PUBLIC PROTECTION CABINET

Department of Alcoholic Beverage Control

(Amendment)

 

      804 KAR 9:050. Quota retail drink licenses.

 

      RELATES TO: KRS 241.060, 241.065,[241.075,] 242.125, 242.127, 242.129, 243.030, 243.230

      STATUTORY AUTHORITY: KRS 241.060

      NECESSITY, FUNCTION, AND CONFORMITY: KRS 241.060(2) authorizes the board to limit the number of licenses of each kind or class to be issued in this state or any political subdivision, and restrict the locations of licensed premises. This administrative regulation establishes quota retail drink licenses in cities that have become wet pursuant to KRS 242.125 separately from their respective counties that remain dry.

 

      Section 1. Establishment of General City Quotas. (1) Except as provided in subsection (2) of this section and Section 4 of this administrative regulation, the number of quota retail drink licenses issued by the department in a city of the commonwealth which becomes wet separately by virtue of a KRS 242.125 local option election[held after January 1, 2013,] shall be one (1) for every 2,500 persons resident in the city.

      (2) The minimum number of quota retail drink licenses issued by the department in a city shall be two (2) licenses.

      (3) A wet fourth class city shall not receive any quotas under this section unless a majority of the votes cast in an election held under KRS 242.127 and KRS 242.129 are in favor of the sale of distilled spirits and wine by the drink for consumption on the premises.

      (4) The estimates of population for Kentucky cities prepared by the Kentucky State Data Center, Urban Studies Center of the University of Louisville, Louisville, Kentucky, shall be used in every year except a census year to determine the number of licenses prescribed by this administrative regulation. The United States Government census figures of population shall be used in a census year.

 

      Section 2. Requests for Specific City Quota. (1) Three (3) or more years after the certification of a wet election pursuant to KRS 242.125 by a first, second, or third class city, or pursuant to KRS 242.127 and 242.129 for a fourth class city, the city may file a request to the board seeking a specific city quota to increase the number of quota retail drink licenses for the city.

      (2) Before seeking this request, the city shall publish a notice in the newspaper used by the city for legal notices advising the general public of the city’s intent to request additional city quota licenses from the board.

      (3) A city’s request to the board for a specific increased quota shall include:

      (a) A certified copy of a city’s governing body government resolution approving the request;

      (b) A certified copy of the notice referenced in subsection (2) of this section; and

      (c) An explanation why the city meets the criteria for a quota increase in conformity with Section 3 of this administrative regulation.

      (4) Upon receiving a city request satisfying subsection (3) of this section, the board may promulgate, in conformity with KRS Chapter 13A, an amendment to Section 4 of this administrative regulation which sets a higher specific quota for the city.

      (5) The specific city quota for quota retail drink licenses set by the board in subsection (4) of this section shall not exceed a ratio of one (1) for every 1,500 persons resident in the city.

      (6) This section shall not guarantee that a city will receive the requested specific city quota even if the board promulgates an initial amendment pursuant to subsection (4) of this section. The city shall bear the burden of showing the requested increase is necessary due to a change in circumstances from the previous request and that current needs are not being met by the current license holders.

      (7) If the board rejects a request made under this section, the board shall notify the city of its decision by registered mail at the address given in the request. Within thirty (30) days after the date of the mailing of the notice, the city may indicate, in writing, its desire for an administrative hearing before the board regarding its request. The hearing shall be conducted in accordance with the provisions of KRS Chapter 13B.

      (8) Following an initial request for an increase under subsection (1) of this section, a city may file an additional request to the board once every three (3) years from the date of the denial or establishment of a specific city quota. The procedures established in subsections (1) through (7) of this section shall be followed.

 

      Section 3. Criteria for Consideration. (1) The board shall consider the following information in its determination of a city’s request for an increased quota made under Section 2(3) of this administrative regulation:

      (a) Population served by the city;

      (b) Total retail sales of the city for the most recent past fiscal year;

      (c) Retail sales per capita for the most recent past fiscal year;

      (d) Total alcohol sales in the city for the most recent fiscal year;

      (e) Tourist destinations in the area, if applicable; and

      (f) Other economic and commercial data offered to show the city’s capacity to support additional licenses.

