H.B. 354

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PILOT PROGRAM - CORK-FINISHED WINE SAMPLING
2 1997 GENERAL SESSION
3 STATE OF UTAH
4 Sponsor: John W. Hickman
5 David M. Jones

6 AN ACT RELATING TO ALCOHOLIC BEVERAGES; MODIFYING DEFINITIONS;
7 CREATING A PILOT PROGRAM TO ALLOW FOR SAMPLING OF CORK-FINISHED
8 WINE BY RETAIL LICENSEES UNDER CERTAIN CIRCUMSTANCES; MAKING
9 TECHNICAL CORRECTIONS; AND PROVIDING AN EFFECTIVE DATE.
10 This act affects sections of Utah Code Annotated 1953 as follows:
11 AMENDS:
12 32A-1-105, as last amended by Chapters 77 and 88, Laws of Utah 1994
13 32A-8-505, as enacted by Chapter 20, Laws of Utah 1993
14 32A-12-213, as last amended by Chapter 30, Laws of Utah 1992
15 32A-12-501, as last amended by Chapter 20, Laws of Utah 1995
16 32A-12-603, as last amended by Chapter 88, Laws of Utah 1994
17 76-10-1506, as last amended by Chapter 132, Laws of Utah 1991
18 Be it enacted by the Legislature of the state of Utah:
19 Section 1. Section 32A-1-105 is amended to read:
20 32A-1-105. Definitions.
21 As used in this title:
22 (1) "Airport lounge" means a place of business licensed to sell alcoholic beverages, at
23 retail, for consumption on its premises located at an international airport with a United States
24 Customs office on its premises.
25 (2) "Alcoholic beverages" means "beer" and "liquor" as the terms are defined in this
26 section.
27 (3) (a) "Alcoholic products" means all products that contain at least 63/100 of 1% of

1 alcohol by volume or at least 1/2 of 1% by weight, and are obtained by fermentation, infusion,
2 decoction, brewing, distillation, or any other process that uses any liquid or combinations of
3 liquids, whether drinkable or not, to create alcohol in an amount greater than the amount
4 prescribed in this subsection.
5 (b) "Alcoholic products" does not include common extracts, vinegars, ciders, essences,
6 tinctures, food preparations, or over-the-counter drugs and medicines that otherwise come within
7 this definition.
8 (4) "Beer" means all products that contain 63/100 of 1% of alcohol by volume or 1/2 of
9 1% of alcohol by weight, but not more than 4% of alcohol by volume or 3.2% by weight, and are
10 obtained by fermentation, infusion, or decoction of any malted grain. Beer may or may not contain
11 hops or other vegetable products. Beer includes products referred to as malt liquor, malted
12 beverages, or malt coolers.
13 (5) (a) "Beer retailer" means any business establishment engaged, primarily or
14 incidentally, in the retail sale or distribution of beer to public patrons, whether for consumption
15 on or off the establishment's premises, and that is licensed to sell beer by the commission, by a
16 local authority, or both.
17 (b) (i) "On-premise beer retailer" means any beer retailer engaged, primarily or
18 incidentally, in the sale or distribution of beer to public patrons for consumption on the beer
19 retailer's premises.
20 (ii) "On-premise beer retailer" includes taverns.
21 (c) (i) "Tavern" means any business establishment engaged primarily in the retail sale or
22 distribution of beer to public patrons for consumption on the establishment's premises, and that
23 is licensed to sell beer under Chapter 10, Part 2, On-Premise Beer Retailer Licenses.
24 (ii) "Tavern" includes a beer bar, parlor, lounge, cabaret, and night club where the revenue
25 from the sale of beer exceeds the revenue of the sale of food, although food need not be sold in the
26 establishment.
27 (6) "Billboard" means any light device, painting, drawing, poster, sign, signboard,
28 scoreboard, or other similar public display used to advertise, but does not include:
29 (a) displays on beer delivery vehicles if the displays do not overtly promote the
30 consumption of alcoholic beverages;
31 (b) displays in taverns and private clubs, if the displays are not visible to persons

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1 off-premises;
2 (c) point-of-sale displays, other than light devices, in retail establishments that sell beer
3 for off-premise consumption, if the displays are not visible to persons off-premises;
4 (d) private business signs on the premises of any business engaged primarily in the
5 distribution of beer;
6 (e) newspapers, magazines, circulars, programs, or other similar printed materials, if the
7 materials are not directed primarily to minors;
8 (f) menu boards in retail establishments that sell beer for on-premise consumption if the
9 menu boards also contain food items;
10 (g) handles on alcoholic beverage dispensing equipment that identify brands of products
11 being dispensed; and
12 (h) displays at the site of a temporary special event for which a single event liquor permit
13 has been obtained from the commission or a temporary special event beer permit has been obtained
14 from a local authority to inform attendees of the location where alcoholic beverages are being
15 dispensed.
16 (7) "Brewer" means any person engaged in manufacturing beer, malt liquor, or malted
17 beverages.
18 (8) "Chartered bus" means a passenger bus, coach, or other motor vehicle provided by a
19 bus company to a group of persons pursuant to a common purpose, under a single contract, and
20 at a fixed charge in accordance with the bus company's tariff, for the purpose of giving the group
21 of persons the exclusive use of the bus and a driver to travel together to a specified destination or
22 destinations.
23 (9) "Church" means a building:
24 (a) set apart primarily for the purpose of worship;
25 (b) in which religious services are held [and];
26 (c) with which clergy is associated[, and];
27 (d) the main body of which is kept for that use and not put to any other use inconsistent
28 with its primary purpose[,]; and
29 (e) which is tax exempt under the laws of this state.
30 (10) "Club" and "private club" means any nonprofit corporation operating as a social club,
31 recreational, fraternal, or athletic association, or kindred association organized primarily for the

