H.B. 344

This document includes House Committee Amendments incorporated into the bill on Mon, Feb 11, 2008 at 2:29 PM by jeyring. --> 1

ALCOHOLIC BEVERAGE ENFORCEMENT
2 PROVISIONS
3 2008 GENERAL SESSION
4 STATE OF UTAH
5 Chief Sponsor: Curtis Oda
6 Senate Sponsor: ____________
7 Cosponsors:
8 Jim Bird
9 Jackie Biskupski
10 Rebecca Chavez-Houck
11 Julie Fisher
12 Craig A. Frank
13 Gage FroererKevin S. Garn
Richard A. Greenwood
Christopher N. Herrod
Gregory H. Hughes
Christine A. Johnson
Michael T. MorleyMichael E. Noel
Patrick Painter
Stephen E. Sandstrom
Jennifer M. Seelig
Kenneth W. Sumsion
Carl Wimmer 14
15 LONG TITLE
16 General Description:
17 This bill modifies the Alcoholic Beverage Control Act to address enforcement actions.
18 Highlighted Provisions:
19 This bill:
20 . prohibits the Department of Alcoholic Beverage Control or its director, with some
21 exceptions, from:
22 . initiating a disciplinary proceeding;
23 . conducting a hearing; or
24 . having one of its employees be selected as a hearing officer;
25 . authorizes the attorney general to initiate a disciplinary proceeding under the same
26 conditions that the department previously initiated a disciplinary proceeding;
27 . modifies the Alcoholic Beverage Control Commission's authority to appoint hearing
28 examiners to prohibit the appointment of an employee of the department as a
29 hearing examiner;

30 . addresses altering documents in relation to the attorney general;
31 . addresses false statements, obstruction, bribes, and forgery in relation to the
32 attorney general;
33 . addresses interfering with suppliers by the attorney general;
34 . addresses duties to enforce and authority to inspect in relation to the attorney
35 general;
36 . addresses governmental immunity;
37 . addresses nuisance actions; and
38 . makes technical and conforming amendments.
39 Monies Appropriated in this Bill:
40 H. [ None ] This bill coordinates with H.B. 157, Alcoholic Beverage Control Violations
40a Amendments, to merge substantive changes. .H
41 Other Special Clauses:
42 None
43 Utah Code Sections Affected:
44 AMENDS:
45 32A-1-107, as last amended by Laws of Utah 2006, Chapter 162
46 32A-1-113, as last amended by Laws of Utah 2003, Chapter 314
47 32A-1-119, as last amended by Laws of Utah 2007, Chapter 284
48 32A-4-106, as last amended by Laws of Utah 2007, Chapters 284, 329, and 341
49 32A-4-206, as last amended by Laws of Utah 2007, Chapters 284 and 341
50 32A-4-307, as last amended by Laws of Utah 2007, Chapters 284, 329, and 341
51 32A-4-406, as last amended by Laws of Utah 2007, Chapters 284 and 341
52 32A-5-107, as last amended by Laws of Utah 2007, Chapters 284, 329, and 341
53 32A-8-106, as last amended by Laws of Utah 2007, Chapter 284
54 32A-8-505, as last amended by Laws of Utah 2007, Chapter 284
55 32A-9-106, as last amended by Laws of Utah 2003, Chapter 314
56 32A-10-206, as last amended by Laws of Utah 2007, Chapters 284 and 341
57 32A-11-106, as last amended by Laws of Utah 2004, Chapter 268
58 32A-12-304, as last amended by Laws of Utah 2000, Chapter 1
59 32A-12-305, as last amended by Laws of Utah 2003, Chapter 314
60 32A-12-306, as last amended by Laws of Utah 2003, Chapter 314

