or revoked may not have the license, endorsement, or privilege renewed or restored until the revocation or suspension period has been completed.
(b) Subject to 61-5-231 and except as provided in subsection (4) of this section:
(i) upon receiving a report of a person’s conviction or forfeiture of bail or collateral not vacated for a first offense of violating 61-8-401, 61-8-406, 61-8-411, or 61-8-465, the department shall suspend the driver’s license or driving privilege of the person for a period of 6 months;
(ii) upon receiving a report of a person’s conviction or forfeiture of bail or collateral not vacated for a second offense of violating 61-8-401, 61-8-406, 61-8-411, or 61-8-465 within the time period specified in 61-8-734, the department shall suspend the driver’s license or driving privilege of the person for a period of 1 year and may not issue a probationary license during the period of suspension unless the person completes at least 45 days of the 1-year suspension and the report of conviction includes a recommendation from the court that a probationary driver’s license be issued subject to the requirements of 61-8-442. If the 1-year suspension period passes and the person has not completed a chemical dependency education course, treatment, or both, as required under 61-8-732, the license suspension remains in effect until the course or treatment, or both, are completed.
(iii) upon receiving a report of a person’s conviction or forfeiture of bail or collateral not vacated for a third or subsequent offense of violating 61-8-401, 61-8-406, 61-8-411, or 61-8-465 within the time period specified in 61-8-734, the department shall suspend the driver’s license or driving privilege of the person for a period of 1 year and may not issue a probationary license during the period of suspension unless the person completes at least 90 days of the 1-year suspension and the report of conviction includes a recommendation from the court that a probationary driver’s license be issued subject to the requirements of 61-8-442. If the 1-year suspension period passes and the person has not completed a chemical dependency education course or treatment, or both, as required under 61-8-732, the license suspension remains in effect until the course or treatment, or both, are completed.
(3) (a) Except as provided in subsection (3)(b), the period of suspension or revocation for a person convicted of any offense that makes mandatory the suspension or revocation of the person’s driver’s license commences from the date of conviction or forfeiture of bail.
(b) A suspension commences from the last day of the prior suspension or revocation period if the suspension is for a conviction of driving with a suspended or revoked license.
(4) If a person is convicted of a violation of 61-8-401, 61-8-406, 61-8-411, or 61-8-465 while operating a commercial motor vehicle, the department shall suspend the person’s driver’s license as provided in 61-8-802.
(5) (a) A driver’s license that is issued after a license revocation to a person described in subsection (5)(b) must be clearly marked with a notation that conveys the term of the person’s probation restrictions.
(b) The provisions of subsection (5)(a) apply to a license issued to a person for whom a court has reported a felony conviction under 61-8-731, the judgment for which has as a condition of probation that the person may not operate a motor vehicle unless:
(i) operation is authorized by the person’s probation officer; or
(ii) a motor vehicle operated by the person is equipped with an ignition interlock device.

61-8-442. Driving under influence of alcohol or drugs — driving with excessive alcohol concentration — ignition interlock device — 24/7 sobriety and drug monitoring program — forfeiture of vehicle. (1) In addition to the punishments provided in 61-8-714, 61-8-722, and 61-8-465, regardless of disposition and if a probationary license is recommended by the court, the court may, for a person convicted of a first offense under 61-8-401, 61-8-406, 61-8-411, or 61-8-465:
(a) restrict the person to driving only a motor vehicle equipped with a functioning ignition interlock device during the probationary period and require the person to pay the reasonable cost of leasing, installing, and maintaining the device; or
(b) require the person to participate in a court-approved alcohol or drug detection testing program and pay the fees associated with the testing program.
(2) If a person is convicted of a second or subsequent violation of 61-8-401, 61-8-406, 61-8-411, or 61-8-465, in addition to the punishments provided in 61-8-714, 61-8-722, and 61-8-465, regardless of disposition, the court shall:
(a) if recommending that a probationary license be issued to the person, restrict the person to driving only a motor vehicle equipped with a functioning ignition interlock device during the probationary period and require the person to pay the reasonable cost of leasing, installing, and maintaining the device;
(b) require the person to participate in the 24/7 sobriety and drug monitoring program provided for in 44-4-1203 and pay the fees associated with the program or require the person to participate in a court-approved alcohol or drug detection testing program and pay the fees associated with the testing program; or
(c) order that each motor vehicle owned by the person at the time of the offense be seized and subjected to the forfeiture procedure provided under 61-8-421.
(3) Any restriction or requirement imposed under this section must be included in a report of the conviction made by the court to the department in accordance with 61-11-101 and placed upon the person’s driving record maintained by the department in accordance with 61-11-102.
(4) The duration of a restriction imposed under this section must be monitored by the department.