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1 benefit of its stockholders or members.
2 (11) "Commission" means the Alcoholic Beverage Control Commission.
3 (12) "Cork-finished wine" means a container of wine stopped by a cork and finished by
4 foil, lead, or other substance by the manufacturer.
5 (13) "Council" means the Citizen's Council on Alcoholic Beverage Control.
6 (14) "Department" means the Department of Alcoholic Beverage Control.
7 (15) "Distressed merchandise" means any alcoholic beverage in the possession of the
8 department that is saleable, but for some reason is unappealing to the public.
9 (16) "General food store" means any business establishment primarily engaged in selling
10 food and grocery supplies to public patrons for off-premise consumption.
11 (17) "Governing body" means the board of not fewer than five shareholders or voting
12 members of a private club who have been elected and authorized to control or conduct the business
13 and affairs of that club.
14 (18) "Guest" means a person accompanied by an active member or visitor of a club who
15 enjoys only those privileges derived from the host for the duration of the visit to the club.
16 (19) "Heavy beer" means all products that contain more than 4% alcohol by volume
17 obtained by fermentation, infusion, or decoction of any malted grain. "Heavy beer" is considered
18 "liquor" for the purposes of this title.
19 (20) "Identification card" means the card issued by the commissioner of the Department
20 of Public Safety under Title 53, Chapter 3, Part 8, Identification Card Act.
21 (21) "Interdicted person" means a person to whom the sale, gift, or provision of an
22 alcoholic beverage is prohibited by law or court order.
23 (22) "Licensee" means any person issued a license by the commission to sell, manufacture,
24 store, or allow consumption of alcoholic beverages on premises owned or controlled by the person.
25 (23) "Limousine" means any motor vehicle licensed by the state or a local authority, other
26 than a bus or taxicab[,]:
27 (a) in which the driver and passengers are separated by a partition, glass, or other barrier;
28 and
29 (b) that is provided by a company to an individual or individuals at a fixed charge in
30 accordance with the company's tariff for the purpose of giving the individual or individuals the
31 exclusive use of the limousine and a driver to travel to a specified destination or destinations.

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1 (24) (a) "Liquor" means alcohol, or any alcoholic, spiritous, vinous, fermented, malt, or
2 other liquid, or combination of liquids, a part of which is spiritous, vinous, or fermented, and all
3 other drinks, or drinkable liquids that contain more than 1/2 of 1% of alcohol by volume and is
4 suitable to use for beverage purposes.
5 (b) "Liquor" does not include any beverage defined as a beer, malt liquor, or malted
6 beverage that has an alcohol content of less than 4% alcohol by volume.
7 (25) "Local authority" means:
8 (a) the county legislative body of the county if the premises are located in an
9 unincorporated area of a county[,]; or
10 (b) the governing body of the city or town if the premises are located in an incorporated
11 city or town.
12 (26) "Manufacture" means to distill, brew, rectify, mix, compound, process, ferment, or
13 otherwise make an alcoholic product for personal use or for sale or distribution to others.
14 (27) "Member" means a person who, after paying regular dues, has full privileges of a club
15 under this title.
16 (28) "Minor" means any person under the age of 21 years.
17 (29) "Outlet" means a location other than a state store or package agency where alcoholic
18 beverages are sold pursuant to a license issued by the commission.
19 (30) "Package" means any container, bottle, vessel, or other receptacle containing liquor.
20 (31) "Package agency" means a retail liquor location operated under a contractual
21 agreement with the department, by a person other than the state, who is authorized by the
22 commission to sell package liquor for consumption off the premises of the agency.
23 (32) "Package agent" means any person permitted by the commission to operate a package
24 agency pursuant to a contractual agreement with the department to sell liquor from premises that
25 the package agent shall provide and maintain.
26 (33) "Permittee" means any person issued a permit by the commission to perform acts or
27 exercise privileges as specifically granted in the permit.
28 (34) "Person" means any individual, partnership, firm, corporation, association, business
29 trust, or other form of business enterprise, including a receiver or trustee, and the plural as well as
30 the singular number, unless the intent to give a more limited meaning is disclosed by the context.
31 (35) "Policy" means a statement of principles established by the commission to guide the

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1 administration of this title and the management of the affairs of the department.
2 (36) "Premises" means any building, enclosure, room, or equipment used in connection
3 with the sale, storage, service, manufacture, distribution, or consumption of alcoholic products,
4 unless otherwise defined in this title or in the rules adopted by the commission.
5 (37) "Prescription" means a writing in legal form, signed by a physician or dentist and
6 given to a patient for obtaining an alcoholic beverage for medicinal purposes only.
7 (38) (a) "Privately-hosted event" or "private social function" means a specific social,
8 business, or recreational event for which an entire room, area, or hall has been leased or rented,
9 in advance by an identified group, and the event or function is limited in attendance to people who
10 have been specifically designated and their guests.
11 (b) "Privately-hosted event" and "private social function" does not include events or
12 functions to which the general public is invited, whether for an admission fee or not.
13 (39) (a) "Public building" means any building or permanent structure owned or leased by
14 the state, a county, or local government entity that is used for:
15 (i) public education[,];
16 (ii) transacting public business[,]; or
17 (iii) regularly conducting government activities.
18 (b) "Public building" does not mean or refer to any building owned by the state or a county
19 or local government entity when the building is used by anyone, in whole or in part, for proprietary
20 functions.
21 (40) "Representative" means an individual who is compensated by salary, commission,
22 or any other means for representing and selling the alcoholic beverage products of a manufacturer,
23 supplier, or importer of liquor, wine, or heavy beer.
24 (41) "Residence" means the person's principal place of abode within Utah.
25 (42) "Restaurant" means any business establishment:
26 (a) where a variety of foods is prepared and complete meals are served to the general
27 public;
28 (b) located on a premises having adequate culinary fixtures for food preparation and dining
29 accommodations; and
30 (c) that is engaged primarily in serving meals to the general public.
31 (43) "Retailer" means any person engaged in the sale or distribution of alcoholic beverages

