In this subtitle the following words have the meanings indicated. “Department” means the Department of Liquor Control for the county. “Dispensary” means a store established and maintained by the Department for the sale of alcoholic beverages.

There is a Department of Liquor Control in the county government, which functions as a liquor control board.

The Board of County Commissioners shall appoint the director of the Department. The director shall serve at the pleasure of the Board of County Commissioners. The director of the Department may not: have a direct or indirect financial interest in the manufacture or sale of alcoholic beverages; or derive profit or remuneration from the sale of alcoholic beverages other than the salary or wages payable for the discharge of the duties of the office. A person who violates this subsection is guilty of a misdemeanor and on conviction is subject to imprisonment not exceeding 3 years or a fine not exceeding $2,000 or both.

The Department shall appoint employees necessary to operate the dispensary system, set employee compensation, and require a bond for the faithful performance of employee duties. An employee of the Department may not: have a direct or indirect financial interest in the manufacture or sale of alcoholic beverages; or derive profit or remuneration from the sale of alcoholic beverages other than the salary or wages payable for the discharge of the duties of the office. A person who violates this subsection is guilty of a misdemeanor and on conviction is subject to imprisonment not exceeding 3 years or a fine not exceeding $2,000 or both.

Subject to § 1–319 of this article, and except as provided in subsection (c) of this section: the Department has a monopoly on the sale and distribution of wine, liquor, or any other alcoholic beverage containing more than 14% of alcohol by volume in the county; and a license holder shall purchase all wine containing more than 14% of alcohol by volume and liquor from the Department. A license holder may purchase beer and wine containing 14% alcohol by volume or less from a licensed wholesaler. Except as provided in subsection (c) of this section, a license holder who purchases wine or liquor from the Department may not be charged more than 85% of the retail price or any special sale price or discount price, whichever is lower, set by the Department. A license holder in the county may elect to purchase wine or liquor from a licensed wholesaler by providing written notice of the license holder’s intent to the Department at least 60 days before the date the purchasing activity is to start. The notice shall contain: the name of the license holder; the name and address of the licensed premises; and the date that the notice was sent to the Department. A license holder that meets the requirements of this subsection may purchase wine or liquor from a licensed wholesaler in addition to or instead of the Department. The Department shall issue a letter of confirmation to a license holder that meets the requirements of this subsection. The license holder shall display the letter conspicuously on the licensed premises.

Subject to § 1–319 of this article, the Department may: purchase from a holder of a wholesaler’s license or manufacturer’s license alcoholic beverages that the Department 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 Department is authorized to sell; and resell the alcoholic beverages once the excise tax is paid; sell alcoholic beverages in sealed containers at prices that the Department determines and that are uniform in all dispensaries; refuse to sell alcoholic beverages to a person that, in the judgment of the Department, 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; subject to the approval of the county, rent, lease, or purchase premises necessary for the operation of the dispensaries; and subject to § 33–307(d) of this subtitle, establish the hours of sale for dispensaries, outside of which a dispensary may not remain open. Subject to § 1–319 of this article and the approval of the County Commissioners, the Director of the Department may purchase or otherwise acquire: real or personal property that the Director considers necessary to operate dispensaries, stores, or warehouses; and subject to paragraph (2) of this subsection, wine and liquor from any source for resale. Acting as a wholesaler, the Department may purchase wine and liquor, on which the excise tax has not been paid, from a licensed wholesaler. The Department may only resell the wine and liquor purchased under this subparagraph to a nondispensary, licensed retailer and only after the excise tax has been paid. Acting as a retailer, the Department may purchase wine and liquor, on which the excise tax has been paid, from a licensed wholesaler for retail sale in dispensary stores.

The Department may establish and maintain stores known as “dispensaries”. A dispensary: may sell any alcoholic beverage except beer; and shall sell alcoholic beverages in a sealed package or container. The Department may establish and maintain dispensaries only in: Berlin; Ocean City; Pocomoke City; Snow Hill; a rural area approved by the Department and the County Commissioners; and a housing development that: has a population of at least 10,000 individuals; is overseen by a homeowners association; and has a special police force commissioned under Title 3, Subtitle 3 of the Public Safety Article. The Department may sell or deliver liquor to a retail license holder from 6 a.m. to midnight Monday through Saturday and from 9 a.m. to 5 p.m. on Sunday. A person may not open or consume the contents of a sealed package or container containing alcoholic beverages on the premises of the dispensary where sold. Title 4, Subtitle 2 of this article does not apply to this section.

The Department shall apply proceeds derived from the operation of dispensaries first toward the repayment of money that was loaned to or borrowed by the Department. After repayment under subsection (a) of this section, the Department may create and maintain a reserve fund not exceeding $400,000 to: provide adequate working capital; and cover any losses sustained by the Department in operating the dispensaries. After the distributions under subsections (a) and (b) of this section, the Department shall distribute on or before June 1 annually: the proceeds generated by dispensaries in rural areas outside of a municipal boundary to the county general fund; and of the remaining proceeds: 50% to the County Commissioners; and 50% to the mayors and city councils of Berlin, Ocean City, Pocomoke City, and Snow Hill, and homeowners associations that oversee an area in which a dispensary has been established, in amounts determined under paragraph (2) of this subsection. The Department shall distribute the proceeds due to municipalities listed in paragraph (1)(ii)2 of this subsection and homeowners associations proportionally according to the net profits on total sales derived from the dispensaries in each municipality or area overseen by a homeowners association. If County Commissioners consent for each municipality listed in paragraph (1)(ii)2 of this subsection, to determine the share of a municipality, a dispensary within 2 miles outside of the municipal boundary shall be considered to be within the municipal boundary. Distributions paid to a municipality under this subsection shall be used for general municipal purposes. Distributions paid to a homeowners association shall be used for the benefit of the special police force of the housing development.

The Department shall keep accurate records of: all purchases of alcoholic beverages; and a complete statement of the business conducted by the Department and the operational achievements of the dispensary system. The records shall be open to inspection by the Comptroller or the Executive Director during regular business hours. The Department shall submit a report annually to the County Commissioners for the period ending on April 30.