No. 27042 (Amendment): R81-3-17. Consignment Inventory Package Agencies

DAR File No.: 27042
Filed: 04/01/2004, 03:06
Received by: NL

 

RULE ANALYSIS

Purpose of the rule or reason for the change:

The Utah Administrative Rulemaking Act was amended in 2003 to provide that an agency's written statements that restrict the legal rights of a public class of persons or another agency must be in rule and go through the rulemaking process. These rule amendments are proposed to comply with the Rulemaking Act. (DAR NOTE: The Utah Administrative Rulemaking Act was amended by S.B. 30 (2003), which is found at UT L 2003 Ch 197, and was effective May 5, 2003.)

 

Summary of the rule or change:

This proposed rule amendment establishes in administrative rule the guidelines and procedures to be followed by consignment package agencies when purchasing liquor from the Department of Alcoholic Beverage Control (DABC) to replenish their inventories.

 

State statutory or constitutional authorization for this rule:

Section 32A-1-107

 

Anticipated cost or savings to:

the state budget:

None--Consignment package agencies have been established throughout the state of Utah for many years. Procedures for ordering and paying for replenishment shipments of liquor from the DABC warehouse have been in place in internal department policy from the beginning. The act of relocating these procedures into administrative rule will have no effect on how the procedures are enforced and no fiscal effect on state budget.

 

local governments:

None--Liquor sold in the state of Utah is handled exclusively through the DABC and state government. Liquor purchase and payment procedures for consignment package agencies have no fiscal effect on local government.

 

other persons:

None--The procedures by which consignment package agencies purchase and pay for liquor from the DABC warehouse have been enforced by internal department policy for many years. Relocating these policies into administrative rules will have no fiscal effect on other persons.

 

Compliance costs for affected persons:

None--The DABC's purchase, payment, and record keeping requirements for the replenishment of liquor in consignment package agencies have been established for many years. The proposed amendments to this rule will not alter the way these package agencies comply with these requirements, therefore, there will be no additional compliance costs.

 

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

Utah is a control state, therefore, all packaged liquor sales are made in either state stores or state contracted package agencies. Other businesses in the state are not directly affected by the internal accounting practices agreed to between state government and the package agencies with whom they contract.

 

The full text of this rule may be inspected, during regular business hours, at the Division 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:

Sharon Mackay at the above address, by phone at 801-977-6800, by FAX at 801-977-6889, or by Internet E-mail at [e-mail]

 

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:

05/17/2004

 

This rule may become effective on:

05/18/2004

 

Authorized by:

Kenneth F. Wynn, Director

 

 

RULE TEXT

R81. Alcoholic Beverage Control, Administration.

R81-3. Package Agencies.

R81-3-17. Consignment Inventory Package Agencies.

(1) Purpose. At the discretion of the department, liquor may be provided by the department to a Type 2 and Type 3 package agency for sale on consignment pursuant to 32A-3-106(2)(b). This rule provides the procedures for such consignment sales.

(2) Application of the Rule.

(a) Consignment Inventory.

(i) The initial amount of consignment inventory furnished to the package agency shall be established by the department's regional manager assigned to the package agency.

(ii) The consignment inventory amount shall be posted to the department's accounting system as "Consignment Inventory Account."

(iii) The consignment inventory amount shall be stated in the department's contract with the package agency.

(iv) Any adjustment to the consignment inventory amount shall be done through the use of a transfer, authorization, or payment of money. A copy of the transfer, adjusting authorization, or evidence of payment shall be included in the package agency's file.

(v) The consignment inventory amount may be adjusted from time to time based on the package agency's monthly average sales. Any adjustment shall be made by a properly executed amendment to the department's contract with the package agency.

(b) Payments.

(i) After receipt of a shipment of merchandise, the package agent shall submit a check to the department within 30 days of the authorization/transfer date.

(ii) The check shall be annotated with the authorization, transfer and credit memo numbers to which it applies as follows: Authorization(s) + or - transfers - credit memos = check.

(iii) All delivery discrepancies shall be resolved immediately by contacting the department's warehouse shipping manager. Payment shall be made on all authorizations/transfers by their due date whether or not any discrepancies have been resolved.

(iv) Any returned checks to the department from a package agent is grounds to require the package agent to provide a certified check to pay for future shipments.

(v) If a check for an authorization is not received by the department within 30 days of its due date, the department may assess the legal rate of interest on the amount owed, or may terminate the contract with the package agent and close the package agency.

(c) Transfers.

(i) Transfers (+ or -) shall be adjusted to the package agency's next payment due the department.

(ii) Transfer in will add to the amount owed to the department on the next check due to the department.

(iii) Transfer out will subtract from the amount owed to the department on the next check due to the department.

(d) Audits.

(i) Any package agency that is on a consignment contract shall keep a daily log of sales.

(ii) The regional manager shall audit the package agency at least once every six months.

(iii) The package agency is subject to a department audit at any time.

 

KEY: alcoholic beverages

[August 1, 2003]2004

Notice of Continuation December 18, 2001

32A-1-107