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1 to the consumer.
2 (44) (a) "Rule" means a general statement adopted by the commission to guide the
3 activities of those regulated or employed by the department, to implement or interpret this title,
4 or to describe the organization, procedure, or practice requirements of the department in order to
5 carry out the intent of the law and ensure its uniform application. This definition includes any
6 amendment or repeal of a prior rule.
7 (b) "Rule" does not include a rule concerning only the internal management of the
8 department that does not affect private rights or procedures available to the public, including
9 intradepartmental memoranda.
10 (45) (a) "Sample" includes:
11 (i) department samples[,];
12 (ii) industry representative samples[,];
13 (iii) on-premise retail licensee wine samples; and
14 (iv) department trade show samples.
15 (b) "Department sample" means liquor, wine, and heavy beer that has been placed in the
16 possession of the department for testing, analysis, and sampling.
17 (c) "Department trade show sample" means liquor, wine, and heavy beer that has been
18 placed in the possession of the department for use in a trade show conducted by the department.
19 (d) "Industry representative sample" means liquor, wine, and heavy beer that has been
20 placed in the possession of the department for testing, analysis, and sampling by local industry
21 representatives on the premises of the department to educate themselves of the quality and
22 characteristics of the product.
23 (e) "On-premise retail licensee wine sample" means cork-finished wine checked-out under
24 the procedures provided in Section 32A-12-603:
25 (i) to a local industry representative holding a license described in Section 32A-8-501;
26 (ii) to conduct on-premise tasting of cork-finished wines to a retail licensee licensed to sell
27 wine at retail for consumption on its premises; and
28 (iii) for the purpose of disseminating information and educating the retail licensees
29 described in Subsection (45)(e)(ii)(A) as to the quality and characteristics of the cork-finished
30 wines.
31 (46) (a) "School" means any building used primarily for the general education of minors.

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1 (b) "School" does not include nursery schools, infant day care centers, or trade or technical
2 schools.
3 (47) "Sell," "sale," and "to sell" means any transaction, exchange, or barter whereby, for
4 any consideration, an alcoholic beverage is either directly or indirectly transferred, solicited,
5 ordered, delivered for value, or by any means or under any pretext is promised or obtained,
6 whether done by a person as a principal, proprietor, or as an agent, servant, or employee, unless
7 otherwise defined in this title or the rules made by the commission.
8 (48) "Small brewer" means a brewer who manufactures less than 60,000 barrels of beer
9 and heavy beer per year.
10 (49) (a) "State label" means the official label designated by the commission affixed to all
11 liquor containers sold in the state.
12 (b) "State label" includes the department identification mark and inventory control
13 number.
14 (50) (a) "State store" means a facility for the sale of package liquor located on premises
15 owned or leased by the state and operated by state employees.
16 (b) "State store" does not apply to any licensee, permittee, or to package agencies.
17 (51) "Supplier" means any person selling alcoholic beverages to the department.
18 (52) "Temporary domicile" means the principal place of abode within Utah of a person
19 who does not have a present intention to continue residency within Utah permanently or
20 indefinitely.
21 (53) "Unsaleable liquor merchandise" means merchandise that is unsaleable because it is
22 unlabeled, leaky, damaged, difficult to open, partly filled, or is in a container having faded labels
23 or defective caps or corks, or in which the contents are cloudy, spoiled, or chemically determined
24 to be impure, or that contains sediment, or any foreign substance, or is otherwise considered by
25 the department as unfit for sale.
26 (54) "Visitor" means a person holding limited privileges in a club by virtue of a visitor
27 card purchased from the club and authorized by a sponsoring member of the club.
28 (55) "Warehouser" means any person, other than a licensed manufacturer, engaged in the
29 importation for sale, storage, or distribution of liquor regardless of amount.
30 (56) "Wholesaler" means any person engaged in the importation for sale, or in the sale of
31 beer in wholesale or jobbing quantities to retailers, other than a small brewer selling beer

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1 manufactured by that brewer.
2 (57) (a) "Wine" means any alcoholic beverage obtained by the fermentation of the natural
3 sugar content of fruits, plants, honey, or milk, or any other like substance, whether or not other
4 ingredients are added.
5 (b) "Wine" is considered "liquor" for purposes of this title.
6 Section 2. Section 32A-8-505 is amended to read:
7 32A-8-505. Operational restrictions.
8 (1) (a) A local industry representative licensee, employee or agent of the licensee, or
9 employee or agent of a manufacturer, supplier, or importer who is conducting business in the state,
10 shall abide by the conditions and requirements set forth in this section.
11 (b) If any person listed in Subsection (1)(a) knowingly violates or fails to comply with the
12 conditions and requirements set forth in this section, such violation or failure to comply may result
13 in a suspension or revocation of the license or other disciplinary action taken against individual
14 employees or agents of the licensee, and the commission may order the removal of the
15 manufacturer's, supplier's, or importer's products from the department's sales list and a suspension
16 of the department's purchase of those products for a period determined by the commission if the
17 manufacturer, supplier, or importer directly committed the violation, or solicited, requested,
18 commanded, encouraged, or intentionally aided another to engage in the violation.
19 (2) A local industry representative licensee, employee or agent of the licensee, or
20 employee or agent of a manufacturer, supplier, or importer who is conducting business in the state:
21 (a) may assist the department in ordering, shipping, and delivering merchandise, new
22 product notification, listing and delisting information, price quotations, product sales analysis,
23 shelf management, and educational seminars[, and];
24 (b) may, for the purpose of acquiring new listings, solicit orders from the department and
25 submit to the department price lists and samples of their products, but only to the extent authorized
26 by Chapter 12;
27 [(b)] (c) may not sell any liquor, wine, or heavy beer within the state except to the
28 department and military installations;
29 [(c)] (d) may not ship or transport, or cause to be shipped or transported, into this state or
30 from one place to another within this state any liquor, wine, or heavy beer[, or];
31 (e) may not sell or furnish, except as provided in Section 32A-12-603 for on-premise retail

