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S.B. 66

             1     

ALCOHOLIC BEVERAGE CONTROL RELATED AMENDMENTS

             2     
2012 GENERAL SESSION

             3     
STATE OF UTAH

             4     
Chief Sponsor: John L. Valentine

             5     
House Sponsor: ____________

             6     
             7      LONG TITLE
             8      General Description:
             9          This bill modifies the Alcoholic Beverage Control Act, the Open and Public Meetings
             10      Act, and the Government Records Access and Management Act, to address the
             11      regulation of alcoholic products.
             12      Highlighted Provisions:
             13          This bill:
             14          .    amends definition provision;
             15          .    changes the Alcoholic Beverage Control Commission to a seven member
             16      commission and makes related changes;
             17          .    addresses removal of commission members and chair;
             18          .    creates subcommittees of the commission;
             19          .    clarifies that the commission's policy authority is to be consistent with the policy
             20      established by the Legislature by statute;
             21          .    provides for appointment and termination of the director;
             22          .    addresses appointment of interim director;
             23          .    imposes terms on the length of time a director serves;
             24          .    provides for the hiring and firing of upper management only with the approval of
             25      the commission;
             26          .    creates the Alcoholic Beverage Control Advisory Board;
             27          .    addresses application of Utah Procurement Code;


             28          .    addresses audits;
             29          .    provides for internal audits division;
             30          .    modifies provisions related to markup for small manufacturers;
             31          .    addresses requirements for package agency agreements;
             32          .    requires a hearing by a hearing examiner of a department recommendation to not
             33      renew a license or to revoke a license;
             34          .    modifies operational requirements for a reception center;
             35          .    addresses provisions related to the transfer of retail licenses;
             36          .    authorizes the director to issue or deny issuance of certain permits with the approval
             37      of the Compliance, Licensing, and Enforcement Subcommittee, and subject to
             38      revocation or issuance by the Commission;
             39          .    addresses notification of an event to law enforcement;
             40          .    requires the director to issue monthly reports to the commission of the director's
             41      activities relative to permits;
             42          .    allows certain permittees to change the location of where to store, sell, offer for
             43      sale, furnish, or allow consumption with the approval of the director and the
             44      Compliance, Licensing, and Enforcement Subcommittee;
             45          .    addresses purposes of which the commission may hold a closed meeting;
             46          .    provides that certain records related to the department or commission are protected
             47      records; and
             48          .    makes technical and conforming amendments.
             49      Money Appropriated in this Bill:
             50          None
             51      Other Special Clauses:
             52          This bill takes effect on July 1, 2012.
             53      Utah Code Sections Affected:
             54      AMENDS:
             55          32B-1-102, as last amended by Laws of Utah 2011, Second Special Session, Chapter 2
             56          32B-2-201, as last amended by Laws of Utah 2011, Chapters 308 and 334
             57          32B-2-202, as last amended by Laws of Utah 2011, Chapter 334
             58          32B-2-205, as last amended by Laws of Utah 2011, Chapter 334


             59          32B-2-206, as last amended by Laws of Utah 2011, Chapter 336
             60          32B-2-207, as enacted by Laws of Utah 2010, Chapter 276
             61          32B-2-209, as last amended by Laws of Utah 2011, Second Special Session, Chapter 2
             62          32B-2-302, as enacted by Laws of Utah 2010, Chapter 276
             63          32B-2-304, as enacted by Laws of Utah 2010, Chapter 276
             64          32B-2-605, as last amended by Laws of Utah 2011, Second Special Session, Chapter 2
             65          32B-3-204, as enacted by Laws of Utah 2010, Chapter 276
             66          32B-6-805, as enacted by Laws of Utah 2011, Chapter 334
             67          32B-8a-302 (Effective 07/01/12), as enacted by Laws of Utah 2011, Chapter 334
             68          32B-8a-303 (Effective 07/01/12), as enacted by Laws of Utah 2011, Chapter 334
             69          32B-9-201, as enacted by Laws of Utah 2010, Chapter 276
             70          32B-9-202, as enacted by Laws of Utah 2010, Chapter 276
             71          32B-9-204, as last amended by Laws of Utah 2011, Chapters 307 and 334
             72          32B-9-303, as enacted by Laws of Utah 2010, Chapter 276
             73          32B-9-403, as enacted by Laws of Utah 2010, Chapter 276
             74          32B-9-404, as enacted by Laws of Utah 2010, Chapter 276
             75          52-4-205, as last amended by Laws of Utah 2011, Chapters 46 and 334
             76          63G-2-305, as last amended by Laws of Utah 2011, Chapters 18, 46, 55, 80, 151, and
             77      161
             78          63I-5-201, as renumbered and amended by Laws of Utah 2008, Chapter 382
             79      ENACTS:
             80          32B-2-201.5, Utah Code Annotated 1953
             81          32B-2-302.5, Utah Code Annotated 1953
             82          32B-2-210, Utah Code Annotated 1953
             83     
             84      Be it enacted by the Legislature of the state of Utah:
             85          Section 1. Section 32B-1-102 is amended to read:
             86           32B-1-102. Definitions.
             87          As used in this title:
             88          (1) "Airport lounge" means a business location:
             89          (a) at which an alcoholic product is sold at retail for consumption on the premises; and


             90          (b) that is located at an international airport with a United States Customs office on the
             91      premises of the international airport.
             92          (2) "Airport lounge license" means a license issued in accordance with Chapter 5,
             93      Retail License Act, and Chapter 6, Part 5, Airport Lounge License.
             94          (3) "Alcoholic beverage" means the following:
             95          (a) beer; or
             96          (b) liquor.
             97          (4) (a) "Alcoholic product" means a product that:
             98          (i) contains at least .5% of alcohol by volume; and
             99          (ii) is obtained by fermentation, infusion, decoction, brewing, distillation, or other
             100      process that uses liquid or combinations of liquids, whether drinkable or not, to create alcohol
             101      in an amount equal to or greater than .5% of alcohol by volume.
             102          (b) "Alcoholic product" includes an alcoholic beverage.
             103          (c) "Alcoholic product" does not include any of the following common items that
             104      otherwise come within the definition of an alcoholic product:
             105          (i) except as provided in Subsection (4)(d), an extract;
             106          (ii) vinegar;
             107          (iii) cider;
             108          (iv) essence;
             109          (v) tincture;
             110          (vi) food preparation; or
             111          (vii) an over-the-counter medicine.
             112          (d) "Alcoholic product" includes an extract containing alcohol obtained by distillation
             113      when it is used as a flavoring in the manufacturing of an alcoholic product.
             114          (5) "Alcohol training and education seminar" means a seminar that is:
             115          (a) required by Chapter 5, Part 4, Alcohol Training and Education Act; and
             116          (b) described in Section 62A-15-401 .
             117          (6) "Banquet" means an event:
             118          (a) that is held at one or more designated locations approved by the commission in or
             119      on the premises of a:
             120          (i) hotel;


             121          (ii) resort facility;
             122          (iii) sports center; or
             123          (iv) convention center;
             124          (b) for which there is a contract:
             125          (i) between a person operating a facility listed in Subsection (6)(a) and another person;
             126      and
             127          (ii) under which the person operating a facility listed in Subsection (6)(a) is required to
             128      provide an alcoholic product at the event; and
             129          (c) at which food and alcoholic products may be sold, offered for sale, or furnished.
             130          (7) (a) "Bar" means a surface or structure:
             131          (i) at which an alcoholic product is:
             132          (A) stored; or
             133          (B) dispensed; or
             134          (ii) from which an alcoholic product is served.
             135          (b) "Bar structure" means a surface or structure on a licensed premises if on or at any
             136      place of the surface or structure an alcoholic product is:
             137          (i) stored; or
             138          (ii) dispensed.
             139          (8) (a) Subject to Subsection (8)(d), "beer" means a product that:
             140          (i) contains at least .5% of alcohol by volume, but not more than 4% of alcohol by
             141      volume or 3.2% by weight; and
             142          (ii) is obtained by fermentation, infusion, or decoction of malted grain.
             143          (b) "Beer" may or may not contain hops or other vegetable products.
             144          (c) "Beer" includes a product that:
             145          (i) contains alcohol in the percentages described in Subsection (8)(a); and
             146          (ii) is referred to as:
             147          (A) beer;
             148          (B) ale;
             149          (C) porter;
             150          (D) stout;
             151          (E) lager; or


             152          (F) a malt or malted beverage.
             153          (d) "Beer" does not include a flavored malt beverage.
             154          (9) "Beer-only restaurant license" means a license issued in accordance with Chapter 5,
             155      Retail License Act, and Chapter 6, Part 9, Beer-only Restaurant License.
             156          (10) "Beer retailer" means a business:
             157          (a) that is engaged, primarily or incidentally, in the retail sale of beer to a patron,
             158      whether for consumption on or off the business premises; and
             159          (b) to whom a license is issued:
             160          (i) for an off-premise beer retailer, in accordance with Chapter 7, Part 2, Off-premise
             161      Beer Retailer Local Authority; or
             162          (ii) for an on-premise beer retailer, in accordance with Chapter 5, Retail License Act,
             163      and Chapter 6, Part 7, On-premise Beer Retailer License.
             164          (11) "Beer wholesaling license" means a license:
             165          (a) issued in accordance with Chapter 13, Beer Wholesaling License Act; and
             166          (b) to import for sale, or sell beer in wholesale or jobbing quantities to one or more
             167      retail licensees or off-premise beer retailers.
             168          (12) "Billboard" means a public display used to advertise, including:
             169          (a) a light device;
             170          (b) a painting;
             171          (c) a drawing;
             172          (d) a poster;
             173          (e) a sign;
             174          (f) a signboard; or
             175          (g) a scoreboard.
             176          (13) "Brewer" means a person engaged in manufacturing:
             177          (a) beer;
             178          (b) heavy beer; or
             179          (c) a flavored malt beverage.
             180          (14) "Brewery manufacturing license" means a license issued in accordance with
             181      Chapter 11, Part 5, Brewery Manufacturing License.
             182          (15) "Certificate of approval" means a certificate of approval obtained from the


             183      department under Section 32B-11-201 .
             184          (16) "Chartered bus" means a passenger bus, coach, or other motor vehicle provided by
             185      a bus company to a group of persons pursuant to a common purpose:
             186          (a) under a single contract;
             187          (b) at a fixed charge in accordance with the bus company's tariff; and
             188          (c) to give the group of persons the exclusive use of the passenger bus, coach, or other
             189      motor vehicle, and a driver to travel together to one or more specified destinations.
             190          (17) "Church" means a building:
             191          (a) set apart for worship;
             192          (b) in which religious services are held;
             193          (c) with which clergy is associated; and
             194          (d) that is tax exempt under the laws of this state.
             195          (18) (a) "Club license" means a license issued in accordance with Chapter 5, Retail
             196      License Act, and Chapter 6, Part 4, Club License.
             197          (b) "Club license" includes:
             198          (i) a dining club license;
             199          (ii) an equity club license;
             200          (iii) a fraternal club license; or
             201          (iv) a social club license.
             202          (19) "Commission" means the Alcoholic Beverage Control Commission created in
             203      Section 32B-2-201 .
             204          (20) "Commissioner" means a member of the commission.
             205          (21) "Community location" means:
             206          (a) a public or private school;
             207          (b) a church;
             208          (c) a public library;
             209          (d) a public playground; or
             210          (e) a public park.
             211          (22) "Community location governing authority" means:
             212          (a) the governing body of the community location; or
             213          (b) if the commission does not know who is the governing body of a community


             214      location, a person who appears to the commission to have been given on behalf of the
             215      community location the authority to prohibit an activity at the community location.
             216          (23) "Container" means a receptacle that contains an alcoholic product, including:
             217          (a) a bottle;
             218          (b) a vessel; or
             219          (c) a similar item.
             220          (24) "Convention center" means a facility that is:
             221          (a) in total at least 30,000 square feet; and
             222          (b) otherwise defined as a "convention center" by the commission by rule.
             223          (25) (a) Subject to Subsection (25)(b), "counter" means a surface or structure in a
             224      dining area of a licensed premises where seating is provided to a patron for service of food.
             225          (b) "Counter" does not include a surface or structure if on or at any point of the surface
             226      or structure an alcoholic product is:
             227          (i) stored; or
             228          (ii) dispensed.
             229          (26) "Department" means the Department of Alcoholic Beverage Control created in
             230      Section 32B-2-203 .
             231          (27) "Department compliance officer" means an individual who is:
             232          (a) an auditor or inspector; and
             233          (b) employed by the department.
             234          (28) "Department sample" means liquor that is placed in the possession of the
             235      department for testing, analysis, and sampling.
             236          (29) "Dining club license" means a license issued in accordance with Chapter 5, Retail
             237      License Act, and Chapter 6, Part 4, Club License, that is designated by the commission as a
             238      dining club license.
             239          (30) "Director," unless the context requires otherwise, means the director of the
             240      department.
             241          (31) "Disciplinary proceeding" means an adjudicative proceeding permitted under this
             242      title:
             243          (a) against a person subject to administrative action; and
             244          (b) that is brought on the basis of a violation of this title.


             245          (32) (a) Subject to Subsection (32)(b), "dispense" means:
             246          (i) drawing of an alcoholic product:
             247          (A) from an area where it is stored; or
             248          (B) as provided in Subsection 32B-6-205 (12)(b)(ii), 32B-6-305 (12)(b)(ii),
             249      32B-6-805 (15)(b)(ii), or 32B-6-905 (12)(b)(ii); and
             250          (ii) using the alcoholic product described in Subsection (32)(a)(i) on the premises of
             251      the licensed premises to mix or prepare an alcoholic product to be furnished to a patron of the
             252      retail licensee.
             253          (b) The definition of "dispense" in this Subsection (32) applies only to:
             254          (i) a full-service restaurant license;
             255          (ii) a limited-service restaurant license;
             256          (iii) a reception center license; and
             257          (iv) a beer-only restaurant license.
             258          (33) "Distillery manufacturing license" means a license issued in accordance with
             259      Chapter 11, Part 4, Distillery Manufacturing License.
             260          (34) "Distressed merchandise" means an alcoholic product in the possession of the
             261      department that is saleable, but for some reason is unappealing to the public.
             262          (35) "Educational facility" includes:
             263          (a) a nursery school;
             264          (b) an infant day care center; and
             265          (c) a trade and technical school.
             266          (36) "Equity club license" means a license issued in accordance with Chapter 5, Retail
             267      License Act, and Chapter 6, Part 4, Club License, that is designated by the commission as an
             268      equity club license.
             269          (37) "Event permit" means:
             270          (a) a single event permit; or
             271          (b) a temporary beer event permit.
             272          (38) "Exempt license" means a license exempt under Section 32B-1-201 from being
             273      considered in determining the total number of a retail license that the commission may issue at
             274      any time.
             275          (39) (a) "Flavored malt beverage" means a beverage:


             276          (i) that contains at least .5% alcohol by volume;
             277          (ii) that is treated by processing, filtration, or another method of manufacture that is not
             278      generally recognized as a traditional process in the production of a beer as described in 27
             279      C.F.R. Sec. 25.55;
             280          (iii) to which is added a flavor or other ingredient containing alcohol, except for a hop
             281      extract; and
             282          (iv) (A) for which the producer is required to file a formula for approval with the
             283      federal Alcohol and Tobacco Tax and Trade Bureau pursuant to 27 C.F.R. Sec. 25.55; or
             284          (B) that is not exempt under Subdivision (f) of 27 C.F.R. Sec. 25.55.
             285          (b) "Flavored malt beverage" is considered liquor for purposes of this title.
             286          (40) "Fraternal club license" means a license issued in accordance with Chapter 5,
             287      Retail License Act, and Chapter 6, Part 4, Club License, that is designated by the commission
             288      as a fraternal club license.
             289          (41) "Full-service restaurant license" means a license issued in accordance with
             290      Chapter 5, Retail License Act, and Chapter 6, Part 2, Full-service Restaurant License.
             291          (42) (a) "Furnish" means by any means to provide with, supply, or give an individual
             292      an alcoholic product, by sale or otherwise.
             293          (b) "Furnish" includes to:
             294          (i) serve;
             295          (ii) deliver; or
             296          (iii) otherwise make available.
             297          (43) "Guest" means an individual who meets the requirements of Subsection
             298      32B-6-407 (9).
             299          (44) "Health care practitioner" means:
             300          (a) a podiatrist licensed under Title 58, Chapter 5a, Podiatric Physician Licensing Act;
             301          (b) an optometrist licensed under Title 58, Chapter 16a, Utah Optometry Practice Act;
             302          (c) a pharmacist licensed under Title 58, Chapter 17b, Pharmacy Practice Act;
             303          (d) a physical therapist licensed under Title 58, Chapter 24b, Physical Therapy Practice
             304      Act;
             305          (e) a nurse or advanced practice registered nurse licensed under Title 58, Chapter 31b,
             306      Nurse Practice Act;


             307          (f) a recreational therapist licensed under Title 58, Chapter 40, Recreational Therapy
             308      Practice Act;
             309          (g) an occupational therapist licensed under Title 58, Chapter 42a, Occupational
             310      Therapy Practice Act;
             311          (h) a nurse midwife licensed under Title 58, Chapter 44a, Nurse Midwife Practice Act;
             312          (i) a mental health professional licensed under Title 58, Chapter 60, Mental Health
             313      Professional Practice Act;
             314          (j) a physician licensed under Title 58, Chapter 67, Utah Medical Practice Act;
             315          (k) an osteopath licensed under Title 58, Chapter 68, Utah Osteopathic Medical
             316      Practice Act;
             317          (l) a dentist or dental hygienist licensed under Title 58, Chapter 69, Dentist and Dental
             318      Hygienist Practice Act; and
             319          (m) a physician assistant licensed under Title 58, Chapter 70a, Physician Assistant Act.
             320          (45) (a) "Heavy beer" means a product that:
             321          (i) contains more than 4% alcohol by volume; and
             322          (ii) is obtained by fermentation, infusion, or decoction of malted grain.
             323          (b) "Heavy beer" is considered liquor for the purposes of this title.
             324          (46) "Hotel" is as defined by the commission by rule.
             325          (47) "Identification card" means an identification card issued under Title 53, Chapter 3,
             326      Part 8, Identification Card Act.
             327          (48) "Industry representative" means an individual who is compensated by salary,
             328      commission, or other means for representing and selling an alcoholic product of a
             329      manufacturer, supplier, or importer of liquor.
             330          (49) "Industry representative sample" means liquor that is placed in the possession of
             331      the department for testing, analysis, and sampling by a local industry representative on the
             332      premises of the department to educate the local industry representative of the quality and
             333      characteristics of the product.
             334          (50) "Interdicted person" means a person to whom the sale, offer for sale, or furnishing
             335      of an alcoholic product is prohibited by:
             336          (a) law; or
             337          (b) court order.


