DAR File No. 40922

Alcoholic Beverage Control, Administration

Section R81-3-14

Type 5 Package Agencies

Notice of Proposed Rule

(Amendment)

DAR File No.: 40922
Filed: 10/31/2016 09:14:04 AM

RULE ANALYSIS

Purpose of the rule or reason for the change:

This rule amendment is necessary to streamline provisions for type 5 package agencies.

Summary of the rule or change:

This rule amendment clarifies what products may be sold by the agency, and changes language related to who may pick up a licensee order to match statutory language.

Statutory or constitutional authorization for this rule:

• Section 32B-2-202
• Subsection 32B-2-605(13)(b)
• Subsection 32B-2-601(4)

Anticipated cost or savings to:

the state budget:

None--This rule streamlines provisions for type 5 package agencies; there are no anticipated cost or savings as the department's responsibilities remain the same.

local governments:

None--This rule streamlines provisions for type 5 package agencies. This rule change affects the department and the licensee. There are no anticipated cost or savings to local government.

small businesses:

This rule streamlines provisions for type 5 package agencies. Any additional cost or savings to small businesses would result from a business' decision related to how and where it manufactures product for sale at its agency, or for coming into compliance with statutory requirements related to licensee sales and pickup.

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

None--This rule streamlines provisions for type 5 package agencies. There are no anticipated costs or savings to persons other than small businesses, businesses or local government entities.

Compliance costs for affected persons:

None--This rule streamlines provisions for type 5 package agencies. Any compliance costs would result from a business's decision related to how and where it manufactures product for sale at its agency, or for coming into compliance with statutory requirements related to licensee sales and pickup.

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

None--This rule streamlines provisions for type 5 package agencies. Any additional cost or savings to businesses would result from a business's decision related to how and where it manufactures product for sale at its agency, or for coming into compliance with statutory requirements related to licensee sales and pickup.

Salvador D. Petilos, Executive 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:

• Nina McDermott at the above address, by phone at 801-977-6805, by FAX at 801-977-6888, 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:

12/15/2016

This rule may become effective on:

12/22/2016

Authorized by:

Sal Petilos, Executive Director

R81. Alcoholic Beverage Control, Administration.

R81-3. Package Agencies.

R81-3-14. Type 5 Package Agencies.

(1) Purpose. A type 5 package agency is for the limited purpose of allowing a winery, distillery, or brewery to sell at its manufacturing location the packaged liquor product it actually produces to the general public for off-premise consumption. This rule establishes guidelines and procedures for type 5 package agencies.

(2) Authority. 32B-2-504, 605; 32B-5-303.

(3) Definitions. Reserved.

(4) Application of Rule.

(a) The package agency must be located at a manufacturing facility that has been granted a manufacturing license by the commission. For purpose of this rule, a manufacturing facility includes the parcel of land and/or building(s) leased or owned by the manufacturing licensee immediately surrounding the manufacturing premise.

(b) The package agency may only sell products produced by the manufacturing licensee[at the winery, distillery, or brewery,] and may not carry the products of other alcoholic beverage manufacturers. For the purpose of this rule, products produced by the manufacturing licensee include products that would be assessed tax for sale as determined by 27 CFR Parts 19, 24 and 25.

(c) The product produced by the manufacturing licensee[winery, distillery, or brewery] and sold in the type 5 package agency need not be shipped from the winery, distillery, or brewery to the department[warehouse] and then back to the package agency. The bottles for sale may be moved directly from the manufacturer's storage area to the package agency provided that proper record-keeping is maintained [on forms provided]in a form and manner as required by the department.

(d) Records required by the department shall be kept current and available to the department for auditing purposes[. Records must be maintained] for at least three years.

(e) The package agency shall submit to the department a completed monthly sales report [form ]which specifies the variety and number of bottles sold from the package agency in a form and manner as required in the package agency contract.[This report must be submitted to the department within the first five working days of the month. A club or restaurant purchases form must be filled out for every licensee purchase.]

(d) Direct deliveries to licensees are prohibited. Products must be purchased and picked up by the licensees or their staff[designated agents] at the Type 5 package agency. Sales to the manufacturer's retail licenses may be transported from the manufacturer's storage area directly to the retail licensed premise provided that a record is maintained showing a sale from the type 5 package agency to the retail licensee at the retail price.

(e) The type 5 package agency shall sell products at a price fixed by the commission and follow the same laws, rules, policies, and procedures applicable to other package agencies as to the retail price of products.

(f) The days and hours of sale of the type 5 package agency shall be in accordance with 32B-2-605(13) and R81-3-13.

 

KEY: alcoholic beverages

Date of Enactment or Last Substantive Amendment: [July 28, 2015]2016

Notice of Continuation: May 2, 2016

Authorizing, and Implemented or Interpreted Law: 32B-2-202; 32B-2-601(4); 32B-2-605(13)(b)