REPRESENTING CRAFT ALCOHOLIC BEVERAGE MANUFACTURERS BEFORE THE STATE LIQUOR AUTHORITY

Transcription

1 ANDREW M. CUOMO Gvernr VINCENT G. BRADLEY Chairman GREELEY FORD Cmmissiner REPRESENTING CRAFT ALCOHOLIC BEVERAGE MANUFACTURERS BEFORE THE STATE LIQUOR AUTHORITY Prepared by Thmas J. Dnhue Secretary t the Authrity New Yrk State Liqur Authrity 80 Suth Swan Street, Suite 900 Albany, NY Thmas.Dnhue@sla.ny.gv Prepared fr Albany Law Schl Gvernment Law Center Rural Law Initiative Hps, Barley, Apples & Laws: Lawyering Basics fr Craft Beverage Businesses Octber 20, 2017 Presentatin

2 INTRODUCTION...1 TYPES OF MANUFACTURING LICENSES...2 BREWERY...2 MICRO-BREWERY...2 FARM BREWERY...2 CIDER PRODUCER S...2 FARM CIDERY...2 WINERY...3 FARM WINERY...3 MICRO-WINERY...3 DISTILLER...3 MICRO-DISTILLER...3 RECTIFIER...3 MICRO-RECTIFIER...3 FRUIT BRAND PRODUCER...4 FARM DISTILLER...4 COMBINED CRAFT MANUFACTURING LICENSE...4 NEW YORK STATE LABELED ALCOHOLIC BEVERAGES...4 "NEW YORK STATE LABELED BEER"...4 NEW YORK STATE LABELED CIDER...4 NEW YORK STATE LABELED LIQUOR...5 NEW YORK STATE LABELED WINE...5 THE APPLICATION PROCESS...6 ELIGIBILITY TO HOLD LICENSE...6 ITEMS TO BE SUBMITTED WITH AN APPLICATION...6 REVIEW OF THE APPLICATION...7 TEMPORARY PERMITS...7 STANDARDS FOR APPROVAL OF LICENSE...7 CONDITIONAL APPROVAL...8 PUBLISHING NOTICE IN NEWSPAPER...8 POSTING LICENSE CERTIFICATE IN PREMISES...8 DISAPPROVAL OF APPLICATION...9 WRITTEN DECISIONS...9 REVIEW OF DISAPPROVAL...9 DISAPPROVAL HEARING...9 REQUEST FOR RECONSIDERATION...9 APPROVALS NEEDED AFTER LICENSE IS ISSUED RENEWAL OF THE LICENSE ALTERATIONS CHANGES IN INFORMATION CONTAINED IN APPLICATION CORPORATE CHANGES FIDUCIARIES NAME CHANGES PARTNERSHIP CHANGES i

3 REMOVALS (CHANGING LOCATIONS) PERMITS THAT MAY BE NEEDED SOLICITOR S PERMIT WAREHOUSE PERMIT TRUCKING PERMIT DISTRIBUTION OF PRODUCTS METHODS OF DISTRIBUTION STATE BRAND LABEL REGISTRATION PRICE RESTRICTIONS SALE ON CREDIT AND THE C.O.D. LIST TASTINGS AND RETAIL SALES TASTINGS AT THE LICENSED PREMISES BREWERY & MICRO- BREWERY FARM BREWERY CIDER PRODUCER FARM CIDERY WINERY FARM WINERY & MICRO-WINERY DISTILLERY, MICRO-DISTILLERY, RECTIFIER, MICRO-RECTIFIER AND FRUIT BRANDY PRODUCER FARM DISTILLERY OFF-PREMISES SALES AT THE LICENSED PREMISES BREWERY & MICRO-BREWERY FARM BREWERY CIDER PRODUCER DISTILLERY, MICRO-DISTILLERY, RECTIFIER, MICRO-RECTIFIER AND FRUIT BRANDY PRODUCER ON-PREMISES SALES AT THE LICENSED PREMISES DISTILLERY, MICRO-DISTILLERY, RECTIFIER, MICRO-RECTIFIER AND FRUIT BRANDY PRODUCER THE MARKETING PERMIT BRANCH OFFICES AND SATELLITE STORES COMPLIANCE MATTERS TIED HOUSE LAWS GIFTS AND SERVICES LAW COMMON DISCIPLINARY VIOLATIONS BY LICENSED MANUFACTURERS ADMINISTRATION OF THE ABC LAW THE STATE LIQUOR AUTHORITY ENFORCEMENT THE DISCIPLINARY PROCESS HEARINGS CONSIDERATION BY FULL BOARD PENALTIES SUMMARY SUSPENSIONS ii

4 INTRODUCTION The infrmatin prvided in this dcument is intended t assist attrneys wh represent New Yrk State craft alchlic beverage manufacturers. It is nt intended t serve as a cmprehensive manual with respect t either the Alchlic Beverage Cntrl Law ( ABCL ), the Rules f the State Liqur Authrity ( Rules ), r the ther laws and regulatins that gvern the issuance f licenses r the bligatins f licensees with respect t the peratin f a licensed business. Please nte that any changes made t the ABCL r the Rules, as well as any new directives r rulings issued by the SLA after the date f this presentatin may impact sme f the infrmatin prvided in this dcument. Yu are encuraged t visit the State Liqur Authrity s website at On that site, yu will find a link t the Alchlic Beverage Cntrl Law and view Advisries and Declaratry Rulings issued by the agency. Yu can als view archived recrdings f meetings f the Members f the Authrity. 1

5 TYPES OF MANUFACTURING LICENSES A persn cannt manufacture r sell at whlesale r retail alchlic beverages in New Yrk State withut btaining the apprpriate license. [ABCL 100(1)]. Licensed manufacturers can distribute their prducts thrugh licensed whlesalers and/r sell directly t licensed retailers. As with whlesalers, manufacturers must btain a federal permit t perate. Certain manufacturers can cnduct retail peratins at their licensed premises. Manufacturing licenses are distinguished by the type f alchlic beverage prduced. Micr licenses allw fr the same privileges as the standard license, but have limits n the amunt that can be prduced in return fr a lwer license fee. Farm manufacturers are als limited in the amunt that can be prduced, and are als limited t prducing alchlic beverages made frm New Yrk State ingredients. BREWERY ABCL 51 N limit n type r amunt f beer prduced MICRO-BREWERY ABCL 51 Same as brewery license, except prductin limited t 75,000 barrels FARM BREWERY ABCL 51-a Can nly prduce up t 75,000 barrels f NYS labeled beer Can als prduce NYS labeled cider Can get permits t perate up t five branch ffices CIDER PRODUCER S ABCL 58 N limit n type r amunt f cider prduced Can get permits t perate up t five satellite stres t sell NYS labeled cider fr ff premises cnsumptin FARM CIDERY ABCL 58-c Can nly prduce up t 250,000 gallns f NYS labeled cider 2

