CHAPTER 55 SENATE BILL No. 178 An Act concerning intoxicating liquors; relating to licensees under the liquor control act;
amending K.S.A. 41-311, 41-313, 41-319 and repealing the existing sections. Be it enacted by the Legislature of the State of Kansas:

      Section  1. K.S.A. 41-311 is hereby amended to read as follows: 41-
311. (a) No license of any kind shall be issued pursuant to the liquor
control act to a person:

      (1) Who has not been a citizen of the United States for at least 10
years, except that the spouse of a deceased retail licensee may receive
and renew a retail license notwithstanding the provisions of this subsec-
tion (a)(1) if such spouse is otherwise qualified to hold a retail license and
is a United States citizen or becomes a United States citizen within one
year after the deceased licensee's death;

      (2) who has been convicted of a felony under the laws of this state,
any other state or the United States;

      (3) who has had a license revoked for cause under the provisions of
this act or who has had any license issued under the cereal malt beverage
laws of any state revoked for cause except that a license may be issued to
a person whose license was revoked for the conviction of a misdemeanor
at any time after the lapse of 10 years following the date of the revocation;

      (4) who has been convicted of being the keeper or is keeping a house
of prostitution or has forfeited bond to appear in court to answer charges
of being a keeper of a house of prostitution;

      (5) who has been convicted of being a proprietor of a gambling house,
pandering or any other crime opposed to decency and morality or has
forfeited bond to appear in court to answer charges for any of those
crimes;

      (6) who is not at least 21 years of age;

      (7) who, other than as a member of the governing body of a city or
county, appoints or supervises any law enforcement officer, who is a law
enforcement official or who is an employee of the director;

      (8) who intends to carry on the business authorized by the license as
agent of another;

      (9) who at the time of application for renewal of any license issued
under this act would not be eligible for the license upon a first application,
except as provided by subsection (a)(12);

      (10) who is the holder of a valid and existing license issued under
article 27 of chapter 41 of the Kansas Statutes Annotated unless the per-
son agrees to and does surrender the license to the officer issuing the
same upon the issuance to the person of a license under this act, except
that a retailer licensed pursuant to K.S.A. 41-2702, and amendments
thereto, shall be eligible to receive a retailer's license under the Kansas
liquor control act;

      (11) who does not own the premises for which a license is sought, or
does not have a written lease thereon for at least 3/4 of the period for
which the license is to be issued; or

      (12) whose spouse would be ineligible to receive a license under this
act for any reason other than citizenship, residence requirements or age,
except that this subsection (a)(12) shall not apply in determining eligibility
for a renewal license.; or

      (13) who does not provide any data or information required by sec-
tion 2, and amendments thereto.

      (b) No retailer's license shall be issued to:

      (1) A person who is not a resident of this state;

      (2) a person who has not been a resident of this state for at least four
years immediately preceding the date of application;

      (3) a person who has beneficial interest in the manufacture, prepa-
ration or wholesaling of alcoholic beverages;

      (4) a person who has beneficial interest in any other retail establish-
ment licensed under this act, except that the spouse of a licensee may
own and hold a retailer's license for another retail establishment;

      (5) a copartnership, unless all of the copartners are qualified to obtain
a license;

      (6) a corporation; or

      (7) a trust, if any grantor, beneficiary or trustee would be ineligible
to receive a license under this act for any reason, except that the provi-
sions of subsection (a)(6) shall not apply in determining whether a ben-
eficiary would be eligible for a license.

      (c) No manufacturer's license shall be issued to:

      (1) A corporation, if any officer or director thereof, or any stockholder
owning in the aggregate more than 25% of the stock of the corporation
would be ineligible to receive a manufacturer's license for any reason
other than citizenship and residence requirements;

      (2) a copartnership, unless all of the copartners shall have been res-
idents of this state for at least five years immediately preceding the date
of application and unless all the members of the copartnership would be
eligible to receive a manufacturer's license under this act;

      (3) a trust, if any grantor, beneficiary or trustee would be ineligible
to receive a license under this act for any reason, except that the provi-
sions of subsection (a)(6) shall not apply in determining whether a ben-
eficiary would be eligible for a license;

      (4) an individual who is not a resident of this state; or

      (5) an individual who has not been a resident of this state for at least
five years immediately preceding the date of application.

