DAR File No. 32589

Alcoholic Beverage Control, Administration

R81-5-14

Membership Fees and Monthly Dues

NOTICE OF PROPOSED RULE

DAR File No.: 32589
Filed: 04/30/2009, 11:08
Received by: NL

RULE ANALYSIS

Purpose of the rule or reason for the change:

This rule amendment is being proposed to implement the provisions of S.B. 187 passed by the 2009 State Legislature. (DAR NOTE: S.B. 187 (2009) is found at Chapter 383, Laws of Utah 2009, and was effective 05/12/2009.)

Summary of the rule or change:

S.B. 187 creates four classes of clubs in Utah: Equity, Fraternal, Dining, and Social. Equity and fraternal clubs will remain private and will continue to sell memberships according to their bylaws. Dining and social clubs will be open to the public. This rule amendment exchanges the word "private" for the words "equity and fraternal" where the word private appears. It also deletes provisions that mandate the amount of membership fees and that deal with memberships for clubs in hotels since these provisions are no longer requisite.

State statutory or constitutional authorization for this rule:

Section 32A-1-107

Anticipated cost or savings to:

the state budget:

None--This amendment does no more than make changes to comply with S.B. 187 in terminology and deletion of unnecessary provisions. The state did not collect any money on the sale of private club memberships, so there will be no cost or savings by eliminating the membership requirement.

local governments:

None--The private club membership requirement is a provision of state law. The changes made in this amendment will not affect local governments.

small businesses and persons other than businesses:

This amendment is being proposed to bring the rule in line with state law and, in itself, will have no effect of small businesses. However, most private clubs have fewer than fifty employees. The decision to be open to the public is a business decision. It is anticipated that any revenues lost from the sale of club memberships will likely be made up by added business resulting from being open and available to the population at large.

Compliance costs for affected persons:

Most clubs will experience savings rather than costs from compliance with this law and rule change. Clubs will no longer be required to print membership applications and cards and will no longer need to account for membership records. This will be a savings of both money and time.

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

The Department of Alcoholic Beverage Control (DABC) staff is pleased with the legislature's decision to eliminate private club memberships in most of Utah's clubs. Private club owners will not only save on money and time spent to manage membership sales and records, but their clubs should experience additional revenues from a larger clientele. DABC feels the savings and added revenues will outweigh the cost of making the change. Dennis R. Kellen, Director

The full text of this rule may be inspected, during regular business hours, at the Division 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:

Sharon Mackay at the above address, by phone at 801-977-6800, 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:

06/15/2009

This rule may become effective on:

06/22/2009

Authorized by:

Dennis R. Kellen, Director

R81. Alcoholic Beverage Control, Administration.

R81-5. [Private ]Clubs.

R81-5-14. Membership Fees and Monthly Dues.

(1) Authority. This rule is pursuant to the commission's powers and duties under 32A-1-107 to act as a general policymaking body on the subject of alcoholic beverage control and to set policy by written rules that prescribe the conduct and management of any premises upon which alcoholic beverages may be sold, consumed, served, or stored.

(2) Purpose. This rule furthers the intent of 32A-5-107(1) [through (7) that private]that equity and fraternal clubs operate in a manner that preserves the concept that [private clubs]they are private and not open to the general public.

(3) Application of Rule.

(a) Each [private]equity and fraternal club shall establish in its by-laws membership application fees and monthly membership dues in amounts determined by the club.[ However, the application fees shall not be less than $4, and the monthly dues may not be less than one dollar per month.]

(b) [A private]An equity or fraternal club, its employees, agents, or members, or any person under a contract or agreement with the club, may not, as part of an advertising or promotional scheme, offer to pay or pay for membership application fees or membership dues in full or in part for a member of the general public.[

(c) Notwithstanding section (3)(b), if a private club is located within a hotel, the hotel may assist the club in the issuance of a club membership to a guest of the hotel under the following conditions:

(i) the guest has booked a room and is staying at the hotel;

(ii) the costs of the membership application fee and membership dues are paid for by the guest either as a separate charge, or as part of the hotel room rate;

(iii) the private club receives payment of the fees and dues for all memberships issued to guests of the hotel;

(iv) the hotel and the club shall maintain a current record of each membership issued to a guest of the hotel as required by the commission;

(v) the records required by subsection (iv) shall be available for inspection by the department; and

(vi) the issuance of the membership is done in accordance with the procedures outlined in 32A-5-107(1) through (4).]

 

KEY: alcoholic beverages

Date of Enactment or Last Substantive Amendment: [June 27, 2008]2009

Notice of Continuation: September 7, 2006

Authorizing, and Implemented or Interpreted Law: 32A-1-107; 32A-5-107(18); 32A-5-107(23)