6 Can get permits t perate up t five branch ffices WINERY ABCL 76 N limit n type r amunt f wine prduced FARM WINERY ABCL 76-a Can nly prduce up t 250,000 gallns f wine made exclusively frm NYS prducts Must be lcated n a farm Can get permits t perate up t five branch ffices MICRO-WINERY ABCL 76-a Same as farm winery license, except prductin limited t 1,500 barrels DISTILLER ABCL 61(1) N limit n type r amunt f liqur prduced Allws fr prductin by distilling r rectifying MICRO-DISTILLER ABCL 61(1-a) Same as distiller s license, except prductin limited t 75,000 gallns RECTIFIER ABCL 61(2) N limit n type r amunt f liqur prduced Allws fr prductin by rectifying MICRO-RECTIFIER ABCL 61(2-b) 3

7 Same as rectifier s license, except prductin limited t 75,000 gallns FRUIT BRAND PRODUCER ABCL 61(2-a) Limited t prductin f fruit brandy FARM DISTILLER ABCL 61(2-c) Can nly prduce up t 75,000 gallns f NYS labeled liqur COMBINED CRAFT MANUFACTURING LICENSE ABCL 61-a Allws tw r mre micr and/r farm manufacturing licenses Eliminates multiple filing fees and paperwrk NEW YORK STATE LABELED ALCOHOLIC BEVERAGES "NEW YORK STATE LABELED BEER" Frm January 14, 2013 until December 31, 2018, beer made with n less than 20%, by weight, f its hps grwn in New Yrk state and n less than 20%, by weight, f all ther ingredients, excluding water, grwn in New Yrk state. 1 Frm January 1, 2019 until December 31, 2023, beer made with n less than 60%, by weight, f its hps grwn in New Yrk state and n less than 60%, by weight, f all ther ingredients, excluding water, grwn in New Yrk state. 2 Frm January 1, 2024 and thereafter, beer made with n less than 90%, by weight, f its hps grwn in New Yrk state and n less than 90%, by weight, f all ther ingredients, excluding water, grwn in New Yrk state. 3 NEW YORK STATE LABELED CIDER Must be made exclusively frm apples r ther pme fruits grwn in New Yrk state. 4 1 ABCL 3(20-d)(a) 2 ABCL 3(20-d)(b) 3 ABCL 3(20-d)(c) 4 ABCL 3(20-e) 4

8 NEW YORK STATE LABELED LIQUOR N less than 75%, by vlume, f the fruits, vegetables, grain and grain prducts, hney, maple sap r ther agricultural prducts used must be grwn r prduced in New Yrk state. 5 NEW YORK STATE LABELED WINE N less than 75%, by vlume, f the grapes r ther fruits used must be grwn in New Yrk state. 6 5 ABCL 3(20-c) 6 ABCL 3(20-a) 5

9 THE APPLICATION PROCESS ELIGIBILITY TO HOLD LICENSE Citizenship Applicants must meet citizenship requirements. 7 Criminal Histry Applicants cannt have cnvictins fr felnies r certain misdemeanrs. 8 Plice Officers Certain plice fficials cannt hld a license. 9 ITEMS TO BE SUBMITTED WITH AN APPLICATION An applicatin fr a craft manufacturing license must include the fllwing: Applicatin Fee (license fee plus filing fee). Applicatin frms with all questins answered accurately and cmpletely. Persnal Questinnaire. Prf f citizenship fr all principals. Fingerprints fr all principals. Cntract f Sale (fr transfer applicatins). Lease Agreement r Deed fr prperty. Diagrams and Phtgraphs f the premises. Cpies f financial recrds shwing the availability f funds being used fr the venture. Filing Receipts fr Crpratins r LLC s/llp s and/r Assumed Name Certificate. Sme infrmatin may be prvided after apprval f the applicatin, but the license will nt be issued until the infrmatin is received. Fllwing are examples f such items: Certificate f Authrity t cllect sales tax. Wrkers Cmpensatin/Disability Insurance- carrier name and plicy number. 7 See ABCL 126(3) fr individual licensees and ABCL 126(4) fr partnerships and crpratins 8 See ABCL 126(1) fr individual licensees and ABCL 126(4) fr partnerships and crpratins 9 ABCL 128 6

10 Federal Tax Identificatin Number. TTB permit. REVIEW OF THE APPLICATION Applicatins are mailed t a pst ffice bx in New Yrk City. Checks are depsited int an accunt held by the agency and images f the applicatin and all supprting dcuments are scanned int a secured file that can be viewed by the Authrity s Licensing Bureau staff. Applicatins are then frwarded t the Albany ffice f the Authrity fr data entry and assignment t Licensing Bureau examiners. The examiners review applicatins in the rder they are received. If there are deficiencies in an applicatin, the examiner will prepare a letter detailing any items that need submissin, crrectin r clarificatin. The applicant is given 20 business days t cmply with the deficiency letter. Shuld the submissin f requested items lead t additinal questins, the applicant will receive anther letter giving them additinal time t respnd. The examiner will list bth items that are needed t cmplete their review and missing items that have nt been submitted but may be submitted later as cnditins f apprval. These items will be needed prir t the issuance f the license certificate but will nt prevent a determinatin n the applicatin frm being made. Once the examiner s review is cmpleted the applicatin is frwarded t the Licensing Bard fr a determinatin. The Licensing Bard cnsists f senir staff recmmended by the Deputy Cmmissiner t the Members f the Authrity. The applicant will receive a letter stating whether the applicatin has been apprved, cnditinally apprved r denied. TEMPORARY PERMITS Only applicants fr winery and farm winery licenses can btain a permit t perate while the applicatin is pending. 10 STANDARDS FOR APPROVAL OF LICENSE Generally, any applicatin fr a license must be apprved unless there is gd cause t deny the applicatin. 11 Gd cause includes, amng ther things any statutry prhibitin against issuing the license t the lcatin r t the applicant, the character, fitness, experience and financial respnsibility f the applicant; the histry f vilatins f the ABCL at the lcatin f the prpsed licensed establishment and by the applicant; and fraud, misrepresentatin, false 10 ABCL 76-b 11 ABCL 54(1) 7

