(a) Definition.
(1) In this section, "closing-out sale" means any sale in connection with which the person conducting the sale represents that the sale is being conducted, or must be conducted, for reasons of
(A) economic or business distress,
(B) inability to continue business at the same location, or
(C) the age or health of an owner of the business.
(2) "Closing-out sale" includes any sale advertised, represented or held under the designation of "going out of business," "discontinuance of business," "selling out," "liquidation," "lost our lease," "must vacate," "forced out," "removal" or any similar designation, but does not include the closing out of an item of merchandise.
(b) License required.
(1) A person must not advertise or offer for sale in the County merchandise under the description of “closing-out sale” or merchandise damaged by fire, smoke, water or otherwise, unless the owner of the business obtains a license to conduct the sale from the Director of the Office of Consumer Protection.
(2) The owner of the business where the proposed sale will take place must file an application with the Director, in writing and under oath, at least 14 days before the opening date of the sale, disclosing all relevant facts relating to the sale, including:
(A) the first and last dates of the proposed sale;
(B) the date when the owner of the business intends to stop the operations of the business at the location or locations listed in the application;
(C) a complete inventory of the merchandise to be sold;
(D) a list of all persons with an ownership interest in the business if the business does not have publicly-traded shares;
(E) the text of all advertising that will be placed in print or electronic media in connection with the proposed sale; and
(F) all details necessary to locate exactly and identify the merchandise to be sold.
(3) If the Director is satisfied from the application that the proposed sale is consistent with the proposed advertising, the Director may issue a license, upon payment of a fee in an amount set by regulation under method (3).
(4) The Director must not issue a license if the person conducting the proposed sale or any owner of the business had authority, alone or with others, to stop the operations or change the location of a business that conducted a closing-out sale within the previous 3 years unless:
(A) the proposed sale will be conducted under the direction of a federal bankruptcy trustee; or
(B) the person conducting the proposed sale or any owner of the business did not have a significant ownership or managerial role in the previous closing-out sale.
(c) Buying new stocks for closing-out sale prohibited.
(1) A person must not order any merchandise for the purpose of selling it at a closing-out sale.
(2) Any unusual purchase and additions to a stock of merchandise within 60 days before an application for a license to conduct a closing-out sale is filed, while the application is pending, or during the sale is prima facie evidence that the purchases and additions to stock were made for the purpose of selling them at the sale. An unusual purchase or addition to a stock of goods is a purchase or addition not made in the ordinary course of business.
(d) Penalty for violation of this section. Any violation of this section is a class A violation. Each day a violation continues is a separate offense. (Ord. No. 6-166; 1972 L.M.C., ch. 16, § 5; 1980 L.M.C., ch. 32, § 1; 1983 L.M.C., ch. 22, § 36; 1992 L.M.C., ch. 3, § 1; 1996 L.M.C., ch. 13, § 1; 2005 L.M.C., ch. 26, § 1.)
Editor’s note-The Court of Appeals held in Jakanna Woodworks, Inc. v. Montgomery County, 344 Md. 584, 689 A.2d 65 (1997), that § 30-10 is invalid because it impermissibly infringes upon the constitutional rights of merchants to engage in truthful and non-misleading commercial speech. The Court also found that § 30-10 does not directly advance the County’s interest in protecting consumers from deceptive advertising and is invalid as a prior restraint that (1) grants a governmental official unfettered discretion to suppress protected speech, and (2) fails to place an adequate limitation on the amount of time the official may take to determine whether to grant or deny a permit.
2005 L.M.C., ch. 26, §§ 2 and 3, state:
Sec. 2. Regulations. A regulation which implements a function transferred to the Office of Consumer Protection by this Act continues in effect until otherwise amended or repealed, but any reference to any predecessor department or office must be treated as referring to the Office of Consumer Protection.
Sec. 3. Transition. This act does not invalidate or affect any action taken by the Department of Housing and Community Affairs before this Act took effect. Any responsibility or right granted by law, regulation, contract, or other document, and which is associated with a function transferred by this Act from the Department of Housing and Community Affairs, is transferred to the Office of Consumer Protection.