      (2) The board shall grant the request if the factors considered under subsection (1) of this section justify the requested increase.

 

      Section 4. Establishment of Specific City Quotas. (1) Danville, which repealed prohibition on March 2, 2010, shall have six (6) quota retail drink licenses.

      (2) Radcliff, which repealed prohibition on October 4, 2011, shall have eight (8) quota retail drink licenses.

      (3) Somerset, which repealed prohibition on June 26, 2012, shall have five (5) quota retail drink licenses.

      (4) Murray, which repealed prohibition on July 17, 2012, shall have seven (7) quota retail drink licenses.

      (5) Bowling Green, which requested a quota increase on May 18, 2015, shall have forty-one (41) quota retail drink licenses.

 

      Section 5. Quota Vacancies. (1) On or before January 1 of each year, the Department of Alcoholic Beverage Control shall request from the Kentucky State Data Center, Urban Studies Center of the University of Louisville, Louisville, Kentucky, population estimates as of that date for all wet cities located in dry counties.

      (2) If a city's population has increased and the city no longer has one (1) quota retail drink license for every 2,500 persons resident in the city, the Department of Alcoholic Beverage Control shall increase the city's quota to maintain the 1:2,500 ratio.

      (3) If a quota retail drink license vacancy is created under Section 1, 2, or 5(2) of this administrative regulation or it occurs for any other reason, the Department of Alcoholic Beverage Control shall within sixty (60) days arrange for the newspaper used for city legal notices to advertise the vacancy and provide information about applying for it.

      (4) The Department of Alcoholic Beverage Control shall accept applications for a quota retail drink license vacancy not later than thirty (30) days following the date on which the public notice required by subsection (3) of this section is published.

      (5) A licensee that holds a quota retail drink license shall assume the business risk that the number of quota licenses might be increased.

 

      Section 6. Quota Reductions. (1) This administrative regulation shall not prohibit renewal or approved transfer of an existing quota retail drink license issued in a wet city situated in a dry county.

      (2) Except for cities with specific quotas under Section 2 of this administrative regulation, if a city has in existence more than one (1) quota retail drink license for every 2,500 persons resident in the city, the number of licenses shall be reduced as they expire or are surrendered or revoked.

 

      Section 7. No Separate City Quota in Wet County. If a dry county in which a wet city is located becomes wet, the quota established for that entire county by 804 KAR 9:010 shall supersede and replace any separate city quota under this administrative regulation.

 

FREDERICK A. HIGDON, Commissioner

AMBROSE WILSON IV, Secretary

      APPROVED BY AGENCY: July 1, 2015

      FILED WITH LRC: July 2, 2015 at 4 p.m.

      PUBLIC HEARING AND PUBLIC COMMENT PERIOD:      A public hearing on this administrative regulation shall be held on August 27, 2015 at 9:30 a.m. Eastern Time at the Kentucky Department of Alcoholic Beverage Control, 1003 Twilight Trail, Frankfort, Kentucky 40601. Individuals interested in being heard at this hearing shall notify this Department in writing by five working days prior to the hearing, of their intent to attend. If no notification of intent to attend the hearing is received by that date, the hearing may be canceled. This hearing is open to the public. Any person who wishes to be heard will be given an opportunity to comment on the proposed administrative regulation. A transcript of the public hearing will not be made unless a written request for a transcript is made. If you do not wish to be heard at the public hearing, you may submit written comments on the proposed administrative regulation. Written comments shall be accepted through the end of the day on August 31, 2015. Send written notification of intent to be heard at the public hearing or written comments on the proposed administrative regulation to the contact person.

      CONTACT PERSON: Melissa McQueen, Department of Alcoholic Beverage Control, 1003 Twilight Trail, Frankfort, Kentucky 40601, phone (502) 782-7906, fax (502) 564-7479.

 

REGULATORY IMPACT ANALYSIS AND TIERING STATEMENT

 

Contact Person: Melissa McQueen

      (1) Provide a brief summary of:

      (a) What this administrative regulation does: This administrative regulation sets specific quotas for retail drink licenses for cities pursuant to KRS 242.125, and sets forth the criteria needed for consideration if a city desires an increase in its quota.