11 material statements, cncealment r suppressin f facts, dcuments and ther infrmatin regarding the applicatin. The gd cause standard applies t all manufacturing licenses. Certain retail licenses, are subject t additinal licensing standards nt addressed in this material. If the manufacturing applicant intends t apply fr an n-premises license fr a fd/drinking establishment in r adjacent t the manufacturing site, that retail applicatin may be subject t thse restrictins. CONDITIONAL APPROVAL An applicatin may be cnditinally apprved. The license certificate will nt be issued until the applicant cmplies with certain cnditins, such as the submissin f phtgraphs shwing the premises ready t pen and perate. PUBLISHING NOTICE IN NEWSPAPER Every applicant btaining a license must publish a ntice f the issuance f the license in a newspaper nce week fr tw weeks. 12 POSTING LICENSE CERTIFICATE IN PREMISES Befre starting in business, each licensee must pst the riginal license certificate in the licensed premises. The license certificate must be enclsed in a suitable wd r metal frame having a clear glass space and a substantial wd r metal back s that the whle f said license may be seen therein, and shall be psted up and at all times displayed in a cnspicuus place in the rm where such business is carried n, s that all persns visiting such place may readily see the same ABCL ABCL 114(6) 8

12 DISAPPROVAL OF APPLICATION WRITTEN DECISIONS When an applicatin is disapprved, the SLA will issue a written decisin. 14 REVIEW OF DISAPPROVAL If an applicatin is disapprved, the applicant has tw ptins, a disapprval hearing r a request fr recnsideratin. Once the applicant has exercised ne f the ptins, it may seek judicial review f the disapprval under Article 78 f the CPLR. 15 DISAPPROVAL HEARING A disapprval hearing is limited t determining whether the reasns fr the disapprval are supprted by the recrd and the law. The prcess cnsists f an administrative hearing fllwed by a review by the Full Bard. REQUEST FOR RECONSIDERATION A request fr recnsideratin may g beynd the issues addressed in the written disapprval. There is n administrative hearing in this prcess. Licensing Bard decisins are reviewed by ne f the Members f the Authrity t determine if there is a sufficient reasn t have the matter reviewed by the Full Bard. A request t recnsider a Full Bard disapprval ges directly t the Full Bard. 14 ABCL 54(3) 15 ABCL 121 9

13 APPROVALS NEEDED AFTER LICENSE IS ISSUED RENEWAL OF THE LICENSE ABCL 109 The term f the license depends n the type f license. Fr example, a brewer s license is issued fr ne year while a distiller s license is issued fr three years. A renewal applicatin must be filed befre the expiratin f the current license perid. The licensee will receive a ntice apprximately three mnths prir t the expiratin f the current license as a reminder that the renewal applicatin needs t be filed. A licensee wh files a cmplete renewal applicatin befre the expiratin f the current license perid is entitled t cntinue t perate under the expired license until the SLA makes a decisin n the renewal applicatin. This is cmmnly referred t as perating under SAPA. 16 Licensees wh d nt file a cmplete applicatin befre the expiratin f the current license must cease selling (r allwing the cnsumptin f) alchlic beverages at the premises nce the current license expires and await the SLA s decisin n the renewal applicatin. ALTERATIONS ABCL 99-d(2) A licensee making any renvatins t the licensed premises may need t ntify, r btain the apprval f, the SLA befre ging frward with the changes. A minr alteratin is anything that csts less than $10,000 that des nt materially affect the character f the premises r the physical structure that existed at the time f licensing. The licensee must ntify the SLA in advance f minr alteratins but des nt need t btain the SLA s apprval. 17 If the licensee is making a substantial alteratin t the licensed premises, it must file an applicatin in advance and btain the SLA s apprval. Substantial alteratins include adding r deleting space (including utside areas) frm the licensed premises; physical changes that reduces visibility; physical changes t interir that materially affect the character f premises; relcating the entrance; enlarging r relcating the bar; cnverting a rm fr fd/beverage service; installing a bandstand, stage, dance flr; and sealing ff r creating a public entrance r windw. 18 Wineries and farm wineries are nt required t ntify/btain apprval fr alteratins. 16 State Administrative Prcedure Act 401(2) 17 ABCL 99-d(1) 18 ABCL 99-d(1) 10

14 CHANGES IN INFORMATION CONTAINED IN APPLICATION All licensees are required t ntify the SLA in writing f any changes t the infrmatin that was cntained in the riginal applicatin. This includes any change in yur residential address. Such changes must be reprted t the SLA within ten days. 19 CORPORATE CHANGES If the license has been issued in the name f a crpratin r limited liability cmpany, the licensee must btain the apprval f the SLA befre making any f the fllwing changes t the crprate structure: (a) adding r remving an fficer r directr f the crpratin; r (b) adding r remving a managing member f a limited liability cmpany. 20 In additin, SLA apprval must be btained befre there is a change in the stckhlders f the crpratin r the members f the limited liability cmpany, r any change in the stck held by an existing stckhlder (f the crpratin) r the wnership interest f an existing member (f the limited liability cmpany) has in the business. Please nte that n apprval is needed if there are ten r mre stckhlders r members and: (a) the change invlves less than 10% f the stck r wnership interest; and (b) nne f the existing stckhlders r members with less than a 10% interest have their interest increased t 10% r mre. 21 FIDUCIARIES On ccasin, a curt may give smene (such as an administratr r executr f an estate, a bankruptcy trustee, r a receiver in a mrtgage freclsure) pwer t run the licensed business pending the utcme f the curt prceeding. In such cases, that persn must advise the SLA f the curt appintment and that persn will becme the nly persn recgnized by the SLA t act fr the licensee until the curt directs therwise. 22 NAME CHANGES If the licensee s name has changed due t marriage, divrce, r any ther reasn, it must file an endrsement applicatin s that the SLA s recrds can be updated. The endrsement applicatin may als be used if the licensee is changing the name f the crpratin that hlds the license if there is n change in wnership and the federal emplyer infrmatin number remains the same. If the license is held in an individual s name, the SLA will als allw a change t a crpratin r limited liability cmpany using an endrsement applicatin. This can nly be dne if the individual remains the sle wner f the business. 19 ABCL 110(4) 20 ABCL 99-d(2) 21 ABCL 99-d(2)(a) 22 ABCL

15 PARTNERSHIP CHANGES If the license is issued t a partnership, SLA apprval must be btained if partners are being added r remved. SLA apprval is als required if the partnership is being disslved and ne partner intends t cntinue with the license in his/her name nly. REMOVALS (CHANGING LOCATIONS) A license may nt be mved t anther lcatin withut the SLA s apprval ABCL 99-d(3) 12

