§ 16-4-430 — Competitive Bidding Process -- All-Beverages, Retail Beer And Wine, And Restaurant Beer And Wine Licenses

16-4-430 . Competitive bidding process -- all-beverages, retail beer and wine, and restaurant beer and wine licenses. (1) (a) When the department determines that a quota area is eligible for a license under 16-4-105 , 16-4-201 , 16-4-204 , or 16-4-420 , the department shall use a competitive bidding process to determine the party afforded the opportunity to apply for the license. The department shall use a competitive bidding process when:
(i) a new license becomes available in a quota area where a license of the same type is not currently available in the quota area;
(ii) the opportunity to transfer a license into a quota area becomes available where a license of the same type is not currently available in the quota area;
(iii) the lapse, revocation, or issuance of a license within the quota area where the license is located has created the last remaining license for that license type in the quota area; or
(iv) the department's denial of an application for licensure or an applicant's withdrawal of an application for licensure has created the last remaining license for that license type in a quota area.
(b) The department shall:
(i) determine the minimum bid based on 75% of the market value of applicable licenses in the quota area;
(ii) publish notice that a quota area is eligible for a new license;
(iii) notify the bidder with the highest bid; and
(iv) keep confidential the identity of bidders, number of bids, and bid amounts until the highest bidder has been approved.
(2) (a) To enter the competitive bidding process, a bidder shall submit an electronic bid form provided by the department.
(b) The department shall contact any bidder whose timely submitted bid form has a deficiency and shall provide that bidder with an opportunity to resubmit the bid form within 5 business days to correct any deficiency.
(3) In the case of a tie for the highest bid, the tied bidders may submit new bids. The minimum bid must be the tied bid amount. To submit a new bid, a tied bidder shall submit an electronic bid form provided by the department.
(4) 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 approval of the license;
(c) meet all other requirements to own the 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. Any extension request must be made in writing to the department prior to the deadline for commencing business.
(5) 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 (4). If no qualified bidder is approved to own the license, the department shall reopen the competitive bidding process for the license.
(6) (a) If no bids are received during the competitive bidding process, the department shall reopen the bid at a lower bid amount than initially determined in subsection (1).
(b) If, after holding a competitive bidding process, the department determines that there is no significant market value for a particular license, the department may withdraw that license from the competitive bidding process and process applications for the license in the order received.
(c) If a quota area is already eligible for a license as of November 24, 2017, the department shall process applications for the license in the order received.
(7) (a) The successful applicant is subject to forfeiture of the license, the license fees, and the original bid amount if the successful applicant:
(i) applies to transfer the awarded license to another person or business entity within 1 year after receiving the license unless that transfer is due to a death of an owner;
(ii) proposes a location for the license within the first year of operation that had the same license type within the previous 12 months; or
(iii) 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. Evidence of the delay must be made in writing to the department prior to the deadline for commencing business.
(b) If a license is forfeited, the department shall determine whether there is a lien against the license. If there is a lien, the department shall notify the lienholder or secured party of the forfeiture and the lienholder or secured party may foreclose on the license and request transfer of the license pursuant to 16-4-801 . If there is not a lien on the license or if the lienholder or secured party does not foreclose on the license pursuant to 16-4-801 , the department shall conduct another competitive bidding process for the license.
(8) A license issued under this section is not eligible to offer gambling under Title 23, chapter 5, part 3, 5, or 6.
(9) Nothing in subsection (7) relating to forfeiture prohibits a lienholder or secured party from foreclosing on a license. A lien may be placed on a license issued under this section and may be foreclosed on. If a license is foreclosed on, the department shall keep the license fees and the original bid amount and the lienholder or secured party may resell the license, pending department approval of the applicant.

Legislative History

En. Sec. 1, Ch. 342, L. 2019; amd. Sec. 5, Ch. 93, L. 2023.