In this subtitle the following words have the meanings indicated. “Director” means the Director of the Services. “Dispensary” means a store established and maintained by the Services for the sale of alcoholic beverages. “Services” means the County Alcohol Beverage Services.

There is the Alcohol Beverage Services in the county government, which functions as a liquor control board.

There is a Director of the Services, who shall be the chief administrative officer of and exercise general supervision over the Services. The County Executive shall appoint the Director with the consent of the County Council. The County Executive shall determine the qualifications of the Director. The Director: serves at the pleasure of the County Executive; and shall devote full time to the duties of the Services. The County Executive shall set the salary of the Director with the approval of the County Council.

With the approval of the County Executive, the Director may appoint employees necessary to operate the dispensary system, set employee compensation, and require a bond for the faithful performance of employee duties. Except for the Director, each Services employee shall be appointed and employed in accordance with regulations of the Merit System Protection Board. The Office of the County Attorney shall provide legal services to the Services.

A member of the County Council or the County Executive may not have a direct or indirect financial interest in the sale, manufacture, blending, brewing, distilling, rectifying, or wholesaling of any alcoholic beverage purchased or sold under this article. Except as provided in subsection (c) of this section, an employee of the Services may not: have a direct or indirect financial interest in the sale, manufacture, blending, brewing, distilling, rectifying, or wholesaling of any alcoholic beverage purchased or sold under this article; have an interest in a license; directly or indirectly solicit or receive any fee, commission, gratuity, emolument, remuneration, reward, present, or alcoholic beverage sample, and any other consideration from: a person who sells, manufactures, blends, brews, distills, rectifies, wholesales, or distributes alcoholic beverages; or a license holder; or derive any profit or remuneration from the purchase or sale of alcoholic beverages other than the salary paid by the county for the discharge of the employee’s duties. Subject to the County Public Ethics Law, the Services may allow a Services employee to be employed by a license holder if the employment directly relates to the performing arts. Except as provided in subsection (e) of this section, a person listed in paragraph (2) of this subsection may not directly or indirectly offer, pay, or give a fee, reward, present, commission, gift, or sample of alcoholic beverages to an employee of the Services, a member of the County Council, or the County Executive. This subsection applies to: a license holder or an employee of a license holder; or a person or an agent or employee of a person engaged in the manufacture, sale, blending, brewing, distilling, rectifying, wholesaling, or distribution of alcoholic beverages. This section does not prohibit a manufacturer, brewer, wholesaler, or dealer that sells or attempts to sell alcoholic beverages to the Services from providing samples of alcoholic beverages to the Services. A person that provides samples of alcoholic beverages to the Services shall obtain a receipt, signed by the Director, stating in detail the amount and a description of the samples. When received, samples of alcoholic beverages provided under this subsection shall be inventoried and sold in the same manner as other beverages that the Services purchases. A person that violates this section is guilty of a misdemeanor and on conviction is subject to imprisonment not exceeding 12 years or a fine not exceeding $5,000 or both.

There is an Advisory Board in the Services. The Advisory Board consists of the following eight members: the Director or the Director’s designee; the Director of the County Department of Police or the designee of the Director of the County Department of Police; the Chair of the Board of License Commissioners; and five members who are county residents appointed by the County Executive with the consent of the County Council. Of the members of the Advisory Board appointed under subsection (b)(4) of this section: only one shall be a holder of a Class B or a Class C beer, wine, and liquor license in the county; and only one shall be a holder of a license of any other class in the county. This subsection applies to members of the Advisory Board appointed under subsection (b)(4) of this section. The term of a member is 4 years. A member appointed after a term has begun serves only for the remainder of the term. The terms of the members are staggered as required by the terms provided for members on July 1, 2016. With the consent of the County Council, the County Executive may remove a member whom the County Executive appointed to the Advisory Board. The Advisory Board shall report at least quarterly to the County Executive on recommendations for the improvement of: the alcoholic beverages control and enforcement activities of the county; and the operations of the dispensary and distribution systems from the standpoint of efficiency, service provided, and convenience to the public. A member of the Advisory Board: may not receive compensation; but is entitled to necessary expenses in connection with the performance of the duties of the Advisory Board.

