DAR File No. 42290

Alcoholic Beverage Control, Administration

Section R81-1-11

Multiple-Licensed Facility Storage and Service

Notice of Proposed Rule

(Amendment)

DAR File No.: 42290
Filed: 11/01/2017 04:22:22 PM

RULE ANALYSIS

Purpose of the rule or reason for the change:

This rule amendment is necessary to implement H.B. 442 passed in the 2017 General Session. This proposed rule amendment establishes a procedure by which a licensee surrenders a retail license if there are two or more licensed premises in the same room as required by Subsection 32B-5-207(3)(d).

Summary of the rule or change:

Subsection 32B-5-207(3)(c) requires that the licensee provide notice to the Alcohol Beverage Control Commission (Commission) of each retail license the licensee will surrender effective 07/01/2018 if there are two or more licensed premises in the same room in violation of Subsection 32B-5-207(1). This proposed rule amendment creates a procedure in which a licensee may request a determination from the Department of Alcohol Beverage Control (Department) as to whether their licenses are in violation of Subsection 32B-5-207(1), establishes a deadline to notify the Department of which license(s) will be surrendered effective 07/01/2018, and creates an avenue for the Commission to take action in the event that a licensee fails to surrender a license that is in violation of Subsection 32B-5-2017(1).

Statutory or constitutional authorization for this rule:

• Section 32B-2-202
• Subsection 32B-5-207(3)(d)

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), which requires that a licensee hold only one license per room (with a small exception for banquet/reception and beer recreational licenses). Costs and savings for administering the change was calculated as part of the fiscal note. This rule change does not create any 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), which requires that a licensee hold only one license per room (with a small exception for banquet/reception and beer recreational licenses). Costs and savings to local governments was calculated as part of the fiscal note. This rule change does not create any 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), which requires that a licensee hold only one license per room (with a small exception for banquet/reception and beer recreational licenses). Costs and savings to small businesses was calculated as part of the fiscal note. This rule change does not create any 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 statutory requirements of H.B. 442 (2017), which requires that a licensee hold only one license per room (with a small exception for banquet/reception and beer recreational licenses). Costs and savings to persons other than small businesses, businesses, or local government entities was calculated as part of the fiscal note. This rule change does not create any additional cost or savings beyond what was anticipated during the legislative process.

Compliance costs for affected persons:

None--This rule does not create any compliance cost for licensees, it simply creates a procedure for compliance. There are no fees associated with this process and any costs for compliance are a result of statutory requirements of H.B. 442 (2017), which requires that a licensee hold only one license per room (with a small exception for banquet/reception and beer recreational licenses).

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), which requires that a licensee hold only one license per room (with a small exception for banquet/reception and beer recreational licenses). This rule amendment creates a procedure for surrendering license(s) that are not in compliance with the statutory change. The costs and savings to businesses was calculated as part of the fiscal note. There was no fee in statute and there is no fee in the proposed rule change. Savings to the businesses would result in reduced licensing fees as a result of surrendering one or more license(s) as required by statute. Therefore, this rule change does not create any additional cost or savings beyond what was anticipated during the legislative process.

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:

• Vickie Ashby at the above address, by phone at 801-977-6801, by FAX at 801-977-6889, or by Internet E-mail at vickieashby@utah.gov
• Nina McDermott at the above address, by phone at 801-977-6805, by FAX at 801-977-6888, or by Internet E-mail at nmcdermott@utah.gov

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:

12/15/2017

This rule may become effective on:

12/22/2017

Authorized by:

Sal Petilos, Executive Director

R81. Alcoholic Beverage Control, Administration.

R81-1. Scope, Definitions, and General Provisions.

R81-1-11. Multiple-Licensed Facility Storage and Service.

