DAR File No. 43343

Alcoholic Beverage Control, Administration

Rule R81-10C

Beer-Only Restaurant Licenses

Notice of Proposed Rule

(Amendment)

DAR File No.: 43343
Filed: 10/31/2018 03:03:19 PM

RULE ANALYSIS

Purpose of the rule or reason for the change:

These rule changes are necessary due to H.B. 442 passed in the 2017 General Session and H.B. 456 passed in the 2018 General Session.

Summary of the rule or change:

These rule changes remove clarification of intent to dine provision, and allowance to consume a product at or in close proximity to a table as the provisions were either codified or clarified by H.B. 442 (2017) and H.B. 456 (2018).

Statutory or constitutional authorization for this rule:

• Title 32B, Chapter 5
• Section 32B-2-202

Anticipated cost or savings to:

the state budget:

None. Any anticipated cost or savings to the state budget are a result of the statutory requirements of H.B. 442 (2017) and H.B. 456 (2018), which streamlined provisions for restaurant licenses. Costs and savings for administering these change were calculated as part of the fiscal notes. These changes do not create additional cost or savings beyond what was anticipated during the legislative process.

local governments:

None. Any anticipated cost or savings to local governments are a result of the statutory requirements of H.B. 442 (2017) and H.B. 456 (2018), which streamlined provisions for restaurant licenses. Costs and savings to local governments for administering these change were calculated as part of the fiscal notes. These changes do not create additional cost or savings beyond what was anticipated during the legislative process.

small businesses:

None. Any anticipated cost or savings to small businesses are a result of the statutory requirements of H.B. 442 (2017) and H.B. 456 (2018), which streamlined provisions for restaurant licenses. These changes do not create additional cost or savings beyond what was anticipated during the legislative process.

persons other than small businesses, businesses, or local governmental entities:

None. Any anticipated cost or savings to persons other than small businesses, businesses, or local government entities are a result of the statutory requirements of H.B. 442 (2017) and H.B. 456 (2018), which streamlined provisions for restaurant licenses. Costs and savings for administering these change were calculated as part of the fiscal notes. These changes do not create additional cost or savings beyond what was anticipated during the legislative process.

Compliance costs for affected persons:

None. Any anticipated costs to comply with these changes are a result of the statutory requirements of H.B. 442 (2017) and H.B. 456 (2018), which streamlined provisions for restaurant licenses. Costs and savings were calculated as part of the fiscal notes. These changes do not create additional cost or savings beyond what was anticipated during the legislative process.

Comments by the department head on the fiscal impact the rule may have on businesses:

None. Any anticipated cost or savings to businesses are a result of the statutory requirements of H.B. 442 (2017) and H.B. 456 (2018), which streamlined provisions for restaurant licenses. Costs and savings were calculated as part of the fiscal notes. These changes do not create additional cost or savings beyond what was anticipated during the legislative process.

Salvador Petilos, Director

The full text of this rule may be inspected, during regular business hours, at the Office of Administrative Rules, or at:

Alcoholic Beverage Control
Administration
1625 S 900 W
SALT LAKE CITY, UT 84104-1630

Direct questions regarding this rule to:

• Vickie Ashby at the above address, by phone at 801-977-6801, by FAX at 801-977-6889, or by Internet E-mail at [email protected]

Interested persons may present their views on this rule by submitting written comments to the address above no later than 5:00 p.m. on:

12/17/2018

This rule may become effective on:

12/24/2018

Authorized by:

Sal Petilos, Executive Director

Appendix 1: Regulatory Impact Summary Table*

Fiscal Costs	FY 2019	FY 2020	FY 2021
State Government	$0	$0	$0
Local Government	$0	$0	$0
Small Businesses	$0	$0	$0
Non-Small Businesses	$0	$0	$0
Other Person	$0	$0	$0
Total Fiscal Costs:	$0	$0	$0
Fiscal Benefits
State Government	$0	$0	$0
Local Government	$0	$0	$0
Small Businesses	$0	$0	$0
Non-Small Businesses	$0	$0	$0
Other Persons	$0	$0	$0
Total Fiscal Benefits:	$0	$0	$0
Net Fiscal Benefits:	$0	$0	$0

 

*This table only includes fiscal impacts that could be measured. If there are inestimable fiscal impacts, they will not be included in this table. Inestimable impacts for State Government, Local Government, Small Businesses and Other Persons are described in the narrative. Inestimable impacts for Non - Small Businesses are described in Appendix 2.