             338          (51) "Intoxicated" means that a person:
             339          (a) is significantly impaired as to the person's mental or physical functions as a result of
             340      the use of:
             341          (i) an alcoholic product;
             342          (ii) a controlled substance;
             343          (iii) a substance having the property of releasing toxic vapors; or
             344          (iv) a combination of Subsections (51)(a)(i) through (iii); and
             345          (b) exhibits plain and easily observed outward manifestations of behavior or physical
             346      signs produced by the over consumption of an alcoholic product.
             347          (52) "Investigator" means an individual who is:
             348          (a) a department compliance officer; or
             349          (b) a nondepartment enforcement officer.
             350          (53) "Invitee" is as defined in Section 32B-8-102 .
             351          (54) "License" means:
             352          (a) a retail license;
             353          (b) a license issued in accordance with Chapter 11, Manufacturing and Related
             354      Licenses Act;
             355          (c) a license issued in accordance with Chapter 12, Liquor Warehousing License Act;
             356      or
             357          (d) a license issued in accordance with Chapter 13, Beer Wholesaling License Act.
             358          (55) "Licensee" means a person who holds a license.
             359          (56) "Limited-service restaurant license" means a license issued in accordance with
             360      Chapter 5, Retail License Act, and Chapter 6, Part 3, Limited-service Restaurant License.
             361          (57) "Limousine" means a motor vehicle licensed by the state or a local authority, other
             362      than a bus or taxicab:
             363          (a) in which the driver and a passenger are separated by a partition, glass, or other
             364      barrier;
             365          (b) that is provided by a business entity to one or more individuals at a fixed charge in
             366      accordance with the business entity's tariff; and
             367          (c) to give the one or more individuals the exclusive use of the limousine and a driver
             368      to travel to one or more specified destinations.


             369          (58) (a) (i) "Liquor" means a liquid that:
             370          (A) is:
             371          (I) alcohol;
             372          (II) an alcoholic, spirituous, vinous, fermented, malt, or other liquid;
             373          (III) a combination of liquids a part of which is spirituous, vinous, or fermented; or
             374          (IV) other drink or drinkable liquid; and
             375          (B) (I) contains at least .5% alcohol by volume; and
             376          (II) is suitable to use for beverage purposes.
             377          (ii) "Liquor" includes:
             378          (A) heavy beer;
             379          (B) wine; and
             380          (C) a flavored malt beverage.
             381          (b) "Liquor" does not include beer.
             382          (59) "Liquor Control Fund" means the enterprise fund created by Section 32B-2-301 .
             383          (60) "Liquor warehousing license" means a license that is issued:
             384          (a) in accordance with Chapter 12, Liquor Warehousing License Act; and
             385          (b) to a person, other than a licensed manufacturer, who engages in the importation for
             386      storage, sale, or distribution of liquor regardless of amount.
             387          (61) "Local authority" means:
             388          (a) for premises that are located in an unincorporated area of a county, the governing
             389      body of a county; or
             390          (b) for premises that are located in an incorporated city or a town, the governing body
             391      of the city or town.
             392          (62) "Lounge or bar area" is as defined by rule made by the commission.
             393          (63) "Manufacture" means to distill, brew, rectify, mix, compound, process, ferment, or
             394      otherwise make an alcoholic product for personal use or for sale or distribution to others.
             395          (64) "Member" means an individual who, after paying regular dues, has full privileges
             396      in an equity club licensee or fraternal club licensee.
             397          (65) (a) "Military installation" means a base, air field, camp, post, station, yard, center,
             398      or homeport facility for a ship:
             399          (i) (A) under the control of the United States Department of Defense; or


             400          (B) of the National Guard;
             401          (ii) that is located within the state; and
             402          (iii) including a leased facility.
             403          (b) "Military installation" does not include a facility used primarily for:
             404          (i) civil works;
             405          (ii) a rivers and harbors project; or
             406          (iii) a flood control project.
             407          (66) "Minor" means an individual under the age of 21 years.
             408          (67) "Nondepartment enforcement agency" means an agency that:
             409          (a) (i) is a state agency other than the department; or
             410          (ii) is an agency of a county, city, or town; and
             411          (b) has a responsibility to enforce one or more provisions of this title.
             412          (68) "Nondepartment enforcement officer" means an individual who is:
             413          (a) a peace officer, examiner, or investigator; and
             414          (b) employed by a nondepartment enforcement agency.
             415          (69) (a) "Off-premise beer retailer" means a beer retailer who is:
             416          (i) licensed in accordance with Chapter 7, Part 2, Off-premise Beer Retailer Local
             417      Authority; and
             418          (ii) engaged in the retail sale of beer to a patron for consumption off the beer retailer's
             419      premises.
             420          (b) "Off-premise beer retailer" does not include an on-premise beer retailer.
             421          (70) "On-premise banquet license" means a license issued in accordance with Chapter
             422      5, Retail License Act, and Chapter 6, Part 6, On-premise Banquet License.
             423          (71) "On-premise beer retailer" means a beer retailer who is:
             424          (a) authorized to sell, offer for sale, or furnish beer under a license issued in
             425      accordance with Chapter 5, Retail License Act, and Chapter 6, Part 7, On-premise Beer
             426      Retailer License; and
             427          (b) engaged in the sale of beer to a patron for consumption on the beer retailer's
             428      premises:
             429          (i) regardless of whether the beer retailer sells beer for consumption off the licensed
             430      premises; and


             431          (ii) on and after March 1, 2012, operating:
             432          (A) as a tavern; or
             433          (B) in a manner that meets the requirements of Subsection 32B-6-703 (2)(e)(i).
             434          (72) "Opaque" means impenetrable to sight.
             435          (73) "Package agency" means a retail liquor location operated:
             436          (a) under an agreement with the department; and
             437          (b) by a person:
             438          (i) other than the state; and
             439          (ii) who is authorized by the commission in accordance with Chapter 2, Part 6, Package
             440      Agency, to sell packaged liquor for consumption off the premises of the package agency.
             441          (74) "Package agent" means a person who holds a package agency.
             442          (75) "Patron" means an individual to whom food, beverages, or services are sold,
             443      offered for sale, or furnished, or who consumes an alcoholic product including:
             444          (a) a customer;
             445          (b) a member;
             446          (c) a guest;
             447          (d) an attendee of a banquet or event;
             448          (e) an individual who receives room service;
             449          (f) a resident of a resort;
             450          (g) a public customer under a resort spa sublicense, as defined in Section 32B-8-102 ;
             451      or
             452          (h) an invitee.
             453          (76) "Permittee" means a person issued a permit under:
             454          (a) Chapter 9, Event Permit Act; or
             455          (b) Chapter 10, Special Use Permit Act.
             456          (77) "Person subject to administrative action" means:
             457          (a) a licensee;
             458          (b) a permittee;
             459          (c) a manufacturer;
             460          (d) a supplier;
             461          (e) an importer;


             462          (f) one of the following holding a certificate of approval:
             463          (i) an out-of-state brewer;
             464          (ii) an out-of-state importer of beer, heavy beer, or flavored malt beverages; or
             465          (iii) an out-of-state supplier of beer, heavy beer, or flavored malt beverages; or
             466          (g) staff of:
             467          (i) a person listed in Subsections (77)(a) through (f); or
             468          (ii) a package agent.
             469          (78) "Premises" means a building, enclosure, or room used in connection with the
             470      storage, sale, furnishing, consumption, manufacture, or distribution, of an alcoholic product,
             471      unless otherwise defined in this title or rules made by the commission.
             472          (79) "Prescription" means an order issued by a health care practitioner when:
             473          (a) the health care practitioner is licensed under Title 58, Occupations and Professions,
             474      to prescribe a controlled substance, other drug, or device for medicinal purposes;
             475          (b) the order is made in the course of that health care practitioner's professional
             476      practice; and
             477          (c) the order is made for obtaining an alcoholic product for medicinal purposes only.
             478          (80) (a) "Private event" means a specific social, business, or recreational event:
             479          (i) for which an entire room, area, or hall is leased or rented in advance by an identified
             480      group; and
             481          (ii) that is limited in attendance to people who are specifically designated and their
             482      guests.
             483          (b) "Private event" does not include an event to which the general public is invited,
             484      whether for an admission fee or not.
             485          (81) (a) "Proof of age" means:
             486          (i) an identification card;
             487          (ii) an identification that:
             488          (A) is substantially similar to an identification card;
             489          (B) is issued in accordance with the laws of a state other than Utah in which the
             490      identification is issued;
             491          (C) includes date of birth; and
             492          (D) has a picture affixed;


             493          (iii) a valid driver license certificate that:
             494          (A) includes date of birth;
             495          (B) has a picture affixed; and
             496          (C) is issued:
             497          (I) under Title 53, Chapter 3, Uniform Driver License Act; or
             498          (II) in accordance with the laws of the state in which it is issued;
             499          (iv) a military identification card that:
             500          (A) includes date of birth; and
             501          (B) has a picture affixed; or
             502          (v) a valid passport.
             503          (b) "Proof of age" does not include a driving privilege card issued in accordance with
             504      Section 53-3-207 .
             505          (82) (a) "Public building" means a building or permanent structure that is:
             506          (i) owned or leased by:
             507          (A) the state; or
             508          (B) a local government entity; and
             509          (ii) used for:
             510          (A) public education;
             511          (B) transacting public business; or
             512          (C) regularly conducting government activities.
             513          (b) "Public building" does not include a building owned by the state or a local
             514      government entity when the building is used by a person, in whole or in part, for a proprietary
             515      function.
             516          (83) "Public conveyance" means a conveyance to which the public or a portion of the
             517      public has access to and a right to use for transportation, including an airline, railroad, bus,
             518      boat, or other public conveyance.
             519          (84) "Reception center" means a business that:
             520          (a) operates facilities that are at least 5,000 square feet; and
             521          (b) has as its primary purpose the leasing of the facilities described in Subsection
             522      (84)(a) to a third party for the third party's event.
             523          (85) "Reception center license" means a license issued in accordance with Chapter 5,


             524      Retail License Act, and Chapter 6, Part 8, Reception Center License.
             525          (86) (a) "Record" means information that is:
             526          (i) inscribed on a tangible medium; or
             527          (ii) stored in an electronic or other medium and is retrievable in a perceivable form.
             528          (b) "Record" includes:
             529          (i) a book;
             530          (ii) a book of account;
             531          (iii) a paper;
             532          (iv) a contract;
             533          (v) an agreement;
             534          (vi) a document; or
             535          (vii) a recording in any medium.
             536          (87) "Residence" means a person's principal place of abode within Utah.
             537          (88) "Resident," in relation to a resort, is as defined in Section 32B-8-102 .
             538          (89) "Resort" is as defined in Section 32B-8-102 .
             539          (90) "Resort facility" is as defined by the commission by rule.
             540          (91) "Resort license" means a license issued in accordance with Chapter 5, Retail
             541      License Act, and Chapter 8, Resort License Act.
             542          (92) "Restaurant" means a business location:
             543          (a) at which a variety of foods are prepared;
             544          (b) at which complete meals are served to the general public; and
             545          (c) that is engaged primarily in serving meals to the general public.
             546          (93) "Retail license" means one of the following licenses issued under this title:
             547          (a) a full-service restaurant license;
             548          (b) a limited-service restaurant license;
             549          (c) a club license;
             550          (d) an airport lounge license;
             551          (e) an on-premise banquet license;
             552          (f) an on-premise beer license;
             553          (g) a reception center license; or
             554          (h) a beer-only restaurant license.


             555          (94) "Room service" means furnishing an alcoholic product to a person in a guest room
             556      of a:
             557          (a) hotel; or
             558          (b) resort facility.
             559          (95) "Serve" means to place an alcoholic product before an individual.
             560          (96) (a) "School" means a building used primarily for the general education of minors.
             561          (b) "School" does not include an educational facility.
             562          (97) "Sell" or "offer for sale" means a transaction, exchange, or barter whereby, for
             563      consideration, an alcoholic product is either directly or indirectly transferred, solicited, ordered,
             564      delivered for value, or by a means or under a pretext is promised or obtained, whether done by
             565      a person as a principal, proprietor, or as staff, unless otherwise defined in this title or the rules
             566      made by the commission.
             567          (98) "Sexually oriented entertainer" means a person who while in a state of seminudity
             568      appears at or performs:
             569          (a) for the entertainment of one or more patrons;
             570          (b) on the premises of:
             571          (i) a social club licensee; or
             572          (ii) a tavern;
             573          (c) on behalf of or at the request of the licensee described in Subsection (98)(b);
             574          (d) on a contractual or voluntary basis; and
             575          (e) whether or not the person is designated as:
             576          (i) an employee;
             577          (ii) an independent contractor;
             578          (iii) an agent of the licensee; or
             579          (iv) a different type of classification.
             580          (99) "Single event permit" means a permit issued in accordance with Chapter 9, Part 3,
             581      Single Event Permit.
             582          (100) "Small brewer" means a brewer who manufactures less than [60,000] 80,000
             583      barrels of beer, heavy beer, and flavored malt beverages per year.
             584          (101) "Social club license" means a license issued in accordance with Chapter 5, Retail
             585      License Act, and Chapter 6, Part 4, Club License, that is designated by the commission as a


             586      social club license.
             587          (102) "Special use permit" means a permit issued in accordance with Chapter 10,
             588      Special Use Permit Act.
             589          (103) (a) "Spirituous liquor" means liquor that is distilled.
             590          (b) "Spirituous liquor" includes an alcoholic product defined as a "distilled spirit" by
             591      27 U.S.C. Sec. 211 and 27 C.F.R. Sec. 5.11 through 5.23.
             592          (104) "Sports center" is as defined by the commission by rule.
             593          (105) (a) "Staff" means an individual who engages in activity governed by this title:
             594          (i) on behalf of a business, including a package agent, licensee, permittee, or certificate
             595      holder;
             596          (ii) at the request of the business, including a package agent, licensee, permittee, or
             597      certificate holder; or
             598          (iii) under the authority of the business, including a package agent, licensee, permittee,
             599      or certificate holder.
             600          (b) "Staff" includes:
             601          (i) an officer;
             602          (ii) a director;
             603          (iii) an employee;
             604          (iv) personnel management;
             605          (v) an agent of the licensee, including a managing agent;
             606          (vi) an operator; or
             607          (vii) a representative.
             608          (106) "State of nudity" means:
             609          (a) the appearance of:
             610          (i) the nipple or areola of a female human breast;
             611          (ii) a human genital;
             612          (iii) a human pubic area; or
             613          (iv) a human anus; or
             614          (b) a state of dress that fails to opaquely cover:
             615          (i) the nipple or areola of a female human breast;
             616          (ii) a human genital;


             617          (iii) a human pubic area; or
             618          (iv) a human anus.
             619          (107) "State of seminudity" means a state of dress in which opaque clothing covers no
             620      more than:
             621          (a) the nipple and areola of the female human breast in a shape and color other than the
             622      natural shape and color of the nipple and areola; and
             623          (b) the human genitals, pubic area, and anus:
             624          (i) with no less than the following at its widest point:
             625          (A) four inches coverage width in the front of the human body; and
             626          (B) five inches coverage width in the back of the human body; and
             627          (ii) with coverage that does not taper to less than one inch wide at the narrowest point.
             628          (108) (a) "State store" means a facility for the sale of packaged liquor:
             629          (i) located on premises owned or leased by the state; and
             630          (ii) operated by a state employee.
             631          (b) "State store" does not include:
             632          (i) a package agency;
             633          (ii) a licensee; or
             634          (iii) a permittee.
             635          (109) (a) "Storage area" means an area on licensed premises where the licensee stores
             636      an alcoholic product.
             637          (b) "Store" means to place or maintain in a location an alcoholic product from which a
             638      person draws to prepare an alcoholic product to be furnished to a patron, except as provided in
             639      Subsection 32B-6-205 (12)(b)(ii), 32B-6-305 (12)(b)(ii), 32B-6-805 (15)(b)(ii), or
             640      32B-6-905 (12)(b)(ii).
             641          (110) "Sublicense" is as defined in Section 32B-8-102 .
             642          (111) "Supplier" means a person who sells an alcoholic product to the department.
             643          (112) "Tavern" means an on-premise beer retailer who is:
             644          (a) issued a license by the commission in accordance with Chapter 5, Retail License
             645      Act, and Chapter 6, Part 7, On-premise Beer Retailer License; and
             646          (b) designated by the commission as a tavern in accordance with Chapter 6, Part 7,
             647      On-premise Beer Retailer License.