16 PERMITS THAT MAY BE NEEDED SOLICITOR S PERMIT ABCL 93 Sales staff wrking fr brewers, cider prducers distillers, rectifiers, fruit brandy prducers and wineries, r any whlesaler must have a slicitr s permit. Sales staff f micr-brewers, farm brewers, farm cideries, micr-distillers, farm distillers and farm wineries d nt need a slicitr s permit. 24 Principals f the licensed entity and staff accepting rders at licensed premises d nt need a slicitr s permit. Licensed manufacturers and whlesalers can btain a temprary slicitr s permit t cver newly hired sales staff while they apply fr their slicitr s permit. 25 WAREHOUSE PERMIT ABCL 96 A warehuse permit is nt needed if the licensee is string its inventry n its wn licensed premises. A warehuse permit is needed if the licensee is string its inventry smeplace ther than the licensed premises. The licensee may perate its wn warehuse r use the services f a third party s warehuse. In either situatin, the warehuse must have a permit. TRUCKING PERMIT ABCL 94 A licensed manufacturer r whlesaler des nt need a separate trucking permit if it is transprting its wn prduct in a vehicle wned/hired and perated by the licensed manufacturer r whlesaler. The license infrmatin must be psted n the sides f the vehicle r a cpy f the license must be kept in the cab f the vehicle. 26 A trucking permit is needed by a nn-licensee that will be transprting alchlic beverages, r a licensed manufacturer r whlesaler transprting anther licensee s prduct. 24 ABCL 93(1) 25 ABCL 93(2) 26 ABCL

17 There are three types f trucking permits: single vehicle trucking permit; a fleet permit fr all the permittee s vehicles; and a cmpany permit fr licensed manufacturer s and beer whlesalers fr tractr-trailers hired by permittee t deliver prduct. 14

18 DISTRIBUTION OF PRODUCTS METHODS OF DISTRIBUTION Self-distributin All licensed manufacturers have the right t self-distribute (act as their wn whlesaler) and/r use a licensed whlesaler t distribute their prducts. Franchise agreements with beer whlesalers 27 Written agreement between brewer and whlesale required. With ne exceptin, agreements between brewers and whlesalers cannt be terminated unless there is gd cause. Brewers prducing less than 300,000 barrels can terminate withut gd cause if the brewer makes up 3% r less f whlesaler s business. Licensed manufacturers can sell t ut-f-state entities if allwed by the state where the entity is lcated. STATE BRAND LABEL REGISTRATION All alchlic beverages sld in New Yrk must have a brand label that has been apprval by the Authrity. 28 Wine des nt require state apprval if the label has been apprved by TTB. 29 Fee exemptins fr beer, cider r liqur prduced in small batches. 30 Brand label registratin guidance cntained in Advisry PRICE RESTRICTIONS Beer 180 Day Law- price charged t a whlesaler r retailer cannt be increased until 180 days after last price decrease. 31 N unifrm prices t retailers required- can charge different price t different retailers. Liqur & wine subject t price psting ABCL 55-c 28 ABCL 107-a(3)(a) 29 ABCL 107-a(4)(c)(3) 30 ABCL 107-a(4)(e) & ABCL 107-a(4)(f) 31 ABCL 55-b 32 ABCL 101-b 15

19 Price psting is the filing f a schedule with the prices at which liqur and wine manufacturers and whlesalers will sell their prducts. Tw price schedules: the whlesale schedule f prices charged by manufacturers/imprters t licensed whlesalers; and the retail schedule f prices charged by licensed manufacturers and licensed whlesalers t licensed retailers. 33 N liqur r wine can be sld at retail unless it is included n bth price schedules. Any vlume discunts must be set frth in the schedule. 34 All schedules nw filed electrnically. 35 New price schedule must be psted each mnth, except that wineries and farm wineries can file nce a year. Need t file amendment if prices change. 36 A licensed manufacturer r licensed whlesaler cannt refuse t sell t any retailer wh ffers t pay cash unless: ne retailer wns the brand; r the prduct has been psted as limited availability. 37 The price schedule cannt require purchase f ne prduct t get anther, except fr permissible cmbinatin packages. 38 Cmbinatin packages are sealed, pre-wrapped packages cntaining either: tw r mre bttles f different liqurs r wines; r ne bttle f liqur r wine cmbined with certain ther items. 39 SALE ON CREDIT AND THE C.O.D. LIST Manufacturers and whlesalers must sell t any retailer willing t pay cash. 40 Cash means U.S. currency, certified check, mney rder, electrnic funds transfer, bank fficer s check r draft, r a check drawn n the retailer s accunt payable t the manufacturer r whlesaler. Checks cannt be frm third parties. Checks drawn n retailer s accunt cannt be pst-dated. Manufacturers and whlesalers d nt have t accept checks drawn n retailer s accunt. Manufacturers and whlesalers can, but are nt required t, allw retailers t pay n credit ABCL 101-b(3)(a) and 101-b(3)(b) 34 ABCL 101-b(3)(a) and 101-b(3)(b) 35 ABCL 101-b(3)(d) 36 ABCL 101-b(4) and 101-b(5) 37 ABCL 101-b(3)(c) [private labels] and 101-b(4-a)(d) & Advisry [limited availability] 38 ABCL 101-b(4-a)(e) 39 ABCL 101-b(3)(a) & Advisry ABCL 101-aa(1)(f) and 101-aaa(1)(g) 16

20 Retailers purchasing liqur r wine n credit have 30 days t pay the bill. 42 Retailers purchasing beer n credit have between 12 t 26 days t pay the bill, depending n the date f delivery within the credit cycle. 43 Licensed manufacturers and whlesalers must reprt retailers wh are delinquent in payment. C.O.D. list cntains all the retailers wh are delinquent in paying fr prducts purchased n credit frm licensed manufacturers and whlesalers. 44 Fr liqur and wine, if a retailer has a credit equal t, r mre than, the utstanding bill, the retailer cannt be reprted as delinquent. 45 Licensed manufacturers and whlesalers cannt sell n credit t any retailer n C.O.D. list ABCL 101-aa(8) and 101-aaa(7) 42 ABCL 101-aa(1)(b) 43 ABCL 101-aaa(3) 44 ABCL 101-aa(3) and 101-aaa(3) 45 ABCL 101-aa(3) 46 ABCL 101-aa(3) and 101-aaa(3) 17

