MT Code § 16-4-401 (2021)
2021 Montana Code Annotated|Title 16. Alcohol, Tobacco, and Marijuana|Chapter 4. License Administration|Part 4. Licensing Criteria|16-4-401. License as privilege -- criteria for decision on application

  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. However, resort retail all-beverages licenses issued under 16-4-213 do not count toward this limit.   (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, except that an applicant's spouse may possess an ownership interest in one or more manufacturer licenses;   (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; however, nothing in this subsection (2)(a)(iv) authorizes the department to consider an applicant's tax status or whether the applicant was or is an income tax protestor when renewing the license;   (v) 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; and   (vi) the applicant is not under 19 years of age;   (b) if the applicant is a publicly traded corporation:   (i) each owner of 15% 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 15% 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 15% 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 15% 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 15% 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 15% 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 15% must meet the requirements of subsection (2)(a). If no single limited partner's interest equals or exceeds 15%, 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 15% must meet the requirements of subsection (2)(a). If no single member's interest equals or exceeds 15%, 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; however, nothing in this subsection (3)(a)(v) authorizes the department to consider an applicant's tax status or whether the applicant was or is an income tax protestor when renewing the license; and   (vi) the applicant is not under 19 years of age;   (b) if the applicant is a publicly traded corporation:   (i) each owner of 15% or more of the outstanding stock meets the requirements for an individual listed in subsection (3)(a). If no single owner owns more than 15% 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 15% 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 15% 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 15% must meet the requirements of subsection (3)(a). If no single limited partner's interest equals or exceeds 15%, 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 15% must meet the requirements of subsection (3)(a). If no single member's interest equals or exceeds 15%, 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; however, nothing in this subsection (4)(a)(iv) authorizes the department to consider an applicant's tax status or whether the applicant was or is an income tax protestor when renewing the license;   (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 15% or more of the outstanding stock meets the requirements for an individual listed in subsection (4)(a). If no single owner owns more than 15% 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 15% 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 15% 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 15% must meet the requirements of subsection (4)(a). If no single limited partner's interest equals or exceeds 15%, 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 15% must meet the requirements of subsection (4)(a). If no single member's interest equals or exceeds 15%, 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.   (9) (a) Except as specifically provided in this code relating to financial interests in licenses, nothing in this section applies or otherwise prohibits an applicant or licensee from obtaining personal financing from a licensed financial institution, taking advantage of consumer credit, or using a personal credit card to make purchases on behalf of a licensed entity if the applicant or licensee is reimbursed by the licensed entity within 90 days. An applicant or individual may obtain multiple transactions up to an aggregate maximum of $100,000 with each individual transaction not to exceed $25,000 to be used on behalf of the licensed entity.   (b) A licensee's use of short-term financing of 90 days or less from institutional lenders and noninstitutional lenders does not constitute an undisclosed ownership interest in the license.   (c) It is the intent of this subsection (9) to facilitate the efficient administration of an entity licensed under this code.   History: En. Sec. 10, Ch. 84, L. 1937; amd. Sec. 1, Ch. 76, L. 1945; amd. Sec. 1, Ch. 244, L. 1947; amd. Sec. 1, Ch. 10, L. 1957; Sec. 4-412, R.C.M. 1947; amd. and redes. 4-4-108 by Sec. 90, Ch. 387, L. 1975; R.C.M. 1947, 4-4-108; amd. Sec. 2, Ch. 186, L. 1979; amd. Sec. 3, Ch. 359, L. 1981; amd. Sec. 1, Ch. 178, L. 1983; amd. Sec. 20, Ch. 19, L. 1985; amd. Sec. 1, Ch. 133, L. 1985; amd. Sec. 28, Ch. 68, L. 1987; amd. Sec. 36, Ch. 530, L. 1995; amd. Sec. 2, Ch. 148, L. 1999; amd. Sec. 4, Ch. 448, L. 2001; amd. Sec. 5, Ch. 591, L. 2005; amd. Sec. 1, Ch. 197, L. 2007; amd. Sec. 2, Ch. 211, L. 2013; amd. Sec. 7, Ch. 336, L. 2019; amd. Sec. 2, Ch. 161, L. 2021; amd. Sec. 5, Ch. 568, L. 2021.