             648          (113) "Temporary beer event permit" means a permit issued in accordance with
             649      Chapter 9, Part 4, Temporary Beer Event Permit.
             650          (114) "Temporary domicile" means the principal place of abode within Utah of a
             651      person who does not have a present intention to continue residency within Utah permanently or
             652      indefinitely.
             653          (115) "Translucent" means a substance that allows light to pass through, but does not
             654      allow an object or person to be seen through the substance.
             655          (116) "Unsaleable liquor merchandise" means a container that:
             656          (a) is unsaleable because the container is:
             657          (i) unlabeled;
             658          (ii) leaky;
             659          (iii) damaged;
             660          (iv) difficult to open; or
             661          (v) partly filled;
             662          (b) (i) has faded labels or defective caps or corks;
             663          (ii) has contents that are:
             664          (A) cloudy;
             665          (B) spoiled; or
             666          (C) chemically determined to be impure; or
             667          (iii) contains:
             668          (A) sediment; or
             669          (B) a foreign substance; or
             670          (c) is otherwise considered by the department as unfit for sale.
             671          (117) (a) "Wine" means an alcoholic product obtained by the fermentation of the
             672      natural sugar content of fruits, plants, honey, or milk, or other like substance, whether or not
             673      another ingredient is added.
             674          (b) "Wine" is considered liquor for purposes of this title, except as otherwise provided
             675      in this title.
             676          (118) "Winery manufacturing license" means a license issued in accordance with
             677      Chapter 11, Part 3, Winery Manufacturing License.
             678          Section 2. Section 32B-2-201 is amended to read:


             679           32B-2-201. Alcoholic Beverage Control Commission created.
             680          (1) There is created the "Alcoholic Beverage Control Commission." The commission is
             681      the governing board over the department.
             682          (2) (a) The commission is composed of [five] seven part-time commissioners
             683      appointed by the governor with the consent of the Senate.
             684          (b) No more than [three] four commissioners may be of the same political party.
             685          (3) (a) Except as required by Subsection (3)(b), as terms of commissioners expire, the
             686      governor shall appoint each new commissioner or reappointed commissioner to a four-year
             687      term.
             688          (b) Notwithstanding the requirements of Subsection (3)(a), the governor shall, at the
             689      time of appointment or reappointment, adjust the length of terms to ensure that the terms of no
             690      more than [two] three commissioners expire in a fiscal year.
             691          (4) (a) When a vacancy occurs on the commission for any reason, the governor shall
             692      appoint a replacement for the unexpired term with the consent of the Senate.
             693          (b) Unless removed in accordance with Subsection (6), a commissioner shall remain on
             694      the commission after the expiration of a term until a successor is appointed by the governor,
             695      with the consent of the Senate.
             696          (5) A commissioner shall take the oath of office.
             697          (6) (a) The governor may remove a commissioner from the commission for cause,
             698      neglect of duty, inefficiency, or malfeasance after a public hearing conducted by:
             699          (i) the governor; or
             700          (ii) an impartial hearing examiner appointed by the governor to conduct the hearing.
             701          (b) At least 10 days before the hearing described in Subsection (6)(a), the governor
             702      shall provide the commissioner notice of:
             703          (i) the date, time, and place of the hearing; and
             704          (ii) the alleged grounds for the removal.
             705          (c) The commissioner shall have an opportunity to:
             706          (i) attend the hearing;
             707          (ii) present witnesses and other evidence; and
             708          (iii) confront and cross examine witnesses.
             709          (d) After a hearing under this Subsection (6):


             710          (i) the person conducting the hearing shall prepare written findings of fact and
             711      conclusions of law; and
             712          (ii) the governor shall serve a copy of the prepared findings and conclusions upon the
             713      commissioner.
             714          (e) If a hearing under this Subsection (6) is held before a hearing examiner, the hearing
             715      examiner shall issue a written recommendation to the governor in addition to complying with
             716      Subsection (6)(d).
             717          (f) A commissioner has five days from the day on which the commissioner receives the
             718      findings and conclusions described in Subsection (6)(d) to file written objections to the
             719      recommendation before the governor issues a final order.
             720          (g) The governor shall:
             721          (i) issue the final order under this Subsection (6) in writing; and
             722          (ii) serve the final order upon the commissioner.
             723          (7) A commissioner may not receive compensation or benefits for the commissioner's
             724      service, but may receive per diem and travel expenses in accordance with:
             725          (a) Section 63A-3-106 ;
             726          (b) Section 63A-3-107 ; and
             727          (c) rules made by the Division of Finance pursuant to Sections 63A-3-106 and
             728      63A-3-107 .
             729          (8) (a) The governor shall annually appoint the chair of the commission. A
             730      commissioner serves as chair to the commission at the pleasure of the governor. If removed as
             731      chair, the commissioner continues to serve as a commissioner unless removed as a
             732      commissioner under Subsection (6).
             733          (b) The commission shall elect:
             734          (i) another commissioner to serve as vice chair; and
             735          (ii) other commission officers as the commission considers advisable.
             736          (c) A commissioner elected under Subsection (8)(b) shall serve in the office to which
             737      the commissioner is elected at the pleasure of the commission.
             738          (9) (a) Each commissioner has equal voting rights on a commission matter when in
             739      attendance at a commission meeting.
             740          (b) [Three] Four commissioners is a quorum for conducting commission business.


             741          (c) A majority vote of the quorum present at a meeting is required for the commission
             742      to act.
             743          (10) (a) The commission shall meet at least monthly, but may hold other meetings at
             744      times and places as scheduled by:
             745          (i) the commission;
             746          (ii) the chair; or
             747          (iii) three commissioners upon filing a written request for a meeting with the chair.
             748          (b) Notice of the time and place of a commission meeting shall be given to each
             749      commissioner, and to the public in compliance with Title 52, Chapter 4, Open and Public
             750      Meetings Act. A commission meeting is open to the public, except for a commission meeting
             751      or portion of a commission meeting that is closed by the commission as authorized by Sections
             752      52-4-204 and 52-4-205 .
             753          Section 3. Section 32B-2-201.5 is enacted to read:
             754          32B-2-201.5. Commission subcommittee -- Chair's oversight responsibilities.
             755          (1) There is created within the commission two subcommittees consisting of members
             756      of the commission and known as the:
             757          (a) "Compliance, Licensing, and Enforcement Subcommittee"; and
             758          (b) "Operations and Procurement Subcommittee."
             759          (2) A subcommittee shall have four members, including the chair of the commission.
             760      The chair of the commission shall appoint the members to a subcommittee.
             761          (3) The director shall consult with the chair of the commission over:
             762          (a) the internal affairs of the department; and
             763          (b) subject to Section 32B-2-207 , hiring and firing of upper management of the
             764      department.
             765          (4) The commission by rule, made in accordance with Title 63G, Chapter 3, Utah
             766      Administrative Rulemaking Act, shall establish the duties of the subcommittees created under
             767      this section.
             768          Section 4. Section 32B-2-202 is amended to read:
             769           32B-2-202. Powers and duties of the commission.
             770          (1) The commission shall:
             771          (a) consistent with the policy established by the Legislature by statute, act as a general


             772      policymaking body on the subject of alcoholic product control;
             773          (b) adopt and issue policies, rules, and procedures;
             774          (c) set policy by written rules that establish criteria and procedures for:
             775          (i) issuing, denying, not renewing, suspending, or revoking a package agency, license,
             776      permit, or certificate of approval; and
             777          (ii) determining the location of a state store, package agency, or retail licensee;
             778          (d) decide within the limits, and under the conditions imposed by this title, the number
             779      and location of state stores, package agencies, and retail licensees in the state;
             780          (e) issue, deny, suspend, revoke, or not renew the following package agencies, licenses,
             781      permits, or certificates of approval for the purchase, storage, sale, offer for sale, furnishing,
             782      consumption, manufacture, and distribution of an alcoholic product:
             783          (i) a package agency;
             784          (ii) a full-service restaurant license;
             785          (iii) a limited-service restaurant license;
             786          (iv) a club license;
             787          (v) an airport lounge license;
             788          (vi) an on-premise banquet license;
             789          (vii) a resort license, under which four or more sublicenses may be included;
             790          (viii) an on-premise beer retailer license;
             791          (ix) a reception center license;
             792          (x) a beer-only restaurant license;
             793          (xi) subject to Subsection (4), a single event permit;
             794          (xii) subject to Subsection (4), a temporary beer event permit;
             795          (xiii) a special use permit;
             796          (xiv) a manufacturing license;
             797          (xv) a liquor warehousing license;
             798          (xvi) a beer wholesaling license; and
             799          (xvii) one of the following that holds a certificate of approval:
             800          (A) an out-of-state brewer;
             801          (B) an out-of-state importer of beer, heavy beer, or flavored malt beverages; and
             802          (C) an out-of-state supplier of beer, heavy beer, or flavored malt beverages;


             803          (f) in accordance with Section 32B-5-205 , issue, deny, suspend, or revoke one of the
             804      following conditional licenses for the purchase, storage, sale, furnishing, consumption,
             805      manufacture, and distribution of an alcoholic product:
             806          (i) a conditional full-service restaurant license; or
             807          (ii) a conditional limited-service restaurant license;
             808          (g) prescribe the duties of the department in assisting the commission in issuing a
             809      package agency, license, permit, or certificate of approval under this title;
             810          (h) to the extent a fee is not specified in this title, establish a fee allowed under this title
             811      in accordance with Section 63J-1-504 ;
             812          (i) fix prices at which liquor is sold that are the same at all state stores, package
             813      agencies, and retail licensees;
             814          (j) issue and distribute price lists showing the price to be paid by a purchaser for each
             815      class, variety, or brand of liquor kept for sale by the department;
             816          (k) (i) require the director to follow sound management principles; and
             817          (ii) require periodic reporting from the director to ensure that:
             818          (A) sound management principles are being followed; and
             819          (B) policies established by the commission are being observed;
             820          (l) (i) receive, consider, and act in a timely manner upon the reports, recommendations,
             821      and matters submitted by the director to the commission; and
             822          (ii) do the things necessary to support the department in properly performing the
             823      department's duties;
             824          (m) obtain temporarily and for special purposes the services of an expert or person
             825      engaged in the practice of a profession, or a person who possesses a needed skill if:
             826          (i) considered expedient; and
             827          (ii) approved by the governor;
             828          (n) prescribe the conduct, management, and equipment of premises upon which an
             829      alcoholic product may be stored, sold, offered for sale, furnished, or consumed;
             830          (o) make rules governing the credit terms of beer sales within the state to retail
             831      licensees; and
             832          (p) in accordance with Chapter 3, Disciplinary Actions and Enforcement Act, take
             833      disciplinary action against a person subject to administrative action.


             834          (2) [The] Consistent with the policy established by the Legislature by statute, the power
             835      of the commission to do the following is plenary, except as otherwise provided by this title, and
             836      not subject to review:
             837          (a) establish a state store;
             838          (b) issue authority to act as a package agent or operate a package agency; and
             839          (c) issue or deny a license, permit, or certificate of approval.
             840          (3) If the commission is authorized or required to make a rule under this title, the
             841      commission shall make the rule in accordance with Title 63G, Chapter 3, Utah Administrative
             842      Rulemaking Act.
             843          (4) Notwithstanding Subsections (1)(e)(xi) and (xii), the director or deputy director
             844      may issue an event permit in accordance with Chapter 9, Event Permit Act.
             845          Section 5. Section 32B-2-205 is amended to read:
             846           32B-2-205. Director of alcoholic beverage control.
             847          (1) (a) [The commission by a vote of four of the five commissioners, with the approval
             848      of the] In accordance with Subsection (1)(b), the governor, [and] with the consent of the
             849      Senate, shall appoint a director of alcoholic beverage control [who] to a four-year term. The
             850      director may be appointed to more than one four-year term. The director is the administrative
             851      head of the department.
             852          (b) (i) The governor shall appoint the director from nominations made by the
             853      commission.
             854          (ii) The commission shall submit the nomination of three individuals to the governor
             855      for appointment of the director.
             856          (iii) By no later than 30 calendar days from the day on which the governor receives the
             857      three nominations submitted by the commission, the governor may:
             858          (A) appoint the director; or
             859          (B) reject the three nominations.
             860          (iv) If the governor rejects the nominations or fails to take action within the 30-day
             861      period, the commission shall nominate three different individuals from which the governor may
             862      appoint the director or reject the nominations until such time as the governor appoints the
             863      director.
             864          (v) The governor may reappoint the director without seeking nominations from the


             865      commission. Reappointment of a director is subject to the consent of the Senate.
             866          (c) If there is a vacancy in the position of director, during the nomination process
             867      described in Subsection (1)(b), the governor may appoint an interim director for a period of up
             868      to 30 calendar days. If a director is not appointed within the 30-day period, the interim director
             869      may continue to serve beyond the 30-day period subject to the consent of the Senate at the next
             870      scheduled time for the Senate giving consent to appointments of the governor. Except that if
             871      the Senate does not act on the consent to the appointment of the interim director within 60 days
             872      of the end of the initial 30-day period, the interim director may continue as the interim director.
             873          [(b)] (d) The director [serves at the pleasure of the commission, except that the director
             874      may only be removed from office by a vote of four commissioners.] may be terminated by:
             875          (i) the commission by a vote of four commissioners; or
             876          (ii) the governor after consultation with the commission.
             877          [(c)] (e) The director may not be a commissioner.
             878          [(d)] (f) The director shall:
             879          (i) be qualified in administration;
             880          (ii) be knowledgeable by experience and training in the field of business management;
             881      and
             882          (iii) possess any other qualification prescribed by the commission.
             883          (2) The governor shall establish the director's compensation within the salary range
             884      fixed by the Legislature in Title 67, Chapter 22, State Officer Compensation.
             885          (3) The director shall:
             886          (a) carry out the policies of the commission;
             887          (b) carry out the policies of the department;
             888          (c) fully inform the commission of the operations and administrative activities of the
             889      department; and
             890          (d) assist the commission in the proper discharge of the commission's duties.
             891          Section 6. Section 32B-2-206 is amended to read:
             892           32B-2-206. Powers and duties of the director.
             893          Subject to the powers and responsibilities of the commission under this title, the
             894      director:
             895          (1) (a) shall prepare and propose to the commission general policies, rules, and


             896      procedures governing the administrative activities of the department; and
             897          (b) may submit other recommendations to the commission as the director considers in
             898      the interest of the commission's or the department's business;
             899          (2) within the general policies, rules, and procedures of the commission, shall:
             900          (a) provide day-to-day direction, coordination, and delegation of responsibilities in the
             901      administrative activities of the department's business; and
             902          (b) make internal department policies and procedures relating to:
             903          (i) department personnel matters; and
             904          (ii) the day-to-day operation of the department;
             905          (3) subject to Section 32B-2-207 , shall appoint or employ personnel as considered
             906      necessary in the administration of this title, and with regard to the personnel shall:
             907          (a) prescribe the conditions of employment;
             908          (b) define the respective duties and powers; and
             909          (c) fix the remuneration in accordance with Title 67, Chapter 19, Utah State Personnel
             910      Management Act;
             911          (4) shall establish and secure adherence to a system of reports, controls, and
             912      performance in matters relating to personnel, security, department property management, and
             913      operation of:
             914          (a) a department office;
             915          (b) a warehouse;
             916          (c) a state store; and
             917          (d) a package agency;
             918          (5) within the policies, rules, and procedures approved by the commission and
             919      provisions of law, shall purchase, store, keep for sale, sell, import, and control the storage, sale,
             920      furnishing, transportation, or delivery of an alcoholic product;
             921          (6) shall prepare for commission approval:
             922          (a) recommendations regarding the location, establishment, relocation, and closure of a
             923      state store or package agency;
             924          (b) recommendations regarding the issuance, denial, nonrenewal, suspension, or
             925      revocation of a license, permit, or certificate of approval;
             926          (c) an annual budget, proposed legislation, and reports as required by law and sound


             927      business principles;
             928          (d) plans for reorganizing divisions of the department and the functions of the
             929      divisions;
             930          (e) manuals containing commission and department policies, rules, and procedures;
             931          (f) an inventory control system;
             932          (g) any other report or recommendation requested by the commission;
             933          (h) rules described in Subsection 32B-2-202 (1)(o) governing the credit terms of the
             934      sale of beer;
             935          (i) rules governing the calibration, maintenance, and regulation of a calibrated metered
             936      dispensing system;
             937          (j) rules governing the display of a list of types and brand names of liquor furnished
             938      through a calibrated metered dispensing system;
             939          (k) price lists issued and distributed showing the price to be paid for each class, variety,
             940      or brand of liquor kept for sale at a state store, package agency, or retail licensee;
             941          (l) policies or rules prescribing the books of account maintained by the department and
             942      by a state store, package agency, or retail licensee; and
             943          (m) a policy prescribing the manner of giving and serving a notice required by this title
             944      or rules made under this title;
             945          (7) shall make available through the department to any person, upon request, a copy of
             946      a policy made by the director;
             947          (8) shall make and maintain a current copy of a manual that contains the rules and
             948      policies of the commission and department available for public inspection;
             949          (9) (a) after consultation with the governor, shall determine whether an alcoholic
             950      product should not be sold, offered for sale, or otherwise furnished in an area of the state
             951      during a period of emergency that is proclaimed by the governor to exist in that area; and
             952          (b) shall issue a necessary public announcement or policy with respect to the
             953      determination described in Subsection (9)(a); [and]
             954          (10) issue event permits in accordance with Chapter 9, Event Permit Act; and
             955          [(10)] (11) shall perform any other duty required by the commission or by law.
             956          Section 7. Section 32B-2-207 is amended to read:
             957           32B-2-207. Department employees -- Requirements.


