a. License required of retail dealers.
1. It shall be unlawful for any person to engage in business as a retail dealer without first having obtained a license as hereinafter prescribed for each place of business wherein such person sells cigarettes or tobacco products in the city.
2. It shall be unlawful for a person to permit any premises under such person's control to be used by any other person in violation of paragraph 1 of subdivision a of this section.
3. It shall be unlawful for a pharmacy to obtain a license to engage in business as a retail dealer.
b. License application. In order to obtain a license to engage in business as a retail dealer, a person shall file an application with the commissioner for a license for each place of business that he or she desires to have for the retail sale of cigarettes or tobacco products in the city. The application for each license or renewal thereof shall be made upon such form as prescribed by the commissioner and shall contain such information as the commissioner shall require.
c. Fee and license term.
1. There shall be a biennial fee of $200 for a license to engage in the business of a retail dealer at each place of business where cigarettes or tobacco products are sold in the city.
2. All even-numbered licenses shall expire on December 31 of the even-numbered year, and all odd-numbered licenses shall expire on December 31 of the odd-numbered year, next succeeding the year in which the license is issued.
d. Issuance of license.
1. A license shall be issued to a person to conduct the business of a retail dealer for each place of business where such person engages in selling cigarettes or tobacco products in the city only where:
(A) an applicant for a license or renewal thereof meets all the requirements prescribed herein and any criteria in addition thereto established by the commissioner by rule as he or she deems necessary to effectuate the purposes of this subchapter;
(B) an applicant satisfies the commissioner that such person is fit and able to conduct the business of a retail dealer;
(C) the commissioner has not received notification from the commissioner of finance or the commissioner of the department of health and mental hygiene that such applicant is not in full compliance with any provisions of chapter 13 or chapter 40 of title 11 of this code relating to the sale of cigarettes or tobacco products, section 17-176 or section 17-176.1 or chapter 7 of title 17, or any rules promulgated by the commissioner of finance or the commissioner of the department of health and mental hygiene to effectuate the purposes of such chapters; and
(D) the number of licenses in the community district in which the place of business of such applicant is located is lower than the community district retail dealer cap.
2. A retail dealer license shall not be assignable and shall be valid only for the persons in whose names it is issued and for the transaction of business in the place designated therein and shall at all times be conspicuously displayed at the place for which it is issued.
3. Where a license for any place of business licensed pursuant to this subchapter has been revoked, the commissioner shall refuse to issue a license required under this subchapter for such place of business, unless the applicant for such license demonstrates with documentary proof, to the satisfaction of the commissioner, that the applicant acquired the premises or business through an arm's length transaction and that the applicant neither:
(A) shared in the ownership, or otherwise exercised control over the management, of the original licensee; nor
(B) employs any person who shared in the ownership, or otherwise exercised control over the management, of the original licensee.
4. For purposes of revocation of retail dealer licenses pursuant to section 17-710, any violation of section 17-703, section 17-703.2, subdivision a of 17-704, subdivision a of section 17-704.1, section 17-705 or subdivision a or b of section 17-706, or, for purposes of suspension of retail dealer licenses pursuant to section 17-716, any violation of section 17-715, by any license holder at a place of business shall be included in determining the number of violations by any subsequent license holder at the same place of business unless the subsequent license holder provides the commissioner with adequate documentation demonstrating that the subsequent license holder acquired the premises or business through an arm's length transaction and that the sale or lease was not conducted, in whole or in part, for the purpose of permitting the original licensee to avoid the effect of violations on the premises and that the subsequent license holder neither:
(A) shared in the ownership, or otherwise exercised control over the management, of the original licensee; nor
(B) employs any person who shared in the ownership, or otherwise exercised control over the management, of the original licensee.
5. For purposes of paragraphs 3 and 4 of this subdivision, "arm's length transaction" means a sale of a fee or all undivided interests in real property, or lease of any part thereof, or a sale of a business, in good faith and for valuable consideration, that reflects the fair market value of such real property or lease, or business, in the open market, between two informed and willing parties, where neither is under any compulsion to participate in the transaction, unaffected by any unusual conditions indicating a reasonable possibility that the sale or lease was made for the purpose of permitting the original licensee to avoid the effect of violations on the premises. The following sales or leases shall be presumed not to be arm's length transactions unless adequate documentation is provided demonstrating that the sale or lease was not conducted, in whole or in part, for the purpose of permitting the original licensee to avoid the effect of violations on the premises:
(1) a sale between relatives; or
(2) a sale between related companies or partners in a business; or
(3) a sale or lease affected by other facts or circumstances that would indicate that the sale or lease is entered into for the primary purpose of permitting the original licensee to avoid the effect of violations on the premises, or revocation of a license, such as a sale or lease entered into while there are violations pending against the original licensee that could result in revocation or suspension of the license.
e. Community district retail dealer cap.
1. The commissioner shall establish a community district retail dealer cap for each community district in the city. The initial community district retail dealer cap shall be 50 percent of the total number of licenses issued to retail dealers in the community district, exclusive of the number of licenses issued to retail dealers that are pharmacies, on the effective date of the local law that added this subdivision, as determined by the department.
2. The department, in conjunction with the department of health and mental hygiene, shall evaluate community district retail dealer caps every two years and any time community district boundaries change. Such evaluation shall include consideration of the number of retail dealers and the prevalence of cigarette smoking and use of other tobacco products. If, based on the evaluation, the department of health and mental hygiene recommends further reductions to the community district retail dealer cap, the department of health and mental hygiene shall advise the speaker of the city council of such recommendations.
3. The commissioner may promulgate rules governing the application process related to the issuance of new licenses after the establishment of a community district retail dealer cap.
4. Exceptions for certain licenses. Notwithstanding subparagraph (D) of paragraph 1 of subdivision d, if:
(A) a license of a retail dealer expires at the end of the license term, such retail dealer may apply for renewal of such license;
(B) a business whose owner has been issued a retail dealer license is sold, the succeeding owner may apply for a license for use at the same location, provided that the retail dealer selling such business was in good standing at the time of such sale, and the application is received within thirty days of the applicable change of ownership;
(C) a retail dealer license becomes void pursuant to section 20-110, the succeeding beneficial owners of 10 percent or more of the stock of the organization to which a license had been granted may apply for a license, provided that such retail dealer was in good standing at the time the license became void, and the application is received within thirty days of the change of ownership; and
(D) a retail dealer license becomes void pursuant to section 20-111, the succeeding partnership may apply for a license, provided that such retail dealer was in good standing at the time the license became void and the application is received within thirty days of the change of ownership.
(Am. L.L. 2017/142, 8/28/2017, eff. 1/1/2019; Am. L.L. 2017/143, 8/28/2017, eff. 2/24/2018; Am. L.L. 2017/146, 8/28/2017, eff. 2/24/2018)
Editor's note: For related unconsolidated provisions, see Appendix A at L.L. 2000/002, L.L. 2013/097, L.L. 2017/142, L.L. 2017/146 and L.L. 2018/161.