This section does not apply to a holder of a Class F license. Except as provided in paragraphs (2) through (8) of this subsection: the Services has a monopoly on the wholesale distribution of beer, wine, and liquor and retail distribution of off–sale liquor in the county, subject to § 1–319 of this article; and a person may sell only alcoholic beverages that are purchased from the Services. The holders of the following wholesaler’s licenses may sell or deliver alcoholic beverages for resale to a dispensary: a Class 1 beer, wine, and liquor license; a Class 2 wine and liquor license; a Class 3 beer and wine license; a Class 4 beer license; or a Class 5 wine license. The holder of a Class 6 limited wine wholesaler’s license or nonresident winery permit may sell or deliver wine directly to a dispensary, restaurant, or other retail dealer in the county. The holder of a Class 7 limited beer wholesaler’s license or nonresident brewery permit may sell or deliver its own beer to a dispensary, restaurant, or other retail dealer in the county. The holder of a Class 8 liquor wholesaler’s license or nonresident distillery permit may sell or deliver its own liquor to a dispensary, restaurant, or other retail dealer authorized to sell liquor in the county. A holder of a direct wine shipper’s permit may ship wine directly to a consumer in the county. A dispensary, restaurant, or other retail dealer in the county may purchase wine directly from a holder of a Class 6 limited wine wholesaler’s license or of a nonresident winery permit. A dispensary, restaurant, or other retail dealer in the county may purchase beer directly from a holder of a Class 7 limited beer wholesaler’s license or of a nonresident brewery permit. A dispensary, restaurant, or other retail dealer authorized to sell liquor in the county may purchase liquor directly from a holder of a Class 8 liquor wholesaler’s license or of a nonresident distillery permit. A holder of a charity wine auction permit in the county may receive and sell wine obtained from any source listed under § 2–137 of this article.

The Services may enter into an agreement with a holder of a per diem license to deliver beer on the effective date of the per diem license and accept returns on the same day. The agreement entered into under subsection (a) of this section shall include the type of equipment, services, personnel, and supplies required to dispense draft beer.

With the approval of the County Executive and subject to § 1–319 of this article, the Director may: purchase from a holder of a wholesaler’s license or manufacturer’s license alcoholic beverages that the Services is authorized to sell and on which the excise tax imposed by § 5–102 of the Tax – General Article is paid; purchase from a holder of a resident or nonresident dealer’s permit and import for resale alcoholic beverages that the Services is authorized to sell, and resell the alcoholic beverages once the excise tax is paid; sell alcoholic beverages in sealed containers at prices that it determines and that are uniform in all dispensaries; refuse to sell alcoholic beverages to a person that, in the Services’ judgment, is not suitable to purchase or consume the alcoholic beverages; restrict by any method the quantity of alcoholic beverages that may be sold to an individual consumer or license holder at or during any time; enter into a contract or adopt regulations necessary or desirable to carry out this article; sell and ship outside of the county a container or package of alcoholic beverages kept for sale in a dispensary, if not prohibited by law in the place where the shipment is consigned; and establish the hours of sale for dispensaries, outside of which a dispensary may not remain open. With the approval of the County Executive, the Director, by rental, lease, purchase, or otherwise, may acquire: real or personal property determined by the Director to be necessary to operate dispensaries, stores, or warehouses; and alcoholic beverages from any source for resale. Except for purchases of merchandise for resale, the Services shall make all purchases through the County Office of Procurement.