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1 licensee wine samples, any liquor, wine, or heavy beer to any person within this state other than
2 to the department and military installations;
3 [(d)] (f) except as otherwise provided, may not advertise products it represents in violation
4 of this title or any other federal or state law;
5 [(e)] (g) shall comply with all trade practices provided in Chapter 12; and
6 [(f)] (h) may only provide samples of their products for tasting and sampling purposes:
7 (i) as provided in Section 32A-12-603;
8 (ii) by the department; or
9 (iii) by retail licensees or permittees at a department trade show.
10 (3) (a) A local industry representative licensee shall maintain on file with the department
11 a current accounts list of the names and addresses of all manufacturers, suppliers, and importers
12 the licensee represents.
13 (b) The licensee shall notify the department in writing of any changes to the accounts
14 listed within 14 days from the date the licensee either acquired or lost the account of a particular
15 manufacturer, supplier, or importer.
16 (4) A local industry representative licensee shall maintain accounting and other records
17 and documents as the department may require for at least three years.
18 (5) Any local industry representative licensee or person acting for the licensee, who
19 knowingly forges, falsifies, alters, cancels, destroys, conceals, or removes the entries in any of the
20 books of account or other documents of the licensee required to be made, maintained, or preserved
21 by this title or the rules of the commission for the purpose of deceiving the commission, council,
22 or department, or any of their officials or employees, is subject to the immediate suspension or
23 revocation of the industry representative's license and possible criminal prosecution under Chapter
24 12.
25 (6) A local industry representative licensee may, for the purpose of becoming educated as
26 to the quality and characteristics of a liquor, wine, or heavy beer product which the licensee
27 represents, [may] taste and analyze industry representative samples under the following conditions:
28 (a) The licensee may not receive more than two industry representative samples of a
29 particular type, vintage, and production lot of a particular branded product within a consecutive
30 120-day period.
31 (b) (i) Each sample of liquor may not exceed 1 liter.

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1 (ii) Each sample of wine or heavy beer may not exceed 1.5 liters unless that exact product
2 is only commercially packaged in a larger size, not to exceed 5 liters.
3 (c) Each industry representative sample may only be of a product not presently listed on
4 the department's sales list.
5 (d) (i) Industry representative samples shall be shipped prepaid by the manufacturer,
6 supplier, or importer by common carrier [and not via United States mail] directly to the
7 department's central administrative warehouse office. [These]
8 (ii) Industry representative samples may not be shipped:
9 (A) to any [other] location within the state other than the department's central
10 administrative warehouse office; or
11 (B) by United States mail.
12 (e) Industry representative samples shall be accompanied by a letter from the
13 manufacturer, supplier, or importer:
14 (i) clearly identifying the product as an "industry representative sample"[,]; and
15 (ii) clearly stating:
16 (A) the FOB case price of the product[,]; and
17 (B) the name of the local industry representative for who it is intended.
18 (f) The department shall assess a reasonable handling, labeling, and storage fee for each
19 industry representative sample received.
20 (g) The department shall affix to each bottle or container a label clearly identifying the
21 product as an "industry representative sample".
22 (h) The department shall:
23 (i) account for and record each industry representative sample received[,];
24 (ii) account for [its] the samples disposition[,]; and
25 (iii) maintain a record of the sample and its disposition for a two-year period.
26 (i) Industry representative samples may not leave the premises of the department's central
27 administrative warehouse office.
28 (j) Licensed industry representatives and their employees and agents may, at regularly
29 scheduled days and times established by the department, taste and analyze industry representative
30 samples on the premises of the department's central administrative warehouse office.
31 (k) Any unused contents of an opened product remaining after the product has been

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1 sampled shall be destroyed by the department under controlled and audited conditions established
2 by the department.
3 (l) Industry representative samples that are not tasted within 30 days of receipt by the
4 department shall be disposed of at the discretion of the department in one of the following ways:
5 (i) contents destroyed under controlled and audited conditions established by the
6 department; or
7 (ii) added to the inventory of the department for sale to the public.
8 (7) A local industry representative licensee may conduct on-premise retail licensee wine
9 sampling of on-premise retail licensee wine samples as provided in Section 32A-12-603.
10 [(7)] (8) A local representative licensee may not sell, exchange, barter, give, or attempt in
11 any way to dispose of the license whether for monetary gain or not. A local industry representative
12 license has no monetary value for the purpose of any type of disposition.
13 Section 3. Section 32A-12-213 is amended to read:
14 32A-12-213. Unlawful bringing onto premises for consumption.
15 (1) [Beginning January 1, 1991, a] A person may not bring onto the premises of any
16 licensed or unlicensed restaurant, airport lounge, licensed or unlicensed private club, on-premise
17 beer retailer licensee, or any establishment open to the general public any alcoholic beverage for
18 on-premises consumption, except:
19 (a) a person may bring cork-finished wines onto the premises of any restaurant liquor
20 licensee or private club liquor licensee and consume the wine pursuant to the restrictions contained
21 in Subsection 32A-4-106 (17) or 32A-5-107 (24)(m), as the case may be;
22 (b) a passenger of a limousine may bring onto, have, and consume any alcoholic beverage
23 on the limousine if:
24 (i) the travel of the limousine begins and ends at:
25 (A) the residence of the passenger[, at];
26 (B) the hotel of the passenger, if the passenger is a registered guest of the hotel[,]; or [at]
27 (C) the temporary domicile of the passenger; and
28 (ii) the driver of the limousine is separated from the passengers by partition or other means
29 approved by the department;
30 (c) a passenger of a chartered bus may bring onto, have, and consume any alcoholic
31 beverage on the chartered bus:

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1 (i) (A) but may consume only during travel to a specified destination of the chartered bus
2 and not during travel back to the place where the travel begins; or
3 [(ii)] (B) if the travel of the chartered bus begins and ends at:
4 (I) the residence of the passengers[, at];
5 (II) the hotel of the passenger, if the passenger is a registered guest of the hotel[,]; or [at]
6 (III) the temporary domicile of the passenger; and
7 [(iii)] (ii) the chartered bus has a nondrinking designee other than the driver traveling on
8 the chartered bus to monitor consumption; and
9 (d) a person may bring onto any premises, have, and consume any alcoholic beverage at
10 a privately-hosted event that is not open to the general public.
11 (2) Except as provided in Subsection (1)(c)(i)(A), the consumption of alcoholic beverages
12 in limousines and chartered buses is not allowed if the limousine or chartered bus drops off
13 passengers at locations from which they depart in private vehicles.
14 (3) A licensed or unlicensed private club, licensed or unlicensed restaurant, airport lounge,
15 or on-premise beer retailer licensee, or its officers, managers, employees, or agents may not allow
16 a person to bring onto its premises any alcoholic beverage for on-premises consumption or allow
17 consumption of any such alcoholic beverage in violation of this section, except as authorized in
18 Subsection (1).
19 (4) This section does not apply to an on-premise retail licensee wine sample, as defined
20 in Section 32A-1-105, checked-out under Subsection 32A-12-603(20).
21 Section 4. Section 32A-12-501 is amended to read:
22 32A-12-501. Disposition of liquor items shipped to the department.
23 (1) All liquor items received by the department from suppliers, other than as samples or
24 as items not specifically listed on department purchase orders, shall be handled in accordance with
25 and subject to Subsection 32A-12-603(3)[(i)](j).
26 (2) Funds of the department may not be used to pay freight or charges on samples or any
27 liquor items shipped to the department by suppliers and not listed on its purchase orders.
28 Section 5. Section 32A-12-603 is amended to read:
29 32A-12-603. Tied house -- Prohibition.
30 (1) (a) It is unlawful for any industry member, directly or indirectly or through an affiliate,
31 to induce, through any of the following means, any retailer to purchase any alcoholic beverages