21 TASTINGS AND RETAIL SALES TASTINGS AT THE LICENSED PREMISES Brewery & Micr- Brewery May cnduct tastings f beer it prduces and any New Yrk state labeled beer withut btaining an additinal license r permit. 47 Farm Brewery May cnduct tastings f any New Yrk state labeled beer and New Yrk State labeled cider withut btaining an additinal license r permit. 48 May als cnduct tastings f any New Yrk state labeled liqur 49 and New Yrk state labeled wine 50 withut btaining an additinal license r permit. Cider Prducer May cnduct tastings f New Yrk State labeled cider manufactured by the licensee withut btaining an additinal license r permit. 51 Farm Cidery Winery May cnduct tastings f any New Yrk state labeled cider withut btaining an additinal license r permit. 52 May als cnduct tastings f any New Yrk state labeled beer, 53 New Yrk state labeled liqur 54 and New Yrk state labeled wine 55 withut btaining an additinal license r permit. May cnduct tastings f wine and wine prducts it prduces and any New Yrk state labeled wine and New Yrk state labeled wine prduct withut btaining an additinal license r permit. 56 Farm Winery & Micr-Winery May cnduct tastings f any New Yrk state labeled wine and New Yrk State labeled cider withut btaining an additinal license r permit ABCL 51(3-a) 48 ABCL 51-a(2)(f) 49 ABCL 51-a(2)(k) 50 ABCL 51-a(2)(i) 51 ABCL 58(3-a)(b) 52 ABCL 58-c(3-a)(b) 53 ABCL 58-c(2)(h) 54 ABCL 58-c(2)(j) 55 ABCL 58-c(2)(i) 56 ABCL 76(4) 18

22 May als cnduct tastings f New Yrk state labeled liqur 58 and New Yrk state labeled beer withut btaining an additinal license r permit. 59 Distillery, Micr-Distillery, Rectifier, Micr-Rectifier and Fruit Brandy Prducer Cannt cnduct any tastings at its licensed premises. Farm Distillery May cnduct tastings f any New Yrk state labeled liqur withut btaining an additinal license r permit. 60 May als cnduct tastings f New Yrk state labeled wine, 61 New Yrk state labeled cider 62 and New Yrk state labeled beer 63 withut btaining an additinal license r permit. OFF-PREMISES SALES AT THE LICENSED PREMISES Brewery & Micr-Brewery May sell by the bttle beer it prduces and any New Yrk state labeled beer withut btaining an additinal license r permit. 64 Farm Brewery May sell by the bttle any New Yrk state labeled beer and New Yrk State labeled cider withut btaining an additinal license r permit. 65 May als sell by the bttle any New Yrk state labeled liqur 66 and New Yrk state labeled wine 67 withut btaining an additinal license r permit. Cider Prducer Cannt sell by the bttle at the licensed premises. Farm Cidery May sell by the bttle any New Yrk state labeled cider withut btaining an additinal license r permit ABCL 76-a(6)(h) & ABCL 80(1) 58 ABCL 76-a(6)(f) 59 ABCL 76-a(6)(g) 60 ABCL 61(2-c)(c) 61 ABCL 61(2-c)(a)(vii) 62 ABCL 61(2-c)(a)(vi) 63 ABCL 61(2-c)(a)(v) 64 ABCL 51(3-a) 65 ABCL 51-a(2)(e) 66 ABCL 51-a(2)(k) 67 ABCL 51-a(2)(i) 19

23 Winery May als sell by the bttle any New Yrk state labeled beer, New Yrk state labeled liqur and New Yrk state labeled wine withut btaining an additinal license r permit. 69 May sell by the bttle wine and wine prducts it prduces and any New Yrk state labeled wine and New Yrk state labeled wine prduct withut btaining an additinal license r permit. 70 Farm Winery May sell by the bttle any New Yrk state labeled wine and New Yrk State labeled cider withut btaining an additinal license r permit. 71 May als sell by the bttle New Yrk state labeled liqur 72 and New Yrk state labeled beer withut btaining an additinal license r permit. 73 Distillery, Micr-Distillery, Rectifier, Micr-Rectifier and Fruit Brandy Prducer Cannt sell any alchlic beverages by the bttle at its licensed premises. Farm Distillery May sell by the bttle any New Yrk state labeled liqur withut btaining an additinal license r permit. 74 May als sell by the bttle New Yrk state labeled wine, 75 New Yrk state labeled cider 76 and New Yrk state labeled beer 77 withut btaining an additinal license r permit. ON-PREMISES SALES AT THE LICENSED PREMISES Brewery & Micr-Brewery May sell, fr n-premises cnsumptin, the beer it prduces and any New Yrk state labeled beer withut btaining an additinal license r permit. 78 May perate a fd/drinking establishment in r adjacent t the brewery and can btain an n-premises license t sell ther alchlic beverages at that establishment ABCL 58-c(2)(f)(i) 69 ABCL 58-c(2)(h), ABCL 58-c(2)(i) & ABCL 58-c(2)(j) 70 ABCL 76(4) 71 ABCL 76-a(2)(e) 72 ABCL 76-a(6)(e) 73 ABCL 76-a(6)(g) 74 ABCL 61(2-c)(a)(iii) 75 ABCL 61(2-c(a)(vii) 76 ABCL 61(2-c)(a)(vi) 77 ABCL 61(2-c)(a)(v) 78 ABCL 51(3-a) 20

24 Farm Brewery May sell, fr n-premises cnsumptin, any New Yrk State labeled beer, 80 New Yrk state labeled cider, 81 New Yrk state labeled liqur 82 and New Yrk state labeled wine 83 withut btaining an additinal license r permit. May perate a fd/drinking establishment in r adjacent t the brewery and btain an npremises license t sell ther alchlic beverages fr that establishment. 84 Cider Prducer May perate a fd/drinking establishment in r adjacent t the cidery and sell, fr npremises cnsumptin, New Yrk state labeled cider that it prduces withut btaining an additinal license r permit. 85 Farm Cidery Winery May sell, fr n-premises cnsumptin, any New Yrk State labeled cider withut btaining an additinal license r permit. 86 May sell, fr n-premises cnsumptin, any New Yrk State labeled beer, 87 New Yrk state labeled liqur 88 and New Yrk state labeled wine 89 withut btaining an additinal license r permit. May perate a fd/drinking establishment in r adjacent t the cidery can btain an npremises license t sell ther alchlic beverages fr that establishment. 90 May sell, fr n-premises cnsumptin, the wine it prduces and any New Yrk state labeled wine withut btaining an additinal license r permit. 91 May perate a fd/drinking establishment in r adjacent t the winery and btain an npremises license t sell ther alchlic beverages fr that establishment ABCL 51(4) 80 ABCL 51-a(2)(e) 81 ABCL 51-a(2)(e) 82 ABCL 51-a(2)(e) 83 ABCL 51-a(2)(e) 84 ABCL 51-a(2)(g) 85 ABCL 58(3)(d) 86 ABCL 58-c(2)(f) 87 ABCL 58-c(2)(h) 88 ABCL 58-c(2)(j) 89 ABCL 58-c(2)(i) 90 ABCL 58-c(2)(f) 91 ABCL 76(4) 92 ABCL 76(4-a) 21