61 32A-12-307, as last amended by Laws of Utah 2003, Chapter 314
62 32A-12-308, as last amended by Laws of Utah 2003, Chapter 314
63 32A-12-310, as last amended by Laws of Utah 2000, Chapter 1
64 32A-13-108, as last amended by Laws of Utah 1990, Chapter 118 and renumbered and
65 amended by Laws of Utah 1990, Chapter 23
66 32A-13-109, as last amended by Laws of Utah 2000, Chapter 1
67 32A-14a-104, as renumbered and amended by Laws of Utah 2000, Chapter 197
68 32A-15a-102, as last amended by Laws of Utah 2007, Chapter 341
69 32A-15a-202, as enacted by Laws of Utah 2003, Chapter 314
70 32A-15a-203, as enacted by Laws of Utah 2003, Chapter 314
71
72 Be it enacted by the Legislature of the state of Utah:
73 Section 1. Section 32A-1-107 is amended to read:
74 32A-1-107. Powers and duties of the commission.
75 (1) The commission shall:
76 (a) act as a general policymaking body on the subject of alcoholic product control;
77 (b) adopt and issue policies, directives, rules, and procedures;
78 (c) set policy by written rules that establish criteria and procedures for:
79 (i) granting, denying, suspending, or revoking [permits, licenses, certificates] a permit,
80 license, certificate of approval, [and] or package [agencies] agency;
81 (ii) controlling liquor merchandise inventory including:
82 (A) listing and delisting one or more products;
83 (B) the procedures for testing a new [products] product;
84 (C) purchasing policy;
85 (D) turnover requirements for regularly coded products to be continued; and
86 (E) the disposition of discontinued, distressed, or unsaleable merchandise; and
87 (iii) determining the location of a state [stores] store, package [agencies, and outlets]
88 agency, or outlet;
89 (d) decide within the limits and under the conditions imposed by this title, the number
90 and location of state stores, package agencies, and outlets established in the state;
91 (e) issue, grant, deny, suspend, revoke, or not renew the following permits, licenses,

92 certificates of approval, and package agencies for the purchase, sale, storage, service,
93 manufacture, distribution, and consumption of an alcoholic [products] product:
94 (i) package [agencies] agency;
95 (ii) restaurant [licenses] license;
96 (iii) airport lounge [licenses] license;
97 (iv) limited restaurant [licenses] license;
98 (v) on-premise banquet [licenses] license;
99 (vi) private club [licenses] license;
100 (vii) on-premise beer retailer [licenses] license;
101 (viii) temporary special event beer [permits] permit;
102 (ix) special use [permits] permit;
103 (x) single event [permits] permit;
104 (xi) manufacturing [licenses] license;
105 (xii) liquor warehousing [licenses] license;
106 (xiii) beer wholesaling [licenses] license; and
107 (xiv) out-of-state brewer [certificates] certificate of approval;
108 (f) fix prices at which [liquors are] liquor is sold that [are] is the same at all state
109 stores, package agencies, and outlets;
110 (g) issue and distribute price lists showing the price to be paid by [purchasers for each]
111 a purchaser for a class, variety, or brand of liquor kept for sale by the department;
112 (h) (i) require the director to follow sound management principles; and
113 (ii) require periodic reporting from the director to ensure that:
114 (A) sound management principles are being followed; and
115 (B) policies established by the commission are being observed;
116 (i) (i) receive, consider, and act in a timely manner upon [all reports, recommendations,
117 and matters] a report, recommendation, or matter submitted by the director to the commission;
118 and
119 (ii) do all things necessary to support the department in properly performing the
120 department's [duties and] responsibilities;
121 (j) obtain temporarily and for special purposes the services of [experts and persons] an
122 expert or person engaged in the practice of a profession or who [possess any] possesses a