With the approval of the County Executive, the Director may establish a dispensary at one or more locations that the Director determines. The Services may sell its inventory through: dispensaries selling at wholesale and retail; and subject to subsection (c) of this section, retail outlets operated by individuals with whom the Services contracts. Notwithstanding any other law, the Director may sell at wholesale or retail alcoholic beverages in whole cases or in individual bottles through dispensaries to a license holder in the county. The Services may not sell alcoholic beverages at different prices to different license holders or classes of license holders. The Director may not contract with a person to operate: a dispensary; or except as provided in paragraph (2) of this subsection, a retail outlet for the sale of beer, wine, and liquor. The Director may enter into a contract with a person to operate a retail outlet for the sale of liquor for off–premises consumption if the person holds any license for off–premises consumption or for on– and off–premises consumption. The Services shall establish criteria for contracting with retail outlets. In this subsection the following words have the meanings indicated. “Beer” includes draft beer in refillable and nonrefillable containers. “Wine” includes wine in refillable containers. A dispensary: may sell only: except as provided for in subsection (e) of this section, for off–premises consumption, nonchilled beer, wine, and liquor; ice; bottled water; and items commonly associated with the serving or consumption of alcoholic beverages, including bottle openers, corkscrews, drink mixes, and lime juice; and may not sell snack foods or soft drinks. A dispensary may sell any product in the dispensary’s inventory for the purpose of: holding tastings of beer, wine, and liquor on the premises of the dispensary only; serving, for tasting, beer, wine, and liquor; and allowing the consumption of beer, wine, and liquor by an individual for tasting in a quantity of not more than: one–half ounce from each offering of liquor; 5 ounces from all offerings of liquor in a day; 1 ounce from each offering of wine; 4 ounces from all offerings of wine in a day; 3 ounces from each offering of beer; and 12 ounces from all offerings of beer in a day. Once opened, a bottle used for beer, wine, or liquor tasting shall be marked that it is to be used for that purpose only. A dispensary may sell chilled beer or chilled wine for off–premises consumption only from a keg for the purpose of filling: for beer, a refillable container or a nonrefillable container; and for wine, a refillable container. The Services may sell or deliver alcoholic beverages to a retail license holder from 6 a.m. to midnight on every day except Sunday. A manager of a dispensary, an individual who contracts to operate a retail outlet as authorized under subsection (c) of this section, or an employee of a dispensary or retail outlet who commits a prohibited act related to the sale or providing of alcoholic beverages to individuals under the age of 21 years under this article or the Criminal Law Article is subject to: any penalty authorized by law, including a civil citation issued under § 10–119 of the Criminal Law Article; and a fine and suspension or revocation of employment by the Board in the same manner as a license holder or employee of a license holder would be subject to a fine and suspension or revocation of the license for the violation. Title 4, Subtitle 2 of this article does not apply to this section.

Revenue derived from the sale of alcoholic beverages shall be: deposited in a bank located in the county in the name of Montgomery County, Maryland; and disbursed by the Director of Finance in the same manner as other county funds. There is an Alcohol Beverage Services Fund in the county. The proceeds derived from the sale of alcoholic beverages shall be credited into the Alcohol Beverage Services Fund to maintain an adequate balance of working capital, as determined by the Director and the Director of Finance and subject to the approval of the County Executive, for the continued operation of the dispensary system. After providing adequate working capital for the Alcohol Beverage Services Fund, the net proceeds shall be deposited to the general fund of the county.

The Services shall have the immunity from liability established under § 5–504 of the Courts Article.

The Department of Finance shall: keep accurate records of all purchases of alcoholic beverages; and prepare and forward to the County Executive and County Council an annual report for the previous fiscal year.

A supplier may enter into an agreement with a wholesaler or an authorized representative of a wholesaler to replace, directly or indirectly, stale or out–of–date malt beverage products on retail licensed premises: on a case for case basis; at the supplier’s expense; and under a plan that the Executive Director approves. If a wholesaler refuses to replace stale or out–of–date malt beverage products on retail licensed premises under the plan described in subsection (a)(3) of this section, the supplier may unilaterally submit a replacement plan to the Executive Director for approval. The replacement plan that the supplier unilaterally submits to the Executive Director may include the designation of an authorized representative or wholesaler outside the territory of the wholesaler who refuses to participate in the plan.