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1 from the industry member or from the department to the exclusion in whole or in part of any of
2 those products sold or offered for sale by other persons:
3 (i) by acquiring or holding any interest in any retailer's license, except where the license
4 is held by a retailer that is completely owned by the industry member; or
5 (ii) by acquiring any interest in real or personal property owned, occupied, or used by any
6 retailer in the conduct of the retailer's business.
7 (b) For purposes of Subsection (1)(a)(ii), "interest" does not include complete ownership
8 of a retail business by an industry member but may include acquiring a mortgage on a retailer's real
9 or personal property or paying for display space at a retail establishment.
10 (2) It is unlawful for any industry member, directly or indirectly or through an affiliate,
11 to furnish, give, rent, lend, or sell any equipment, fixtures, signs, supplies, money, services, or
12 other thing of value, as defined in federal law 27 C.F.R. Section 6.41 through 6.47, to the
13 department, to any retailer, or to any third party retailer association or display company where the
14 benefits resulting from the thing of value flow to the individual retailers, subject to the following
15 exceptions:
16 (a) (i) Product displays such as wine racks, bins, barrels, casks, shelving and the like from
17 which liquor, wine, and heavy beer are displayed may be provided to the department, package
18 agencies, private clubs, airport lounges, public service permittees, and single event permittees to
19 the extent allowed by federal law 27 C.F.R. Section 6.83, but may only be displayed so as not to
20 be visible to persons off the premises.
21 (ii) Product displays from which beer is displayed may be provided to package agencies,
22 licensed off-premise beer retailers, taverns, private clubs, airport lounges, public service
23 permittees, and single event permittees to the extent allowed by federal law 27 C.F.R. Section
24 6.83, but may only be displayed so as not to be visible to persons off the premises.
25 (b) (i) Inside signs relating to liquor, wine, and heavy beer products may be provided to
26 private clubs, airport lounges, public service permittees, and single event permittees that bear
27 advertising matter such as posters, placards, designs, and mechanical devices, and point-of-sale
28 advertising matter such as table tents and menu clip-ons if they have no secondary value, are of
29 value to the retailer only as advertising, are displayed in a manner so as not to be visible off the
30 retailer's premises, otherwise comply with the advertising provisions of this title, and the industry
31 member does not directly or indirectly pay or credit the retailer for displaying the sign or pay any

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1 expense incidental to its operation.
2 (ii) Inside signs as described in Subsection (2)(b)(i) relating to beer products may be
3 provided to off-premise beer retailers licensed by local authority, taverns, private clubs, airport
4 lounges, public service permittees, and single event permittees if they are displayed in a manner
5 so as not to be visible off of the retailer's premises, otherwise comply with the advertising
6 provisions of this title, and the industry member does not directly or indirectly pay or credit the
7 retailer for displaying the sign or pay any expenses incidental to its operation.
8 (c) (i) Liquor, wine, and heavy beer retailer advertising specialties such as trays, coasters,
9 mats, menu cards, meal checks, paper napkins, foam scrapers, back bar mats, thermometers,
10 clocks, and calendars may be provided to licensed private clubs, airport lounges, public service
11 permittees, and single event permittees but only to the extent allowed by federal law 27 C.F.R.
12 Section 6.85 if they bear advertising matter and are primarily valuable to the retailer as point of
13 sale advertising.
14 (ii) Beer retailer advertising specialties as described in Subsection (2)(c)(i) may be
15 provided to licensed taverns, private clubs, airport lounges, public service permittees, and single
16 event permittees if sold at a price not less than the cost to the industry member, if the price is
17 collected within 30 days of the sale date, and if they bear advertising matter and are primarily
18 valuable to the retailer as point of sale advertising.
19 (d) (i) Trade literature, recipes, brochures, wine lists, and wine menus relating to liquor,
20 wine, and heavy beer products may be provided to licensed private clubs, restaurants with a state
21 liquor license, airport lounges, special use permittees, and single event permittees.
22 (ii) Trade literature, recipes, and brochures relating to beer products may be provided to
23 licensed on-premise beer retailers, off-premise beer retailers licensed by local authority, private
24 clubs, restaurants with a state liquor license, airport lounges, special use permittees, and single
25 event permittees.
26 (e) (i) Glassware that bears advertising matter relating to liquor, wine, and heavy beer, and
27 identifying the industry member or the industry member's product may be provided to private
28 clubs, airport lounges, public service permittees, and single event permittees if sold at a price not
29 less than the cost to the industry member and the price is collected within 30 days of the sale date.
30 (ii) Glassware that bears advertising matter relating to beer and identifying the industry
31 member or the industry member's product may be provided to licensed on-premise beer retailers,

