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STATE OF OKLAHOMA
2nd Session of the 58th Legislature (2022)
SENATE BILL 1727 By: Bergstrom
AS INTRODUCED
An Act relating to alcoholic beverages; providing
definitions; creating Alcoholic Beverage Regulatory
Business Program; requiring the Alcoholic Beverage
Law Enforcement Commission to administer program;
providing for consultations between an applicant and
Commission; requiring an applicant to submit
applications; providing for contents of application;
requiring Commission to review applications;
providing factors for Commission to consider during
review; providing for acceptance or denial of
application by the Commission; allowing for the
Commission’s discretion on denial of applications;
providing for reasons of denial; allowing for
approved applicants to demonstrate offering in a
twelve-month time frame; providing for condition s of
an offering by a participant of the program;
providing for the sus pension of law or rules
necessary for participant to demonstrate offering;
prohibiting immunity from criminal offenses by
participant; allowing regulatory relief office to end
participant’s participation under certain conditions;
requiring participant to provide disclosure before
demonstration to consumer; providing contents of
disclosure; allowing for participant to extend
demonstration period at end of twelve -month period;
requiring participant to retain all records,
documents, and data produ ced during the program;
allowing for the Commission to request records,
documents, and data from partic ipant; allowing for
Commission to dismiss participant for failure to
comply; requiring participant to compile report for
Commission following the en d of program
participation; providing for contents of report;
providing for promulgation of rules; providing for
codification; and providing an effective date.
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BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
SECTION 1. NEW LAW A new se ction of law to be codified
in the Oklahoma Statutes as Section 8-101 of Title 37A, unless there
is created a duplication in numbe ring, reads as follows:
As used in this act:
1. “Alcoholic beverage product or services” means an alcoholic
beverage product or ser vice that requires lice nsure, registration,
or other authorization as regulated by state law or rule, including
an alcoholic beverage specific product or alcoholic beverage service
that includes a business model, delivery mech anism, or element that
requires a license, registration, or othe r authorization to do a n
alcoholic beverage specific business, as an alcoholic beverage
producer or consultant;
2. “Applicant” means an individual or entity that is applying
to participate in the alcoholic beverage specific regulatory
business program;
3. “Commission” means the Alcoholic Beverage Law Enforcement
Commission;
4. “Consumer” means a person that purchases or otherwise enters
into a transaction agreement to receive an innovative alcoholic
beverage specific product or service th at is being tested by an
alcoholic beverage specific regulatory bu siness program;
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5. “Innovation” means the use or incorporation of a new or
emerging technology or a new use of existing technology, including
blockchain technology, to address a problem, provide a benefit, or
otherwise offer a product, service, business model, or delivery
mechanism that is not known by the Commission to have a comparable
widespread offering in this state.
6. “Innovative product or service” means an alcoholic beverage
product or service that includes an innovation;
7. “Participant” means a person whose application to
participate in the alcoholic beverage regulatory program is approved
in accordance with th e provisions of this act;
8. “Program” means the Alcoholic Beverage Regulatory Business
Program created in this act, which allows a per son to temporarily
test an innovative al coholic beverage product or service on a
limited basis without otherwise being licensed or authorized to act
under the laws of this state; and
9. “Test” means to provide an innovative alcoholic beverage
product or services in accordance with th e provisions of this act.
SECTION 2. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Section 8-102 of Title 37A, unless there
is created a duplication in numbering, reads as fol lows:
A. The Alcoholic Beverages Law Enforcement Commission shall
create the Alcoholic Beverage Regulatory Business Program.
B. In administering the program, the Commission:
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1. Shall Establish a program to enable a person to obtain
limited access to the m arket in the state to test an innovative
alcoholic beverage product or service without obtaining a license or
other authorization that might otherwise be required;
2. May enter into agreements with or foll ow the practices of
the Consumer Financial Protection Bureau or other states that are
administering similar programs; and
3. May not approve participation in the program by an applicant
or any other participant who has been convicted, entered a plea of
guilty or nolo contendere for a serious crime:
a. involving theft, fraud, or dishonesty,
b. that bears substantial relationship to the applicant ’s
or participant’s ability to safely or competently
participate in the program.