123 needed [skills, talents, or abilities] skill, talent, or ability if:
124 (i) considered expedient; and
125 (ii) approved by the governor;
126 (k) prescribe the duties of a departmental [officials] official authorized to assist the
127 commission in issuing [permits, licenses, certificates] a permit, license, certificate of approval,
128 [and] or package [agencies] agency under this title;
129 (l) prescribe, consistent with this title, the fees payable for:
130 (i) [permits, licenses, certificates] a permit, license, certificate of approval, [and] or
131 package [agencies] agency issued under this title; or
132 (ii) anything done or permitted to be done under this title;
133 (m) prescribe the conduct, management, and equipment of [any] premises upon which
134 an alcoholic [beverages] beverage may be sold, consumed, served, or stored;
135 (n) make rules governing the credit terms of beer sales to [retailers] a retailer within the
136 state;
137 (o) require that each of the following, where required in this title, display in a
138 prominent place a sign in large letters stating: "Warning: Driving under the influence of alcohol
139 or drugs is a serious crime that is prosecuted aggressively in Utah.":
140 (i) a state store;
141 (ii) a permittee;
142 (iii) a licensee; and
143 (iv) a package agency; [and]
144 (p) subject to Subsection (4) and as provided in this title, impose fines against:
145 (i) a permittee, licensee, certificate holder, or package agent described in Subsection
146 (1)(e); or
147 (ii) [any] an officer, employee, or agent of a permittee, licensee, certificate holder, or
148 package agent described in Subsection (1)(p)(i)[.]; and
149 (q) do all things necessary to support the attorney general in properly performing the
150 attorney general's responsibility under this title.
151 (2) The power of the commission to do the following is plenary, except as otherwise
152 provided by this title, and not subject to review:
153 (a) establish a state [stores] store;

154 (b) create a package [agencies] agency;
155 (c) grant authority to operate a package [agencies] agency; and
156 (d) grant or deny [permits, licenses, and certificates] a permit, license, or certificate of
157 approval.
158 (3) The commission may appoint a qualified hearing [examiners] examiner to conduct
159 [any] a suspension or revocation [hearings] hearing required by law, except that a hearing
160 officer may not be an employee of the department.
161 (4) (a) In [any] the case where the commission is given the power to suspend [any] a
162 permit, license, certificate of approval, or package agency, the commission may impose a fine
163 in addition to or in lieu of suspension.
164 (b) [Fines] One or more fines imposed may not exceed $25,000 in the aggregate for:
165 (i) [any] a single Notice of Agency Action; or
166 (ii) a single action against a package agency.
167 (c) The commission shall promulgate, by rule, a schedule setting forth a range of fines
168 for each violation.
169 Section 2. Section 32A-1-113 is amended to read:
170 32A-1-113. Department expenditures and revenues -- Liquor Control Fund --
171 Exempt from Division of Finance -- Annual audits.
172 (1) (a) [All money] (i) Money received by the department in the administration of this
173 title, except as otherwise provided, together with all property acquired, administered,
174 possessed, or received by the department, is the property of the state.
175 (ii) Money received in the administration of this title shall be paid to the department
176 and transferred into the state treasury to the credit of the Liquor Control Fund.
177 (b) All expenses, debts, and liabilities incurred by the department or the Office of the
178 Attorney General in connection with the administration of this title shall be paid from the
179 Liquor Control Fund.
180 (c) The fiscal officers of the department shall transfer annually from the Liquor Control
181 Fund to the General Fund a sum equal to the amount of net profit earned from the sale of liquor
182 since the preceding transfer of funds. The transfer shall be made within 90 days of the end of
183 the department's fiscal year on June 30.
184 (2) (a) Deposits made by the department shall be made to banks designated as state

