No. 42288 (Amendment): Rule R81-10. Off-Premise Beer Retailers

(Amendment)

DAR File No.: 42288
Filed: 11/01/2017 04:07:31 PM

RULE ANALYSIS

Purpose of the rule or reason for the change:

This rule amendment is necessary to implement H.B. 442 passed in the 2017 General Session. This proposed rule amendment removes the definition "area that is visibly separate and distinct from the area where a nonalcoholic beverage is displayed" as rulemaking authority for that definition was removed from statute. Additionally, this proposed rule establishes a deadline for certain off-premises beer retailers to apply for an off-premise state beer license as required by Section 32B-7-401.

Summary of the rule or change:

This proposed rule amendment removes the definition "area that is visibly separate and distinct from the area where a nonalcoholic beverage is displayed". Statute now defines how beer should be displayed in off-premise retailers and does not give explicit authority for the agency to engage in rulemaking. This change establishes a deadline of 10/10/2018 for off-premise retailers who are in operation as of 07/01/2018 to submit their application for an off-premise beer retail license. The proposed change further defines "in operation as of July 1, 2018", as well as the requirements for a complete application.

Statutory or constitutional authorization for this rule:

• Section 32B-7-401
• Subsection 32B-7-202(5)
• Section 32B-2-202

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), which requires all off-premise beer retailers to obtain state licensing and requires that beer displays be limited to two locations. Costs and savings were calculated as part of the fiscal note. This rule change does not create any 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), which requires all off-premise beer retailers to obtain state licensing and requires that beer displays be limited to two locations. Costs and savings were calculated as part of the fiscal note. This rule change does not create any 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), which requires all off-premise beer retailers to obtain state licensing and requires that beer displays be limited to two locations. Costs and savings were calculated as part of the fiscal note. This rule change does not create any 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), which requires all off-premise beer retailers to obtain state licensing and requires that beer displays be limited to two locations. Those costs were calculated as part of the fiscal note. This rule change does not create any additional cost or savings beyond what was anticipated during the legislative process.

Compliance costs for affected persons:

None--Any compliance cost for off-premise beer retailers are a result of the statutory requirements of H.B. 442 (2017), which requires all off-premise beer retailers to obtain state licensing and requires that beer displays be limited to two locations. This rule change does not create any additional costs for affected persons, it simply creates a deadline for which to comply.

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), which requires all off-premise beer retailers to obtain state licensing and requires that beer displays be limited to two locations. The application fee and requirements for licensing are set by statute and not by rule. Those costs and savings were calculated as part of the fiscal note. This rule change does not create any additional cost or savings beyond what was anticipated during the legislative process.

Salvador D. Petilos, Executive 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 [e-mail]
• Nina McDermott at the above address, by phone at 801-977-6805, by FAX at 801-977-6888, 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:

12/15/2017

This rule may become effective on:

12/22/2017

Authorized by:

Sal Petilos, Executive Director

RULE TEXT

R81. Alcoholic Beverage Control, Administration.

R81-10. Off-Premise Beer Retailers.

R81-10-1. Separation of Alcoholic Beverages from Non-Alcoholic Beverages and Required Signage.

(1) Authority and General Purpose. This rule is pursuant to 32B-7-202(5) that requires:

(a) [an off-premise beer retailer to display beer sold by the retailer in an area that is visibly separate and distinct from the area where a nonalcoholic beverage is displayed, and requires the commission to define by rule what constitutes an "area that is visibly separate and distinct from the area where a nonalcoholic beverage is displayed"; and

(b) ]an off-premise beer retailer to prominently post in the separate and distinct area where beer is sold, an easily readable sign that reads in print that is no smaller than .5 inches, bold type, "These beverages contain alcohol. Please read the label carefully," and requires the commission to define by rule the format of the sign.

(2) Application of the Rule.

(a) [Display requirements.

(i) Pursuant to 32B-7-202(5), an off-premise beer retailer must display beer products in an "area that is visibly separate and distinct from the area where a non-alcoholic beverage is displayed."

(ii) This requires that under no circumstances may there be a co-mingling or interspersing of beer products with non-alcoholic beverages, except that non-alcoholic beers may be displayed with beer products.

(iii) The separation must clearly and unambiguously convey to a consumer those beverage products that contain alcohol and those that do not. This may be satisfied by any of the following means:

(A) An entire display cabinet, cooler, shelf, aisle, end-cap, side-stack, or stand alone floor display, or room where the only beverages displayed are beer products, accompanied by the prominent and unambiguous posting of the sign required by 32B-7-202(5); or

(B) A shared display cabinet, cooler, shelf, aisle, or room where beer products are displayed separately from non-alcoholic beverages by way of a physical barrier or visible divider of sufficient prominence to create a clear divide between the beer products and the non-alcoholic beverages. The area where beer products are displayed must have a prominent and unambiguous posting of the sign required by 32B-7-202(5). End-cap, side-stack, or stand-alone floor displays may not contain both beer products and non-alcoholic beverages other than non-alcoholic beers.

(b) ]Sign requirements.

(i) The sign required by 32B-7-202(5) must be:

(A) prominently posted in the area where beer is sold;

(B) easily readable;

(C) in print that is no smaller than .5 inches, bold type.

(ii) The print on the sign must be clearly readable and on a solid, contrasting background.

(iii) The size of the sign, and the size of the print must be sufficiently large so as to be readable, and clearly and unambiguously convey to a consumer that the beverage products displayed in that area contain alcohol. In no instance may the sign be smaller than 8.5 inches x 3.5 inches.

(iv) Additional signs may be necessary depending on the size and type of display area. For example, an entire aisle devoted to beer products may require more than one sign to adequately inform the consumer.

 

R81-10-2. Off-Premise Beer Retailer State License.

(1) Authority and General Purpose. This rule is pursuant to 32B-7-401 that requires:

(a) the commission establish a deadline for each off-premise beer retailer in operation on July 1, 2018 to submit an application for an off-premise beer retailer state license.

(2) Application of the Rule.

(a) An off-premise beer retailer in operation on July 1, 2018 must submit a complete application for an off-premise beer state license by October 10, 2018.

(i) An off-premise beer retailer is considered "in operation as of July 1, 2018" if they have all local licensing in place and are open to the public.

(ii) A "complete application" includes the department's application form and all supplemental materials listed on the department's application checklist.

 

KEY: alcoholic beverages

Date of Enactment or Last Substantive Amendment: [June 27, 2008]2017

Notice of Continuation: May 31, 2013

Authorizing, and Implemented or Interpreted Law: [32A-1-107]32B-1-102; 32B-7-202; 32B-7-401

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