25 Farm Winery May sell, fr n-premises cnsumptin, any New Yrk State labeled beer, New Yrk state labeled cider, New Yrk state labeled liqur and New Yrk state labeled wine withut btaining an additinal license r permit. 93 May perate a fd/drinking establishment in r adjacent t the brewery can btain an npremises license t sell ther alchlic beverages fr that establishment.94 Distillery, Micr-Distillery, Rectifier, Micr-Rectifier and Fruit Brandy Prducer Cannt sell any alchlic beverages by the glass at its licensed premises. Farm Distiller May sell, fr n-premises cnsumptin, any New Yrk State labeled liqur withut btaining an additinal license r permit. 95 May als sell, fr n-premises cnsumptin, any New Yrk State labeled beer, 96 New Yrk state labeled cider 97 and New Yrk state labeled wine 98 withut btaining an additinal license r permit. May perate a fd/drinking establishment in r adjacent t the distillery can btain an npremises license t sell ther alchlic beverages fr that establishment. 99 THE MARKETING PERMIT Advisry Permit created under the Authrity s pwers t issue miscellaneus permits fr situatins nt addressed by, but cnsistent with the purpses f, the ABCL. 100 Allws licensed manufacturers t cnduct tastings and sell their prducts by the bttle at certain events. Licensed manufacturers can accept rders n behalf f their whlesalers. Tastings and bttle sales can be cnducted at: An establishment licensed under the ABCL t sell the prduct at retail; 93 ABCL 51-a(2)(e) 94 ABCL 76-a(2)(f) 95 ABCL 61(2-c)(e)(i) 96 ABCL 61(2-c)(a)(v) 97 ABCL 61(2-c)(a)(vi) 98 ABCL 61(2-c)(a)(iii) 99 ABCL 61(2-c)(e)(ii) 100 ABCL 99-b(1)(k) 22

26 The State Fair, recgnized cunty fairs and farmers markets perated n a nt-frprfit basis; Outdr r indr gatherings, functins, ccasins r events spnsred by a bna fide charitable rganizatin; and Other indr r utdr events specifically apprved by the Authrity. Permit hlder cannt charge fr samples. Limitatins n size f samples, but nt the number f samples. Beer, wine prducts and cider: 3 unces. Wine: 2 unces. Liqur: ne-quarter unce. BRANCH OFFICES AND SATELLITE STORES A branch ffice is a separate lcatin where any activity that can be cnducted at the licensed premises can be cnducted. Available t farm breweries, 101 farm cideries,102 farm distilleries 103 and farm wineries. 104 A farm brewery, farm cidery r farm winery may perate up t five branch ffices. A farm distiller can perate ne branch ffice. The licensee must file fr a permit fr each branch ffice. 101 ABCL 51-a(9) 102 ABCL 51-a(9) 103 ABCL 61(2-c)(g) 104 ABCL 51-a(9) 23

27 COMPLIANCE MATTERS TIED HOUSE LAWS The tied huse law restricts licensees in ne tier f the industry frm having an interest in a business in anther tier f the industry. Licensed retailers cannt have an interest in a business that manufactures r whlesales alchlic beverages. 105 Licensed manufacturers and whlesalers cannt have an interest in a business that sells alchlic beverages at retail. 106 Direct and indirect interests are prhibited. It des nt matter whether the interest is significant r insignificant. It des nt matter where the ther business is lcated. The ABCL cntains exceptins t the tied huse law fr specific gegraphic lcatins. GIFTS AND SERVICES LAW The gifts and services law prhibits manufacturers and whlesalers frm giving smething f value t retailers t induce the retailer int buying the manufacturer s r whlesaler s prduct. 107 The Authrity presumes that anything a manufacturer r whlesaler gives t a retailer is meant t induce the retailer t buy prduct. Manufacturers shuld be familiar with the Cnsent Orders. There are certain things that a manufacturer can d withut vilating the gifts and services law, fr example: Retailer advertising specialties- items with the brand lg intended t be used by the retailer. There is an annual cap n the value that can be given t a retailer. 108 Cnsumer advertising specialties- items with the brand lg intended t be given away t cnsumers. There is n limit n the amunt that can be given t a retailer. 109 Cntests and rebates (with n retailer participatin)- the Authrity allws mail-in rebates but nt thse that can be redeemed immediately at the retail lcatin ABCL 105(16) and 106(13) 106 ABCL 101(1)(a) 107 ABCL 101(1)(c) 108 Rules f the Authrity Rules f the Authrity Rules f the Authrity

28 Advertising the name f retailers wh carry the prduct- the advertisement must include several retailers and the reference t the retailers cannt be the predminant part f the advertisement. 111 COMMON DISCIPLINARY VIOLATIONS BY LICENSED MANUFACTURERS Alteratins Failure t ntify r btain apprval fr alteratins. 112 Availing A license issued t ne persn/entity cannt be transferred t anther persn/entity. 113 Allwing smene nt disclsed (and apprved by the Authrity) as a principal f the licensee t use (r avail themselves) f the license is a vilatin. Failure t have the transfer apprved by the Authrity is an availing. Availing is cnsidered ne f the mst serius vilatins f the ABCL, since it undermines the entire licensing prcess and cnstitutes a danger t the public. 114 Bks & recrds All manufacturing licensees are required t maintain adequate bks and recrds f all transactins invlving the business cnducted by the licensee. 115 The failure f a licensee t keep recrds regarding emplyees, even part-time emplyees, cnstitutes failure t maintain adequate bks and recrds. 116 Brand labels N alchlic beverages can be advertised r ffered fr sale in this state unless the brand label affixed t the cntainer has been registered with and apprved by the Authrity. 117 Crprate Changes Crprate licensees are required t btain the apprval f the Authrity befre making changes t the crprate principals. Failure t btain such apprval is an unauthrized crprate change Rules f the Authrity ABCL 99-d(1) 113 ABCL Hacker v. State Liqur Authrity, 19 NY2d 177 (1967) 115 ABCL 103(7) 116 Rb Tess Restaurant Crp. v. State Liqur Authrity, 68 AD2d 821 (1 st Dept., 1979) 117 ABCL 107-a(4)(a) 118 ABCL 99-d(2) 25