185 depositories and reported to the state treasurer at the end of each day.
186 (b) Any member of the commission and any employee of the department is not
187 personally liable for any loss caused by the default or failure of depositories.
188 (c) All funds deposited in any bank or trust company are entitled to the same priority of
189 payment as other public funds of the state.
190 (3) All expenditures necessary for the administration of this title, including the
191 payment of all salaries, premiums, if any, on bonds of the commissioners, the director, and the
192 department staff in all cases where bonds are required, and all other expenditures incurred in
193 establishing, operating, and maintaining state stores and package agencies and in the
194 administration of this title, shall be paid by warrants drawn on the state treasurer paid out of the
195 Liquor Control Fund.
196 (4) If the cash balance of the Liquor Control Fund is not adequate to cover the warrants
197 drawn against it by the state treasurer, the cash resources of the General Fund may be [utilized]
198 used to the extent necessary. However, at no time may the fund equity of the Liquor Control
199 Fund fall below zero.
200 (5) (a) When [any] a check issued in payment of [any fees or costs] a fee or cost
201 authorized or required by this title is returned to the department as dishonored:
202 (i) the department may assess a service charge in an amount set by commission rule
203 against the person on whose behalf the check was tendered; and
204 (ii) if the check that is returned to the department is from a licensee, permittee, or
205 package agent, it is grounds for:
206 (A) the suspension or revocation of the license or permit; or
207 (B) the suspension or termination of the operation of the package agency.
208 (b) The revocation of a license or permit under this Subsection (5) is grounds for the
209 forfeiture of the bond of the:
210 (i) licensee; or
211 (ii) permittee.
212 (c) The termination of the operation of a package agency under this Subsection (5) is
213 grounds for the forfeiture of the bond of the package agency.
214 (6) The laws that govern the Division of Finance and prescribe the general powers and
215 duties of the Division of Finance are not applicable to the Department of Alcoholic Beverage

216 Control in the purchase and sale of alcoholic products.
217 (7) The accounts of the department shall be audited annually by the state auditor or by
218 any other person, firm, or corporation the state auditor appoints. The audit report shall be made
219 to the state auditor, and copies submitted to members of the Legislature not later than January 1
220 following the close of the fiscal year for which the report is made.
221 Section 3. Section 32A-1-119 is amended to read:
222 32A-1-119. Disciplinary proceedings -- Procedure.
223 (1) (a) As used in this section and Section 32A-1-120 , "disciplinary proceeding" means
224 an adjudicative proceeding permitted under this title:
225 (i) against:
226 (A) a permittee;
227 (B) a licensee;
228 (C) a manufacturer;
229 (D) a supplier;
230 (E) an importer;
231 (F) an out-of-state brewer holding a certificate of approval under Section 32A-8-101 ;
232 or
233 (G) an officer, employee, or agent of:
234 (I) a person listed in Subsections (1)(a)(i)(A) through (F); or
235 (II) a package agent; and
236 (ii) that is brought on the basis of a violation of this title.
237 (b) As used in Subsection (4), "final adjudication" means an adjudication for which a
238 final unappealable judgment or order [has been] is issued.
239 (2) (a) The following may conduct an adjudicative [proceedings] proceeding to inquire
240 into [any] a matter necessary and proper for the administration of this title and rules adopted
241 under this title:
242 (i) the commission;
243 (ii) a hearing examiner appointed by the commission for the purposes provided in
244 Subsection 32A-1-107 (3); and
245 (iii) the director[; and], to the extent expressly provided for in another provision of this
246 title.