             958          (1) "Upper management" means the director, a deputy director, or other exempt
             959      employee of the department, except for the director of internal audits and auditors hired by the
             960      director of internal audits under Section 32B-2-302.5 .
             961          [(1)] (2) (a) Subject to this title, including the requirements of Chapter 1, Part 3,
             962      Qualifications and Background, the director may prescribe the qualifications of a department
             963      employee.
             964          (b) The director may hire an employee who is upper management only with the
             965      approval of four commissioners voting in an open meeting.
             966          (c) Except as provided in Section 32B-1-303 , the executive director may dismiss an
             967      employee who is upper management after consultation with the chair of the commission.
             968          [(2)] (3) (a) A person who seeks employment with the department shall file with the
             969      department an application under oath or affirmation in a form prescribed by the commission.
             970          (b) Upon receiving an application, the department shall determine whether the
             971      individual is:
             972          (i) of good moral character; and
             973          (ii) qualified for the position sought.
             974          (c) The department shall select an individual for employment or advancement with the
             975      department in accordance with Title 67, Chapter 19, Utah State Personnel Management Act.
             976          [(3)] (4) The following are not considered a department employee:
             977          (a) a package agent;
             978          (b) a licensee;
             979          (c) a staff member of a package agent; or
             980          (d) staff of a licensee.
             981          [(4)] (5) The department may not employ a minor to:
             982          (a) work in:
             983          (i) a state store; or
             984          (ii) a department warehouse; or
             985          (b) engage in an activity involving the handling of an alcoholic product.
             986          Section 8. Section 32B-2-209 is amended to read:
             987           32B-2-209. Prohibited interests, relationships, and actions.
             988          (1) As used in this section:


             989          (a) "Applicable department employee" means a department employee who is:
             990          (i) designated as a deputy or assistant director;
             991          (ii) a chief administrative officer of a division within the department;
             992          (iii) a department compliance officer; or
             993          (iv) an employee directly performing purchasing, licensing, or compliance functions of
             994      the department.
             995          (b) "Immediate family" means an individual's:
             996          (i) spouse; or
             997          (ii) child who is younger than 18 years of age.
             998          (c) "Permit" does not include:
             999          (i) an industrial or manufacturing use permit;
             1000          (ii) a scientific or educational use permit; or
             1001          (iii) a religious wine use permit.
             1002          (2) In addition to being subject to Title 67, Chapter 16, Utah Public Officers' and
             1003      Employees' Ethics Act, an individual who is a commissioner, the director, or an applicable
             1004      department employee may not:
             1005          (a) have a pecuniary interest, whether as the holder of stock or other securities other
             1006      than a mutual fund, in a person who applies for or holds a package agency, license, or permit
             1007      under this title;
             1008          (b) otherwise have a conflict of interest with a person who applies for or holds a
             1009      package agency, license, or permit under this title;
             1010          (c) have an office, position, or relationship, or be engaged in a business or avocation
             1011      that interferes or is incompatible with the effective and objective fulfillment of the duties of
             1012      office or employment;
             1013          (d) have a direct business relationship with a person subject to administrative action
             1014      under this title;
             1015          (e) accept a gift, gratuity, emolument, or employment from:
             1016          (i) a person who applies for or holds a package agency, license, or permit under this
             1017      title; or
             1018          (ii) an officer, agent, or employee of a person who applies for or holds a package
             1019      agency, license, or permit under this title, except that a commissioner, the director, or an


             1020      applicable department employee may accept a gift from an officer, agent, or employee if the
             1021      gift is equal to or less than $50; or
             1022          (f) solicit, suggest, request, or recommend, directly or indirectly, the appointment of
             1023      any person to any office or employment with a person who applies for or holds a package
             1024      agency, license, or permit under this title.
             1025          (3) An immediate family member of a commissioner, the director, or an applicable
             1026      department employee may not:
             1027          (a) have a pecuniary interest, whether as the holder of stock or other securities other
             1028      than a mutual fund, in a person who applies for or holds a package agency, license, or permit
             1029      under this title;
             1030          (b) otherwise have a conflict of interest with a person who applies for or holds a
             1031      package agency, license, or permit under this title;
             1032          (c) have an office, position, or relationship, or be engaged in a business or avocation
             1033      that interferes or is incompatible with the effective and objective fulfillment of the duties of
             1034      office or employment of the commissioner, director, or applicable department employee for
             1035      whom the person is immediate family;
             1036          (d) accept a gift, gratuity, emolument, or employment from:
             1037          (i) a person who applies for or holds a package agency, license, or permit under this
             1038      title; or
             1039          (ii) an officer, agent, or employee of a person who applies for or holds a package
             1040      agency, license, or permit under this title, except that an immediate family member may accept
             1041      a gift from an officer, agent, or employee if the gift is equal to or less than $50; or
             1042          (e) solicit, suggest, request, or recommend, directly or indirectly, the appointment of
             1043      any person to any office or employment with a person who applies for or holds a package
             1044      agency, license, or permit under this title.
             1045          (4) An officer, agent, attorney, or employee of a person who applies for or holds a
             1046      package agency, license, or permit under this title may not directly or indirectly solicit, request,
             1047      or recommend to the governor, any state senator, the commission, or the department the
             1048      appointment of any person:
             1049          (a) as a commissioner;
             1050          (b) as director of the department; or


             1051          (c) to a department staff position.
             1052          (5) (a) A commissioner shall disclose during a meeting of the commission a potential
             1053      violation of this section, including the existence and nature of a professional, financial,
             1054      business, or personal interest with a person who holds, or an applicant for, a package agency,
             1055      license, or permit issued under this title that may result in a violation of this section.
             1056          (b) After a commissioner makes a disclosure under Subsection (5)(a):
             1057          (i) the commission may, by motion, determine whether there is a potential violation of
             1058      this section;
             1059          (ii) if the commission determines that there is a potential violation of this section:
             1060          (A) the commission shall notify the governor; and
             1061          (B) the commissioner may not vote on any matter that would result in the potential
             1062      violation of this section; and
             1063          (iii) if the commission determines that there is not a potential violation of this section,
             1064      a commissioner may elect whether to vote on the issue that gives rise to the disclosure under
             1065      Subsection (5)(a).
             1066          (c) The commission shall record any declaration of a potential violation of this section
             1067      in the minutes of the meeting.
             1068          Section 9. Section 32B-2-210 is enacted to read:
             1069          32B-2-210. Alcoholic Beverage Control Advisory Board.
             1070          (1) There is created within the department an advisory board known as the "Alcoholic
             1071      Beverage Control Advisory Board."
             1072          (2) The advisory board shall consist of 12 members as follows:
             1073          (a) the following voting members appointed by the commission, a representative of:
             1074          (i) a full-service restaurant licensee;
             1075          (ii) a limited-service restaurant licensee;
             1076          (iii) a beer-only restaurant licensee;
             1077          (iv) a social club licensee;
             1078          (v) a fraternal club licensee;
             1079          (vi) a dining club licensee;
             1080          (vii) a wholesaler licensee;
             1081          (viii) an on-premise banquet licensee;


             1082          (ix) an on-premise beer retailer licensee; and
             1083          (x) a reception center licensee;
             1084          (b) the chair of the Utah Substance Abuse Advisory Council, or the chair's designee,
             1085      who serves as a voting member; and
             1086          (c) the chair of the commission or the chair's designee from the members of the
             1087      commission, who shall serve as a nonvoting member.
             1088          (3) (a) Except as required by Subsection (3)(b), as terms of current voting members of
             1089      the advisory board expire, the commission shall appoint each new member or reappointed
             1090      member to a four-year term beginning July 1 and ending June 30.
             1091          (b) Notwithstanding the requirements of Subsection (3)(a), the commission shall, at the
             1092      time of appointment or reappointment, adjust the length of terms to ensure that the terms of
             1093      voting advisory board members are staggered so that approximately half of the advisory board
             1094      is appointed every two years.
             1095          (c) No two members of the board may be employed by the same company or nonprofit
             1096      organization.
             1097          (4) (a) When a vacancy occurs in the membership for any reason, the commission shall
             1098      appoint a replacement for the unexpired term.
             1099          (b) The commission shall terminate the term of a voting advisory board member who
             1100      ceases to be representative as designated by the member's original appointment.
             1101          (5) The advisory board shall meet no more than quarterly as called by the chair for the
             1102      purpose of advising the commission and the department, with discussion limited to
             1103      administrative rules made under this title.
             1104          (6) The chair of the commission or the chair's designee shall serve as the chair of the
             1105      advisory board and call the necessary meetings.
             1106          (7) (a) Six members of the board constitute a quorum of the board.
             1107          (b) An action of the majority when a quorum is present is the action of the board.
             1108          (8) The department shall provide staff support to the advisory board.
             1109          (9) A member may not receive compensation or benefits for the member's service, but
             1110      may receive per diem and travel expenses in accordance with:
             1111          (a) Section 63A-3-106 ;
             1112          (b) Section 63A-3-107 ; and


             1113          (c) rules made by the Division of Finance pursuant to Sections 63A-3-106 and
             1114      63A-3-107 .
             1115          Section 10. Section 32B-2-302 is amended to read:
             1116           32B-2-302. Exempt from Division of Finance -- Application of procurement --
             1117      External audits.
             1118          (1) (a) The laws that govern the Division of Finance are not applicable to the
             1119      department in the purchase and sale of an alcoholic product.
             1120          [(2) (a) The state auditor, or a person appointed by the state auditor, shall annually
             1121      audit the department's accounts.]
             1122          [(b) If an audit is conducted by a person appointed by the state auditor, the person shall
             1123      make the audit report to the state auditor.]
             1124          [(c) The state auditor shall submit a copy of an audit report to the Legislature by no
             1125      later than the January 1 following the close of the fiscal year for which the audit report is
             1126      made.]
             1127          (b) The department is exempt from Title 63G, Chapter 6, Utah Procurement Code, for
             1128      the purchase of an alcoholic product. The department is subject to Title 63G, Chapter 6, Utah
             1129      Procurement Code, for any purchase other than for an alcoholic product.
             1130          (2) The commission shall annually:
             1131          (a) select a private person to perform a financial audit of the department's accounts,
             1132      subject to the state auditor approving the private person selected to perform the financial audit;
             1133          (b) notify the governor of the private person selected to perform the financial audit; and
             1134          (c) determine the scope and focus of the financial audit in an open meeting of the
             1135      commission before the audit commences.
             1136          (3) (a) Biannually, beginning for fiscal year 2013-14, the state auditor shall conduct an
             1137      audit of the department's:
             1138          (i) management operations, best practices, and efficiency; and
             1139          (ii) ethics and statutory compliance.
             1140          (b) In addition to complying with Subsection (3)(a), the state auditor may engage in an
             1141      activity related to the department or commission allowed under Title 67, Chapter 3, Auditor.
             1142          (4) The commission shall forward an audit report issued under Subsection (2) or (3) to
             1143      the following by no later than 30 days after the day on which the audit report is made:


             1144          (a) the governor;
             1145          (b) the Legislative Management Committee;
             1146          (c) the director; and
             1147          (d) the legislative auditor general.
             1148          Section 11. Section 32B-2-302.5 is enacted to read:
             1149          32B-2-302.5. Internal audits.
             1150          (1) In accordance with Title 63I, Chapter 5, Utah Internal Audit Act, the department
             1151      shall conduct various types of auditing procedures determined by the commission through an
             1152      internal audit division.
             1153          (2) (a) The commission shall appoint an internal audit director who shall serve at the
             1154      pleasure of the commission.
             1155          (b) The internal audit director shall hire auditors in the division with the approval of
             1156      the commission.
             1157          (c) The internal audit director may dismiss an auditor with the approval of the
             1158      commission.
             1159          (3) Notwithstanding Section 63I-5-301 , the commission shall serve as the audit
             1160      committee.
             1161          (4) Subject to the other provisions of this section, the internal audit director shall have
             1162      the powers and duties described in Section 63I-5-401 or any other duty prescribed by the chair
             1163      of the commission. The internal audit director shall oversee and materially participate in
             1164      internal audits conducted under this section.
             1165          (5) (a) Once an internal audit is completed, the internal audit director shall provide an
             1166      internal audit report to the director, the chair of the commission, and the other commissioners.
             1167          (b) Within five business days of receipt of the internal audit, the director shall prepare a
             1168      written response and deliver it to the chair of the commission and the other commissioners.
             1169          (c) Within five business days of receipt of the director's written response under
             1170      Subsection (5)(b), the chair of the commission may prepare a separate response.
             1171          (d) Within 12 business days of the internal audit being given to the director, chair of
             1172      the commission, and the other commissioners under Subsection (5)(a), the chair of the
             1173      commission shall forward the audit and any response to:
             1174          (i) the governor;


             1175          (ii) the legislative auditor general; and
             1176          (iii) the Legislative Management Committee.
             1177          (e) Within 120 calendar days of an internal audit being completed, the commission
             1178      shall prepare a report to the governor describing steps taken to implement the recommendations
             1179      of the audit or a detailed explanation of why recommendations have not been implemented.
             1180      The chair of the commission shall forward the report to:
             1181          (i) the legislative auditor general; and
             1182          (ii) the Legislative Management Committee.
             1183          (f) The chair of the commission shall make such other reports as the governor requests.
             1184          Section 12. Section 32B-2-304 is amended to read:
             1185           32B-2-304. Liquor prices -- School lunch program.
             1186          (1) For purposes of this section:
             1187          (a) (i) "Landed case cost" means:
             1188          (A) the cost of the product; and
             1189          (B) inbound shipping costs incurred by the department.
             1190          (ii) "Landed case cost" does not include the outbound shipping cost from a warehouse
             1191      of the department to a state store.
             1192          (b) "Proof gallon" has the same meaning as in 26 U.S.C. Sec. 5002.
             1193          [(c) Notwithstanding Section 32B-1-102 , "small brewer" means a brewer who
             1194      manufactures in a calendar year less than 40,000 barrels of beer, heavy beer, and flavored malt
             1195      beverage.]
             1196          (2) Except as provided in Subsection (3):
             1197          (a) spirituous liquor sold by the department within the state shall be marked up in an
             1198      amount not less than 86% above the landed case cost to the department;
             1199          (b) wine sold by the department within the state shall be marked up in an amount not
             1200      less than 86% above the landed case cost to the department;
             1201          (c) heavy beer sold by the department within the state shall be marked up in an amount
             1202      not less than 64.5% above the landed case cost to the department; and
             1203          (d) a flavored malt beverage sold by the department within the state shall be marked up
             1204      in an amount not less than 86% above the landed case cost to the department.
             1205          (3) (a) Liquor sold by the department to a military installation in Utah shall be marked


             1206      up in an amount not less than 15% above the landed case cost to the department.
             1207          (b) Except for spirituous liquor sold by the department to a military installation in
             1208      Utah, spirituous liquor that is sold by the department within the state shall be marked up 47%
             1209      above the landed case cost to the department if:
             1210          (i) the spirituous liquor is manufactured by a manufacturer producing less than
             1211      [30,000] 60,000 proof gallons of spirituous liquor in a calendar year; and
             1212          (ii) the manufacturer applies to the department for a reduced markup.
             1213          (c) Except for wine sold by the department to a military installation in Utah, wine that
             1214      is sold by the department within the state shall be marked up 47% above the landed case cost to
             1215      the department if:
             1216          (i) the wine is manufactured by a manufacturer producing less than [20,000] 40,000
             1217      gallons of wine in a calendar year; and
             1218          (ii) the manufacturer applies to the department for a reduced markup.
             1219          (d) Except for heavy beer sold by the department to a military installation in Utah,
             1220      heavy beer that is sold by the department within the state shall be marked up 30% above the
             1221      landed case cost to the department if:
             1222          (i) a small brewer manufactures the heavy beer; and
             1223          (ii) the small brewer applies to the department for a reduced markup.
             1224          (e) The department shall verify an amount described in Subsection (3)(b) or (c)
             1225      pursuant to a federal or other verifiable production report.
             1226          (4) The department shall deposit 10% of the total gross revenue from sales of liquor
             1227      with the state treasurer to be credited to the Uniform School Fund and used to support the
             1228      school lunch program administered by the State Board of Education under Section
             1229      53A-19-201 .
             1230          (5) This section does not prohibit the department from selling discontinued items at a
             1231      discount.
             1232          Section 13. Section 32B-2-605 is amended to read:
             1233           32B-2-605. Operational requirements for package agency.
             1234          (1) (a) A person may not operate a package agency until a package agency agreement is
             1235      entered into by the package agent and the department.
             1236          (b) A package agency agreement shall state the conditions of operation by which the


             1237      package agent and the department are bound.
             1238          (c) (i) If a package agent or staff of the package agent violates this title, rules under this
             1239      title, or the package agency agreement, the department may take any action against the package
             1240      agent that is allowed by the package agency agreement.
             1241          (ii) An action against a package agent is governed solely by its package agency
             1242      agreement and may include suspension or revocation of the package agency.
             1243          (iii) A package agency agreement shall provide procedures to be followed if a package
             1244      agent fails to pay money owed to the department including a procedure for replacing the
             1245      package agent or operator of the package agency.
             1246          (iv) A package agency agreement shall provide that the package agency is subject to
             1247      covert investigations for selling an alcoholic product to a minor.
             1248          [(iii)] (v) Notwithstanding that this part refers to "package agency" or "package agent,"
             1249      staff of the package agency or package agent is subject to the same requirement or prohibition.
             1250          (2) (a) A package agency shall be operated by an individual who is either:
             1251          (i) the package agent; or
             1252          (ii) an individual designated by the package agent.
             1253          (b) An individual who is a designee under this Subsection (2) shall be:
             1254          (i) an employee of the package agent; and
             1255          (ii) responsible for the operation of the package agency.
             1256          (c) The conduct of the designee is attributable to the package agent.
             1257          (d) A package agent shall submit the name of the person operating the package agency
             1258      to the department for the department's approval.
             1259          (e) A package agent shall state the name and title of a designee on the application for a
             1260      package agency.
             1261          (f) A package agent shall:
             1262          (i) inform the department of a proposed change in the individual designated to operate
             1263      a package agency; and
             1264          (ii) receive prior approval from the department before implementing the change
             1265      described in this Subsection (2)(f).
             1266          (g) Failure to comply with the requirements of this Subsection (2) may result in the
             1267      immediate termination of a package agency agreement.


             1268          (3) (a) A package agent shall display in a prominent place in the package agency the
             1269      record issued by the commission that designates the package agency.
             1270          (b) A package agent that displays or stores liquor at a location visible to the public
             1271      shall display in a prominent place in the package agency a sign in large letters that consists of
             1272      text in the following order:
             1273          (i) a header that reads: "WARNING";
             1274          (ii) a warning statement that reads: "Drinking alcoholic beverages during pregnancy
             1275      can cause birth defects and permanent brain damage for the child.";
             1276          (iii) a statement in smaller font that reads: "Call the Utah Department of Health at
             1277      [insert most current toll-free number] with questions or for more information.";
             1278          (iv) a header that reads: "WARNING"; and
             1279          (v) a warning statement that reads: "Driving under the influence of alcohol or drugs is a
             1280      serious crime that is prosecuted aggressively in Utah."
             1281          (c) (i) The text described in Subsections (3)(b)(i) through (iii) shall be in a different
             1282      font style than the text described in Subsections (3)(b)(iv) and (v).
             1283          (ii) The warning statements in the sign described in Subsection (3)(b) shall be in the
             1284      same font size.
             1285          (d) The Department of Health shall work with the commission and department to
             1286      facilitate consistency in the format of a sign required under this section.
             1287          (4) A package agency may not display liquor or a price list in a window or showcase
             1288      that is visible to passersby.
             1289          (5) (a) A package agency may not purchase liquor from a person except from the
             1290      department.
             1291          (b) At the discretion of the department, liquor may be provided by the department to a
             1292      package agency for sale on consignment.
             1293          (6) A package agency may not store, sell, offer for sale, or furnish liquor in a place
             1294      other than as designated in the package agent's application, unless the package agent first
             1295      applies for and receives approval from the department for a change of location within the
             1296      package agency premises.
             1297          (7) A package agency may not sell, offer for sale, or furnish liquor except at a price
             1298      fixed by the commission.


             1299          (8) A package agency may not sell, offer for sale, or furnish liquor to:
             1300          (a) a minor;
             1301          (b) a person actually, apparently, or obviously intoxicated;
             1302          (c) a known interdicted person; or
             1303          (d) a known habitual drunkard.
             1304          (9) (a) A package agency may not employ a minor to handle liquor.
             1305          (b) (i) Staff of a package agency may not:
             1306          (A) consume an alcoholic product on the premises of a package agency; or
             1307          (B) allow any person to consume an alcoholic product on the premises of a package
             1308      agency.
             1309          (ii) Violation of this Subsection (9)(b) is a class B misdemeanor.
             1310          (10) (a) A package agency may not close or cease operation for a period longer than 72
             1311      hours, unless:
             1312          (i) the package agency notifies the department in writing at least seven days before the
             1313      closing; and
             1314          (ii) the closure or cessation of operation is first approved by the department.
             1315          (b) Notwithstanding Subsection (10)(a), in the case of emergency closure, a package
             1316      agency shall immediately notify the department by telephone.
             1317          (c) (i) The department may authorize a closure or cessation of operation for a period
             1318      not to exceed 60 days.
             1319          (ii) The department may extend the initial period an additional 30 days upon written
             1320      request of the package agency and upon a showing of good cause.
             1321          (iii) A closure or cessation of operation may not exceed a total of 90 days without
             1322      commission approval.
             1323          (d) The notice required by Subsection (10)(a) shall include:
             1324          (i) the dates of closure or cessation of operation;
             1325          (ii) the reason for the closure or cessation of operation; and
             1326          (iii) the date on which the package agency will reopen or resume operation.
             1327          (e) Failure of a package agency to provide notice and to obtain department
             1328      authorization before closure or cessation of operation results in an automatic termination of the
             1329      package agency agreement effective immediately.