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1 private clubs, airport lounges, public service permittees, and single event permittees if sold at a
2 price not less than the cost to the industry member and the price is collected within 30 days of the
3 sale date.
4 (f) Beer and wine tapping accessories such as standards, hoses, washers, couplings, gas
5 gauges, vent tongues, shanks, check valves, and coil cleaning services may be provided to private
6 clubs, restaurants with a state liquor license, airport lounges, public service permittees, and single
7 event permittees. Beer tapping accessories, coil cleaning services, and supplies also may be
8 provided to licensed on-premise beer retailers. All wine tapping accessories referenced in this
9 subsection shall be sold at a price not less than the cost to the industry member and the price shall
10 be collected within 30 days of the sale date. All wine services and supplies referenced in this
11 subsection shall be sold at reasonable market price for the locality and the price shall be collected
12 within 30 days of the sale. All beer tapping accessories referenced in this subsection may be
13 provided without charge.
14 (3) (a) Samples of liquor, wine, and heavy beer may be provided under the conditions
15 listed in Subsections (3)(b) through (r):
16 (i) to the department; and
17 (ii) to licensed retailers [under the following conditions], except on-premise retail licensee
18 wine samples may be provided only in accordance with:
19 (A) this Subsection (3); and
20 (B) Subsection (20).
21 [(a)] (b) An industry member may submit department samples to the department for
22 product testing, analysis, and sampling, but only with the department's permission.
23 [(b)] (c) No more than two department samples of a particular type, vintage, and
24 production lot of a particular branded product may be submitted to the department for department
25 testing, analysis, and sampling within a consecutive 120-day period.
26 [(c)] (d) (i) Each sample of liquor may not exceed 1 liter.
27 (ii) Each sample of wine and heavy beer may not exceed 1.5 liters unless that exact
28 product is only commercially packaged in a larger size, not to exceed 5 liters.
29 [(d)] (e) (i) Department samples submitted to the department shall be shipped prepaid by
30 the industry member by common carrier [and not via United States mail] directly to the
31 department's central administrative warehouse office.

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1 (ii) Department samples may not be shipped:
2 (A) to any [other] location within the state other than the department's central
3 administrative warehouse office; or
4 (B) by United States mail.
5 [(e)] (f) Department samples submitted to the department shall be accompanied by a letter
6 from the industry member:
7 (i) clearly identifying the product as a "department sample"[,]; and
8 (ii) clearly stating the FOB case price of the product.
9 [(f)] (g) (i) The department may transfer listed items from current stock for use as
10 comparison control samples or to verify product spoilage as deemed appropriate.
11 (ii) Each sample transferred under Subsection (3)(g)(i) shall be billed back, debited, to
12 their respective industry members.
13 [(g)] (h) The department shall:
14 (i) account for, label, and record all department samples received or transferred[,];
15 (ii) account for [their] the department sample's disposition[,]; and
16 (iii) maintain a record of the samples and their disposition for a two-year period.
17 [(h)] (i) The department shall affix to each bottle or container a label clearly identifying
18 the product as a "department sample".
19 [(i)] (j) Each department sample delivered to the department or transferred from the
20 department's current stock shall be disposed of at the discretion of the department in one of the
21 following ways:
22 (i) tested and analyzed with the remaining contents destroyed under controlled and audited
23 conditions established by the department;
24 (ii) entire contents destroyed under controlled and audited conditions established by the
25 department; or
26 (iii) added to the inventory of the department for sale to the public.
27 [(j)] (k) An industry member, for purposes of educating licensed retailers of the quality
28 and characteristics of the industry member's liquor, wine, or heavy beer product may utilize
29 department trade show samples for tasting and analysis purposes only.
30 [(k)] (l) (i) Department trade show samples shall be shipped prepaid by the industry
31 member by common carrier [and not via United States mail] directly to the department's central

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1 administrative warehouse office. [These]
2 (ii) Department trade show samples may not be shipped:
3 (A) to any [other] location within the state other than the department's central
4 administrative warehouse office; or
5 (B) by United States mail.
6 [(l)] (m) Department trade show samples shall be accompanied by a letter from the
7 industry member:
8 (i) clearly identifying the product as a "department trade show sample"[,]; and
9 (ii) stating:
10 (A) the name, time, and location of the trade show[,];
11 (B) the FOB case price of the product[,]; and
12 (C) the name of the industry member who will be representing the product at the trade
13 show.
14 [(m)] (n) The department shall assess a reasonable handling, labeling, storage, and delivery
15 fee for each department trade show sample received.
16 [(n)] (o) The department shall affix to each bottle or container a label clearly identifying
17 the product as a "department trade show sample".
18 [(o)] (p) The department shall:
19 (i) account for and record each department trade show sample received[,];
20 (ii) account for [its] the department trade show's disposition[,]; and
21 (iii) maintain a record of the samples and their disposition for a two-year period.
22 [(p)] (q) The department shall:
23 (i) transport department trade show samples to the appropriate trade show designated in
24 the letter described in Subsection (3)[(l)](m); and [shall]
25 (ii) deliver the sample to the industry member designated to represent the product at the
26 trade show.
27 [(q)] (r) Department trade show samples may not be removed from the premises of the
28 trade show.
29 (4) The department shall take reasonable measures to ensure that only industry members,
30 licensed retailers, trade show permittees, their employees and agents, and department personnel
31 are in attendance, and to ensure that retailer trade show samples are not removed from the premises

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1 except by the department.
2 (5) Industry members may charge a fee to trade show attendees for tasting samples of their
3 product at a department trade show.
4 (6) At the conclusion of the trade show, the department shall take possession of all
5 department trade show sample bottles and:
6 (a) destroy the unused portion of all opened sample bottles under controlled and audited
7 conditions established by the department; and
8 (b) either destroy the contents of unopened sample bottles under controlled and audited
9 conditions established by the department or return the bottles to the department and add them to
10 the inventory of the department for sale to the public.
11 (7) Persons other than authorized department officials may not be in possession of
12 department or department trade show samples except as otherwise provided.
13 (8) (a) Samples of beer may be provided by a beer industry member to a licensed
14 on-premise beer retailer, off-premise beer retailer licensed by local authority, private club,
15 restaurant with a liquor license, airport lounge, public service permittee, and single event
16 permittee.
17 (b) For each on-premise beer retailer or liquor licensee or permittee, the industry member
18 may give not more than two gallons of any brand of beer, except that if a particular product is not
19 available in a size within the quantity limitation an industry member may furnish the next largest
20 size.
21 (c) For each off-premise beer retailer, the industry member may give not more than two
22 liters of any brand of beer.
23 (9) Educational seminars may involve an industry member under the following conditions:
24 (a) An industry member may provide or participate in educational seminars involving the
25 department and its employees, retailers, holders of educational or scientific special use permits,
26 or other industry members regarding such topics as merchandising and product knowledge, and
27 tours of alcoholic beverage manufacturing facilities. An industry member may not pay a
28 department employee's, retailer's, or permittee's expenses or compensate them for attending these
29 seminars and tours.
30 (b) An industry member may conduct tastings for the department, at the department's
31 request, for licensed industry representatives, but only at the department's central administrative

