No. 43336 (Amendment): Section R81-1-11. Multiple-Licensed Facility Storage and Service

(Amendment)

DAR File No.: 43336
Filed: 10/31/2018 02:47:18 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 clarify the definition of multiple licensed facilities for purposes of allowing shared dispensing and shared storage areas so that the provisions are consistent with provisions that were either codified or clarified by H.B. 442 (2017) and H.B. 456 (2018).

Statutory or constitutional authorization for this rule:

Subsection 32B-5-207(3)(d)
Subsection 32B-1-102(82)
Section 32B-2-202
Subsection 32B-1-102(101)

Anticipated cost or savings to:

the state budget:

None, any anticipated costs or savings to the state budget are a result of the statutory requirements of H.B. 442 (2017) and H.B. 456 (2018), which codified provisions for multiple licensed facilities. Costs and savings for administering these changes 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.

local governments:

None, any anticipated costs or savings to local governments are a result of the statutory requirements of H.B. 442 (2017) and H.B. 456 (2018), which codified provisions for multiple licensed facilities. Costs and savings to local governments 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.

small businesses:

None, any anticipated costs or savings to small businesses are a result of the statutory requirements of H.B. 442 (2017) and H.B. 456 (2018), which codified provisions for multiple licensed facilities. These rule changes do not create additional costs or savings beyond what was anticipated during the legislative process.

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

None, any anticipated costs or savings to persons other than small business, businesses, or local government entities are a result of the statutory requirements of H.B. 442 (2017) and H.B. 456 (2018), which codified provisions for multiple licensed facilities. These rule changes do not create additional costs or savings beyond what was anticipated during the legislative process.

Compliance costs for affected persons:

None, any costs to comply with these changes are a result of the statutory requirements of H.B. 442 (2017) and H.B. 456 (2018), which codified provisions for multiple licensed facilities. 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.

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

None, any anticipated costs or savings to businesses are a result of the statutory requirements of H.B. 442 (2017) and H.B. 456 (2018), which codified provisions for multiple licensed facilities. These rule changes do not create additional costs 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 vickieashby@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:

12/17/2018

This rule may become effective on:

12/24/2018

Authorized by:

Sal Petilos, Executive Director

RULE TEXT

Appendix 1: Regulatory Impact Summary Table*

Fiscal Costs

FY 2019

FY 2020

FY 2021

State Government

Local Government

Small Businesses

Non-Small Businesses

Other Person

Total Fiscal Costs:

Fiscal Benefits

State Government

Local Government

Small Businesses

Non-Small Businesses

Other Persons

Total Fiscal Benefits:

Net Fiscal Benefits:

*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.

R81-1. 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, 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.]A "multiple-licensed facility" includes any retail license that shares a licensed premises as allowed by 32B-5-207(2), retail licensed premises that are located in the same room as allowed by 32B-5-207(6), and retail licensees that are authorized for dispensing from an adjacent retail licensed premises as allowed by 32B-6-205.2(11)(a)(iii), 305.2(11)(a)(iii) and 905.1(12)(a)(iii) and any sublicense located within the boundary of a resort building of a resort license under 32B-8 or the boundary of a hotel of a hotel license under 32B-8b.

(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~~]connection with each retail license.

([d]c) "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, t~~]The dispensing of alcoholic beverages may be made from the alcoholic beverage inventory of [~~an outlet in one licensed location~~]one retail license to patrons in [~~either consumption area of the qualified~~] premises of another retail license in a multiple-licensed facility 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 connection with each [~~location~~]retail license;

(b) cost allocation of the alcoholic beverage product cost must be made for each [~~location~~]retail license 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~~]in connection with a retail license 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 retail 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 retail 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~~]retail licensed premises to the various approved [~~consumption areas~~]retail licenses, or dispensed to each [~~outlet~~]retail license through the use of a remote storage alcoholic beverage dispensing system.

(3) [~~On qualified premises~~]At a multiple-licensed facility where each licensee maintains an inventory of alcoholic beverage products, the alcoholic beverages owned by each retail license[e] 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 retail license[e] 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~~]retail licensee premises within the facility.

(4) In accordance with 32B-5-207(5)(d) which requires that the commission establish by rule a procedure by which a licensee surrenders a retail license if they have a bar or tavern in the same room as a restaurant in violation of 32B-5-207.

(a) On May 1 2018 a notice will be sent to all bar establishment licensees informing them that renewal of the bar license will be considered notice of intent to surrender any restaurant license in violation of 32B-5-207 unless they apply for a change in floor plan with the department.

(b) On May 1, 2018 a notice will be sent to any tavern that has both a restaurant and a tavern asking them to return a form electing whether to surrender the tavern or restaurant if they are in violation of 32B-5-207 or to apply for a change in floor plan. Failure to respond will result in surrender of restaurant license as of July 1, 2018.

(c) Those that are seeking to keep both licenses shall apply for a change in floor plan with the department outlying what will be done to comply with the requirements of 32B-5-207. If modifications are not completed by July 1, 2018 one or more of the licenses will need to cease operations in accordance with 32B-5-309 until modifications have been completed and staff has inspected the multiple premises to verify compliance with 32B-5-207.

KEY: alcoholic beverages

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

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)