FEDERAL ALCOHOL ADMINISTRATION ACT – TITLE 27

 

27 CFR §6.91   Samples.

The act by an industry member of furnishing or giving a sample of distilled spirits, wine, or malt beverages to a retailer who has not purchased the brand from that industry member within the last 12 months does not constitute a means to induce within the meaning of section 105(b)(3) of the Act. For each retail establishment the industry member may give not more than 3 gallons of any brand of malt beverage, not more than 3 liters of any brand of wine, and not more than 3 liters of distilled spirits. If a particular product is not available in a size within the quantity limitations of this section, an industry member may furnish to a retailer the next larger size.

[T.D. ATF-364, 60 FR 20423, Apr. 26, 1995]

§7.26   Alcoholic content [suspended as of April 19, 1993; see §7.71].

(a) The alcoholic content and the percentage and quantity of the original extract shall not be stated unless required by State law. When alcoholic content is required to be stated, but the manner of statement is not specified in the State law, it shall be stated in percentage of alcohol by weight or by volume, and not by proof or by maximums or minimums. Otherwise the manner of statement shall be as specified in the State law.

(b) The terms “low alcohol” or “reduced alcohol” may be used only on malt beverage products containing less than 2.5 percent alcohol by volume.

(c) The term “non-alcoholic” may be used on malt beverage products, provided the statement “contains less than 0.5 percent (or .5%) alcohol by volume” appears in direct conjunction with it, in readily legible printing and on a completely contrasting background.

(d) The term “alcohol-free” may be used only on malt beverage products containing no alcohol.

[T.D. 6521, 25 FR 13859, Dec. 29, 1960, as amended by T.D. ATF 280, 54 FR 3594, Jan. 25, 1989; T.D. ATF-339, 58 FR 21231, Apr. 19, 1993]

Effective Date Note: By 58 FR 21231, Apr. 19, 1993, §7.26 was suspended indefinitely.

§ 7.71 Alcoholic content.

(a) General. Alcoholic content and the percentage and quantity of the original gravity or extract may be stated on a label unless prohibited by State law. When alcoholic content is stated, and the manner of statement is not required under State law, it shall be stated as prescribed in paragraph (b) of this section.

(b) Form of statement.

(1) Statement of alcoholic content shall be expressed in percent alcohol by volume, and not by proof, by a range, or by maximums or minimums, unless required by State law. Other truthful, accurate, and specific factual representations of alcohol content, such as alcohol by weight, may be made, as long as they appear together with, and as part of, the statement of alcohol content as a percentage of alcohol by volume.

(2) For malt beverages containing 0.5 percent or more alcohol by volume, statements of alcoholic content shall be expressed to the nearest one-tenth of a percent, subject to the tolerance permitted by paragraph (c) (1) and (2) of this section. For malt beverages containing less than 0.5 percent alcohol by volume, alcoholic content may be expressed in one-hundredths of a percent, subject to the tolerance permitted in paragraph (c)(3) of this section.

(3) Alcoholic content shall be expressed in the following fashion: “alcohol – percent by volume,” “alcohol by volume – percent,” “ – percent alcohol by volume,” or “ – percent alcohol/volume.” The abbreviations “alc” and “vol” may be used in lieu of the words “alcohol” and “volume,” and the symbol “%” may be used in lieu of the word “percent.”

(c) Tolerances.

(1) For malt beverages containing 0.5 percent or more alcohol by volume, a tolerance of 0.3 percent will be permitted, either above or below the stated percentage of alcohol. Any malt beverage which is labeled as containing 0.5 percent or more alcohol by volume may not contain less than 0.5 percent alcohol by volume, regardless of any tolerance.

(2) For malt beverages which are labeled as “low alcohol” or “reduced alcohol” under paragraph (d) of this section, the actual alcoholic content may not equal or exceed 2.5 percent alcohol by volume, regardless of any tolerance permitted by paragraph (c)(1) of this section.

(3) For malt beverages containing less than 0.5 percent alcohol by volume, the actual alcoholic content may not exceed the labeled alcoholic content. A malt beverage may not be labeled with an alcoholic content of 0.0 percent alcohol by volume unless it is also labeled as “alcohol free” and contains no alcohol.

(d) Low alcohol and reduced alcohol. The terms “low alcohol” or “reduced alcohol” may be used only on malt beverages containing less than 2.5 percent alcohol by volume.

(e) Non-alcoholic. The term “non-alcoholic” may be used on malt beverages, provided the statement “contains less than 0.5 percent (or .5%) alcohol by volume” appears in direct conjunction with it, in readily legible printing and on a completely contrasting background.

(f) Alcohol free. The term “alcohol free” may be used only on malt beverages containing no alcohol.

§11.21   General.

