No. 31330 (Amendment): R81-3-14. Type 5 Package Agencies

DAR File No.: 31330
Filed: 04/30/2008, 10:37
Received by: NL

RULE ANALYSIS

Purpose of the rule or reason for the change:

This rule amendment is proposed to correct an omission in the Type 5 package agency rule.

Summary of the rule or change:

Wineries have aways been permitted to operate a package agency on their premises for the purpose of selling their products to persons touring the winery. This proposed rule amendment gives distilleries and breweries in the state the same privilege.

State statutory or constitutional authorization for this rule:

Section 32A-1-107

Anticipated cost or savings to:

the state budget:

None--The state does not require that alcoholic beverage manufacturers operate a package agency on their premises. There is no cost or savings to the state's budget by including distilleries and breweries to the list of those manufacturers that may operate a package agency.

local governments:

None--Local governments do not regulate the day-to-day operations of package agencies. The passage of this proposed amendment will have no fiscal impact on local governments.

small businesses and persons other than businesses:

Local alcoholic beverage manufacturers in the State of Utah are virtually all operated as small businesses. The ability for distilleries and breweries to operate package agencies on their premises should bring in revenues that help their bottom line. Patrons touring these facilities will save time by having the convenience of being able to purchase the the spirits and heavy beers without having to make a trip to a liquor store.

Compliance costs for affected persons:

There are no actual compliance costs to this proposed rule amendment since manufacturers are not required to maintain a package agency on the premises. If the manufacturer chooses to apply for the package agency privilege, there may be some logistical costs in placing the package agency within their establishment. These costs will likely be offset by the revenues from the sale of their products.

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

Utah's wineries have always enjoyed the privilege to sell their products to individuals who tour their production facilities. It is only fair that distilleries and breweries have the same opportunity. It is hoped that this rule will have a positive fiscal impact on the small alcoholic beverage manufacturers who choose to take advantage of it, and that it will add convenience for the citizens who tour these facilities. Dennis R. Kellen, Director

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:

06/16/2008

This rule may become effective on:

06/23/2008

Authorized by:

Dennis R. Kellen, Director

RULE TEXT

R81. Alcoholic Beverage Control, Administration.

R81-3. Package Agencies.

R81-3-14. Type 5 Package Agencies.

(1) Purpose. A type 5 package agency is for the limited purpose of allowing a winery, distillery, or brewery to sell at its [winery]manufacturing location the packaged [wine]liquor product it actually produces to the general public for off-premise consumption. This rule establishes guidelines and procedures for type 5 package agencies.

(2) Application of Rule.

(a) The package agency must be located on the winery, distillery, or brewery premises at a location approved by the commission.

(b) The package agency may only sell products produced at the winery, distillery, or brewery, and may not carry the products of other alcoholic beverage manufacturers.

(c) The product produced by the winery, distillery, or brewery and sold in the type 5 package agency need not be shipped from the winery, distillery, or brewery to the department warehouse and then back to the package agency. The bottles for sale may be moved directly from the [winery]manufacturer's storage area to the package agency provided that proper record-keeping is maintained on forms provided by the department. Records required by the department shall be kept current and available to the department for auditing purposes. Records must be maintained for at least three years. The package agency shall submit to the department a completed monthly sales report form which specifies the variety and number of bottles sold from the package agency. This report must be submitted to the department within the first five working days of the month. A club or restaurant purchases form must be filled out for every licensee purchase.

(d) Direct deliveries to licensees are prohibited. [Wines]Products must be purchased and picked up by the licensees or their designated agents at the Type 5 package agency.

(e) The type 5 package agency shall follow the same laws, rules, policies, and procedures applicable to other package agencies as to the retail price of products.

(f) The days and hours of sale of the type 5 package agency shall be in accordance with 32A-3-106(10).

 

KEY: alcoholic beverages

Date of Enactment or Last Substantive Amendment: [June 1, 2004]2008

Notice of Continuation: September 6, 2006

Authorizing, and Implemented or Interpreted Law: 32A-1-107