29 Extensin f premises A licensee cannt transfer r extend its license t anther premises r t anther part f the building cntaining the licensed premises. The license can be used nly in the premises that is licensed by the Authrity. 119 False material statements Felns Fraud, misrepresentatin, false material statements, cncealment r suppressin f facts by a licensee in cnnectin with the riginal applicatin, a renewal applicatin, r any ther applicatin requiring the Authrity s apprval is grunds fr revcatin f the license. 120 Manufacturing licensees may nt emply a persn wh has been cnvicted f a felny f any f the fllwing ffenses: illegally using, carrying r pssessing a pistl r ther dangerus weapn; making r pssessing burglar s instruments; buying r receiving r criminally pssessing stlen prperty; unlawful entry f a building; aiding escape frm prisn; unlawfully pssessing r distributing habit frming narctic drugs; vilating prvisins f the frmer Penal Law invlving prstitutin; vagrancy; prstitutin; r wnership, pssessin, peratin, custdy r cntrl f a still. 121 The general prhibitin des nt apply t: Persns wh have received a pardn; certificate f relief frm civil disabilities; certificate f gd cnduct; r ther relief frm disabilities prvided fr in the law. Persns wh have btained the apprval f the SLA t wrk in licensed premises. Imprper cnduct Licensees are subject t disciplinary actin fr imprper cnduct by the licensee r its principals, even if the cnduct des nt take place at the licensed premises. The standard is whether the cnduct is f such a nature that if knwn t the Authrity, the license/permit r renewal theref wuld have been disapprved because f the unsatisfactry character and/r fitness f the persn. 122 License certificates A licensee is required t display its license certificate in the licensed premises. The certificate must be enclsed in a wd r metal frame with (a) a clear glass frnt shwing the entire certificate space and (b) a substantial wd r metal back. The certificate, as framed, must always be psted and displayed in the licensed premises. It must be psted in a cnspicuus place s that it may be readily seen by all persns visiting the establishment ABCL Rules f the Authrity 53.1(b) 121 ABCL 102(2) 122 Rules f the Authrity 53.1(n) 123 ABCL

30 Nn Bna Fide When a licensed premises ceases t be perated within the cntemplatin f the license that was issued, it is cnsidered t be nn bna fide. 124 Put anther way, the licensee is n lnger perating the business that the Authrity licensed, r the business n lnger meets the requirements t be eligible fr a license. Ntificatin f changes Licensees must ntify the Authrity f any change if facts in the infrmatin submitted in an applicatin within ten days f such change. 125 Plice Officers Manufacturing licensees may nt emply plice fficers. 126 Surety bnds The ABCL gives the SLA the pwer t require licensees and permittees t btain surety bnds t insure the payment f penalties impsed by the Authrity. 127 By regulatin, the SLA has designated the licensees and permittees that must btain a bnd, as well as the amunt f the bnd fr each type f license r permit. 128 Once the Authrity makes a claim against a bnd, r a prtin f a bnd, the licensee r permittee has 10 days t file a new bnd, r (in the case f a partial bnd claim) restre the bnd t the full amunt required by the regulatins. Failure t d s is grunds fr revcatin f the license r permit. 129 Trade Names Licensees are nt permitted t use a trade name that des nt appear n the license certificate. Use f the trade name includes having it appear n bks, recrds, statinary, canpies, exterir signs, advertisement, r telephne listings. 130 The inclusin by the licensee f the unapprved trade name in a renewal r ther applicatin des nt cnstitute apprval by the Authrity. T btain apprval f new trade name, a licensee needs t submit a letter requesting sale alng with a cpy f the assumed name certificate. Multiple trade names can be used at the same licensed premises. Transprtatin f alchlic beverages Licensees may deliver/ship alchlic beverages in ne f tw ways. They may: 124 Rules f the Authrity 53.1(d) 125 ABCL 110(4) 126 ABCL ABCL Rules f the Authrity Part Rules f the Authrity Rules f the Authrity 53.1(p) 27

31 use a delivery cmpany with a trucking permit, 131 r use vehicles wned (r hired) and perated by the licensee. 132 A licensee using its wn vehicle must either have a sign with licensing infrmatin n the sides f the vehicle r keep a cpy f the licensee certificate in the vehicle. 131 ABCL ABCL

32 ADMINISTRATION OF THE ABC LAW THE STATE LIQUOR AUTHORITY The State Liqur Authrity (the Authrity ) is the agency respnsible fr issuing licenses and permits t traffic in alchlic beverages in New Yrk. It is als respnsible fr ensuring that licensees and permittees cmply with the Alchlic Beverage Cntrl Law and the Rules f the Authrity. In additin t thse respnsibilities, the Authrity has ther statutry pwers, including the fllwing: The Authrity can place a mratrium n issuing licensees thrughut the state r in any plitical subdivisin f the state. 133 The Authrity can, during a public emergency, prhibit the sale f alchlic beverages. 134 At the request f a cunty legislative bdy, the Authrity can restrict the hurs f sale f alchlic beverages within the cunty. 135 The Authrity cnsists f three Cmmissiners, r Members, appinted by the Gvernr fr three year terms. One f the Cmmissiners is designated by the Gvernr t serve as the Chairman. 136 Any actin f the Members f the Authrity must be taken by a majrity vte at a public meeting. When the Members meet t cnsider matters, they are referred t as the Full Bard. 137 ENFORCEMENT Disciplinary prceedings cmmenced by the Authrity are based n referrals frm ther law enfrcement agencies r investigatins cnducted by the Authrity s Enfrcement Bureau. Mst investigatins f licensed manufacturers and whlesalers are in respnse t cmplaints made by retailers and ther licensed manufacturers and whlesalers. Referrals frm ther law enfrcement agencies and Enfrcement Bureau investigatin reprts are reviewed by the Office f Cunsel t determine whether there is evidence f a vilatin f the ABCL r the Rules f the Authrity. Disciplinary prceedings result in either: an administrative hearing; a n cntest plea t the charges; r an ffer negtiated between the licensee and the prsecutr that must be reviewed by the Members f the Authrity. 133 ABCL 17(2) 134 ABCL 17(7) 135 ABCL 17(11) 136 ABCL ABCL 14 29