 

Appendix 2: Regulatory Impact to Non - Small Businesses

None, any anticipated costs or savings to non-small businesses are a result of the statutory requirements of H.B. 442 (2017) and H.B. 456 (2018). Costs and savings were calculated as part of the fiscal notes. These rule changes do not create additional costs or savings beyond what was anticipated during the legislative process.

 

The head of the department of Alcoholic Beverage Control, Salvador Petilos, has reviewed and approved this fiscal analysis.

 

 

R81. Alcoholic Beverage Control, Administration.

R81-10C. Beer-Only Restaurant Licenses.

R81-10C-1. Licensing.

(1) Beer-only restaurant licenses are issued to persons as defined in Section 32B-1-102(74). The department must be immediately notified of any action or transaction that may alter the organizational structure or ownership interest of the person to whom the license is issued to ensure there is no violation of Sections 32B-5-310.

 

R81-10C-2. Application.

(1) No license application will be included on the agenda of a monthly commission meeting for consideration for issuance of a beer only restaurant license until:

(a) The applicant has first met all requirements of Sections 32B-1-304 (qualifications to hold the license), and 32B-5-201, -204, and 32B-6-904 (submission of a completed application, payment of application and licensing fees, written consent of local authority, copy of current local business license(s) necessary for operation of a beer-only restaurant license, evidence of proximity to certain community locations, a bond, a floor plan, and public liability and liquor liability insurance); and

(b) the department has inspected the beer-only restaurant premise.

(2)(a) All application requirements of Subsection (1)(a) must be filed with the department no later than the 10th day of the month in order for the application to be included on that month's commission meeting agenda unless the 10th day of the month is a Saturday, Sunday, or state or federal holiday, in which case all application requirements of Subsection (1)(a) must be filed on the next business day after the 10th day of the month.

(b) An incomplete application will be returned to the applicant.

(c) A completed application filed after the deadline in Subsection (2)(a) will not be considered by the commission that month, but will be included on the agenda of the commission meeting the following month.

 

R81-10C-3. Bonds.

No part of any corporate or cash bond required by Section 32B-5-204 and 32B-6-904(4) may be withdrawn during the time the license is in effect. If the beer-only restaurant licensee fails to maintain a valid corporate or cash bond, the license shall be immediately suspended until a valid bond is obtained. Failure to obtain a bond within 30 days of notification by the department of the delinquency shall result in the automatic revocation of the license.

 

R81-10C-4. Insurance.

Public liability and dram shop insurance coverage required in Section 32B-5-201(2)(j)must remain in force during the time the license is in effect. Failure of the licensee to maintain the required insurance coverage may result in a suspension or revocation of the license by the commission.

 

R81-10C-5. Identification Badge.

Each employee of the licensee who sells, dispenses or provides alcoholic beverages shall wear a unique identification badge visible above the waist, bearing the employee's first name, initials, or a unique number in letters or numbers not less than 3/8 inch high. The identification badge must be worn on the front portion of the employee's body. The licensee shall maintain a record of all employee badges assigned, which shall be available for inspection by any peace officer, or representative of the department. The record shall include the employee's full name and address and a driver's license or similar identification number.

 

R81-10C-6. Sale and Purchase of Beer.

(1) [Beer may be furnished after the licensee or their employee confirms that the patron has the intent to order food that is prepared and sold for consumption on site. An order for food may not include food items normally provided to patrons without charge. A patron may pay for an alcoholic beverage at the time of purchase, or, at the discretion of both the licensee and the patron, the price charged may be added to the patron's tab, provided that a written beverage tab, as provided in Section 32B-6-905(4), shall be commenced upon the patron's first purchase and shall be maintained by the restaurant during the course of the patron's stay at the restaurant regardless of where the patron orders and consumes an alcoholic beverage.

(2) ]The restaurant shall maintain at least 70% of its total business from the sale of food pursuant to Section 32B-6-905(7).

(a) The restaurant shall maintain records separately showing quarterly expenditures and sales for beer and food. These shall be available for inspection and audit by representatives of the department, and maintained for a period of three years.

