R81-1-34. Transfer Agreements

  (1) This rule is pursuant to Section 32B-5-310, which authorizes the Department to make rules governing requirements for interim alcoholic beverage management agreements.

  (2) An interim alcoholic beverage management agreement is required if a buyer will be performing the day-to-day operations of the business before the Commission approves the transfer of the license from seller to buyer.

  (3)(a) Before a retail licensee enters into an interim alcoholic beverage management agreement, it shall provide the proposed interim alcoholic beverage management agreement to the Department for its approval.

  (b) The Department shall create a checklist of information that an interim alcoholic beverage management agreement must contain and may create an optional form to assist licensees in providing necessary information.

  (c) The Department shall review a proposed interim alcoholic beverage management agreement and, no later than 15 business days after the day on which the agreement is received by the Department:

  (i) approve the interim alcoholic beverage management agreement if it contains all the necessary information; or

  (ii) return the proposed interim alcoholic beverage management agreement to the licensee, if the agreement is lacking in information or specificity, with guidance on how to remedy any errors or omissions.

  (4) Once an interim alcoholic beverage management agreement has been approved by the Department, the seller may allow the buyer to use their license to purchase alcoholic product from the Department, but all revenue from the sale of alcohol during the transition period must be retained by the buyer, less the cost of reimbursing the seller for the cost of the alcoholic product paid to the Department.

  (5) The seller must maintain the required bond, insurance, and business license during the transition period, as these are statutory requirements to hold a license, but the buyer may agree to reimburse the seller for any necessary costs incurred to maintain the bond, insurance, and business license.

  (6) Nothing in this rule authorizes a licensee to close business without approval from the Department or Commission, as required by statute.