      (d) No distributor's license shall be issued to:

      (1) A corporation, if any officer, director or stockholder of the cor-
poration would be ineligible to receive a distributor's license for any rea-
son. It shall be unlawful for any stockholder of a corporation licensed as
a distributor to transfer any stock in the corporation to any person who
would be ineligible to receive a distributor's license for any reason, and
any such transfer shall be null and void, except that: (A) If any stockholder
owning stock in the corporation dies and an heir or devisee to whom stock
of the corporation descends by descent and distribution or by will is in-
eligible to receive a distributor's license, the legal representatives of the
deceased stockholder's estate and the ineligible heir or devisee shall have
14 months from the date of the death of the stockholder within which to
sell the stock to a person eligible to receive a distributor's license, any
such sale by a legal representative to be made in accordance with the
provisions of the probate code; or (B) if the stock in any such corporation
is the subject of any trust and any trustee or beneficiary of the trust who
is 21 years of age or older is ineligible to receive a distributor's license,
the trustee, within 14 months after the effective date of the trust, shall
sell the stock to a person eligible to receive a distributor's license and
hold and disburse the proceeds in accordance with the terms of the trust.
If any legal representatives, heirs, devisees or trustees fail, refuse or ne-
glect to sell any stock as required by this subsection, the stock shall revert
to and become the property of the corporation, and the corporation shall
pay to the legal representatives, heirs, devisees or trustees the book value
of the stock. During the period of 14 months prescribed by this subsec-
tion, the corporation shall not be denied a distributor's license or have its
distributor's license revoked if the corporation meets all of the other
requirements necessary to have a distributor's license;

      (2) a copartnership, unless all of the copartners are eligible to receive
a distributor's license; or

      (3) a trust, if any grantor, beneficiary or trustee would be ineligible
to receive a license under this act for any reason, except that the provi-
sions of subsection (a)(6) shall not apply in determining whether a ben-
eficiary would be eligible for a license;

      (4) an individual who is not a resident of this state; or

      (5) an individual who has not been a resident of this state for at least
10 years immediately preceding the date of application, except that:

      (A) A wholesaler of cereal malt beverages properly licensed on Sep-
tember 1, 1948, shall be eligible for a beer distributor's license; and

      (B) a person who has been a resident of the state for at least one year
immediately preceding the date of application shall be eligible for a beer
distributor's license.

      (e) No nonbeverage user's license shall be issued to a corporation, if
any officer, manager or director of the corporation or any stockholder
owning in the aggregate more than 25% of the stock of the corporation
would be ineligible to receive a nonbeverage user's license for any reason
other than citizenship and residence requirements.

      (f) No microbrewery license or farm winery license shall be issued to
a:

      (1) Person who is not a resident of this state;

      (2) person who has not been a resident of this state for at least four
years immediately preceding the date of application;

      (3) person who has beneficial interest in the manufacture, prepara-
tion or wholesaling of alcoholic beverages other than that produced by
such brewery or winery;

      (4) person, copartnership or association which has beneficial interest
in any retailer licensed under this act or under K.S.A. 41-2702, and
amendments thereto;

      (5) copartnership, unless all of the copartners are qualified to obtain
a license;

      (6) corporation, unless stockholders owning in the aggregate 50% or
more of the stock of the corporation would be eligible to receive such
license and all other stockholders would be eligible to receive such license
except for reason of citizenship or residency; or

      (7) a trust, if any grantor, beneficiary or trustee would be ineligible
to receive a license under this act for any reason, except that the provi-
sions of subsection (a)(6) shall not apply in determining whether a ben-
eficiary would be eligible for a license.

      (g) The provisions of subsections (b)(1), (b)(2), (c)(3), (c)(4), (d)(3),
(d)(4), (f)(1) and (f)(2) shall not apply in determining eligibility for the
10th, or a subsequent, consecutive renewal of a license if the applicant
has appointed a citizen of the United States who is a resident of Kansas
as the applicant's agent and filed with the director a duly authenticated
copy of a duly executed power of attorney, authorizing the agent to accept
service of process from the director and the courts of this state and to
exercise full authority, control and responsibility for the conduct of all
business and transactions within the state relative to alcoholic liquor and
the business licensed. The agent must be satisfactory to and approved by
the director, except that the director shall not approve as an agent any
person who:

      (1) Has been convicted of a felony under the laws of this state, any
other state or the United States;

      (2) has had a license issued under the alcoholic liquor or cereal malt
beverage laws of this or any other state revoked for cause, except that a
person may be appointed as an agent if the person's license was revoked
for the conviction of a misdemeanor and 10 years have lapsed since the
date of the revocation;

      (3) has been convicted of being the keeper or is keeping a house of
prostitution or has forfeited bond to appear in court to answer charges of
being a keeper of a house of prostitution;

      (4) has been convicted of being a proprietor of a gambling house,
pandering or any other crime opposed to decency and morality or has
forfeited bond to appear in court to answer charges for any of those
crimes; or

      (5) is less than 21 years of age.