It is unlawful for an industry member to sell, offer for sale, or contract to sell to any trade buyer, or for any such trade buyer to purchase, offer to purchase, or contract to purchase any products (a) on consignment; or (b) under conditional sale; or (c) with the privilege of return; or (d) on any basis other than a bona fide sale; or (e) if any part of the sale involves, directly or indirectly, the acquisition by such person of other products from the trade buyer or the agreement to acquire other products from the trade buyer. Transactions involving the bona fide return of products for ordinary and usual commercial reasons arising after the product has been sold are not prohibited.

Subpart C—Unlawful Sales Arrangements

§11.21   General.

It is unlawful for an industry member to sell, offer for sale, or contract to sell to any trade buyer, or for any such trade buyer to purchase, offer to purchase, or contract to purchase any products (a) on consignment; or (b) under conditional sale; or (c) with the privilege of return; or (d) on any basis other than a bona fide sale; or (e) if any part of the sale involves, directly or indirectly, the acquisition by such person of other products from the trade buyer or the agreement to acquire other products from the trade buyer. Transactions involving the bona fide return of products for ordinary and usual commercial reasons arising after the product has been sold are not prohibited.

§11.22   Consignment sales.

Consignment sales are arrangements wherein the trade buyer is under no obligation to pay for distilled spirits, wine, or malt beverages until they are sold by the trade buyer.

§11.23   Sales conditioned on the acquisition of other products.

(a) General. A sale in which any part of the sale involves, directly or indirectly, the acquisition by the industry member from the trade buyer, or the agreement, as a condition to present or future sales, to accept other products from the trade buyer is prohibited.

(b) Exchange. The exchange of one product for another is prohibited as a sales transaction conditioned on the acquisition of other products. However, the exchange of a product for equal quantities (case for case) of the same type and brand of product, in containers of another size is not considered an acquisition of “other” products and is not prohibited if there was no direct or implied privilege of return extended when the product was originally sold. Industry members may make price adjustments on products eligible for exchange under this paragraph.

Subpart D—Rules for the Return of Distilled Spirits, Wine, and Malt Beverages

 

§11.31   General.

(a) Section 5(d) of the Act provides, in part, that it is unlawful to sell, offer to sell, or contract to sell products with the privilege of return for any reason, other than those considered to be “ordinary and usual commercial reasons” arising after the product has been sold. Sections 11.32 through 11.39 specify what are considered “ordinary and usual commercial reasons” for the return of products, and outline the conditions and limitations for such returns.

(b) An industry member is under no obligation to accept the return of products for the reasons listed in §§11.32 through 11.39.

Exchanges and Returns for Ordinary and Usual Commercial Reasons

§11.32   Defective products.

Products which are unmarketable because of product deterioration, leaking containers, damaged labels or missing or mutilated tamper evident closures may be exchanged for an equal quantity of identical products or may be returned for cash or credit against outstanding indebtedness.

[T.D. ATF-364, 60 FR 20427, Apr. 26, 1995]

§11.33   Error in products delivered.

Any discrepancy between products ordered and products delivered may be corrected, within a reasonable period after delivery, by exchange of the products delivered for those which were ordered, or by a return for cash or credit against outstanding indebtedness.

§11.34   Products which may no longer be lawfully sold.

Products which may no longer be lawfully sold may be returned for cash or credit against outstanding indebtedness. This would include situations where, due to a change in regulation or administrative procedure over which the trade buyer or an affiliate of the trade buyer has no control, a particular size or brand is no longer permitted to be sold.

[T.D. ATF-364, 60 FR 20428, Apr. 26, 1995]

§11.35   Termination of business.

Products on hand at the time a trade buyer terminates operations may be returned for cash or credit against outstanding indebtedness. This does not include a temporary seasonal shutdown (see §11.39).

[T.D. ATF-364, 60 FR 20428, Apr. 26, 1995]

§11.36   Termination of franchise.

When an industry member has sold products for cash or credit to one of its wholesalers and the distributorship arrangement is subsequently terminated, stocks of the product on hand may be returned for cash or credit against outstanding indebtedness.

§11.37   Change in product.

A trade buyer’s inventory of a product which has been changed in formula, proof, label or container (subject to §11.46) may be exchanged for equal quantities of the new version of that product.

§11.38   Discontinued products.

When a producer or importer discontinues the production or importation of a product, a trade buyer’s inventory of that product may be returned for cash or credit against outstanding indebtedness.

§11.39   Seasonal dealers.

Industry members may accept the return of products from retail dealers who are only open a portion of the year, if the products are likely to spoil during the off season. These returns will be for cash or for credit against outstanding indebtedness.

Exchanges and Returns for Reasons Not Considered Ordinary and Usual

§11.45   Overstocked and slow-moving products.

The return or exchange of a product because it is overstocked or slow-moving does not constitute a return for “ordinary and usual commercial reasons.”

§11.46   Seasonal products.

The return or exchange of products for which there is only a limited or seasonal demand, such as holiday decanters and certain distinctive bottles, does not constitute a return for “ordinary and usual commercial reasons.”