(b) If any inspection or audit discloses that the sales of food are less than 70% for any quarterly period, the department shall immediately put the licensee on a probationary status and closely monitor the licensee's food sales during the next quarterly period to determine that the licensee is able to prove to the satisfaction of the department that the sales of food meet or exceed 70%. Failure of the licensee to provide satisfactory proof of the required food percentage within the probationary period shall result in issuance of an order to show cause by the department to determine why the license should not be revoked by the commission.

(3) Beer dispensing shall be in accordance with Section 32B-5-304(5) and Section R81-1-11 (Multiple Licensed Facility Storage and Service) of these rules.

 

R81-10C-7. Alcoholic Product Flavoring.

Beer Only Restaurant licensees may use alcoholic products as flavoring subject to the following guidelines:

(1) Alcoholic product flavoring may be used in the preparation of food items and desserts at any time if plainly and conspicuously labeled "cooking flavoring".

(2) No restaurant employee under the age of 21 years may handle alcoholic product flavorings.

 

R81-10C-8. Table, Counter, and "Grandfathered Bar Structure" Service.

(1) Beer, if in sealed containers, may be opened and poured by the server at the patron's table, counter, or "grandfathered bar structure".

 

[R81-10C-9. Consumption at Patron's Table, Counter, and "Grandfathered Bar Structure".

(1) A patron's table, counter, or "grandfathered bar structure" may be located in waiting, patio, garden and dining areas previously approved by the department.

(2) Consumption of any alcoholic beverage must be within a reasonable proximity of a patron's table, counter, or "grandfathered bar structure so as to ensure that the server can maintain a written beverage tab on the amount of alcoholic beverages consumed.]

 

R81-10C-10. Grandfathered Bar Structures.

(1) Authority 32B-1-102; 32B-6-902; and 32B-6-905.2.

(2) The purpose of this rule is to define terms for full service restaurant licenses as required by 32B-6 Part 9.

(3) Definitions.

(a) "remodels the grandfathered bar structure" for purposes of 32B-6-902(1)(b) means that:

(i) the grandfathered bar structure has been altered or reconfigured to:

(A) extend the length of the existing structure to increase its seating capacity; or

(B) increase the visibility of the storage or dispensing area to restaurant patrons.

(b) "remodels the grandfathered bar structure" does not:

(i) preclude making cosmetic changes or enhancements to the existing structure such as painting, staining, tiling, or otherwise refinishing the bar structure;

(ii) preclude locating coolers, sinks, plumbing, cooling or electrical equipment to an existing structure; or

(iii) preclude utilizing existing space at the existing bar structure to add additional seating.

(c) Pursuant to 32B-5-303(3), the licensee must first apply for and receive approval from the department for a change of location where alcohol is stored, served, and sold other than what was originally designated in the licensee's application for the license. Thus, any modification of the alcoholic beverage storage and dispensing area at a "grandfathered bar structure" must first be reviewed and approved by the department to determine whether it is:

(i) an acceptable use of an existing bar structure; or

(ii) a remodel of a "grandfathered bar structure".

(d) "remodels the grandfathered bar structure or dining area" for purposes of 32B-6-905.2 means that:

(i) the grandfathered bar structure or dining area has been altered or reconfigured to:

(A) extend the length of the existing bar structure to increase its seating capacity; or

(B) increase the visibility of the storage or dispensing area to restaurant patrons from the dining area.

(e) "remodels the grandfathered bar structure or dining area " does not:

(i) preclude making cosmetic changes or enhancements to the existing bar structure such as painting, staining, tiling, or otherwise refinishing the bar structure;

(ii) preclude locating coolers, sinks, plumbing, cooling or electrical equipment to an existing structure; or

(iii) preclude utilizing existing space at the existing bar structure to add additional seating.

(f) Pursuant to 32B-5-303(3), the licensee must first apply for and receive approval from the department for a change of location where alcohol is stored, served, and sold other than what was originally designated in the licensee's application for the license. Thus, any modification of the alcoholic beverage storage, dispensing, or consumption area must first be reviewed and approved by the department to determine whether it is:

(i) an acceptable use of an existing bar structure or dining area; or

(ii) a remodel of a "grandfathered bar structure or dining area".

 

KEY: alcoholic beverages

Date of Enactment or Last Substantive Amendment: [December 28, 2017]2018

Notice of Continuation: September 28, 2016

Authorizing, and Implemented or Interpreted Law: 32B-2-202; 32B-5; 32B-6-901 through 905