      New Sec.  2. (a) If an applicant for licensure is not a resident of the
state of Kansas on the date of submission of such application or has not
been a resident for at least one year immediately preceding the date of
submission of such application, the director shall require the individual
applicant, or if the applicant is a corporation, partnership or trust, each
individual officer, director, stockholder, copartner or trustee to:

      (1) Submit to a national criminal history record check and provide
the director with a legible set of fingerprints;

      (2) disclose to the director any substantial financial interest the ap-
plicant owns in any entity that receives proceeds from the sale of alcoholic
beverages; and

      (3) submit a release allowing the director to have access to and review
of the applicant's financial records to verify ownership and to ensure ap-
plicant is not an agent of another person. This release shall remain in
effect after the license has been issued until the license is canceled or
revoked.

      (b) The director shall submit the fingerprints provided under sub-
section (a) to the Kansas bureau of investigation and to the federal bureau
of investigation and receive a reply to enable the director to verify the
identity of such applicant or such individuals specified in subsection (a)
and whether such applicant or such individuals have been convicted of
any crimes that would disqualify the applicant or such individuals from
holding a license under the liquor control act. The director is authorized
to use the information obtained from the national criminal history record
check to determine such applicant's or individuals' eligibility to hold a
license under the liquor control act.

      (c) All costs incurred pursuant to this section to ensure that the ap-
plicant is qualified for licensure shall be paid by the applicant.

      Sec.  3. K.S.A. 41-313 is hereby amended to read as follows: 41-313.
(a) No corporation, either organized under the laws of this state, any other
state or a foreign country, shall be issued a manufacturer's, distributor's,
microbrewery or farm winery license unless the corporation has first pro-
cured a certificate of authority from the secretary of state to do business
in this state as provided by law, appointed a citizen of the United States,
and resident of Kansas, as its agent and filed with the director a duly
authenticated copy of a duly executed power of attorney, authorizing the
agent to accept service of process from the director and the courts of this
state and to exercise full authority of the corporation and full authority,
control and responsibility for the conduct of all business and transactions
of the corporation within the state relative to alcoholic liquor and the
business licensed. The agent must be satisfactory to and approved by the
director with respect to the agent's character. The agent shall at all times
be maintained by the corporation.

      In addition, any corporation organized under the laws of any other state
or foreign country, as a condition precedent to the issuance to it of any
license, shall file with the secretary of state of the state of Kansas, a duly
authorized and executed power of attorney, authorizing the secretary of
state to accept service of process from the director and the courts of this
state and to accept service of any notice or order provided for in this act,
and all such acts by the secretary of state shall be fully binding upon the
corporation.

      (b) Every nonresident applicant on applying for a license or permit
under this act, and as a condition precedent to obtaining such license or
permit, shall file with the secretary of state of this state its written consent,
irrevocable, that any action or garnishment proceeding may be com-
menced against such applicant in the proper court of any county in this
state in which the cause of action shall arise or in which the plaintiff may
reside by the service of process on the resident agent specified in subsec-
tion (a), and stipulating and agreeing that such service shall be taken and
held in all courts to be as valid and binding as if due service had been
made upon the applicant. The written consent shall state that the courts
of this state have jurisdiction over the person of such applicant and are
the proper and convenient forum for such action and shall waive the right
to request a change of jurisdiction or venue to a court outside this state
and that all actions arising under this act and commenced by the applicant
shall be brought in this state's courts as the proper and convenient forum.
Such consent shall be executed by the applicant and if a corporation, by
the president and secretary of the corporate applicant, and shall be ac-
companied by a duly certified copy of the order or resolution of the board
of directors, trustees or managers authorizing the president and secretary
to execute the same.

      Sec.  4. K.S.A. 41-319 is hereby amended to read as follows: 41-319.
(a) Except as provided by subsection (b), within 30 days after an appli-
cation is filed for a retailer's, microbrewery or farm winery license and
within 20 days after an application is filed for a manufacturer's, distrib-
utor's or nonbeverage user's license, the director shall enter an order
either refusing or granting the license. If the director does not enter an
order within the time prescribed, the license applied for shall be deemed
to have been refused. The director, with the written consent of the ap-
plicant for a license, may delay entering an order on an application for
an additional period of not to exceed 30 days.

      (b) In order to complete any national criminal history record check
of an applicant who submitted any application after January 31, 2001,
and if the applicant is not a resident of the state of Kansas on the date of
submission of such application or has not been a resident for at least one
year immediately preceding the date of submission of such application
the director shall enter an order either refusing or granting the license
within 90 days after such application is filed. If the director does not enter
an order within the time prescribed, the license applied for shall be
deemed to have been refused. The director, with the written consent of
the applicant for a license, may delay entering an order on an application
for an additional period of not to exceed 30 days.

 Sec.  5. K.S.A. 41-311, 41-313 and 41-319 are hereby repealed.
 Sec.  6. This act shall take effect and be in force from and after its
publication in the Kansas register.

Approved March 30, 2001.
 Published in the Kansas Register April 5, 2001.
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