(1) For the purposes of this rule:

(a) "premises" as defined in Section 32B-1-102(75) shall include the location of any licensed restaurant, limited restaurant, beer-only restaurant, [club]bar establishment, or recreational amenity on-premise beer retailer facility or facilities operated or managed by the same person or entity that are located within the same building or complex, and any similar sublicense located within the same building of a resort license under 32B-8. Multiple licensed facilities shall be termed "qualified premises" as used in this rule. Two premises may not be located in the same room except as allowed by 32B-5-207(1)(b).

(b) the terms "sell", "sale", "to sell" as defined in Section 32B-1-102(92) shall not apply to a cost allocation of alcoholic beverages as used in this rule.

(c) "cost allocation" means an apportionment of the as purchased cost of the alcoholic beverage product based on the amount sold in each outlet.

(d) "remote storage alcoholic beverage dispensing system" means a dispensing system where the alcoholic product is stored in a single centralized location, and may have separate dispensing heads at different locations, and is capable of accounting for the amount of alcoholic product dispensed to each location.

(2) Where qualified premises have consumption areas in reasonable proximity to each other, the dispensing of alcoholic beverages may be made from the alcoholic beverage inventory of an outlet in one licensed location to patrons in either consumption area of the qualified premises subject to the following requirements:

(a) point of sale control systems must be implemented that will record the amounts of each alcoholic beverage product sold in each location;

(b) cost allocation of the alcoholic beverage product cost must be made for each location on at least a monthly or quarterly basis pursuant to the record keeping requirements of Section 32B-5-302;

(c) dispensing of alcoholic beverages to a licensed location may not be made on prohibited days or at prohibited hours pertinent to that license type;

(d) if separate inventories of liquor are maintained in one dispensing location, the storage area of each licensee's liquor must remain locked during the prohibited hours and days of sale for each license type;

(e) dispensing of alcoholic beverages to a licensed location may not be made in any manner prohibited by the statutory or regulatory operational restrictions of that license type;

(f) alcoholic beverages dispensed under this section may be delivered by servers from one outlet to the various approved consumption areas, or dispensed to each outlet through the use of a remote storage alcoholic beverage dispensing system.

(3) On qualified premises where each licensee maintains an inventory of alcoholic beverage products, the alcoholic beverages owned by each licensee may be stored in a common location in the building subject to the following guidelines:

(a) each licensee shall identify the common storage location when applying for or renewing their license, and shall receive department approval of the location;

(b) each licensee must be able to account for its ownership of the alcoholic beverages stored in the common storage location by keeping records, balanced monthly, of expenditures for alcoholic beverages supported by items such as delivery tickets, invoices, receipted bills, canceled checks, petty cash vouchers; and

(c) the common storage area may be located on the premises of one of the licensed liquor establishments.

(4) 32B-5-207(3)(d) requires that the commission establish by rule a procedure by which a licensee surrenders a retail license if there are two or more licensed premises in the same room in violation of 32B-5-207(1).

(a) If there are two or more premises located in the same room as of May 9, 2017 the licensee shall notify the commission of each retail license the licensee will surrender effective July 1, 2018.

(c) A Request for department decision regarding whether a premises is in violation of the same room requirement must be submitted to the department by March 12, 2018. Requests received by March 12, 2018 will receive a decision by May 1, 2018.

(d) Notification of surrender shall be made on a form provided by the department and submitted to the department by May 31, 2018.

(e) Failure to submit notification of surrender will result in non-renewal of retail licenses found to be in violation of the same room requirement.

 

KEY: alcoholic beverages

Date of Enactment or Last Substantive Amendment: [June 24, 2015]2017

Notice of Continuation: May 2, 2016

Authorizing, and Implemented or Interpreted Law: 32B-2-201(10); 32B-2-202; 32B-2-204; 32B-2-206; 32B-3-203(3)(c); 32B-3-205(2)(b); 32B-5-304; 32B-1-305; 32B-1-306; 32B-1-307; 32B-1-607; 32B-1-304(1)(a); 32B-6-702; 32B-6-805(3); 32B-9-204(4); 32B-4-414(1)(b) and (c)