C. An applicant for the p rogram shall provide to the C ommission
an application in a form prescribed by t he Commission that:
1. Includes a refundable application fee ;
2. Demonstrates the applicant is subject to the jurisdiction o f
this state;
3. Demonstrates the applicant has established a physical or
virtual location that is adequately accessible to the Commission,
from which testing will be developed and performed and where al l
required records, documents, and data will be main tained;
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4. Contains relevant personal and contact informa tion for the
application, including legal names, a ddresses, telephone numbers, e-
mail addresses, website addresses, and other information r equired by
the Commission;
5. Discloses criminal convictio n of the applicant or other
participating personnel, if any;
6. Demonstrates that the applicant has the n ecessary personnel,
financial, and technical expertise , access to capital, and developed
plans to test, monitor, and assess the innovative alcoholic beverage
product or service;
7. Contains a description of the innovative alcoholic beverage
or service to be tested, including statements regarding the
following:
a. how the innovative alcoholic beverage or service is
subject to licensing or other authorizatio n
requirements outside the scope of the program,
including a specific list of all state l aws,
regulations, and licensing or other requirements that
the applicant is seeking to have waived during the
testing period,
b. how the innovative alcoholic product or service would
benefit consumers,
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c. how the innovative alcoholic product or service is
different from other alcoholic beverage products or
services available in this state ,
d. what risks may confront consumers that use or purchase
the innovative alcoholic beverage product or services,
e. how participating in the program would enable a
successful test of th e innovative alcoholic beverage
product or services,
f. a description of how the applicant will per form
ongoing duties after the test, and
g. how the applicant will end the test and protect
consumers if the test fails, including providing
evidence of sufficient liability coverage and
financial reserves to protect consumers and to protect
against insolvency by the applicant; and
8. Includes any additional information deemed necessary by the
Commission.
C. An applicant shall file a sperate application for e ach
innovative alcoholic beverage product or service the applicant wa nts
to test.
D. After an application is fi led, and before approving the
application, the Commission may seek any additional information from
the applicant that the C ommission deems neces sary.
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E. Subject to subsection F of this section, no later than
ninety (90) days after the day on which a completed application is
received by the Commission, the Commission shall inform the
applicant as to whether the application is approved for enter ing
into the program.
F. The Commission and an applicant may mutually agree to extend
the ninety (90) day timeline as described in subsection E of this
section for the Commission to determine whether an appli cation is
approved for entry int the program.
G. In reviewing an application under this section , the
Commision shall identify how the applica nt’s innovative alcoholic
beverage product or services is subject to licensing or other
authorization requirements outside of the program, including a
specific list of all state laws, regulations, and licensing or other
requirements that the applican t is seeking to have waived during the
testing period.
H. In reviewing the application, the Commission shall consider
whether a competitor to the applicant is or has bee n a previous
program participant and weigh that as a factor in allowing the
applicant to also become a participant.
I. If the Commission and each applicable ag ency approve
admitting an applicant into the p rogram, then an applicant shall
become a participant.
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J. The Commission may deny any application submitted under this
section, for any reason, at the Commission ’s discretion.
K. If the Commission denies an application submitted under this
section, the Commission shall provide to th e applicant a written
description of the reasons for the denial .
SECTION 3. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Section 8-103 of Title 37A, unless there
is created a duplication in numbering, reads as follows:
A. If the Commission approved an application under Section 2 of
this act, the participant shall have twelve (12) months after the
day of approval to test the innovat ive product or services described
in the participant’s application.
B. A participant testing an i nnovative alcoholic beverage
product or service within the program is subj ect to the following :
1. Consumers shall be residents of this state ;
2. The Commission may, on a cas e-by-case basis, specify the
maximum number of consumers that may enter into a n agreement with
the participant to use the innovative alcoholic beverage product or
service;
3. The Commission may, if applicable on a case -by-case basis,
specify the maximum number of items for each item that may be
offered by a participant during the test of the innovative alcoholic
beverage product or service ;
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4. If a participant is accepted into the program, the
Commission shall notify other businesses in the industry that a
waiver was granted to afford other companies the opportunity to
apply for the same waiver if they choose.
C. This section does not restrict any participant who holds a
license or other authorization in another juris diction from acting
in accordance with that license or other authori zation.
D. A participant is deemed to possess an appropriate license
pursuant to the laws of this state for the purpose of any provi sions
of federal law requiring state licensure or authorization.
E. A participant that is testing an innovative alcoholic
beverage product or service is not subject to stat e laws,
regulations, licensing requirements, or authorization requirements
that were identified by the partic ipant’s application and have been
waived in writing by the Commission.
F. Notwithstanding any other provision of this act, a
participant shall not have immunity related to any c riminal offense
committed during participation of this program.
G. By written notice, the C ommission may end a participant’s
participation in the program at any time and for any reason
including, but not limited to, the Comm ission determining the
participant is not operating in good faith to b ring an innovative
alcoholic beverage product to market.
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H. The Commission and the Commission ’s employees are not liable
for any business losses, or the recouping of application expense s,
related to the program including for:
1. Denying an applicant’s application to participate in the
program for any reason ; or
2. Ending a participant’s participation in the program at any
time for any reason.
I. No guaranty association in this state may be held liable for
business losses or liabilities incurred as a result of activities
undertaken by a participa nt in the program.