             1330          (f) Failure of a package agency to reopen or resume operation by the approved date
             1331      results in an automatic termination of the package agency agreement effective on that date.
             1332          (11) A package agency may not transfer its operations from one location to another
             1333      location without prior written approval of the commission.
             1334          (12) (a) A person, having been issued a package agency, may not sell, transfer, assign,
             1335      exchange, barter, give, or attempt in any way to dispose of the package agency to another
             1336      person, whether for monetary gain or not.
             1337          (b) A package agency has no monetary value for any type of disposition.
             1338          (13) (a) Subject to the other provisions of this Subsection (13):
             1339          (i) sale or delivery of liquor may not be made on or from the premises of a package
             1340      agency, and a package agency may not be kept open for the sale of liquor:
             1341          (A) on Sunday; or
             1342          (B) on a state or federal legal holiday.
             1343          (ii) Sale or delivery of liquor may be made on or from the premises of a package
             1344      agency, and a package agency may be open for the sale of liquor, only on a day and during
             1345      hours that the commission directs by rule or order.
             1346          (b) A package agency located at a manufacturing facility is not subject to Subsection
             1347      (13)(a) if:
             1348          (i) the package agency is located at a manufacturing facility licensed in accordance
             1349      with Chapter 11, Manufacturing and Related Licenses Act;
             1350          (ii) the manufacturing facility licensed in accordance with Chapter 11, Manufacturing
             1351      and Related Licenses Act, holds:
             1352          (A) a full-service restaurant license;
             1353          (B) a limited-service restaurant license;
             1354          (C) a beer-only restaurant license; or
             1355          (D) dining club license;
             1356          (iii) the restaurant or dining club is located at the manufacturing facility;
             1357          (iv) the restaurant or dining club sells an alcoholic product produced at the
             1358      manufacturing facility;
             1359          (v) the manufacturing facility:
             1360          (A) owns the restaurant or dining club; or


             1361          (B) operates the restaurant or dining club;
             1362          (vi) the package agency only sells an alcoholic product produced at the manufacturing
             1363      facility; and
             1364          (vii) the package agency's days and hours of sale are the same as the days and hours of
             1365      sale at the restaurant or dining club.
             1366          (c) (i) Subsection (13)(a) does not apply to a package agency held by a resort licensee if
             1367      the package agent that holds the package agency to sell liquor at the resort does not sell liquor
             1368      in a manner similar to a state store.
             1369          (ii) The commission may by rule define what constitutes a package agency that sells
             1370      liquor "in a manner similar to a state store."
             1371          (14) (a) Except to the extent authorized by commission rule, a minor may not be
             1372      admitted into, or be on the premises of a package agency unless accompanied by a person who
             1373      is:
             1374          (i) 21 years of age or older; and
             1375          (ii) the minor's parent, legal guardian, or spouse.
             1376          (b) A package agent or staff of a package agency that has reason to believe that a
             1377      person who is on the premises of a package agency is under the age of 21 and is not
             1378      accompanied by a person described in Subsection (14)(a) may:
             1379          (i) ask the suspected minor for proof of age;
             1380          (ii) ask the person who accompanies the suspected minor for proof of age; and
             1381          (iii) ask the suspected minor or the person who accompanies the suspected minor for
             1382      proof of parental, guardianship, or spousal relationship.
             1383          (c) A package agent or staff of a package agency shall refuse to sell liquor to the
             1384      suspected minor and to the person who accompanies the suspected minor into the package
             1385      agency if the minor or person fails to provide any information specified in Subsection (14)(b).
             1386          (d) A package agent or staff of a package agency shall require the suspected minor and
             1387      the person who accompanies the suspected minor into the package agency to immediately leave
             1388      the premises of the package agency if the minor or person fails to provide information specified
             1389      in Subsection (14)(b).
             1390          (15) (a) A package agency shall sell, offer for sale, or furnish liquor in a sealed
             1391      container.


             1392          (b) A person may not open a sealed container on the premises of a package agency.
             1393          (c) Notwithstanding Subsection (15)(a), a package agency may sell, offer for sale, or
             1394      furnish liquor in other than a sealed container:
             1395          (i) if the package agency is the type of package agency that authorizes the package
             1396      agency to sell, offer for sale, or furnish the liquor as part of room service;
             1397          (ii) if the liquor is sold, offered for sale, or furnished as part of room service; and
             1398          (iii) subject to:
             1399          (A) staff of the package agency providing the liquor in person only to an adult guest in
             1400      the guest room;
             1401          (B) staff of the package agency not leaving the liquor outside a guest room for retrieval
             1402      by a guest; and
             1403          (C) the same limits on the portions in which an alcoholic product may be sold by a
             1404      retail licensee under Section 32B-5-304 .
             1405          (16) On or after October 1, 2011, a package agency may not sell, offer for sale, or
             1406      furnish heavy beer in a sealed container that exceeds two liters.
             1407          (17) The department may pay or otherwise remunerate a package agent on any basis,
             1408      including sales or volume of business done by the package agency.
             1409          (18) The commission may prescribe by policy or rule general operational requirements
             1410      of a package agency that are consistent with this title and relate to:
             1411          (a) physical facilities;
             1412          (b) conditions of operation;
             1413          (c) hours of operation;
             1414          (d) inventory levels;
             1415          (e) payment schedules;
             1416          (f) methods of payment;
             1417          (g) premises security; and
             1418          (h) any other matter considered appropriate by the commission.
             1419          Section 14. Section 32B-3-204 is amended to read:
             1420           32B-3-204. Disciplinary proceeding procedure.
             1421          (1) (a) Subject to Section 32B-3-202 , the following may conduct an adjudicative
             1422      proceeding to inquire into a matter necessary and proper for the administration of this title and


             1423      rules adopted under this title:
             1424          (i) the commission;
             1425          (ii) a hearing examiner appointed by the commission to conduct a suspension,
             1426      non-renewal, or revocation hearing required by law;
             1427          (iii) the director; and
             1428          (iv) the department.
             1429          (b) Except as provided in this section or Section 32B-2-605 , a person described in
             1430      Subsection (1)(a) shall comply with Title 63G, Chapter 4, Administrative Procedures Act, in an
             1431      adjudicative proceeding.
             1432          (c) Except when otherwise provided by law, an adjudicative proceeding before the
             1433      commission or a hearing examiner appointed by the commission shall be:
             1434          (i) video or audio recorded; and
             1435          (ii) subject to Subsection (3)(b), conducted in accordance with Title 52, Chapter 4,
             1436      Open and Public Meetings Act.
             1437          (d) A person listed in Subsection (1)(a) shall conduct an adjudicative proceeding
             1438      concerning departmental personnel in accordance with Title 67, Chapter 19, Utah State
             1439      Personnel Management Act.
             1440          (e) A hearing that is informational, fact gathering, and nonadversarial in nature shall be
             1441      conducted in accordance with rules, policies, and procedures made by the commission,
             1442      director, or department.
             1443          (2) (a) Subject to Section 32B-3-202 , a disciplinary proceeding shall be conducted
             1444      under the authority of the commission, which is responsible for rendering a final decision and
             1445      order on a disciplinary matter.
             1446          (b) (i) The commission may appoint a necessary officer, including a hearing examiner,
             1447      from within or without the department, to administer the disciplinary proceeding process.
             1448          (ii) A hearing examiner appointed by the commission:
             1449          (A) may conduct a disciplinary proceeding hearing on behalf of the commission; and
             1450          (B) shall submit to the commission a report including:
             1451          (I) findings of fact determined on the basis of a preponderance of the evidence
             1452      presented at the hearing;
             1453          (II) conclusions of law; and


             1454          (III) recommendations.
             1455          (iii) A report of a hearing examiner under this Subsection (2)(b) may not recommend a
             1456      penalty more severe than that initially sought by the department in the notice of agency action.
             1457          (iv) A copy of a hearing examiner report under this Subsection (2)(b) shall be served
             1458      upon the respective parties.
             1459          (v) Before final commission action, the commission shall give a respondent and the
             1460      department reasonable opportunity to file a written objection to a hearing examiner report.
             1461          (3) (a) The commission or an appointed hearing examiner shall preside over a
             1462      disciplinary proceeding hearing.
             1463          (b) A disciplinary proceeding hearing may be closed only after the commission or
             1464      hearing examiner makes a written finding that the public interest in an open hearing is clearly
             1465      outweighed by factors enumerated in the closure order.
             1466          (c) (i) The commission or its hearing examiner as part of a disciplinary proceeding
             1467      hearing may:
             1468          (A) administer an oath or affirmation;
             1469          (B) take evidence;
             1470          (C) take a deposition within or without this state; and
             1471          (D) require by subpoena from a place within this state:
             1472          (I) the testimony of a person at a hearing; and
             1473          (II) the production of a record or other evidence considered relevant to the inquiry.
             1474          (ii) A person subpoenaed in accordance with this Subsection (3)(c) shall testify and
             1475      produce a record or tangible thing as required in the subpoena.
             1476          (iii) A witness subpoenaed, called to testify, or called to produce evidence who claims
             1477      a privilege against self-incrimination may not be compelled to testify, but the commission or
             1478      the hearing examiner shall file a written report with the county attorney or district attorney in
             1479      the jurisdiction where the privilege is claimed or where the witness resides setting forth the
             1480      circumstance of the claimed privilege.
             1481          (iv) (A) A person is not excused from obeying a subpoena without just cause.
             1482          (B) A district court within the judicial district in which a person alleged to be guilty of
             1483      willful contempt of court or refusal to obey a subpoena is found or resides, upon application by
             1484      the party issuing the subpoena, may issue an order requiring the person to:


             1485          (I) appear before the issuing party; and
             1486          (II) (Aa) produce documentary evidence if so ordered; or
             1487          (Bb) give evidence regarding the matter in question.
             1488          (C) Failure to obey an order of the court may be punished by the court as contempt.
             1489          (d) In a case heard by the commission, the commission shall issue its final decision and
             1490      order in accordance with Subsection (2).
             1491          (4) (a) The commission shall:
             1492          (i) render a final decision and order on a disciplinary action; and
             1493          (ii) cause its final order to be prepared in writing, issued, and served on all parties.
             1494          (b) An order of the commission is final on the date the order is issued.
             1495          (c) The commission, after the commission renders its final decision and order, may
             1496      require the director to prepare, issue, and cause to be served on the parties the final written
             1497      order on behalf of the commission.
             1498          (5) (a) If a respondent requests a disciplinary proceeding hearing, the hearing held by
             1499      the commission or a hearing examiner appointed by the commission shall proceed formally in
             1500      accordance with Sections 63G-4-204 through 63G-4-209 if:
             1501          (i) the alleged violation poses, or potentially poses, a grave risk to public safety, health,
             1502      and welfare;
             1503          (ii) the alleged violation involves:
             1504          (A) selling or furnishing an alcoholic product to a minor;
             1505          (B) attire, conduct, or entertainment prohibited by Chapter 1, Part 5, Attire, Conduct,
             1506      and Entertainment Act;
             1507          (C) fraud, deceit, willful concealment, or misrepresentation of the facts by or on behalf
             1508      of the respondent;
             1509          (D) interfering or refusing to cooperate with:
             1510          (I) an authorized official of the department or the state in the discharge of the official's
             1511      duties in relation to the enforcement of this title; or
             1512          (II) a peace officer in the discharge of the peace officer's duties in relation to the
             1513      enforcement of this title;
             1514          (E) an unlawful trade practice under Chapter 4, Part 7, Trade Practices Act;
             1515          (F) unlawful importation of an alcoholic product; or


             1516          (G) unlawful supply of liquor by a liquor industry member, as defined in Section
             1517      32B-4-702 , to a person other than the department or a military installation, except to the extent
             1518      permitted by this title; or
             1519          (iii) the department determines to seek in a disciplinary proceeding hearing:
             1520          (A) an administrative fine exceeding $3,000;
             1521          (B) a suspension of a license, permit, or certificate of approval of more than 10 days; or
             1522          (C) a revocation of a license, permit, or certificate of approval.
             1523          (b) If a respondent does not request a disciplinary proceeding hearing, a hearing shall
             1524      proceed informally unless it is designated as a formal proceeding pursuant to rules adopted by
             1525      the commission in accordance with Subsection (5)(c).
             1526          (c) The commission shall make rules to provide a procedure to implement this
             1527      Subsection (5).
             1528          (6) (a) If the department recommends nonrenewal of a license, the department shall
             1529      notify the licensee of the recommendation at least 15 days before the commission takes action
             1530      on the nonrenewal.
             1531          (b) Notwithstanding Subsection (2), the commission shall appoint a hearing examiner
             1532      to conduct an adjudicative hearing in accordance with this section if the licensee files a request
             1533      for a hearing within 10 days of receipt of the notice under Subsection (6)(a).
             1534          Section 15. Section 32B-6-805 is amended to read:
             1535           32B-6-805. Specific operational requirements for a reception center license.
             1536          (1) (a) In addition to complying with Chapter 5, Part 3, Retail Licensee Operational
             1537      Requirements, a reception center licensee and staff of the reception center licensee shall
             1538      comply with this section.
             1539          (b) Failure to comply as provided in Subsection (1)(a) may result in disciplinary action
             1540      in accordance with Chapter 3, Disciplinary Actions and Enforcement Act, against:
             1541          (i) a reception center licensee;
             1542          (ii) individual staff of a reception center licensee; or
             1543          (iii) both a reception center licensee and staff of the reception center licensee.
             1544          (2) In addition to complying with Section 32B-5-303 , a reception center licensee shall
             1545      store an alcoholic product in a storage area described in Subsection (15)(a).
             1546          (3) (a) For the purpose described in Subsection (3)(b), a reception center licensee shall


             1547      provide the following with advance notice of a scheduled event in accordance with rules made
             1548      by the commission:
             1549          (i) the department; and
             1550          (ii) the local law enforcement agency responsible for the enforcement of this title in the
             1551      jurisdiction where the reception center is located.
             1552          (b) Any of the following may conduct a random inspection of an event:
             1553          (i) an authorized representative of the commission or the department; or
             1554          (ii) a law enforcement officer.
             1555          (4) (a) Except as otherwise provided in this title, a reception center licensee may sell,
             1556      offer for sale, or furnish an alcoholic product at an event only for consumption at the reception
             1557      center's licensed premises.
             1558          (b) A host of an event, a patron, or a person other than the reception center licensee or
             1559      staff of the reception center licensee, may not remove an alcoholic product from the reception
             1560      center's licensed premises.
             1561          (c) Notwithstanding Section 32B-5-307 , a patron at an event may not bring an
             1562      alcoholic product into or onto, or remove an alcoholic product from, the reception center.
             1563          (5) (a) A reception center licensee may not leave an unsold alcoholic product at an
             1564      event following the conclusion of the event.
             1565          (b) At the conclusion of an event, a reception center licensee shall:
             1566          (i) destroy an opened and unused alcoholic product that is not saleable, under
             1567      conditions established by the department; and
             1568          (ii) return to the reception center licensee's approved locked storage area any:
             1569          (A) opened and unused alcoholic product that is saleable; and
             1570          (B) unopened container of an alcoholic product.
             1571          (c) Except as provided in Subsection (5)(b) with regard to an open or sealed container
             1572      of an alcoholic product not sold or consumed at an event, a reception center licensee:
             1573          (i) shall store the alcoholic product in accordance with Subsection (2); and
             1574          (ii) may use the alcoholic product at more than one event.
             1575          (6) Notwithstanding Section 32B-5-308 , a reception center licensee may not employ a
             1576      minor in connection with an event at the reception center at which food is not made available.
             1577          (7) A person's willingness to serve an alcoholic product may not be made a condition


             1578      of employment as a server with a reception center licensee.
             1579          (8) A reception center licensee may not sell, offer for sale, or furnish an alcoholic
             1580      product at the licensed premises on any day during the period that:
             1581          (a) begins at 1 a.m.; and
             1582          (b) ends at 9:59 a.m.
             1583          (9) (a) A reception center licensee may not maintain in excess of 30% of its total
             1584      annual receipts from the sale of an alcoholic product, which includes:
             1585          [(a)] (i) mix for an alcoholic product; or
             1586          [(b)] (ii) a charge in connection with the furnishing of an alcoholic product.
             1587          (b) A reception center licensee shall report the information necessary to show
             1588      compliance with this Subsection (9) to the department on a quarterly basis.
             1589          (10) A reception center licensee may not sell, offer for sale, or furnish an alcoholic
             1590      product at an event at which a minor is present unless the reception center licensee makes food
             1591      available at all times when an alcoholic product is sold, offered for sale, furnished, or
             1592      consumed during the event.
             1593          (11) (a) Subject to the other provisions of this Subsection (11), a patron may not have
             1594      more than two alcoholic products of any kind at a time before the patron.
             1595          (b) An individual portion of wine is considered to be one alcoholic product under
             1596      Subsection (11)(a).
             1597          (12) (a) A reception center licensee shall supervise and direct a person involved in the
             1598      sale, offer for sale, or furnishing of an alcoholic product.
             1599          (b) A person involved in the sale, offer for sale, or furnishing of an alcoholic product
             1600      shall complete an alcohol training and education seminar.
             1601          (13) A staff person of a reception center licensee shall remain at an event at all times
             1602      when an alcoholic product is sold, offered for sale, furnished, or consumed at the event.
             1603          (14) A reception center licensee may not sell, offer for sale, or furnish an alcoholic
             1604      product to a patron, and a patron may not consume an alcoholic product at a bar structure.
             1605          (15) Except as provided in Subsection (16), a reception center licensee may dispense
             1606      an alcoholic product only if:
             1607          (a) the alcoholic product is dispensed from an area that is:
             1608          (i) separated from an area for the consumption of food by a patron by a solid,


