CHAPTER 376

FORMERLY

HOUSE BILL NO. 515

AS AMENDED BY HOUSE AMENDMENT NOS. 1 AND 2

AN ACT TO AMEND TITLE 4 OF THE DELAWARE CODE RELATING TO ALCOHOLIC LIQUORS. BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF DELAWARE:

Section 1. Amend Subchapter III, Chapter 5, Title 4 of the Delaware Code by adding a new section designated as §546 which shall read as follows:

"§546. Limit on Number of Retail Licenses.

(a) The General Assembly finds that, in order for the Delaware Alcoholic Beverage Control Commission to maintain effective control of the importation, distribution, and sale of alcoholic liquor into and within this State, and in order to prevent geographical price fixing of alcoholic liquor at the retail level, there shall be a limitation placed on the number of retail licenses issued, held, controlled, or acquired directly or indirectly by one person. The General Assembly further finds that a limitation on the number of retail licenses held by one person is necessary to ensure a stable system for the lawful distribution of alcoholic liquor, serve the public need and convenience, and prevent the public harm associated with a monopoly of the retail alcoholic liquor trade by any person or group of persons, whether such licenses are held by a corporation, partnership, association, proprietorship, individual, or other entity. The General Assembly further finds that a reasonable restriction on the number of retail licenses held by one person will further the State's interest in maintaining a three—tier system for the importation, distribution, and sale of alcoholic liquor by minimizing or limiting absentee ownership and the domination of retail establishments by suppliers, manufacturers, importers, or other economically powerful interests.

Therefore, it is declared to be the public policy of this State that limitations, as hereinafter specified, be placed on the number of retail licenses that any person may at one time hold, directly or indirectly, and that the Commission shall actively supervise and enforce these limitations.

The Commission shall refuse to grant a license for the sale of alcoholic liquor by any restaurant, taproom, hotel, store, or other establishment for consumption off the premises where sold if the Commission has substantial evidence that would reasonably support a belief that the applicant, or any of the applicant's directors, officers, or shareholders, or any of the applicant's partners, corporations, proprietorships, or other legal entities engaged in any undertaking, industry, or business is singularly, or in combination with the applicant, the holder of two (2) or more retail licenses, or has any financial, pecuniary, beneficial,
management, supervisory, or other interest whatsoever, direct or indirect, and however small, in two (2) or more retail licenses; provided, however, that nothing herein shall require any person who, prior to April 1, 1992, acquired an interest in more than two (2) retail licenses to surrender, dispose of, or release their interest in any such license; nor shall anything herein affect such person's right to continue to hold, use, and renew any such license.

For the purposes of this section, a person shall be deemed to acquire a financial, pecuniary, beneficial, management, supervisory, or other interest in a retail license to purchase and re—sell or dispense alcoholic liquor if such person or person's spouse or child under 21 years of age has either (i) any interest whatsoever, direct or indirect, and however small, as a director, officer, shareholder, partner, associate, employee, or member in any corporation, partnership, association,
proprietorship, or other entity engaged in any undertaking, industry, or business which holds a retail license pursuant to this chapter, or (ii) any authority whatsoever to supervise, manage, control, or direct the operation of the licensee's business, or to hire, terminate, or discipline its employees, or to issue any orders, policies, or directives concerning its business; provided, however, that any person whose relationship with the licensee is, as determined by the Commission, merely that of a bona fide lender, lending institution, secured party, or lienholder, or merely that of a bona fide landlord or lessor of real or personal property, shall not, for the purposes of this section, be deemed to acquire a financial, pecuniary, beneficial, management, supervisory, or other interest in such license.

(d) The Commission may promulgate such rules and regulations with respect to the enforcement and furtherance of the objectives and provisions of this section as it may deem necessary, and all such rules and regulations that are not inconsistent with provisions of this Title and the Delaware Code shall have the force and effect of law."

Section 2. Amend §561, Subchapter V, Chapter 5, Title 4 of the Delaware Code by adding a new subsection (e) which shall read as follows:

"(e) The Commission may cancel any retail license if it has reasonable grounds to believe that the license was granted in violation of §546(b) of this Title, or any rule enacted pursuant to §546(d) of this Title."

Section 3. If any section, subsection, paragraph, or provision of this Act or the application thereof to any person or circumstance is held invalid, such invalidity shall- not affect other sections, subsections, paragraphs, provisions, or applications of this Act which can be given effect without the invalid section, subsection, paragraph, provision, or application, and to that end the provisions of this Act are declared to be severable.

Approved July 11, 1992.