247 [(iv) the department.]
248 (b) Except as provided in this section or Section 32A-3-106 , the following shall
249 comply with the procedures and requirements of Title 63, Chapter 46b, Administrative
250 Procedures Act, in an adjudicative [proceedings] proceeding:
251 (i) the commission;
252 (ii) a hearing examiner appointed by the commission; and
253 (iii) the director[; and].
254 [(iv) the department.]
255 (c) Except where otherwise provided by law, [all] an adjudicative [proceedings]
256 proceeding before the commission or [its appointed] a hearing examiner appointed by the
257 commission shall be:
258 (i) video or audio recorded; and
259 (ii) subject to Subsection (5)(e), conducted in accordance with Title 52, Chapter 4,
260 Open and Public Meetings Act.
261 (d) [All adjudicative proceedings] A person shall conduct an adjudicative proceeding
262 concerning departmental personnel [shall be conducted] in accordance with Title 67, Chapter
263 19, Utah State Personnel Management Act.
264 (e) [All hearings that are] A hearing that is informational, fact gathering, and
265 nonadversarial in nature shall be conducted in accordance with rules, policies, and procedures
266 [promulgated] made by the commission, director, or department.
267 (3) (a) A disciplinary proceeding shall be conducted under the authority of the
268 commission, which is responsible for rendering a final decision and order on [any] a
269 disciplinary matter.
270 (b) (i) Nothing in this section precludes the commission from appointing a necessary
271 [officers] officer, including a hearing [examiners] examiner, from [within or] without the
272 department, to administer the disciplinary proceeding process.
273 (ii) A hearing examiner appointed by the commission:
274 (A) may conduct a disciplinary proceeding hearing on behalf of the commission; and
275 (B) shall submit to the commission a report including:
276 (I) findings of fact determined on the basis of a preponderance of the evidence
277 presented at the hearing;

278 (II) conclusions of law; and
279 (III) recommendations.
280 (c) Nothing in this section precludes the commission, after the commission [has
281 rendered] renders its final decision and order, from having the director prepare, issue, and
282 cause to be served on the parties the final written order on behalf of the commission.
283 (4) (a) The [department] attorney general may initiate a disciplinary proceeding
284 described in Subsection (4)(b) [when] if the [department] attorney general receives:
285 (i) a report from [any] a government agency, peace officer, examiner, or investigator
286 alleging that [any] a person listed in Subsections (1)(a)(i)(A) through (G) has violated this title
287 or the rules of the commission;
288 (ii) a final adjudication of criminal liability against [any] a person listed in Subsections
289 (1)(a)(i)(A) through (G) based on an alleged violation of this title; or
290 (iii) a final adjudication of civil liability under Chapter 14a, Alcoholic Beverage
291 Liability, against [any] a person listed in Subsections (1)(a)(i)(A) through (G) based on an
292 alleged violation of this title.
293 (b) The [department] attorney general may initiate a disciplinary proceeding if the
294 [department] attorney general receives an item listed in Subsection (4)(a) to determine:
295 (i) whether [any] a person listed in Subsections (1)(a)(i)(A) through (G) violated this
296 title or rules of the commission; and
297 (ii) if a violation is found, the appropriate sanction to be imposed.
298 (5) (a) Unless waived by the respondent, a disciplinary proceeding shall be held:
299 (i) if required by law;
300 (ii) before revoking or suspending [any] a permit, license, or certificate of approval
301 issued under this title; or
302 (iii) before imposing a fine against [any] a person listed in Subsections (1)(a)(i)(A)
303 through (G).
304 (b) Inexcusable failure of a respondent to appear at a scheduled disciplinary proceeding
305 hearing after receiving proper notice is an admission of the charged violation.
306 (c) The validity of a disciplinary proceeding is not affected by the failure of [any] a
307 person to attend or remain in attendance.
308 (d) [All disciplinary proceeding hearings shall be presided over by the] The