             1609      translucent, permanent structural barrier such that the facilities for the storage or dispensing of
             1610      an alcoholic product are:
             1611          (A) not readily visible to a patron; and
             1612          (B) not accessible by a patron; and
             1613          (ii) apart from an area used:
             1614          (A) for staging; or
             1615          (B) as a lobby or waiting area;
             1616          (b) the reception center licensee uses an alcoholic product that is:
             1617          (i) stored in an area described in Subsection (15)(a); or
             1618          (ii) in an area not described in Subsection (15)(a) on the licensed premises and:
             1619          (A) immediately before the alcoholic product is dispensed it is in an unopened
             1620      container;
             1621          (B) the unopened container is taken to an area described in Subsection (15)(a) before it
             1622      is opened; and
             1623          (C) once opened, the container is stored in an area described in Subsection (15)(a); and
             1624          (c) any instrument or equipment used to dispense an alcoholic product is located in an
             1625      area described in Subsection (15)(a).
             1626          (16) A reception center licensee may dispense an alcoholic product from a mobile
             1627      serving area that:
             1628          (a) is moved only by staff of the reception center licensee;
             1629          (b) is capable of being moved by only one individual; and
             1630          (c) is no larger than 6 feet long and 30 inches wide.
             1631          (17) (a) A reception center licensee may not have an event on the licensed premises
             1632      except pursuant to a contract between a third party host of the event and the reception center
             1633      licensee under which the reception center licensee provides an alcoholic product sold, offered
             1634      for sale, or furnished at an event.
             1635          (b) At an event, a reception center licensee may furnish an alcoholic product:
             1636          (i) without charge to a patron, except that the third party host of the event shall pay for
             1637      an alcoholic product furnished at the event; or
             1638          (ii) with a charge to a patron at the event.
             1639          (c) The commission may by rule define what constitutes a "third-party host" for


             1640      purposes of this Subsection (17) so that a reception center licensee and the third-party host are
             1641      not affiliated with, owned by, or operated by the same persons.
             1642          (18) A reception center licensee shall have culinary facilities that are:
             1643          (a) adequate to prepare a full meal; and
             1644          (b) (i) located on the licensed premises; or
             1645          (ii) under the same control as the reception center licensee.
             1646          (19) A reception center licensee may not operate an event:
             1647          (a) that is open to the general public; and
             1648          (b) at which an alcoholic product is sold or offered for sale.
             1649          Section 16. Section 32B-8a-302 (Effective 07/01/12) is amended to read:
             1650           32B-8a-302 (Effective 07/01/12). Application -- Approval process.
             1651          (1) To obtain the transfer of a retail license from a retail licensee, the transferee shall
             1652      file a transfer application with the department that includes:
             1653          (a) an application in the form provided by the department;
             1654          (b) a statement as to whether the consideration, if any, to be paid to the transferor
             1655      includes payment for any or all of the following:
             1656          (i) inventory;
             1657          (ii) fixtures; and
             1658          (iii) transfer of the retail license;
             1659          (c) a copy of the notice of intended transfer; and
             1660          (d) (i) an application fee of $300; and
             1661          (ii) a transfer fee determined in accordance with Section 32B-8a-303 .
             1662          (2) (a) (i) Before the commission may approve the transfer of a retail license, the
             1663      department shall conduct an investigation and may hold public hearings to gather information
             1664      and make recommendations to the commission as to whether the transfer of the retail license
             1665      should be approved.
             1666          (ii) The department shall forward the information and recommendations described in
             1667      this Subsection (2)(a) to the commission to aid in the commission's determination.
             1668          (b) Before approving a transfer, the commission shall:
             1669          (i) determine that the transferee filed a complete application;
             1670          (ii) determine that the transferee is eligible to hold the type of retail license that is to be


             1671      transferred at the premises to which the retail license would be transferred;
             1672          (iii) determine that the transferee is not delinquent in the payment of an amount
             1673      described in Subsection 32B-8a-201 (3);
             1674          (iv) determine that the transferee is not disqualified under Section 32B-1-304 ;
             1675          (v) consider the locality within which the proposed licensed premises is located,
             1676      including the factors listed in Section [ 32B-5-206 ] 32B-5-203 for the issuance of a retail
             1677      license;
             1678          (vi) consider the transferee's ability to manage and operate the retail license to be
             1679      transferred, including the factors listed in Section [ 32B-5-202 ] 32B-5-203 for the issuance of a
             1680      retail license;
             1681          (vii) consider the nature or type of retail licensee operation of the transferee, including
             1682      the factors listed in Section [ 32B-5-202 ] 32B-5-203 for the issuance of a retail license;
             1683          (viii) if the transfer involves consideration, determine that the transferee and transferor
             1684      have complied with Part 4, Protection of Creditors; and
             1685          (ix) consider any other factor the commission considers necessary.
             1686          (3) (a) Except as provided in Subsection (3)(b), the commission may not approve the
             1687      transfer of a retail license to premises that do not meet the proximity requirements of Section
             1688      32B-1-202 .
             1689          (b) If after a transfer of a retail license the transferee operates the same type of retail
             1690      license at the same location as did the transferor, the commission may waive or vary the
             1691      proximity requirements of Subsection 32B-1-202 (2) in considering whether to approve the
             1692      transfer under the same circumstances that the commission may waive or vary the proximity
             1693      requirements in accordance with Subsection 32B-1-202 (4) when considering whether to issue a
             1694      retail license.
             1695          Section 17. Section 32B-8a-303 (Effective 07/01/12) is amended to read:
             1696           32B-8a-303 (Effective 07/01/12). Transfer fees.
             1697          (1) Except as otherwise provided in this section, the department shall charge the
             1698      following transfer fees:
             1699          (a) for a transfer of a retail license from a retail licensee to another person, the transfer
             1700      fee equals the initial license fee amount specified in the relevant part under Chapter 6, Specific
             1701      Retail License Act, for the type of retail license that is being transferred;


             1702          (b) for the transfer of a retail license from one premises to another premises of the
             1703      same retail licensee, the transfer fee equals the renewal fee amount specified in the relevant
             1704      part under Chapter 6, Specific Retail License Act, for the type of retail license that is being
             1705      transferred;
             1706          (c) subject to Subsections (1)(d) and (2), for a transfer described in Section
             1707      32B-8a-202 , the transfer fee equals the renewal fee amount specified in the relevant part under
             1708      Chapter 6, Specific Retail License Act, for the type of retail license that is being transferred;
             1709          (d) for a transfer of a retail license to include the parent or adult child of a retail
             1710      licensee, when no consideration is given for the transfer, the transfer fee is one-half of the
             1711      amount described in Subsection (1)(a); and
             1712          (e) for one of the following transfers, the transfer fee is one-half of the amount
             1713      described in Subsection (1)(a):
             1714          (i) a retail license of one spouse to the other spouse when the transfer application is
             1715      made before the entry of a final decree of divorce;
             1716          (ii) a retail license of a deceased retail licensee to:
             1717          (A) the one or more surviving partners of the deceased retail licensee;
             1718          (B) the executor, administrator, or conservator of the estate of the deceased retail
             1719      licensee; or
             1720          (C) the surviving spouse of the deceased retail licensee, if the deceased retail licensee
             1721      leaves no estate to be administered;
             1722          (iii) a retail license of [a minor ward,] an incompetent person[,] or conservatee by or to
             1723      the conservator or guardian for the [minor ward,] incompetent person[,] or conservatee who is
             1724      the retail licensee;
             1725          (iv) a retail license of a debtor in a bankruptcy case by or to the trustee of a bankrupt
             1726      estate of the retail licensee;
             1727          (v) a retail license of a person for whose estate a receiver is appointed may be
             1728      transferred by or to a receiver of the estate of the retail licensee;
             1729          (vi) a retail license of an assignor for the benefit of creditors by or to an assignee for
             1730      the benefit of creditors of a licensee with the consent of the assignor;
             1731          (vii) a retail license transferred to a revocable living trust if the retail licensee is the
             1732      trustee of the revocable living trust;


             1733          (viii) a retail license transferred between partners when no new partner is being
             1734      licensed;
             1735          (ix) a retail license transferred between corporations whose outstanding shares of stock
             1736      are owned by the same individuals;
             1737          (x) upon compliance with Section 32B-8a-202 , a retail license to a corporation whose
             1738      entire stock is owned by:
             1739          (A) the transferor; or
             1740          (B) the spouse of the transferor;
             1741          (xi) upon compliance with Section 32B-8a-202 , a retail license to a limited liability
             1742      company whose entire membership consists of:
             1743          (A) the transferor; or
             1744          (B) the spouse of the transferor; or
             1745          (xii) a retail license transferred from a corporation to a person who owns, or whose
             1746      spouse owns, the entire stock of the corporation.
             1747          (2) If there are multiple and simultaneous transfers of retail licenses under Section
             1748      32B-8a-202 , a transfer fee described in Subsection (1)(c) is required for only one of the retail
             1749      licenses being transferred.
             1750          (3) (a) Except as provided in Subsection (3)(b), a transfer fee required under
             1751      Subsection (1) is due for a transfer subsequent to a transfer under Subsection (1)(e)[(xiii)](xii)
             1752      if the subsequent transfer is of 51% of the stock in a corporation to which a retail license is
             1753      transferred by a retail licensee or the spouse of a retail licensee.
             1754          (b) If the transfer of stock described in Subsection (3)(a) is from a parent to the parent's
             1755      adult child or adult grandchild, the transfer fee is one-half of the amount described in
             1756      Subsection (1)(a).
             1757          (4) Money collected from a transfer fee shall be deposited in the Liquor Control Fund.
             1758          Section 18. Section 32B-9-201 is amended to read:
             1759           32B-9-201. Application requirements for event permit.
             1760          (1) To obtain an event permit, a person shall submit to the department:
             1761          (a) a written application in a form that the department prescribes;
             1762          (b) an event permit fee:
             1763          (i) in the amount specified in the relevant part under this chapter for the type of event


             1764      permit for which the person is applying; and
             1765          (ii) that is refundable if an event permit is not issued;
             1766          (c) written consent of the local authority;
             1767          (d) a bond as specified by Section 32B-9-203 ;
             1768          (e) the times, dates, location, estimated attendance, nature, and purpose of the event;
             1769          (f) a description or floor plan designating:
             1770          (i) the area in which the person proposes that an alcoholic product be stored;
             1771          (ii) the site from which the person proposes that an alcoholic product be sold, offered
             1772      for sale, or furnished; and
             1773          (iii) the area in which the person proposes that an alcoholic product be allowed to be
             1774      consumed;
             1775          (g) a signed consent form stating that the event permittee will permit any authorized
             1776      representative of the commission, department, or any law enforcement officer to have
             1777      unrestricted right to enter the premises during the event;
             1778          (h) if the person is an entity, proper verification evidencing that a person who signs the
             1779      application is authorized to sign on behalf of the entity; and
             1780          (i) any other information as the commission or department may require.
             1781          (2) An entity applying for a permit need not meet the requirements of Subsections
             1782      (1)(b), (c), and (d) if the entity is:
             1783          (a) a state agency; or
             1784          (b) a political subdivision of the state.
             1785          (3) The [commission] director may not issue an event permit to a person who is
             1786      disqualified under Section 32B-1-304 .
             1787          (4) (a) The proximity requirements of Section 32B-1-202 do not apply to an event
             1788      permit.
             1789          (b) Notwithstanding Subsection (4)(a), nothing in this section prevents the director, the
             1790      Compliance, Licensing, and Enforcement Subcommittee, or the commission from considering
             1791      the proximity of an educational, religious, or recreational facility, or any other relevant factor in
             1792      deciding whether to issue an event permit.
             1793          Section 19. Section 32B-9-202 is amended to read:
             1794           32B-9-202. Duties before issuing event permit.


             1795          (1) (a) Before the [commission] director may issue an event permit, the department
             1796      shall conduct an investigation and may hold public hearings to gather information and make
             1797      recommendations to the [commission] director as to whether the [commission] director should
             1798      issue an event permit.
             1799          (b) The department shall forward the information and recommendations described in
             1800      Subsection (1)(a) to the [commission] director and the Compliance, Licensing, and
             1801      Enforcement Subcommittee to aid in the [commission's] determination.
             1802          (2) Before issuing an event permit, the [commission] director shall:
             1803          (a) determine that the person filed a complete application and is in compliance with:
             1804          (i) Section 32B-9-201 ; and
             1805          (ii) the relevant part under this chapter for the type of event permit for which the
             1806      person is applying;
             1807          (b) determine that the person is not disqualified under Section 32B-1-304 ;
             1808          (c) consider the purpose of the organization or its local lodge, chapter, or other local
             1809      unit;
             1810          (d) consider the times, dates, location, estimated attendance, nature, and purpose of the
             1811      event;
             1812          (e) to minimize the risk of minors being sold or furnished alcohol or adults being
             1813      overserved alcohol at the event, assess the adequacy of control measures for:
             1814          (i) a large-scale public event when the estimated attendance is in excess of 1,000
             1815      people; or
             1816          (ii) an outdoor public event; [and]
             1817          (f) obtain the approval of the Compliance, Licensing, and Enforcement Subcommittee
             1818      before issuing an event permit;
             1819          (g) notify each commissioner at least three business days before the director issues the
             1820      event permit in accordance with Subsection (3); and
             1821          [(f)] (h) consider any other factor the [commission] director considers necessary.
             1822          (3) (a) The director shall inform each commissioner of the director's preliminary
             1823      decision to issue or deny the issuance of an event permit three business days before the
             1824      decision is to be final.
             1825          (b) The preliminary decision becomes a final decision of the director:


             1826          (i) unless within three business days of receipt of the notice at least three of the
             1827      commissioners request a meeting to discuss whether the event permit should be issued; or
             1828          (ii) the director modifies or revokes the preliminary decision to issue or deny issuance
             1829      of the event permit.
             1830          (c) If three or more of the commissioners request a meeting, the applicant for the event
             1831      permit shall be notified and the commission:
             1832          (i) shall hold a meeting on the application for an event permit no later than the next
             1833      regularly scheduled meeting of the commission; and
             1834          (ii) may issue or deny issuance of the event permit if the applicant meets the
             1835      requirements of this chapter.
             1836          (d) Notwithstanding the other provisions of this Subsection (3), the director may at any
             1837      time refer an application for an event permit directly to the commission for a determination as
             1838      to whether an event permit should be issued or denied.
             1839          (e) For purposes of this title, an event permit issued by the commission is to be treated
             1840      the same as an event permit issued by the director.
             1841          (f) If the commission finds that an event permit was improperly issued or that the
             1842      permittee has violated this chapter, the commission may take any action permitted under this
             1843      title.
             1844          [(3)] (4) Once the [commission] director issues an event permit, the department shall
             1845      send a copy of the approved application and the event permit by written or electronic means to
             1846      the state and local law enforcement authorities [before the scheduled event] at least three days
             1847      before the event.
             1848          (5) The director shall provide the commission a monthly report of the actions taken by
             1849      the director under this part.
             1850          (6) If authorized by the director, the deputy director may act on behalf of the director
             1851      for purposes of issuing an event permit under this chapter.
             1852          Section 20. Section 32B-9-204 is amended to read:
             1853           32B-9-204. General operational requirements for an event permit.
             1854          (1) (a) An event permittee and a person involved in the storage, sale, offer for sale, or
             1855      furnishing of an alcoholic product at an event for which an event permit is issued, shall comply
             1856      with this title and rules of the commission.


             1857          (b) Failure to comply as provided in Subsection (1)(a):
             1858          (i) may result in:
             1859          (A) disciplinary action in accordance with Chapter 3, Disciplinary Actions and
             1860      Enforcement Act, against:
             1861          (I) an event permittee;
             1862          (II) a person involved in the storage, sale, offer for sale, or furnishing of an alcoholic
             1863      product at the event; or
             1864          (III) any combination of the persons listed in this Subsection (1)(b);
             1865          (B) immediate revocation of the event permit;
             1866          (C) forfeiture of a bond; or
             1867          (D) immediate seizure of an alcoholic product present at the event; and
             1868          (ii) if the event permit is revoked, disqualifies the event permittee from applying for an
             1869      event permit for a period of three years from the date of revocation of the event permit.
             1870          (c) An alcoholic product seized under this Subsection (1) shall be returned to the event
             1871      permittee after an event if forfeiture proceedings are not instituted under Section 32B-4-206 .
             1872          (2) (a) If there is a conflict between this part and the relevant part under this chapter for
             1873      the specific type of special use permit held by the special use permittee, the relevant part
             1874      governs.
             1875          (b) Notwithstanding that this part may refer to "liquor" or an "alcoholic product," an
             1876      event permittee may only sell, offer for sale, or furnish an alcoholic product specified in the
             1877      relevant part under this chapter for the type of event permit that is held by the event permittee.
             1878          (c) Notwithstanding that this part or the relevant part under this chapter for the type of
             1879      event permit held by an event permittee refers to "event permittee," a person involved in the
             1880      storage, sale, offer for sale, or furnishing of an alcoholic product at the event for which the
             1881      event permit is issued is subject to the same requirement or prohibition.
             1882          (3) An event permittee shall display a copy of the event permit in a prominent place in
             1883      the area in which an alcoholic product is sold, offered for sale, furnished, and consumed.
             1884          (4) An event permittee may not on the premises of the event:
             1885          (a) engage in or allow any form of gambling, as defined and proscribed in Title 76,
             1886      Chapter 10, Part 11, Gambling;
             1887          (b) have any video gaming device, as defined and proscribed by Title 76, Chapter 10,


