1. (1) All licensees, their agents, employees, and concessionaires must operate in compliance with the rules of other state and local agencies and abide by all:

   1. (a) provisions of the laws of Montana and the United States related to alcoholic beverages;
   2. (b) county and city or town ordinances related to alcoholic beverages;
   3. (c) Indian alcoholic beverage laws applicable within the areas of Indian country, as defined by 18 USC 1151, provided a tribe having jurisdiction over such area of Indian country adopted an ordinance, certified by the Secretary of the Interior, and published in the Federal Register; and
   4. (d) rules of the department relating to alcoholic beverages.
2. (2) Proof of violation by a licensee, a concessionaire, or the licensee's or concessionaire's agent or employee of any of the provisions of the above laws, ordinances, or rules is sufficient grounds for revocation or suspension of the license or termination of a concession agreement, and a licensee, a concessionaire, or both, may be reprimanded or assessed a civil penalty in accordance with 16-4-406, MCA.

3. (3) The department may use a range of progressive and proportional penalties for any combination of violations of any laws, ordinances, and rules. The progressive penalty schedule is not an exhaustive list of the grounds for administrative action. The schedule does not preclude the department's use of discretion to propose a penalty greater or less than those listed based upon aggravating or mitigating circumstances, non-exhaustive examples of which are described in (4) and (5). For purposes of determining penalties under the progressive penalty schedule, the department uses a three-year lookback. Proposed penalties are assessed based upon the date the violation occurs. For violations that occur over time, such as an undisclosed ownership interest, the violation date shall be the date the department issues its notice of proposed department action. The department may proceed to revoke or refuse to grant the renewal of a license, concession agreement, or both, only if a violation jeopardizes health, welfare, safety, or there is not a cure in place.

   Progressive Penalty Schedule

   Violation	Penalty
   1st Violation	Up to a $250 monetary penalty
   2nd Violation	Up to a $600 monetary penalty
   3rd Violation	Up to a $1,000 monetary penalty, up to a 2-day suspension, or both
   4th Violation	Up to a $1,500 monetary penalty, up to a 5-day suspension, or both
   5th Violation	Up to a $1,500 monetary penalty, up to a 7-day suspension, or both
   Subsequent Violations	In accordance with 16-4-406, MCA

4. (4) Aggravating circumstances may result in the imposition of maximum monetary penalties, maximum suspension time or revocation, and will not bind the department to the progressive penalty schedule. Aggravating circumstances include, but are not limited to:

   1. (a) no effort on the part of a licensee, a concessionaire, or both, to prevent a violation from occurring;
   2. (b) a licensee's failure to report a violation at the time of renewal;
   3. (c) involvement of a licensee, a location manager, a concessionaire, or a combination thereof, in the violation;
   4. (d) recurring sales to underage or intoxicated persons;
   5. (e) providing alcoholic beverages to a person under 18 years of age;
   6. (f) lack of cooperation by a licensee, a location manager, a concessionaire, or a combination thereof, in an investigation;
   7. (g) a violation's significant negative effect on the health, welfare, and safety of the community in which the licensee, the concessionaire, or both, operate; and
   8. (h) those instances provided in 16-4-406, MCA.

5. (5) Mitigating circumstances may result in the adjustment of monetary penalties, amount of suspension time, or revocation, and will not bind the department to the progressive penalty schedule. Mitigating circumstances include, but are not limited to:

   1. (a) the admissions of either the licensee, a location manager, or concessionaire regarding violations of the code or a rule of the department prior to the department commencing investigation of the licensee or concessionaire; and
   2. (b) those instances provided in 16-4-406, MCA.
6. (6) Nothing in this rule prevents the department from revoking, suspending, or refusing the renewal of a license, or a concession agreement, or both, if revocation, suspension, or refusing renewal is expressly allowed in law or rule with reference to a prohibited act.

Authorizing statute(s): 16-1-303, MCA

Implementing statute(s): 16-1-302, 16-3-301, 16-4-406, 16-6-314, MCA

History: NEW, Eff. 11/3/75; AMD, 1980 MAR p. 2199, Eff. 7/18/80; AMD, 1985 MAR p. 170, Eff. 2/15/85; AMD, 1998 MAR p. 2088, Eff. 7/31/98; AMD, 2001 MAR p. 449, Eff. 3/23/01; AMD, 2002 MAR p. 2337, Eff. 8/30/02; AMD, 2007 MAR p. 483, Eff. 4/13/07; AMD, 2012 MAR p. 122, Eff. 1/13/12; AMD, 2012 MAR p. 1150, Eff. 6/8/12; AMD, 2012 MAR p. 1846, Eff. 9/21/12; AMD, 2014 MAR p. 2980, Eff. 12/12/14; AMD, 2017 MAR p. 346, Eff. 3/25/17; AMD, 2020 MAR p. 1283, Eff. 6/27/20; AMD, 2022 MAR p. 1707, Eff. 8/27/22.