309 commission or an appointed hearing examiner shall preside over a disciplinary proceeding
310 hearing.
311 (e) A disciplinary proceeding hearing may be closed only after the commission or
312 hearing examiner makes a written finding that the public interest in an open hearing is clearly
313 outweighed by factors enumerated in the closure order.
314 (f) (i) The commission or its hearing examiner as part of a disciplinary proceeding
315 hearing may:
316 (A) administer oaths or affirmations;
317 (B) take evidence;
318 (C) take [depositions] a deposition within or without this state; and
319 (D) require by subpoena from [any] a place within this state:
320 (I) the testimony of [any] a person at a hearing; and
321 (II) the production of [any books, records, papers, contracts, agreements, documents] a
322 book, record, paper, contract, agreement, document, or other evidence considered relevant to
323 the inquiry.
324 (ii) A person subpoenaed in accordance with this Subsection (5)(f) shall testify and
325 produce [any books, papers, documents,] a book, paper, document, or tangible [things] thing as
326 required in the subpoena.
327 (iii) [Any] A witness subpoenaed or called to testify or produce evidence who claims a
328 privilege against self-incrimination may not be compelled to testify, but the commission or the
329 hearing examiner shall file a written report with the county attorney or district attorney in the
330 jurisdiction where the privilege [was] is claimed or where the witness resides setting forth the
331 circumstance of the claimed privilege.
332 (iv) (A) A person is not excused from obeying a subpoena without just cause.
333 (B) [Any] A district court within the judicial district in which a person alleged to be
334 guilty of willful contempt of court or refusal to obey a subpoena is found or resides, upon
335 application by the party issuing the subpoena, may issue an order requiring the person to:
336 (I) appear before the issuing party; and
337 (II) (Aa) produce documentary evidence if so ordered; or
338 (Bb) give evidence regarding the matter in question.
339 (C) Failure to obey an order of the court may be punished by the court as contempt.

340 (g) (i) In [all] a disciplinary proceeding [hearings] hearing heard by a hearing
341 examiner, the hearing examiner shall prepare a report required by Subsection (3)(b)(ii) to the
342 commission.
343 (ii) The report required by Subsection (3)(b)(ii) and this Subsection (5)(g) may not
344 recommend a penalty more severe than that initially sought by the [department] attorney
345 general in the notice of agency action.
346 (iii) A copy of the report required by Subsection (3)(b)(ii) and this Subsection (5)(g)
347 shall be served upon the respective parties.
348 (iv) The respondent and the [department] attorney general shall be given reasonable
349 opportunity to file [any] a written [objections] objection to the report required by Subsection
350 (3)(b)(ii) and this Subsection (5)(g) before final commission action.
351 (h) In [all cases] a case heard by the commission, it shall issue its final decision and
352 order in accordance with Subsection (3).
353 (6) (a) The commission shall:
354 (i) render a final decision and order on [any] a disciplinary action; and
355 (ii) cause its final order to be prepared in writing, issued, and served on all parties.
356 (b) [Any] An order of the commission is considered final on the date the order
357 becomes effective.
358 (c) If the commission is satisfied that a person listed in Subsections (1)(a)(i)(A)
359 through (G) [has committed a violation of] violated this title or the commission's rules, in
360 accordance with Title 63, Chapter 46b, Administrative Procedures Act, the commission may:
361 (i) suspend or revoke the permit, license, or certificate of approval;
362 (ii) impose a fine against a person listed in Subsections (1)(a)(i)(A) through (G);
363 (iii) assess the administrative costs of [any] a disciplinary proceeding to the permittee,
364 the licensee, or certificate holder; or
365 (iv) [any] take a combination of actions described in Subsections (6)(c)(i) through (iii).
366 (d) A fine imposed in accordance with this Subsection (6) is subject to Subsections
367 32A-1-107 (1)(p) and (4).
368 (e) (i) If a permit or license is suspended under this Subsection (6), the permittee or
369 licensee shall prominently post a sign provided by the department [shall be prominently
370 posted]:

371 (A) during the suspension; and
372 [(B) by the permittee or licensee; and]
373 [(C)] (B) at the entrance of the premises of the permittee or licensee.
374 (ii) The sign required by this Subsection (6)(e) shall:
375 (A) read "The Utah Alcoholic Beverage Control Commission has suspended the
376 alcoholic beverage license or permit of this establishment. Alcoholic beverages may not be
377 sold, served, furnished, or consumed on these premises during the period of suspension."; and
378 (B) include the dates of the suspension period.
379 (iii) A permittee or licensee may not remove, alter, obscure, or destroy a sign required
380 to be posted under this Subsection (6)(e) during the suspension period.
381 (f) If a permit or license is revoked, the commission may order the revocation of [any]