             1888      Part 11, Gambling; or
             1889          (c) engage in or permit a contest, game, gaming scheme, or gaming device that requires
             1890      the risking of something of value for a return or for an outcome when the return or outcome is
             1891      based upon an element of chance, excluding the playing of an amusement device that confers
             1892      only an immediate and unrecorded right of replay not exchangeable for value.
             1893          (5) An event permittee may not knowingly allow a person at an event to, in violation of
             1894      Title 58, Chapter 37, Utah Controlled Substances Act, or Chapter 37a, Utah Drug
             1895      Paraphernalia Act:
             1896          (a) sell, distribute, possess, or use a controlled substance, as defined in Section
             1897      58-37-2 ; or
             1898          (b) use, deliver, or possess with the intent to deliver drug paraphernalia, as defined in
             1899      Section 58-37a-3 .
             1900          (6) An event permittee may not sell, offer for sale, or furnish beer except beer
             1901      purchases from:
             1902          (a) a beer wholesaler licensee;
             1903          (b) a beer retailer; or
             1904          (c) a small brewer.
             1905          (7) An event permittee may not store, sell, offer for sale, furnish, or allow the
             1906      consumption of an alcoholic product purchased for an event in a location other than that
             1907      described in the application and designated on the event permit unless the event permittee first
             1908      applies for and receives approval from the [commission] director, with the approval of the
             1909      Compliance, Licensing, and Enforcement Subcommittee, for a change of location.
             1910          (8) (a) Subject to Subsection (8)(b), an event permittee may sell, offer for sale, or
             1911      furnish beer for on-premise consumption:
             1912          (i) in an open original container; and
             1913          (ii) in a container on draft.
             1914          (b) An event permittee may not sell, offer for sale, or furnish beer sold pursuant to
             1915      Subsection (8)(a):
             1916          (i) in a size of container that exceeds two liters; or
             1917          (ii) to an individual patron in a size of container that exceeds one liter.
             1918          (9) (a) An event permittee may not sell or offer for sale an alcoholic product at less


             1919      than the cost of the alcoholic product to the event permittee.
             1920          (b) An event permittee may not sell an alcoholic product at a discount price on any date
             1921      or at any time.
             1922          (c) An event permittee may not sell or offer for sale an alcoholic product at a price that
             1923      encourages over consumption or intoxication.
             1924          (d) An event permittee may not sell or offer for sale an alcoholic product at a special or
             1925      reduced price for only certain hours of the day of an event.
             1926          (e) An event permittee may not sell, offer for sale, or furnish more than one alcoholic
             1927      product at the price of a single alcoholic product.
             1928          (f) An event permittee, or a person operating, selling, offering, or furnishing an
             1929      alcoholic product under an event permit, may not sell, offer for sale, or furnish an indefinite or
             1930      unlimited number of alcoholic products during a set period for a fixed price, unless:
             1931          (i) the alcoholic product is served to a patron at a seated event;
             1932          (ii) food is available whenever the alcoholic product is sold, offered for sale, or
             1933      furnished; and
             1934          (iii) no person advertises that at the event a person may be sold or furnished an
             1935      indefinite or unlimited number of alcoholic products during a set period for a fixed price.
             1936          (g) An event permittee may not engage in a public promotion involving or offering a
             1937      free alcoholic product to the general public.
             1938          (10) An event permittee may not sell, offer for sale, or furnish an alcoholic product to:
             1939          (a) a minor;
             1940          (b) a person actually, apparently, or obviously intoxicated;
             1941          (c) a known interdicted person; or
             1942          (d) a known habitual drunkard.
             1943          (11) (a) An alcoholic product is considered under the control of the event permittee
             1944      during an event.
             1945          (b) A patron at an event may not bring an alcoholic product onto the premises of the
             1946      event.
             1947          (12) An event permittee may not permit a patron to carry from the premises an open
             1948      container that:
             1949          (a) is used primarily for drinking purposes; and


             1950          (b) contains an alcoholic product.
             1951          (13) (a) A person involved in the storage, sale, or furnishing of an alcoholic product at
             1952      an event is considered under the supervision and direction of the event permittee.
             1953          (b) A person involved in the sale, offer for sale, or furnishing of an alcoholic product at
             1954      an event may not, while on duty:
             1955          (i) consume an alcoholic product; or
             1956          (ii) be intoxicated.
             1957          (14) A minor may not handle, sell, offer for sale, or furnish an alcoholic product at an
             1958      event.
             1959          (15) The location specified in an event permit may not be changed without prior
             1960      written approval of the commission.
             1961          (16) An event permittee may not sell, transfer, assign, exchange, barter, give, or
             1962      attempt in any way to dispose of the event permit to another person whether for monetary gain
             1963      or not.
             1964          (17) (a) An event permittee may not sell, offer for sale, furnish, or allow the
             1965      consumption of an alcoholic product during a period that:
             1966          (i) begins at 1 a.m.; and
             1967          (ii) ends at 9:59 a.m.
             1968          (b) This Subsection (17) does not preclude a local authority from being more restrictive
             1969      with respect to the hours of sale, offer for sale, furnishing, or consumption of an alcoholic
             1970      product at an event.
             1971          (18) A patron may have no more than one alcoholic product of any kind at a time
             1972      before the patron.
             1973          (19) (a) An event permittee shall display, in a prominent place, a sign in large letters
             1974      that consists of text in the following order:
             1975          (i) a header that reads: "WARNING";
             1976          (ii) a warning statement that reads: "Drinking alcoholic beverages during pregnancy
             1977      can cause birth defects and permanent brain damage for the child.";
             1978          (iii) a statement in smaller font that reads: "Call the Utah Department of Health at
             1979      [insert most current toll-free number] with questions or for more information.";
             1980          (iv) a header that reads: "WARNING"; and


             1981          (v) a warning statement that reads: "Driving under the influence of alcohol or drugs is a
             1982      serious crime that is prosecuted aggressively in Utah."
             1983          (b) (i) The text described in Subsections (19)(a)(i) through (iii) shall be in a different
             1984      font style than the text described in Subsections (19)(a)(iv) and (v).
             1985          (ii) The warning statements in the sign described in Subsection (19)(a) shall be in the
             1986      same font size.
             1987          (c) The Department of Health shall work with the commission and department to
             1988      facilitate consistency in the format of a sign required under this section.
             1989          Section 21. Section 32B-9-303 is amended to read:
             1990           32B-9-303. Director's power to issue single event permit.
             1991          (1) Before a person may sell, offer for sale, or furnish liquor at retail for on-premise
             1992      consumption at an event, the person shall first obtain a single event permit from the
             1993      [commission] director in accordance with this part.
             1994          (2) (a) [The commission] Subject to Subsection (5), the director may issue a single
             1995      event permit to any of the following that is conducting a convention, civic, or community
             1996      enterprise, a bona fide:
             1997          (i) partnership;
             1998          (ii) corporation;
             1999          (iii) limited liability company;
             2000          (iv) religious organization;
             2001          (v) political organization;
             2002          (vi) incorporated association;
             2003          (vii) recognized subordinate lodge, chapter, or other local unit of an entity described in
             2004      this Subsection (2)(a);
             2005          (viii) state agency; or
             2006          (ix) political subdivision of the state.
             2007          (b) The [commission] director may not issue a single event permit to an entity that has
             2008      not been in existence as a bona fide entity for at least one year before the day on which the
             2009      entity applies for a single event permit.
             2010          (3) (a) A single event permit may authorize:
             2011          (i) the storage, sale, offering for sale, furnishing, and consumption of liquor at an event


             2012      at which the storage, sale, offering for sale, furnishing, or consumption of liquor is otherwise
             2013      prohibited by this title under either:
             2014          (A) a 120 hour single event permit; or
             2015          (B) a 72 hour single event permit; and
             2016          (ii) the storage, sale, offer for sale, furnishing, and consumption of beer at the same
             2017      event for the period that the storage, sale, offer for sale, furnishing, or consumption of liquor is
             2018      authorized under Subsection (3)(a)(i) for the single event permit.
             2019          (b) The single event permit shall state in writing whether it is:
             2020          (i) a 120 hour single event permit; or
             2021          (ii) a 72 hour single event permit.
             2022          (4) The [commission] director may not issue more than:
             2023          (a) four single event permits in any one calendar year to the same person listed in
             2024      Subsection (2) if one or more of the single event permits is a 120 hour single event permit; or
             2025          (b) 12 single event permits in any one calendar year to the same person listed in
             2026      Subsection (2) if each of the single event permits issued to that person is a 72 hour single event
             2027      permit.
             2028          (5) Before the director issues or denies the issuance of a single event permit under this
             2029      section, the director shall comply with Section 32B-9-202 .
             2030          Section 22. Section 32B-9-403 is amended to read:
             2031           32B-9-403. Director's power to issue temporary beer event permit.
             2032          (1) Before a person may sell, offer for sale, or furnish beer at retail for on-premise
             2033      consumption at an event, the person shall obtain in accordance with this part:
             2034          (a) a single event permit; or
             2035          (b) (i) a temporary beer event permit; and
             2036          (ii) (A) a beer permit issued by the local authority as provided in Section 32B-9-404 ; or
             2037          (B) written consent of the local authority to sell beer at retail for on-premise
             2038      consumption at the event.
             2039          (2) (a) [The commission] Subject to Subsection (4), the director may issue a temporary
             2040      beer event permit to allow the sale, offering for sale, or furnishing of beer for on-premise
             2041      consumption only at an event that does not last longer than 30 days.
             2042          (b) A temporary beer event permit authorizes, for a period not to exceed 30 days, the


             2043      storage, sale, offer for sale, furnishing, and consumption of beer at an event.
             2044          (c) If a person obtains a temporary beer event permit for an event that lasts no longer
             2045      than 30 days, an on-premise beer retailer license is not required for the sale of beer at the event.
             2046          (3) (a) The [commission] director may not issue a temporary beer event permit to a
             2047      person if the aggregate of the days that the person is authorized to store, sell, offer for sale, or
             2048      furnish an alcoholic product under a temporary beer event permit will exceed a total of 90 days
             2049      in any one calendar year.
             2050          (b) The [commission] director may not issue, and a person may not obtain, a temporary
             2051      beer event permit to avoid or attempt to avoid the requirement to be licensed under Chapter 6,
             2052      Part 7, On-premise Beer Retailer License.
             2053          (4) Before the director issues or denies the issuance of a temporary beer event permit
             2054      under this section, the director shall comply with Section 32B-9-202 .
             2055          Section 23. Section 32B-9-404 is amended to read:
             2056           32B-9-404. Local authority's power to issue temporary beer event permit.
             2057          (1) A local authority may issue, suspend, and revoke a temporary permit to sell, offer
             2058      for sale, or furnish beer for on-premise consumption at an event, except that the local authority
             2059      may not issue a temporary permit if the event lasts longer than 30 days.
             2060          (2) Suspension or revocation of a temporary beer event permit issued [by the
             2061      commission] under Section 32B-9-403 or a temporary permit issued by a local authority under
             2062      this section prohibits the temporary beer event permittee who has a permit suspended or
             2063      revoked by either the commission or local authority from continuing to operate under the other
             2064      state or local permit.
             2065          Section 24. Section 52-4-205 is amended to read:
             2066           52-4-205. Purposes of closed meetings.
             2067          (1) A closed meeting described under Section 52-4-204 may only be held for:
             2068          (a) discussion of the character, professional competence, or physical or mental health
             2069      of an individual;
             2070          (b) strategy sessions to discuss collective bargaining;
             2071          (c) strategy sessions to discuss pending or reasonably imminent litigation;
             2072          (d) strategy sessions to discuss the purchase, exchange, or lease of real property,
             2073      including any form of a water right or water shares, if public discussion of the transaction


             2074      would:
             2075          (i) disclose the appraisal or estimated value of the property under consideration; or
             2076          (ii) prevent the public body from completing the transaction on the best possible terms;
             2077          (e) strategy sessions to discuss the sale of real property, including any form of a water
             2078      right or water shares, if:
             2079          (i) public discussion of the transaction would:
             2080          (A) disclose the appraisal or estimated value of the property under consideration; or
             2081          (B) prevent the public body from completing the transaction on the best possible terms;
             2082          (ii) the public body previously gave public notice that the property would be offered for
             2083      sale; and
             2084          (iii) the terms of the sale are publicly disclosed before the public body approves the
             2085      sale;
             2086          (f) discussion regarding deployment of security personnel, devices, or systems;
             2087          (g) investigative proceedings regarding allegations of criminal misconduct;
             2088          (h) as relates to the Independent Legislative Ethics Commission, conducting business
             2089      relating to the receipt or review of ethics complaints;
             2090          (i) as relates to an ethics committee of the Legislature, a purpose permitted under
             2091      Subsection 52-4-204 (1)(a)(iii)(B);
             2092          (j) as relates to a county legislative body, discussing commercial information as
             2093      defined in Section 59-1-404 ;
             2094          (k) as relates to the Alcoholic Beverage Control Commission [issuing a retail license
             2095      under Title 32B, Alcoholic Beverage Control Act, after receiving public input in a public
             2096      meeting in support or opposition to the commission issuing the retail license, discussing one or
             2097      more of the following factors], discussing in a closed meeting:
             2098          [(i) a factor the commission is required to consider under Section 32B-5-203 or that is
             2099      specified in the relevant part under Chapter 6, Specific Retail License Act, for the type of retail
             2100      license at issue;]
             2101          [(ii) the availability of a retail license under a quota;]
             2102          [(iii) the length of time the applicant has waited for a retail license;]
             2103          [(iv) an opening date for the applicant;]
             2104          [(v) whether the applicant is a seasonal business;]


             2105          [(vi) whether the location of the applicant has been previously licensed or is a new
             2106      location;]
             2107          [(vii) whether the application involves a change of ownership of an existing location;]
             2108          [(viii) whether the applicant holds other alcohol licenses at any location;]
             2109          [(ix) whether the applicant has a violation history or a pending violation;]
             2110          [(x) projected alcohol sales for the applicant as it relates to the extent to which the
             2111      retail license will be used;]
             2112          [(xi) whether the applicant is a small or entrepreneurial business that would benefit the
             2113      community in which it would be located;]
             2114          [(xii) the nature of entertainment the applicant proposes; or]
             2115          [(xiii) public input in support or opposition to granting the retail license;]
             2116          (i) commercial information or financial information obtained from a person if
             2117      disclosure of the information could reasonably be expected to result in unfair competitive
             2118      injury to the person submitting the information or would impair the ability of the Alcoholic
             2119      Beverage Control Commission from obtaining necessary information in the future;
             2120          (ii) ethics investigations of the Department of Alcoholic Beverage Control or the
             2121      Alcoholic Beverage Control Commission until a public recommendation or public sanction is
             2122      issued; and
             2123          (iii) an audit report and the Alcoholic Beverage Control Commission's response to the
             2124      audit report until the audit report is made available under Subsection 32B-2-302 (4) or
             2125      32B-2-302.5 (5)(d);
             2126          (l) as relates to the Utah Higher Education Assistance Authority and its appointed
             2127      board of directors, discussing fiduciary or commercial information as defined in Section
             2128      53B-12-102 ; or
             2129          (m) a purpose for which a meeting is required to be closed under Subsection (2).
             2130          (2) The following meetings shall be closed:
             2131          (a) a meeting of the Health and Human Services Interim Committee to review a fatality
             2132      review report described in Subsection 62A-16-301 (1)(a), and the responses to the report
             2133      described in Subsections 62A-16-301 (2) and (4); and
             2134          (b) a meeting of the Child Welfare Legislative Oversight Panel to:
             2135          (i) review a fatality review report described in Subsection 62A-16-301 (1)(a), and the


             2136      responses to the report described in Subsections 62A-16-301 (2) and (4); or
             2137          (ii) review and discuss an individual case, as described in Subsection 62A-4a-207 (5).
             2138          (3) A public body may not interview a person applying to fill an elected position in a
             2139      closed meeting.
             2140          Section 25. Section 63G-2-305 is amended to read:
             2141           63G-2-305. Protected records.
             2142          The following records are protected if properly classified by a governmental entity:
             2143          (1) trade secrets as defined in Section 13-24-2 if the person submitting the trade secret
             2144      has provided the governmental entity with the information specified in Section 63G-2-309 ;
             2145          (2) commercial information or nonindividual financial information obtained from a
             2146      person if:
             2147          (a) disclosure of the information could reasonably be expected to result in unfair
             2148      competitive injury to the person submitting the information or would impair the ability of the
             2149      governmental entity to obtain necessary information in the future;
             2150          (b) the person submitting the information has a greater interest in prohibiting access
             2151      than the public in obtaining access; and
             2152          (c) the person submitting the information has provided the governmental entity with
             2153      the information specified in Section 63G-2-309 ;
             2154          (3) commercial or financial information acquired or prepared by a governmental entity
             2155      to the extent that disclosure would lead to financial speculations in currencies, securities, or
             2156      commodities that will interfere with a planned transaction by the governmental entity or cause
             2157      substantial financial injury to the governmental entity or state economy;
             2158          (4) records the disclosure of which could cause commercial injury to, or confer a
             2159      competitive advantage upon a potential or actual competitor of, a commercial project entity as
             2160      defined in Subsection 11-13-103 (4);
             2161          (5) test questions and answers to be used in future license, certification, registration,
             2162      employment, or academic examinations;
             2163          (6) records the disclosure of which would impair governmental procurement
             2164      proceedings or give an unfair advantage to any person proposing to enter into a contract or
             2165      agreement with a governmental entity, except, subject to Subsections (1) and (2), that this
             2166      Subsection (6) does not restrict the right of a person to have access to, once the contract or


             2167      grant has been awarded, a bid, proposal, or application submitted to or by a governmental
             2168      entity in response to:
             2169          (a) a request for bids;
             2170          (b) a request for proposals;
             2171          (c) a grant; or
             2172          (d) other similar document;
             2173          (7) records that would identify real property or the appraisal or estimated value of real
             2174      or personal property, including intellectual property, under consideration for public acquisition
             2175      before any rights to the property are acquired unless:
             2176          (a) public interest in obtaining access to the information outweighs the governmental
             2177      entity's need to acquire the property on the best terms possible;
             2178          (b) the information has already been disclosed to persons not employed by or under a
             2179      duty of confidentiality to the entity;
             2180          (c) in the case of records that would identify property, potential sellers of the described
             2181      property have already learned of the governmental entity's plans to acquire the property;
             2182          (d) in the case of records that would identify the appraisal or estimated value of
             2183      property, the potential sellers have already learned of the governmental entity's estimated value
             2184      of the property; or
             2185          (e) the property under consideration for public acquisition is a single family residence
             2186      and the governmental entity seeking to acquire the property has initiated negotiations to acquire
             2187      the property as required under Section 78B-6-505 ;
             2188          (8) records prepared in contemplation of sale, exchange, lease, rental, or other
             2189      compensated transaction of real or personal property including intellectual property, which, if
             2190      disclosed prior to completion of the transaction, would reveal the appraisal or estimated value
             2191      of the subject property, unless:
             2192          (a) the public interest in access outweighs the interests in restricting access, including
             2193      the governmental entity's interest in maximizing the financial benefit of the transaction; or
             2194          (b) when prepared by or on behalf of a governmental entity, appraisals or estimates of
             2195      the value of the subject property have already been disclosed to persons not employed by or
             2196      under a duty of confidentiality to the entity;
             2197          (9) records created or maintained for civil, criminal, or administrative enforcement