SECTION 4. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Section 8-104 of Title 37A, unless there
is created a duplication in numbering, reads as follows:
A. Before providing an innovative alcoholic beverage product or
service to a consumer, a participant shall disclose the following to
the consumer:
1. The name and contact information of the participant;
2. That the innovative alcoholic beverage product or service is
authorized pursuant to the program and, if applicable, that the
participant does not have a license or other authorization to
provide an alcoholic beverage product or service under state law
that regulates alcoholic beverage products outside the program;
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3. That the innovative alcoholic beverage product or service is
undergoing testing and may not function as inte nded and may expose
the customer to risk;
4. That the provider of the innovative alcoholic beverage
product or service is not immune from civil liability for any losses
or damages caused by the innovative alcoholic beverage product or
service;
5. That the state does not endorse or recommend the innovative
alcoholic beverage product or service ;
6. That the innovative alcoholic beverage product or service is
a temporary test that may be discontinued at the end of the testing
period;
7. The expected end da te of the testing period ; and
8. That a consumer may contact the Commission to file a
complaint regarding the innovative produ ct or service being tested
and provide the Commission’s telephone number and website address
where a complain may be filed.
B. The disclosures required in subsection A of this se ction
shall be provided to a consumer in a clear and conspicuous form and,
for an Internet or application based innovative alcoholic beverage
product or service, a consumer shall acknowledge receipt of the
disclosure before a transaction may be completed.
C. The Commission may require that a participant make
additional disclosures to a cons umer.
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SECTION 5. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Sectio n 8-105 of Title 37A, unless there
is created a duplication in numbering, reads as follows:
A. At least thirty (3 0) days before the end of the twelve -month
testing period, a participant shall:
1. Notify the Commission that the par ticipant will exit the
program, discontinue the participant’s test, and will stop offering
any innovative alcoholic beverage product or service in the program
within sixty (60) days after the day on which the twelve-month
testing period ends; or
2. Seek an extension in accordance with Section 6 of this act .
B. Subject to subsection C of this section, if the Commission
does not receive notification as required by subsection A of this
section, the testing period ends at the end of the twelve-month
testing period and the participant shall immediately stop offering
each innovative alcoholic beverage product or serv ice being tested.
C. If a test includes offering an innovative alcoholic beverage
product or service that require s ongoing duties, the participant
shall continued to fulfi ll those duties or arrange for another
person to fulfill those duties after the date on which the
participant exists the program.
SECTION 6. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Section 8-106 of Title 37A, unless there
is created a duplication in numbering, reads as follows:
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A. No later than thirty (30) days before the end of the twelve-
month testing period, a participant may request an extension of the
testing period for the purpose of obtaining a license or other
authorization.
B. The Commission shall grant or deny a request for an
extension in accordance with subsection A of this section by the end
of the twelve-month testing period.
C. The Commission may grant an ex tension in accordance with
this section for not more than twelve (12) months after the end of
the testing period.
D. A participant that obtains an extension in accord ance with
this section shall provide the Commis sion with a written report
every three (3) months that provides an upd ate on efforts to obtain
a license or other authorization required by law, including any
submitted for licensure or other authorization , rejected
application, or issued license, or other authorization .
SECTION 7. NEW LAW A new secti on of law to be codified
in the Oklahoma Statutes as Section 8-107 of Title 37A, unless there
is created a duplication in numbering, reads as f ollows:
A. A participant shall retain records, documents, and dat a
produced in the ordinary course of business regarding an innovative
alcoholic beverage product or service tested in the program.
B. If an innovative alcoholic beverage product or service fails
before the end of the testing period, the participant shall notify
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the Commission and report on actions taken by the participant to
ensure consumers have not been harmed as result of the failure.
C. The Commission shall establish quarterly reporting
requirements for a participant , including information about any
consumer complaints.
D. The Commission may request records, documents, and data from
a participant and, upon the Commission’s request, a participant
shall make sure records, docum ents, and data available for
inspection by the Commission.
E. If the Commission determine s that a participant has engaged
in, is engaging in, or is about to engage in any pr actice or
transaction that is in violation of this act or that constitute s a
violation of state or federal criminal law, the Commission shall
remove a participant from the program.
F. By October 1 of each year, the Commission shall provide an
annual report to the Legislature that provide information regarding
each participant and that provides recommendations regarding the
effectiveness of the program.
SECTION 8. NEW LAW A new sectio n of law to be codified
in the Oklahoma Statutes a s Section 8-108 of Title 37A, unless there
is created a duplication in numbering, reads as follows:
The Alcoholic Beverage Law Enforcement Commission s hall
promulgate the rules necessary to implement this a ct.
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SECTION 9. This act shall be come effective Novembe r 1, 2022.
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