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1 warehouse office, and for licensed retailers authorized to sell the type of products to be tasted, but
2 only at department trade shows. Tastinsgs may not be offered to the general public. The industry
3 member may only use department, department trade show, or industry representative samples
4 when conducting any tasting.
5 (10) An industry member may participate in retailer association activities, and may:
6 (a) display its products at a retailer convention or trade show, except that liquor, wine, and
7 heavy beer products may only be displayed at department trade shows and products shall be
8 processed, labeled, and delivered to the trade show by the department under the terms and
9 conditions of this title;
10 (b) rent display booth space if the rental fee is not excessive and is the same as paid by all
11 exhibitors;
12 (c) provide its own hospitality that is independent from association sponsored activities;
13 (d) purchase tickets to functions and pay registration fees if the payments or fees are not
14 excessive and are the same as paid by all exhibitors; and
15 (e) make payments for advertisements in programs or brochures issued by retailer
16 associations at a retailer convention or trade show if the total payments made by an industry
17 member for all such advertisements do not exceed that allowed by federal law per year for any
18 retailer association as provided in 27 C.F.R. Section 6.100.
19 (11) (a) An industry member may contribute to charitable, civic, religious, fraternal,
20 educational, or community activities. These contributions may not be given to influence a retailer
21 in the selection of the alcoholic beverage products which may be sold at these activities and events.
22 (b) If the industry member's contribution described in Subsection (11)(a) influences,
23 directly or indirectly, the retailer in the selection of alcoholic beverage products, and a competitor's
24 alcoholic beverage products are excluded in whole or in part from sale at the activity or event, the
25 industry member and the retailer violate the provisions of this section.
26 (12) An industry member, who is also engaged in business as a bona fide vendor of other
27 merchandise, such as groceries or drugs, may sell that merchandise to a retailer if the merchandise:
28 (a) [the merchandise] is sold at its fair market value;
29 (b) [the merchandise] is not sold in combination with alcoholic beverages; and
30 (c) [the merchandise] is itemized separately on the industry member's invoices and other
31 records.

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1 (13) Things of value covered in other subsections of this section may be furnished to
2 retailers only as provided in those subsections.
3 (14) (a) A liquor, wine, and heavy beer industry member may assist the department in
4 ordering, shipping, and delivering merchandise, new product notification, listing and delisting
5 information, price quotations, product sales analysis, shelf management, educational seminars, and
6 may, for the purpose of acquiring new listings, solicit orders from the department and submit to
7 the department samples of their products and price lists. However, an industry member may not
8 solicit either in person, by mail, or otherwise, any state store personnel for the purpose or with the
9 intent of furthering the sale of a particular brand or brands of alcoholic beverage product as against
10 another brand or brands. Any visitations to a state store or package agency by an industry member
11 shall be confined to the customer areas of the store. Calls on the state warehouse by industry
12 members are to be confined to the office area only unless otherwise approved.
13 (b) A beer industry member may assist licensed on-premise beer retailers, off-premise beer
14 retailers licensed by local authority, private clubs, restaurants with liquor licenses, airport lounges,
15 public service permittees, and single event permittees in ordering, shipping, and delivering beer
16 merchandise, new product notification, listing and delisting information, price quotations, product
17 sales analysis, shelf management, educational seminars, and may, for the purpose of acquiring new
18 listings, solicit orders from them and submit to them samples of their beer products and price lists.
19 (c) A beer industry member may, at a licensed on-premise beer retailer, off-premise beer
20 retailer licensed by local authority, private club, restaurant with liquor license, airport lounge,
21 public service permittee and single event permittee premises or establishment, stock, rotate, and
22 affix the price to beer products which they sell, provided products purchased from other industry
23 members are not altered or disturbed.
24 (15) (a) It is unlawful for any industry member, directly or indirectly or through an
25 affiliate, to pay the department or any retailer licensed under this title by the commission or by
26 local authority for any advertising, display, or distribution service as defined in federal law 27
27 C.F.R. Sections 6.51 through 6.56.
28 (b) An industry member may not, directly or indirectly, share the cost of an advertisement
29 with a retailer.
30 (c) An industry member may give, furnish, loan, rent, or sell copy ready art, newspaper
31 cuts, mats or engraved blocks to licensed beer retailers for use in beer retailer advertisements to

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1 the extent such advertisements are authorized by this title.
2 (16) It is unlawful for any industry member, directly or indirectly or through an affiliate,
3 to guarantee any loan or the repayment of any financial obligation of a retailer including, but not
4 limited to, personal loans, home mortgages, car loans, operating capital obligations, or utilities.
5 (17) (a) It is unlawful for any industry member, directly or indirectly or through an
6 affiliate, to induce beer purchases by extending to any beer retailer credit for a period in excess of
7 15 days from the date of delivery to the date of full legal discharge of the retailer through the
8 payment of cash or its equivalent, from all indebtedness arising from the transaction, so long as
9 that beer purchased or delivered during the first 15 days of any month is paid for in cash or its
10 equivalent on or before the 25th day of the same month, and beer purchased or delivered after the
11 15th day of any month is paid for in cash or its equivalent on or before the 10th day of the next
12 succeeding month.
13 (b) First party in-state checks which are honored on presentment and which are received
14 under the terms prescribed in Subsection (17)(a) are considered cash payments.
15 (18) (a) It is unlawful for any industry member, directly or indirectly or through an
16 affiliate, to require the department to take and dispose of a certain quota of any alcoholic products
17 or to require a beer retailer or wholesaler to take and dispose of a certain quota of any beer
18 products.
19 (b) A requirement that the department purchase one product in order to purchase another
20 or that a beer retailer or wholesaler purchase one beer product in order to purchase another is also
21 prohibited.
22 (c) Subsection (18) does not preclude the selling, at a special combination price, two or
23 more kinds or brands of products so long as the department or beer retailer has the option of
24 purchasing either product at the usual price and is not required to purchase any product he or she
25 does not want.
26 (d) An industry member may package and distribute alcoholic beverages in combination
27 with other nonalcoholic items or products.
28 (e) The combination package shall be designed to be delivered intact to the consumer and
29 the additional cost incurred by the industry member shall be included in the cost to the department.
30 (19) It is unlawful for any industry member, directly or indirectly or through an affiliate,
31 to provide financial, legal, administrative, or other assistance to a retailer or wholesaler to obtain