      (b) The necessity of this administrative regulation: This administrative regulation is necessary to set specific quotas for retail drink licenses in cities and to outline the process by which a city can request an increase.

      (c) How this administrative regulation conforms to the content of the authorizing statutes: KRS 241.060(1) authorizes the board to promulgate administrative regulations.

      (d) How this administrative regulation currently assists or will assist in the effective administration of the statutes. This administrative regulation lists specific quotas for cities which makes it clear what number of licenses are available.

      (2) If this is an amendment to an existing administrative regulation, provide a brief summary of:

      (a) How the amendment will change this existing administrative regulation: It adds a quota increase for the city of Bowling Green.

      (b) The necessity of the amendment to this administrative regulation: This amendment is necessary for Bowling Green to get the additional licenses it requested.

      (c) How the amendment conforms to the content of the authorizing statutes: The increased allowance of licenses fits within the mandated prescriptions of KRS 241.065.

      (d) How the amendment will assist in the effective administration of the statutes: This amendment will assist the city of Bowling Green in getting the additional licenses it requested.

      (3) List the type and number of individuals, businesses, organizations, or state and local governments affected by this administrative regulation: The city of Bowling Green is affected by this administrative regulation.

      (4) Provide an analysis of how the entities identified in question (3) will be impacted by either the implementation of this administrative regulation, if new, or by the change, if it is an amendment, including:

      (a) List the actions that each of the regulated entities identified in question (3) will have to take to comply with this administrative regulation or amendment: The city will not have to take any additional steps to comply with this amendment.

      (b) In complying with this administrative regulation or amendment, how much will it cost each of the entities identified in question (3): There are not expected to be any additional costs.

      (c) As a result of compliance, what benefits will accrue to the entities identified in question (3): There will be minimal financial benefits from the licensing fees of the extra available licenses.

      (5) Provide an estimate of how much it will cost the administrative body to implement this administrative regulation:

      (a) Initially:      No extra costs are anticipated to amend this administrative regulation.

      (b) On a continuing basis: None.

      (6) What is the source of the funding to be used for the implementation and enforcement of this administrative regulation: No funding is used to implement and enforce the amendment of this administrative regulation.

      (7) Provide an assessment of whether an increase in fees or funding will be necessary to implement this administrative regulation, if new, or by the change, if it is an amendment: There is no anticipated increase in fees or funding necessary to amend this administrative regulation.

      (8) State whether or not this administrative regulation establishes any fees or directly or indirectly increased any fees: This administrative regulation amendment does not directly or indirectly increase any fees.

      (9) TIERING: Is tiering applied? No tiering is applied because this regulation applies equally to the regulated entities.

 

FISCAL NOTE ON STATE OR LOCAL GOVERNMENT

 

      (1) What units, parts or divisions of state or local government (including cities, counties, fire departments or school districts) will be impacted by this administrative regulation? The city of Bowling Green requested this amendment and is expected to be impacted by this amendment. The Department of Alcoholic Beverage Control will also be impacted as it will have to review additional license applications.

      (2) Identify each state or federal statute or federal regulation that requires or authorizes the action taken by the administrative regulation. KRS 241.060(1) authorizes the board to promulgate administrative regulations.

      (3) Estimate the effect of this administrative regulation on the expenditures and revenues of a state or local government agency (including cities, counties, fire departments, or school districts) for the first full year the administrative regulation is to be in effect.

      (a) How much revenue will this administrative regulation generate for the state or local government (including cities, counties, fire departments, or school districts) for the first year? Minimal revenue will be generated by this administrative regulation in the form of additional licensing fees.

      (b) How much revenue will this administrative regulation generate for the state or local government (including cities, counties, fire departments, or school districts) for subsequent years? Minimal revenue is expected to be generated by this administrative regulation in the form of additional licensing fees.

      (c) How much will it cost to administer this program for the first year? The cost to administer this amendment should be minimal, if any.

      (d) How much will it cost to administer this program for subsequent years? The cost to administer this amendment should be minimal, if any.

      Note: If specific dollar estimates cannot be determined, provide a brief narrative to explain the fiscal impact of the administrative regulation:

      Revenues (+/-):

      Expenditures (+/-):

      Other Explanation: Additional costs to administer these regulatory changes at the local government level for this year or subsequent years should be minimal or none.