DAR File No. 43940

Alcoholic Beverage Control, Administration

Section R81-1-34

Transfer Agreements

Notice of Proposed Rule

(Amendment)

DAR File No.: 43940
Filed: 07/31/2019 03:37:43 PM

RULE ANALYSIS

Purpose of the rule or reason for the change:

This new section is necessary to implement provisions of H.B. 453 passed in the 2019 General Session. This proposed rule section explains how an "interim alcoholic beverage management agreement" may be approved by the Department of Alcoholic Beverage Control (Department) during a license transfer.

Summary of the rule or change:

This section is necessary to implement provisions of H.B. 453 (2019). Section 32B-5-310 authorizes the Department to make rules governing requirements for interim alcoholic beverage management agreements. The proposed rule section explains how an "interim alcoholic beverage management agreement" may be approved by the Department during a license transfer.

Statutory or constitutional authorization for this rule:

• Section 32B-5-310
• Section 32B-1-607

Anticipated cost or savings to:

the state budget:

None--Any anticipated cost or savings to the state budget are a result of statutory requirements of H.B. 453 (2019). Costs and savings for administering this change were calculated as part of the fiscal note. This amendment does 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 statutory requirements of H.B. 453 (2019). Costs and savings for administering this change were calculated as part of the fiscal note. This amendment does 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 statutory requirements of H.B. 453 (2019). Costs and savings for administering this change were calculated as part of the fiscal note. This amendment does 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 are a result of statutory requirements of H.B. 453 (2019). Costs and savings for administering this change were calculated as part of the fiscal note. This amendment does not create additional cost or savings beyond what was anticipated during the legislative process.

Compliance costs for affected persons:

There are no fees associated with this process. Any anticipated cost or savings are a result of statutory requirements of H.B. 453 (2019). Costs and savings for administering this change were calculated as part of the fiscal note. This amendment does 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:

This proposed section is necessary to implement provisions of H.B. 453 (2019). Section 32B-5-310 authorizes the Department to make rules governing requirements for interim alcoholic beverage management agreements. This proposed amendment explains how an "interim alcoholic beverage management agreement" may be approved by the Department during a license transfer.

Salvador 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 [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:

09/16/2019

This rule may become effective on:

09/23/2019

Authorized by:

Sal Petilos, Executive Director

Appendix 1: Regulatory Impact Summary Table*

Fiscal Costs	FY 2020	FY 2021	FY 2022
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 cost or savings to persons other than small business, businesses or local government entities are a result of statutory requirements of H.B. 453 (2019). Any anticipated cost or savings were calculated as part of the fiscal note. This new section does not create additional cost 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.

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

R81-1-34. Transfer Agreements.

(1) This rule is pursuant to Section 32B-5-310, which authorizes the Department to make rules governing requirements for interim alcoholic beverage management agreements.

(2) An interim alcoholic beverage management agreement is required if a buyer will be performing the day-to-day operations of the business before the Commission approves the transfer of the license from seller to buyer.

(3)(a) Before a retail licensee enters into an interim alcoholic beverage management agreement, it shall provide the proposed interim alcoholic beverage management agreement to the Department for its approval.

(b) The Department shall create a checklist of information that an interim alcoholic beverage management agreement must contain and may create an optional form to assist licensees in providing necessary information.

(c) The Department shall review a proposed interim alcoholic beverage management agreement and, no later than 15 business days after the day on which the agreement is received by the Department:

(i) approve the interim alcoholic beverage management agreement if it contains all the necessary information; or

(ii) return the proposed interim alcoholic beverage management agreement to the licensee, if the agreement is lacking in information or specificity, with guidance on how to remedy any errors or omissions.

(4) Once an interim alcoholic beverage management agreement has been approved by the Department, the seller may allow the buyer to use their license to purchase alcoholic product from the Department, but all revenue from the sale of alcohol during the transition period must be retained by the buyer, less the cost of reimbursing the seller for the cost of the alcoholic product paid to the Department.

(5) The seller must maintain the required bond, insurance, and business license during the transition period, as these are statutory requirements to hold a license, but the buyer may agree to reimburse the seller for any necessary costs incurred to maintain the bond, insurance, and business license.

(6) Nothing in this rule authorizes a licensee to close business without approval from the Department or Commission, as required by statute.

 

KEY: alcoholic beverages

Date of Enactment or Last Substantive Amendment: [December 24, 2018]2019

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)