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1 a license or permit.
2 (20) Beginning July 1, 1997, and ending June 30, 1999, the department shall implement
3 a pilot program by which a local industry representative licensee may conduct on-premise retail
4 licensee wine sampling of cork-finished wines under the following conditions:
5 (a) To conduct on-premise retail licensee wine sampling, a local industry representative
6 licensee may check-out bottles of on-premise retail licensee wine samples in accordance with this
7 Subsection (20) from the department's stores in:
8 (i) Park City;
9 (ii) Salt Lake metro;
10 (iii) Salt Lake-Cottonwood; and
11 (iv) Moab.
12 (b) A local industry representative licensee:
13 (i) may not check-out more than the number of bottles per calendar week of on-premise
14 retail licensee wine samples that are allowed under the rules of the department;
15 (ii) shall pay:
16 (A) the prevailing retail purchase price for each bottle of on-premise retail licensee wine
17 sample checked-out; and
18 (B) any fee charged under Subsection (20)(g);
19 (iii) may check-out a bottle of on-premise retail licensee wine samples:
20 (A) during regular business hours; and
21 (B) on regular store business days, except for the day preceding a recognized state or
22 federal holiday;
23 (iv) shall show proper identification at the time of check-out;
24 (v) may check-out an on-premise retail licensee wine sample only for the purpose of
25 conducting on-premise retail licensee wine sampling; and
26 (vi) shall return all bottles checked-out for use in the on-premise retail licensee wine
27 sampling program, whether opened or unopened, to the same store from which they were
28 checked-out, within 72 hours from the time of check-out, excluding any period during which the
29 department's stores are not open for business.
30 (c) (i) At time of check-out the department's employee shall:
31 (A) affix a label on each bottle checked-out, clearly identifying it as a on-premise retail

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1 licensee wine sample for use in the on-premise retail licensee wine sampling program;
2 (B) maintain a record of each bottle of cork-finished wine checked-out under this
3 Subsection (20); and
4 (C) require the local industry representative licensee to sign a statement that the bottles
5 will be used only in connection with the on-premise retail licensee wine sampling program.
6 (ii) At time of check-in, the department's employee shall:
7 (A) make a record of each bottle returned; and
8 (B) obtain a statement from the local industry representative licensee identifying the name
9 and location of each person who sampled.
10 (d) An on-premise retail licensee wine sample checked-out in connection with the
11 on-premise retail licensee wine sampling program shall come from product listed by the
12 department that is:
13 (i) located on the shelf of one of the department's stores identified in Subsection (20)(a);
14 or
15 (ii) if arrangements are made with the department, located at its warehouse and transferred
16 to one of the store locations authorized in Subsection (20)(a).
17 (e) The department and a local industry representative licensee shall maintain for two years
18 a record of all bottles of cork-finished wine checked-out by the local industry representative
19 licensee in connection with the on-premise retail licensee wine sampling program.
20 (f) Each bottle of on-premise retail licensee wine samples checked-out by a local industry
21 representative licensee and returned to a department store shall be disposed of the in one of the
22 ways provided in Subsection (3)(j) or Subsection (6).
23 (g) The department may charge a reasonable administrative fee per bottle to defray the
24 department's actual, ordinary, and necessary costs directly incurred in administering the
25 on-premise retail licensee wine sampling program.
26 (h) Any on-premise retail licensee wine sampling:
27 (i) shall be done in private; and
28 (ii) may not be conducted in the view of:
29 (A) minors; or
30 (B) the general public.
31 (i) Before November 1, 1998, the h [department ] COMMISSION h shall prepare and
31a present a report and

lilac-February 19, 1997

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1 recommendation concerning the on-premise retail licensee wine sampling pilot program to an
2 appropriate interim committee of the Legislature designated by the Legislative Management
3 Committee.
4 Section 6. Section 76-10-1506 is amended to read:
5 76-10-1506. Threatening breach of peace -- Disorderly conduct -- Foul language --
6 Refusing requests -- Use of controlled substance, liquor, or tobacco -- Ejection of passenger.
7 (1) A person is guilty of a class C misdemeanor, if he:
8 (a) threatens a breach of the peace, is disorderly, or uses obscene, profane, or vulgar
9 language on a bus;
10 (b) is in or upon any bus while unlawfully under the influence of a controlled substance
11 as defined in Section 58-37-2;
12 (c) fails to obey a reasonable request or order of a bus driver, bus company representative,
13 a nondrinking designee other than the driver as provided in Subsection 32A-12-213 (1)(c)[(iii)](ii),
14 or other person in charge or control of a bus or terminal;
15 (d) ingests any controlled substance, unless prescribed by a physician or medical facility,
16 in or upon any bus, or drinks intoxicating liquor in or upon any bus, except a chartered bus as
17 defined and provided in Sections 32A-1-105 and 41-6-44.20; or
18 (e) smokes tobacco or other products in or upon any bus, except a chartered bus.
19 (2) If any person violates Subsection (1), the driver of the bus or person in charge thereof
20 may stop at the place where the offense is committed or at the next regular or convenient stopping
21 place and remove such person, using only such force as may be necessary to accomplish the
22 removal, and the driver or person in charge may request the assistance of passengers to assist in
23 the removal. The driver or person in charge may cause the person so removed to be detained and
24 delivered to the proper authorities.
25 Section 7. Effective date.
26 If approved by two-thirds of all the members elected to each house, this act takes effect
27 upon approval by the governor, or the day following the constitutional time limit of Utah
28 Constitution Article VII, Section 8, without the governor's signature, or in the case of a veto, the
29 date of veto override.


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Legislative Review Note
as of 1-27-97 1:06 PM

A limited legal review of this bill raises no obvious constitutional or statutory concerns.

Office of Legislative Research and General Counsel

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