33 Refusal t appear and/r testify at such an interview cnstitutes grunds fr revcatin f the license. 138 THE DISCIPLINARY PROCESS A disciplinary prceeding against licensees cnsists f the issuance f a pleading, fllwed by the entry f a plea (r a default in respnding) by the licensee. The type f plea entered will dictate the next steps that must be taken. Statute f limitatins A disciplinary prceeding may be cmmenced fr vilatins taking place during: the current license perid; and the license perid immediately befre the current license perid. 139 A license may be renewed n stipulatin, with the licensee agreeing t waive the time limitatin fr bringing vilatins that tk place prir t the renewal. 140 If a license is surrendered, a disciplinary prceeding shuld be brught within thirty days f the license certificate being submitted t the Authrity fr surrender. Failure t bring a prceeding within that time entitles the licensee t a refund f the unused prtin f its license fee. 141 Cntent f pleading All pleadings must indicate whether the prceeding may result in a revcatin r cancellatin f the license (a revcatin prceeding ) r a penalty ther than revcatin r cancellatin (a suspensin prceeding ). The captin f the pleading will indicate whether the prceeding invlves a revcatin r suspensin prceeding. 142 All pleadings must include a reference t the legal authrity and jurisdictin under which the prceeding is being cnducted. 143 All pleadings must set frth numbered charges against the licensee. Insfar as pssible, each charge shuld allege a separate vilatin. 144 A shrt and plain statement f the matters asserted is required. 145 The Authrity s finding as t the sufficiency f the statement prvided is nt subject t judicial review. All pleadings must require the licensee t enter a plea t the charges n r befre the date specified in the pleading (als knwn as the return date ) Rules f the Authrity 53.1() 139 ABCL 118(2) 140 Matter f Pepper & Salt Tavern Inc., 99 AD2d 840 (2 nd Dept., 1984) 141 ABCL Rules f the Authrity 54.1(b)(1) 143 SAPA 301(2)(b) 144 Rules f the Authrity 54.1(b)(2) 145 SAPA 301(2)(d) 146 Rules f the Authrity 54.1(b)(3) 30

34 All pleadings must advise the licensee f its right t cunsel. 147 All pleadings must advise licensee that upn failure t appear r enter a plea, the licensee will be deemed t have entered a N Cntest plea t the charges and n further hearing will be held. 148 All pleadings must cntain a statement that interpreter services will be made available t deaf persns at n charge. 149 Pleadings in a suspensin prceeding must als: set frth the maximum penalty, including a fine and/r any claim against the licensee s surety bnd, which the Authrity may assess if the charges are sustained; and advise the licensee that it may request that (in the Authrity s discretin) a bnd frfeiture r fine be impsed in lieu f any suspensin f its license. 150 Pleadings fr cmmnly charged vilatins (such as sales t minrs fr first and secnd time ffenders) may include prpsed terms f a Cnditinal N Cntest ffer. The pleading cannt infrm the licensee that by entering a N Cntest plea it will receive a lesser penalty than if it prceeds t hearing. 151 The Authrity must prepare a summary f the disciplinary prcess in plain language and prvide a cpy f same t licensees wh are the subject f disciplinary actins. Service f pleadings A disciplinary prceeding is cmmenced with the service f a ntice f pleading n the licensee. 152 The pleading must be delivered: in persn t the licensee; r by registered r certified mail t the licensee addressed t the licensed premises. In additin, a cpy f the pleading must be sent by first class mail t the residence f recrd f the licensee (if any individual) r any fficer r directr f a crprate licensee, r any general partner f a partnership licensee. 153 In a revcatin prceeding, a cpy f the pleading must als be sent by first class mail t the wner f the prperty n which the licensed premises is lcated. If the licensee leases the premises frm smene ther than the wner, a cpy must als be mailed t the lessr. Amendment f pleadings/withdrawal f charges A prsecutr may amend a pleading at any time befre the clse f the hearing r (if there was n hearing) prir t a determinatin by the Full Bard. 154 Rules 54.4(d). 147 Rules f the Authrity 54.1(b)(4) 148 Rules f the Authrity 54.1(b)(5) 149 SAPA f the Authrity 301(2)(e) 150 Rules f the Authrity 54.2(c) 151 Cstell v. State Liqur Authrity, 17 AD2d 547 (4 th Dept., 1963) 152 Rules f the Authrity 54.1(a) 153 Rules f the Authrity 54.1(a) 154 Rules f the Authrity 54.1(d)] 31

35 The Full Bard des nt allw prsecutrs t withdraw and clse a case nce a pleading has been issued. Types f pleas A Nt Guilty plea reserves the licensee s right t have a hearing n the charges cntained in the pleading. The licensee may decide later t change its plea t N Cntest r submit a cnditinal ffer. With a N Cntest plea, the licensee gives up the right t have a hearing and the charges are cnsidered sustained. 155 Licensees may submit a statement with the plea either t explain the circumstances that led t the charges r t present sme ther infrmatin that it wants cnsidered befre a penalty is impsed. At any time befre the case ges t the Full Bard, a licensee may change a Nt Guilty plea t a N Cntest plea. A Cnditinal N Cntest plea r cnditinal ffer is a N Cntest plea made n the cnditin that a certain penalty is impsed. Cnditinal Offers are nt specifically prvided fr in the Rules f the Authrity. Hwever, State Administrative Prcedure Act 301(5) prvides that [u]nless precluded by statute, dispsitin may be made f any adjudicatry prceeding by stipulatin, agreed settlement, cnsent rder, default, r ther infrmal methd. Accrding, the Authrity has the pwer t accept cnditinal ffers. 156 Sme pleadings will have a prpsed cnditinal ffer included (usually n a secnd page attached t the pleading). A licensee autmatically reserves it right t a hearing if a cnditinal ffer is rejected by the Full Bard. Defaults Failure f the licensee t enter a plea n r befre the return date set frth in the pleading is deemed a N Cntest plea. The charges are deemed sustained and there is n hearing. 157 Failure f the licensee t appear fr the hearing, r any adjurnment f the hearing, is deemed a N Cntest plea. The charges are deemed sustained and there is n hearing. 158 Discvery The State Administrative Prcedure Act prvides that each agency having pwer t cnduct adjudicatry prceedings may adpt rules prviding fr discvery and depsitin t the extent and in the manner apprpriate t its prceedings. 159 The Authrity has nt adpted any regulatins regarding discvery r depsitins in disciplinary prceedings. 155 Rules f the Authrity 54.2(a) & Mhsin v. State Liqur Authrity, 162 AD2d 203 (1 st Dept., 1990) 156 Nstima Fds Inc. v. State Liqur Authrity, 71 NY2d 648 (1988) 157 Rules f the Authrity 54.2(b) 158 Rules f the Authrity 54.3(a) 159 SAPA