No. 43339 (Amendment): Section R81-1-27. Label Approvals

(Amendment)

DAR File No.: 43339
Filed: 10/31/2018 02:55:19 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 provide the correct citation for rule making authority, apply provisions to certain malted beverages as required by statutory changes in H.B. 442 (2017) and H.B. 456 (2018), remove provisions that restate state statute, clarify the definition of revision, remove provisions that are outdated, and modify format requirements for labeling of certain malted beverages to conform with changes in H.B. 442 (2017) and H.B. 456 (2018).

Statutory or constitutional authorization for this rule:

Section 32B-2-202
Section 32B-1-606

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) and H.B. 456 (2018), which expanded the label requirements beyond flavored malt beverages and clarified label requirements for these certain malt beverages. Costs and savings for administering these change were calculated as part of the fiscal notes. These rule changes do 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 the statutory requirements of H.B. 442 (2017) and H.B. 456 (2018), which expanded the label requirements beyond flavored malt beverages and clarified label requirements for these certain malt beverages. Costs and savings for administering these change were calculated as part of the fiscal notes. These rule changes do 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 the statutory requirements of H.B. 442 (2017) and H.B. 456 (2018), which expanded the label requirements beyond flavored malt beverages and clarified label requirements for these certain malt beverages. Costs and savings for administering these change were calculated as part of the fiscal notes. These rule changes do 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 to persons other than small businesses, businesses or local government entities are a result of the statutory requirements of H.B. 442 (2017) and H.B. 456 (2018), which expanded the label requirements beyond flavored malt beverages and clarified label requirements for these certain malt beverages. Costs and savings for administering these change were calculated as part of the fiscal notes. These rule changes do not create additional cost 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 statutory requirements of H.B. 442 (2017) and H.B. 456 (2018), which expanded the label requirements beyond flavored malt beverages and clarified label requirements for these certain malt beverages. Costs and savings were calculated as part of the fiscal note. These rule changes do 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:

None. Any anticipated cost or savings to businesses are a result of the statutory requirements of H.B. 442 (2017) and H.B. 456 (2018), which expanded the label requirements beyond flavored malt beverages and clarified label requirements for these certain malt beverages. Costs and savings were calculated as part of the fiscal notes. These rule changes do not create additional cost 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.

R81-1-27. Label Approvals.

(1) Authority. This rule is pursuant to 32B-1-606(2)(c) and (d) and 32B-1-607 which give the commission the authority to adopt rules necessary to fully implement certain aspects of the Malted Beverages Act, [~~32A-1-801 to -809~~]32B-1-601-608.

(2) Purpose.

(a) Pursuant to 32B-1-604, a manufacturer may not distribute or sell in this state any malted beverage including beer, heavy beer, and flavored malt beverage unless the label and packaging of the beverage has been first approved by the department.

(b) The requirements and procedures for applying for label and packaging approval are set forth in 32B-1-604 to -606.

(i) establishes administrative fees that may be assessed by the department to process applications for the approval of malt beverage labels and packaging;

(ii) provides supplemental procedures for applying for and processing label and package approvals;

(iii) defines the meaning of certain terms in the Malted Beverages Act; and

(iv) establishes the format of certain words and phrases required on the containers and packaging of certain [~~flavored~~ ]malt beverages as required by 32B-1-606(2)(c) and (d).

(3) Application of Rule.

(a) The department shall assess a fee of $30.00 made payable to the "Department of Alcoholic Beverage Control" for each application submitted for label and packaging approval.

(b) A complete set of original labels for each size of container must accompany each application for label and packaging approval.

(i) This includes all band, strip, front and back labels appearing on any individual container.

(ii) Original containers will not be accepted.

(iii) If original labels cannot be obtained, the following will be accepted:

(A) color reproductions that are exact size; or

(B) a copy of the federal certificate of label approval (COLA) from the Department of Treasury, Tax and Trade Bureau (Form TTB F5100.31) with the exact size label if printed in color.

[(c) Because a heavy beer and flavored malt beverage product may be sold only by the department to consumers and on-premise retailers in this state, label approval for a heavy beer or flavored malt beverage need not be applied for until the department has decided to list the product for sale in this state. Any listing will be contingent on label and packaging approval.

] ([d]c) An application for approval is required for any revision of a previously approved label.

([e]d) A "revision" includes any [~~An application for approval is required for any revision~~]changes to packaging that significantly modifies the notice that the product is an alcoholic beverage.

([f]e) An application for approval is not required for any [~~revision~~]changes to packaging that relates to subject matter other than the required notice that the product is an alcoholic beverage such as temporary seasonal or promotional themes.

[~~(g) Pursuant to 32B-1-605(6):~~

~~(i) the department may revoke any label and packaging that does not comply with the label and packaging requirements of the Malted Beverage Act;~~

(ii) the department may delist any heavy beer or flavored malt beverage product listed by the department prior to October 1, 2008, that does not meet the label and packaging requirements of the Malted Beverage Act;

(iii) any heavy beer or flavored malt beverage product listed by the department prior to October 1, 2008, that did not receive prior label and packaging approval need not submit an application for label and packaging approval if the label and packaging meet the requirements of the Malted Beverage Act.

] ([h]f) Pursuant to 32B-1-606, a [~~flavored~~ ]malt beverage that is packaged in a manner that is similar to a label or package used for a nonalcoholic beverage must bear a prominently displayed label or a firmly affixed sticker on the container that includes the statement "alcoholic beverage" or "contains alcohol". Any packaging of a flavored malt beverage must also prominently include, either imprinted on the packaging or imprinted on a sticker firmly affixed to the packaging the statement "alcoholic beverage" or "contains alcohol". The words in the statement must appear:

(i) in capital letters and bold type;

(ii) in a solid contrasting background;

(iii) on the front of the container and packaging;

(iv) in a format that is readily legible; and

(v) separate and apart from any descriptive or explanatory information.[~~; and~~]

[~~(vi) in a type size no smaller than 3 millimeters wide and 3 millimeters high.~~

] ([i]g) Pursuant to 32B-1-606, the label on a flavored malt beverage container shall state the alcohol content as a percentage of alcohol by volume or by weight. [~~The alcohol content statement may not be abbreviated, but shall use the complete words "alcohol," "volume," or "weight".~~ ]The [~~words in the~~ ]alcohol content statement must appear:

(i) in capital letters and bold type;

(ii) in a solid contrasting background;

(iii) in a format that is readily legible; and

(iv) separate and apart from any descriptive or explanatory information.

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(31-606(2)(c); 32B-3-205(2)(b); 32B-5-304; 32B-1-305;), 32B-1-306; 32B-1-307; 606(2)(d), and 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)