No. 32574: R81-4C-13. Grandfathered Bar Structures

DAR File No.: 32574
Filed: 04/28/2009, 05:03
Received by: NL

RULE ANALYSIS

Purpose of the rule or reason for the change:

This change is proposed to implement provisions of S.B. 187 passed by the 2009 State Legislature. (DAR NOTE: S.B. 187 (2009) is found at Chapter 383, Laws of Utah 2009, and was effective 05/12/2009.)

Summary of the rule or change:

This change adds a new section to Rule R81-4C. S.B. 187 made extensive changes in how restaurants may operate with bar structures on the premises. This change defines the terms "actively engaged in the construction of the restaurant" and "remodels the grandfathered bar structure". (DAR NOTE: A corresponding proposed amendment is under DAR No. 32572 in this issue, May 15, 2009, of the Bulletin.)

State statutory or constitutional authorization for this rule:

Section 32A-1-107 and Subsections 32A-4-307(7)(a)(i)(B)(I)(Bb) and 32A-4-307(7)(a)(ii)

Anticipated cost or savings to:

the state budget:

There may be a potential cost to the state budget if restaurants decide to remodel their grandfathered bar structure as defined by this change. Each restaurant that remodels its grandfathered bar structure may apply for credit for purchases of liquor from state stores and package agencies for the actual remodeling cost up to $30,000. There is no way of knowing at this point how many restaurants will remodel their bar structure and apply for the liquor credit. S.B. 187 limits the aggregate credit available to $1,000,000 and limits the time frame within which the restaurant must apply for the credit.

local governments:

None--The provisions of S.B. 187 deal specifically with regulations of the Department of Alcoholic Beverage Control, and not with local government regulations.

small businesses and persons other than businesses:

None--Even for those small restaurants that may choose to remodel their bar structure and apply for the liquor credit, the credit will only be for the cost of the remodel, therefore, these restaurants will realize neither a cost nor a savings.

Compliance costs for affected persons:

None--There are no compliance costs associated with this change. The change simply defines terms introduced in S.B. 187.

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

Because it is desirable to many restaurant owners to have a working bar structure in their establishment, it is not anticipated that many restaurant owners will choose to remodel their bar structure to take advantage of the liquor credit option in S.B. 187. And if they do, the liquor credit will only be in the amount of the remodel costs. Therefore, it is not anticipated that this change will have a fiscal impact on many businesses. Dennis R. Kellen, Director

Emergency rule reason and justification:

Regular rulemaking procedures would place the agency in violation of federal or state law.

S.B. 187 was effective on 05/12/2009. The provisions in this change must be in effect on that date to provide guidelines to licensees who have questions about the provisions of the new law.

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:

This rule is effective on:

05/01/2009

Authorized by:

Dennis R. Kellen, Director

RULE TEXT

R81. Alcoholic Beverage Control, Administration.

R81-4C. Limited Restaurant Licenses.

R81-4C-13. Grandfathered Bar Structures.

(1) Authority and Purpose.

(a) This rule is pursuant to 32A-4-307(7)(a)(i) which provides that:

(i) a bar structure, as defined in 32A-1-105(4), located in a currently licensed limited restaurant as of May 11, 2009, may be "grandfathered" to allow alcoholic beverages to continue to be stored or dispensed at the bar structure, and in some instances to be served to an adult patron seated at the bar structure;

(ii) a bar structure in a limited restaurant that is not operational as of May 12, 2009, may be similarly "grandfathered" if, as of May 12, 2009:

(A) a person has applied for a limited restaurant license from the commission;

(B) the person is "actively engaged in the construction of the restaurant" as defined by commission rule; and

(C) the person is granted a limited restaurant liquor license by the commission no later than December 31, 2009.

(b) This rule is also pursuant to 32A-4-307(7)(a)(ii) which provides that:

(i) a "grandfathered bar structure" is no longer "grandfathered" once the limited restaurant "remodels the grandfathered bar structure"; and

(ii) the commission shall define by rule what is meant by "remodels the grandfathered bar structure".

(2) Application of Rule.

(a) "Actively engaged in the construction of the restaurant" for purposes of 32A-4-307(7)(a)(i)(B)(I)(Bb) and 32A-4-307(7)(a)(ii) means that:

(i) a building permit has been obtained to build the restaurant; and

(ii) a construction contract has been executed and the contract includes an estimated date that the restaurant will be completed; or

(iii) work has commenced by the applicant on the construction of the restaurant and a good faith effort is made to complete the construction in a timely manner.

(b) "remodels the grandfathered bar structure" for purposes of 32A-4-307(7)(a)(ii) means that:

(i) the grandfathered bar structure has been altered or reconfigured to:

(A) extend the length of the existing structure to increase its seating capacity; or

(B) increase the visibility of the storage or dispensing area to restaurant patrons.

(c) "remodels the grandfathered bar structure" does not:

(i) preclude making cosmetic changes or enhancements to the existing structure such as painting, staining, tiling, or otherwise refinishing the bar structure;

(ii) preclude locating coolers, sinks, plumbing, cooling or electrical equipment to an existing structure; or

(iii) preclude utilizing existing space at the existing bar structure to add additional seating.

(d) Pursuant to 32A-4-307(6), the licensee must first apply for and receive approval from the department for a change of location where alcohol is stored, served, and sold other than what was originally designated in the licensee's application for the license. Thus, any modification of the alcoholic beverage storage and dispensing area at a "grandfathered bar structure" must first be reviewed and approved by the department to determine whether it is:

(i) an acceptable use of an existing bar structure; or

(ii) a remodel of a "grandfathered bar structure".

 

KEY: alcoholic beverages

Date of Enactment or Last Substantive Amendment: May 1, 2009

Notice of Continuation: July 31, 2008

Authorizing, and Implemented or Interpreted Law: 32A-1-107; 32A-4-307(7)(a)(i)(B)(I)(Bb); 32A-4-307(7)(a)(ii)