No. 27047 (Amendment): R81-8-2. Out of State Business

DAR File No.: 27047
Filed: 04/01/2004, 03:50
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. This rule amendment is 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 guidelines by which a brewer outside the state of Utah may receive and maintain a "certificate of approval" which allows that brewer to sell beer with an alcohol content of less than 4% alcohol by volume to licensed beer wholesalers in this state. These regulations were previously written in internal department policy.

 

State statutory or constitutional authorization for this rule:

Section 32A-1-107

 

Anticipated cost or savings to:

the state budget:

None--This proposed rule amendment sets guidelines for an out-of-state brewer to receive a certificate of approval to sell their beer to wholesalers in the state of Utah. These guidelines were previously established in internal agency policy, and relocating them in administrative rule will not effect a cost of savings to the state budget.

 

local governments:

None--Local governments may pass ordinances that regulate the sale of beer (less than 4% alcohol by volume) in the state of Utah. However, these proposed amendments to Section R81-8-2 are separate from local ordinances and, therefore, do not fiscally affect local governments.

 

other persons:

None--Since these regulations have been enforced by internal department policy for man years, relocating them in administrative rule will have no fiscal impact on affected persons.

 

Compliance costs for affected persons:

These regulations have been in internal department policy for many years. Relocating them in administrative rule will involve no further compliance costs.

 

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

The guidelines of this proposed rule amendment have been established in internal agency policy for several years. Relocating these guidelines in administrative rules will have no anticipated fiscal impact on businesses.

 

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.

R81-8. Manufacturers (Distillery, Winery, Brewery).

R81-8-2. Out of State Business.

[Brewers which are located outside the state which desire to sell and deliver beer containing an alcohol content of less than 4% alcohol by volume, to licensed beer wholesalers, must obtain a certificate of approval from the department pursuant to Sections 32A-8-101(4) and 32A-11-106(2).](1) Purpose. Pursuant to 32A-8-101(4), brewers located outside the state must obtain a certificate of approval from the department before selling or delivering beer containing an alcohol content of less than 4% alcohol by volume to licensed beer wholesalers in this state, or if a small brewer, to licensed beer wholesalers or retailers in this state. These certificates must be renewed annually.

In addition to issuing certificates of approval to brewers who actually produce the beer, the department has also issued certificates to (1) importers that hold federal permits, and have the contractual rights to distribute and market beer for foreign breweries; and (2) marketing agents that distribute and market beer for domestic breweries. The department has also allowed brewers with a certificate of approval to market the products on behalf of other brewers under that certificate. However, this has resulted in a loss of direct regulatory authority over the breweries that actually produce the beer.

This rule ensures that each producer of beer obtain its own certificate of approval to allow its beer to be sold or delivered in this state.

(2) Application of Rule.

(a) A certificate of approval to sell or deliver beer in this state under 32A-8-101(4) may be issued only to the company that is ultimately responsible for producing the beer. The company holding the certificate may not allow another brewery to sell or deliver beer to this state under the certificate holder's certificate. A certificate of approval may not be issued to any third party such as an importer or marketing agent that does not actually manufacture or produce alcoholic beverages.

(b) This rule does not preclude the company that holds the certificate of approval from having its brand of beer produced by another brewery under contract under the brand name of the certificate holder's company. However, the certificate holder is responsible to ensure that any beer produced by the contract-brewery complies with the alcoholic beverage laws of this state. Any violations committed by the contract brewery will be the responsibility of the certificate holder.

(c) A distillery or winery that has beer produced for it by a brewery under contract under the distillery's or winery's brand name is deemed to be a "brewery" for purposes of 32A-8-101(4), and may be issued a certificate of approval. However, the distillery or winery is responsible to ensure that any beer produced by the contract-brewery complies with the alcoholic beverage laws of this state. Any violations committed by the contract brewery will be the responsibility of the distillery or winery that holds the certificate.

 

KEY: alcoholic beverages

[April 29, 2002]2004

Notice of Continuation December 18, 2001

32A-1-107