             2198      purposes or audit purposes, or for discipline, licensing, certification, or registration purposes, if
             2199      release of the records:
             2200          (a) reasonably could be expected to interfere with investigations undertaken for
             2201      enforcement, discipline, licensing, certification, or registration purposes;
             2202          (b) reasonably could be expected to interfere with audits, disciplinary, or enforcement
             2203      proceedings;
             2204          (c) would create a danger of depriving a person of a right to a fair trial or impartial
             2205      hearing;
             2206          (d) reasonably could be expected to disclose the identity of a source who is not
             2207      generally known outside of government and, in the case of a record compiled in the course of
             2208      an investigation, disclose information furnished by a source not generally known outside of
             2209      government if disclosure would compromise the source; or
             2210          (e) reasonably could be expected to disclose investigative or audit techniques,
             2211      procedures, policies, or orders not generally known outside of government if disclosure would
             2212      interfere with enforcement or audit efforts;
             2213          (10) records the disclosure of which would jeopardize the life or safety of an
             2214      individual;
             2215          (11) records the disclosure of which would jeopardize the security of governmental
             2216      property, governmental programs, or governmental recordkeeping systems from damage, theft,
             2217      or other appropriation or use contrary to law or public policy;
             2218          (12) records that, if disclosed, would jeopardize the security or safety of a correctional
             2219      facility, or records relating to incarceration, treatment, probation, or parole, that would interfere
             2220      with the control and supervision of an offender's incarceration, treatment, probation, or parole;
             2221          (13) records that, if disclosed, would reveal recommendations made to the Board of
             2222      Pardons and Parole by an employee of or contractor for the Department of Corrections, the
             2223      Board of Pardons and Parole, or the Department of Human Services that are based on the
             2224      employee's or contractor's supervision, diagnosis, or treatment of any person within the board's
             2225      jurisdiction;
             2226          (14) records and audit workpapers that identify audit, collection, and operational
             2227      procedures and methods used by the State Tax Commission, if disclosure would interfere with
             2228      audits or collections;


             2229          (15) records of a governmental audit agency relating to an ongoing or planned audit
             2230      until the final audit is released;
             2231          (16) records prepared by or on behalf of a governmental entity solely in anticipation of
             2232      litigation that are not available under the rules of discovery;
             2233          (17) records disclosing an attorney's work product, including the mental impressions or
             2234      legal theories of an attorney or other representative of a governmental entity concerning
             2235      litigation;
             2236          (18) records of communications between a governmental entity and an attorney
             2237      representing, retained, or employed by the governmental entity if the communications would be
             2238      privileged as provided in Section 78B-1-137 ;
             2239          (19) (a) (i) personal files of a state legislator, including personal correspondence to or
             2240      from a member of the Legislature; and
             2241          (ii) notwithstanding Subsection (19)(a)(i), correspondence that gives notice of
             2242      legislative action or policy may not be classified as protected under this section; and
             2243          (b) (i) an internal communication that is part of the deliberative process in connection
             2244      with the preparation of legislation between:
             2245          (A) members of a legislative body;
             2246          (B) a member of a legislative body and a member of the legislative body's staff; or
             2247          (C) members of a legislative body's staff; and
             2248          (ii) notwithstanding Subsection (19)(b)(i), a communication that gives notice of
             2249      legislative action or policy may not be classified as protected under this section;
             2250          (20) (a) records in the custody or control of the Office of Legislative Research and
             2251      General Counsel, that, if disclosed, would reveal a particular legislator's contemplated
             2252      legislation or contemplated course of action before the legislator has elected to support the
             2253      legislation or course of action, or made the legislation or course of action public; and
             2254          (b) notwithstanding Subsection (20)(a), the form to request legislation submitted to the
             2255      Office of Legislative Research and General Counsel is a public document unless a legislator
             2256      asks that the records requesting the legislation be maintained as protected records until such
             2257      time as the legislator elects to make the legislation or course of action public;
             2258          (21) research requests from legislators to the Office of Legislative Research and
             2259      General Counsel or the Office of the Legislative Fiscal Analyst and research findings prepared


             2260      in response to these requests;
             2261          (22) drafts, unless otherwise classified as public;
             2262          (23) records concerning a governmental entity's strategy about collective bargaining or
             2263      pending litigation;
             2264          (24) records of investigations of loss occurrences and analyses of loss occurrences that
             2265      may be covered by the Risk Management Fund, the Employers' Reinsurance Fund, the
             2266      Uninsured Employers' Fund, or similar divisions in other governmental entities;
             2267          (25) records, other than personnel evaluations, that contain a personal recommendation
             2268      concerning an individual if disclosure would constitute a clearly unwarranted invasion of
             2269      personal privacy, or disclosure is not in the public interest;
             2270          (26) records that reveal the location of historic, prehistoric, paleontological, or
             2271      biological resources that if known would jeopardize the security of those resources or of
             2272      valuable historic, scientific, educational, or cultural information;
             2273          (27) records of independent state agencies if the disclosure of the records would
             2274      conflict with the fiduciary obligations of the agency;
             2275          (28) records of an institution within the state system of higher education defined in
             2276      Section 53B-1-102 regarding tenure evaluations, appointments, applications for admissions,
             2277      retention decisions, and promotions, which could be properly discussed in a meeting closed in
             2278      accordance with Title 52, Chapter 4, Open and Public Meetings Act, provided that records of
             2279      the final decisions about tenure, appointments, retention, promotions, or those students
             2280      admitted, may not be classified as protected under this section;
             2281          (29) records of the governor's office, including budget recommendations, legislative
             2282      proposals, and policy statements, that if disclosed would reveal the governor's contemplated
             2283      policies or contemplated courses of action before the governor has implemented or rejected
             2284      those policies or courses of action or made them public;
             2285          (30) records of the Office of the Legislative Fiscal Analyst relating to budget analysis,
             2286      revenue estimates, and fiscal notes of proposed legislation before issuance of the final
             2287      recommendations in these areas;
             2288          (31) records provided by the United States or by a government entity outside the state
             2289      that are given to the governmental entity with a requirement that they be managed as protected
             2290      records if the providing entity certifies that the record would not be subject to public disclosure


             2291      if retained by it;
             2292          (32) transcripts, minutes, or reports of the closed portion of a meeting of a public body
             2293      except as provided in Section 52-4-206 ;
             2294          (33) records that would reveal the contents of settlement negotiations but not including
             2295      final settlements or empirical data to the extent that they are not otherwise exempt from
             2296      disclosure;
             2297          (34) memoranda prepared by staff and used in the decision-making process by an
             2298      administrative law judge, a member of the Board of Pardons and Parole, or a member of any
             2299      other body charged by law with performing a quasi-judicial function;
             2300          (35) records that would reveal negotiations regarding assistance or incentives offered
             2301      by or requested from a governmental entity for the purpose of encouraging a person to expand
             2302      or locate a business in Utah, but only if disclosure would result in actual economic harm to the
             2303      person or place the governmental entity at a competitive disadvantage, but this section may not
             2304      be used to restrict access to a record evidencing a final contract;
             2305          (36) materials to which access must be limited for purposes of securing or maintaining
             2306      the governmental entity's proprietary protection of intellectual property rights including patents,
             2307      copyrights, and trade secrets;
             2308          (37) the name of a donor or a prospective donor to a governmental entity, including an
             2309      institution within the state system of higher education defined in Section 53B-1-102 , and other
             2310      information concerning the donation that could reasonably be expected to reveal the identity of
             2311      the donor, provided that:
             2312          (a) the donor requests anonymity in writing;
             2313          (b) any terms, conditions, restrictions, or privileges relating to the donation may not be
             2314      classified protected by the governmental entity under this Subsection (37); and
             2315          (c) except for an institution within the state system of higher education defined in
             2316      Section 53B-1-102 , the governmental unit to which the donation is made is primarily engaged
             2317      in educational, charitable, or artistic endeavors, and has no regulatory or legislative authority
             2318      over the donor, a member of the donor's immediate family, or any entity owned or controlled
             2319      by the donor or the donor's immediate family;
             2320          (38) accident reports, except as provided in Sections 41-6a-404 , 41-12a-202 , and
             2321      73-18-13 ;


             2322          (39) a notification of workers' compensation insurance coverage described in Section
             2323      34A-2-205 ;
             2324          (40) (a) the following records of an institution within the state system of higher
             2325      education defined in Section 53B-1-102 , which have been developed, discovered, disclosed to,
             2326      or received by or on behalf of faculty, staff, employees, or students of the institution:
             2327          (i) unpublished lecture notes;
             2328          (ii) unpublished notes, data, and information:
             2329          (A) relating to research; and
             2330          (B) of:
             2331          (I) the institution within the state system of higher education defined in Section
             2332      53B-1-102 ; or
             2333          (II) a sponsor of sponsored research;
             2334          (iii) unpublished manuscripts;
             2335          (iv) creative works in process;
             2336          (v) scholarly correspondence; and
             2337          (vi) confidential information contained in research proposals;
             2338          (b) Subsection (40)(a) may not be construed to prohibit disclosure of public
             2339      information required pursuant to Subsection 53B-16-302 (2)(a) or (b); and
             2340          (c) Subsection (40)(a) may not be construed to affect the ownership of a record;
             2341          (41) (a) records in the custody or control of the Office of Legislative Auditor General
             2342      that would reveal the name of a particular legislator who requests a legislative audit prior to the
             2343      date that audit is completed and made public; and
             2344          (b) notwithstanding Subsection (41)(a), a request for a legislative audit submitted to the
             2345      Office of the Legislative Auditor General is a public document unless the legislator asks that
             2346      the records in the custody or control of the Office of Legislative Auditor General that would
             2347      reveal the name of a particular legislator who requests a legislative audit be maintained as
             2348      protected records until the audit is completed and made public;
             2349          (42) records that provide detail as to the location of an explosive, including a map or
             2350      other document that indicates the location of:
             2351          (a) a production facility; or
             2352          (b) a magazine;


             2353          (43) information:
             2354          (a) contained in the statewide database of the Division of Aging and Adult Services
             2355      created by Section 62A-3-311.1 ; or
             2356          (b) received or maintained in relation to the Identity Theft Reporting Information
             2357      System (IRIS) established under Section 67-5-22 ;
             2358          (44) information contained in the Management Information System and Licensing
             2359      Information System described in Title 62A, Chapter 4a, Child and Family Services;
             2360          (45) information regarding National Guard operations or activities in support of the
             2361      National Guard's federal mission;
             2362          (46) records provided by any pawn or secondhand business to a law enforcement
             2363      agency or to the central database in compliance with Title 13, Chapter 32a, Pawnshop and
             2364      Secondhand Merchandise Transaction Information Act;
             2365          (47) information regarding food security, risk, and vulnerability assessments performed
             2366      by the Department of Agriculture and Food;
             2367          (48) except to the extent that the record is exempt from this chapter pursuant to Section
             2368      63G-2-106 , records related to an emergency plan or program, a copy of which is provided to or
             2369      prepared or maintained by the Division of Emergency Management, and the disclosure of
             2370      which would jeopardize:
             2371          (a) the safety of the general public; or
             2372          (b) the security of:
             2373          (i) governmental property;
             2374          (ii) governmental programs; or
             2375          (iii) the property of a private person who provides the Division of Emergency
             2376      Management information;
             2377          (49) records of the Department of Agriculture and Food relating to the National
             2378      Animal Identification System or any other program that provides for the identification, tracing,
             2379      or control of livestock diseases, including any program established under Title 4, Chapter 24,
             2380      Utah Livestock Brand and Anti-theft Act or Title 4, Chapter 31, Livestock Inspection and
             2381      Quarantine;
             2382          (50) as provided in Section 26-39-501 :
             2383          (a) information or records held by the Department of Health related to a complaint


             2384      regarding a child care program or residential child care which the department is unable to
             2385      substantiate; and
             2386          (b) information or records related to a complaint received by the Department of Health
             2387      from an anonymous complainant regarding a child care program or residential child care;
             2388          (51) unless otherwise classified as public under Section 63G-2-301 and except as
             2389      provided under Section 41-1a-116 , an individual's home address, home telephone number, or
             2390      personal mobile phone number, if:
             2391          (a) the individual is required to provide the information in order to comply with a law,
             2392      ordinance, rule, or order of a government entity; and
             2393          (b) the subject of the record has a reasonable expectation that this information will be
             2394      kept confidential due to:
             2395          (i) the nature of the law, ordinance, rule, or order; and
             2396          (ii) the individual complying with the law, ordinance, rule, or order;
             2397          (52) the name, home address, work addresses, and telephone numbers of an individual
             2398      that is engaged in, or that provides goods or services for, medical or scientific research that is:
             2399          (a) conducted within the state system of higher education, as defined in Section
             2400      53B-1-102 ; and
             2401          (b) conducted using animals;
             2402          (53) an initial proposal under Title 63M, Chapter 1, Part 26, Government Procurement
             2403      Private Proposal Program, to the extent not made public by rules made under that chapter;
             2404          (54) in accordance with Section 78A-12-203 , any record of the Judicial Performance
             2405      Evaluation Commission concerning an individual commissioner's vote on whether or not to
             2406      recommend that the voters retain a judge;
             2407          (55) information collected and a report prepared by the Judicial Performance
             2408      Evaluation Commission concerning a judge, unless Section 20A-7-702 or Title 78A, Chapter
             2409      12, Judicial Performance Evaluation Commission Act, requires disclosure of, or makes public,
             2410      the information or report;
             2411          (56) records contained in the Management Information System created in Section
             2412      62A-4a-1003 ;
             2413          (57) records provided or received by the Public Lands Policy Coordinating Office in
             2414      furtherance of any contract or other agreement made in accordance with Section 63J-4-603 ;


             2415          (58) information requested by and provided to the Utah State 911 Committee under
             2416      Section 53-10-602 ;
             2417          (59) recorded Children's Justice Center investigative interviews, both video and audio,
             2418      the release of which are governed by Section 77-37-4 ;
             2419          (60) in accordance with Section 73-10-33 :
             2420          (a) a management plan for a water conveyance facility in the possession of the Division
             2421      of Water Resources or the Board of Water Resources; or
             2422          (b) an outline of an emergency response plan in possession of the state or a county or
             2423      municipality;
             2424          (61) the following records in the custody or control of the Office of Inspector General
             2425      of Medicaid Services, created in Section 63J-4a-201 :
             2426          (a) records that would disclose information relating to allegations of personal
             2427      misconduct, gross mismanagement, or illegal activity of a person if the information or
             2428      allegation cannot be corroborated by the Office of Inspector General of Medicaid Services
             2429      through other documents or evidence, and the records relating to the allegation are not relied
             2430      upon by the Office of Inspector General of Medicaid Services in preparing a final investigation
             2431      report or final audit report;
             2432          (b) records and audit workpapers to the extent they would disclose the identity of a
             2433      person who, during the course of an investigation or audit, communicated the existence of any
             2434      Medicaid fraud, waste, or abuse, or a violation or suspected violation of a law, rule, or
             2435      regulation adopted under the laws of this state, a political subdivision of the state, or any
             2436      recognized entity of the United States, if the information was disclosed on the condition that
             2437      the identity of the person be protected;
             2438          (c) before the time that an investigation or audit is completed and the final
             2439      investigation or final audit report is released, records or drafts circulated to a person who is not
             2440      an employee or head of a governmental entity for the person's response or information;
             2441          (d) records that would disclose an outline or part of any investigation, audit survey
             2442      plan, or audit program; or
             2443          (e) requests for an investigation or audit, if disclosure would risk circumvention of an
             2444      investigation or audit;
             2445          (62) records that reveal methods used by the Office of Inspector General of Medicaid


             2446      Services, the fraud unit, or the Department of Health, to discover Medicaid fraud, waste, or
             2447      abuse;
             2448          (63) information provided to the Department of Health or the Division of Occupational
             2449      and Professional Licensing under Subsection 58-68-304 (3) or (4); [and]
             2450          (64) a record described in Section 63G-12-210 [.]; and
             2451          (65) a record related to an ethics investigation of the Department of Alcoholic
             2452      Beverage Control or Alcoholic Beverage Control Commission until a public recommendation
             2453      or public sanction is issued.
             2454          Section 26. Section 63I-5-201 is amended to read:
             2455           63I-5-201. Internal auditing programs -- State agencies.
             2456          (1) (a) The Departments of Administrative Services, Agriculture, Commerce,
             2457      Community and Culture, Corrections, Workforce Services, Environmental Quality, Health,
             2458      Human Services, Natural Resources, Public Safety, and Transportation; and the State Tax
             2459      Commission shall conduct various types of auditing procedures as determined by the agency
             2460      head or governor.
             2461          (b) The governor may, by executive order, require other state agencies to establish an
             2462      internal audit program.
             2463          (c) An agency head may establish an internal audit program for the agency head's
             2464      agency if the agency administers programs that:
             2465          (i) might pose a high liability risk to the state; or
             2466          (ii) are essential to the health, safety, and welfare of the citizens of Utah.
             2467          (2) (a) The Office of the Court Administrator shall conduct various types of auditing
             2468      procedures as determined by the Judicial Council, including auditing procedures for courts not
             2469      of record.
             2470          (b) The Judicial Council may, by rule, require other judicial agencies to establish an
             2471      internal audit program.
             2472          (c) An agency head within the judicial branch may establish an internal audit program
             2473      for the agency head's agency if the agency administers programs that:
             2474          (i) might pose a high liability risk to the state; or
             2475          (ii) are essential to the health, safety, and welfare of the citizens of Utah.
             2476          (3) (a) The University of Utah, Utah State University, Salt Lake Community College,


             2477      Utah Valley University, and Weber State University shall conduct various types of auditing
             2478      procedures as determined by the Board of Regents.
             2479          (b) The Board of Regents may issue policies requiring other higher education entities
             2480      or programs to establish an internal audit program.
             2481          (c) An agency head within higher education may establish an internal audit program for
             2482      the agency head's agency if the agency administers programs that:
             2483          (i) might pose a high liability risk to the state; or
             2484          (ii) are essential to the health, safety, and welfare of the citizens of Utah.
             2485          (4) The State Office of Education shall conduct various types of auditing procedures as
             2486      determined by the State Board of Education.
             2487          (5) Subject to Section 32B-2-302.5 , the internal audit division of the Department of
             2488      Alcoholic Beverage Control shall conduct various types of auditing procedures as determined
             2489      by the Alcoholic Beverage Control Commission.
             2490          Section 27. Effective date.
             2491          This bill takes effect on July 1, 2012.




Legislative Review Note
    as of 2-21-12 1:40 PM


Office of Legislative Research and General Counsel


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