H.B. 223

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PRIVATE CLUB AMENDMENTS
2 1997 GENERAL SESSION
3 STATE OF UTAH
4 Sponsor: Steve Barth
5 AN ACT RELATING TO ALCOHOLIC BEVERAGES; AMENDING HOUR RESTRICTION
6 FOR LIQUOR SALES AT PRIVATE CLUBS; AND MAKING TECHNICAL
7 CORRECTIONS.
8 This act affects sections of Utah Code Annotated 1953 as follows:
9 AMENDS:
10 32A-5-107, as last amended by Chapter 95, Laws of Utah 1994
11 Be it enacted by the Legislature of the state of Utah:
12 Section 1. Section 32A-5-107 is amended to read:
13 32A-5-107. Operational restrictions.
14 Each corporation or association granted a private club liquor license and its employees,
15 officers, managing agent, and members shall comply with the following conditions and
16 requirements. Failure to comply may result in a suspension or revocation of the license or other
17 disciplinary action taken against individual employees or management personnel.
18 (1) (a) Each private club shall hold regular meetings as required by its articles or bylaws
19 and conduct its business through regularly elected officers.
20 (b) Within ten days following the election of any officer, the department shall be notified
21 in writing of the officer's name, address, and office to which the officer has been elected, and the
22 term of that office.
23 (2) (a) Each private club may admit members only on written application signed by the
24 applicant, following investigation and approval of the governing body. Admissions shall be
25 recorded in the official minutes of a regular meeting of the governing body and the application,
26 whether approved or disapproved, shall be filed as a part of the official records of the licensee.
27 (b) An applicant may not be accorded the privileges of a member until a quorum of the

1 governing body has formally voted upon and approved the applicant as a member.
2 (c) An applicant may not be admitted to membership until seven days after the application
3 is submitted.
4 (3) (a) Each private club shall maintain a current and complete membership record
5 showing:
6 (i) the date of application of each proposed member[,];
7 (ii) the member's address[,];
8 (iii) the date of admission following application[, and];
9 (iv) the date initiation fees and dues were assessed and paid[. The record shall also show];
10 and
11 (v) the serial number of the membership card issued to each member.
12 (b) A current record shall also be kept indicating when members were dropped or resigned.
13 (4) Each private club shall establish in the club bylaws initial fees and monthly dues, as
14 established by commission rules, which are collected from all members.
15 (5) Each private club may allow guests or visitors to use the premises only when
16 previously authorized by a member. A member is responsible for all services extended to guests
17 and visitors. If the guest or visitor is a member of the same fraternal organization as the private
18 club liquor licensee, [no] previous authorization is not required.
19 (6) Each private club shall limit the issuance of visitor cards for a period not to exceed two
20 weeks and assess and collect a fee from each visitor of not less than $5 for each two-week period
21 the visitor card is issued. One dollar of every visitor card fee shall be remitted quarterly to the
22 department for the administration of this title. A current record of the issuance of each card shall
23 be maintained and shall contain the name of the member sponsoring the visitor.
24 (7) A private club may not sell alcoholic beverages to any person other than a member,
25 guest, or visitor who holds a valid visitor card issued under Subsection (6).
26 (8) A person who is under 21 years of age may not be a member, officer, director, or
27 trustee of a private club.
28 (9) An employee of a club, while on duty, may not:
29 (a) consume an alcoholic beverage[,];
30 (b) be under the influence of alcoholic beverages[,];
31 (c) sponsor a person for visitor privileges[,]; or

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1 (d) act as a host for a guest.
2 (10) A visitor to a club may not host more than five guests at one time.
3 (11) (a) Each private club shall maintain an expense ledger or record showing in detail all
4 expenditures separated by payments for:
5 (i) malt or brewed beverages[,];
6 (ii) liquor[,];
7 (iii) food[,];
8 (iv) detailed payroll[,];
9 (v) entertainment[,];
10 (vi) rent[,];
11 (vii) utilities[,];
12 (viii) supplies[,]; and
13 (ix) all other expenditures. [This]
14 (b) The record required by Subsection (11)(a) shall be kept in a form approved by the
15 department and balanced each month.
16 (c) Each expenditure shall be supported by:
17 (i) delivery tickets[,];
18 (ii) invoices[,];
19 (iii) receipted bills[,];
20 (iv) canceled checks[,];
21 (v) petty cash vouchers[,]; or
22 (vi) other sustaining data or memoranda.
23 (d) All invoices and receipted bills for the current calendar or fiscal year documenting
24 purchases made by officers of the club for the benefit of the club shall also be maintained.
25 (12) Each private club shall maintain a bank account that shows all income and
26 expenditures as a control on the income and disbursements records. This account shall be balanced
27 each month under the direction of the treasurer or other officer of the licensee.
28 (13) Each private club shall maintain a minute book that is posted currently by the
29 secretary. This record shall contain the minutes of all regular and special meetings of the
30 governing body and all committee meetings held to conduct club business. Membership lists shall
31 also be maintained.

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1 (14) Each private club shall maintain current copies of the club's articles of incorporation,
2 current bylaws, and current house rules. Changes in the bylaws are not effective unless submitted
3 to the department within ten days after adoption, and become effective 15 days after received by
4 the department unless rejected by the department before the expiration of the 15-day period.
5 (15) Each private club shall maintain accounting and other records and documents as the
6 department may require.
7 (16) Any club or person acting for the club, who knowingly forges, falsifies, alters,
8 cancels, destroys, conceals, or removes the entries in any of the books of account or other
9 documents of the club required to be made, maintained, or preserved by this title or the rules of
10 the commission for the purpose of deceiving the commission, council, or department, or any of
11 their officials or employees, is subject to the immediate suspension or revocation of the club's
12 license and possible criminal prosecution under Chapter 12, Criminal Offenses.
13 (17) Each private club shall maintain and keep all the records required by this section and
14 all other books, records, receipts, and disbursements maintained or utilized by the licensee, as the
15 department requires, for a minimum period of three years. All records, books, receipts, and
16 disbursements are subject to inspection by authorized representatives of the commission,
17 department, and council. The club shall allow the department, through its auditors or examiners,
18 to audit all records of the club at times the department considers advisable. The department shall
19 audit the records of the licensee at least once annually.
20 (18) (a) Each private club shall make available to the department, upon request, verified
21 copies of any returns filed with the United States Treasury Department, Internal Revenue Service,
22 under the federal Internal Revenue Code. Failure to provide any returns and supporting documents
23 upon reasonable request by the department or, alternatively, to provide evidence of an extension
24 granted by the Internal Revenue Service, constitutes sufficient grounds for the commission to
25 suspend or revoke a license.
26 (b) Any return or copy of a return [so] filed under Subsection (18)(a) with the department
27 is confidential and may not be used in any manner not directly connected with the enforcement of
28 this title, nor may it be disclosed to any person or any department or agency of government,
29 whether federal, state, or local.
30 (19) Each private club shall own or lease premises suitable for its activities in its own
31 name. A copy of the lease shall be filed with the department.

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1 (20) Each private club shall operate the club under the supervision of a manager or house
2 committee, appointed by the governing body of the club.
3 (21) A private club may not maintain facilities in any manner that barricades or conceals
4 the club operation. Any member of the commission, authorized department personnel, member
5 of the council, or any peace officer shall, upon presentation of credentials, be admitted
6 immediately to the club and permitted without hindrance or delay to inspect completely the entire
7 club premises and all books and records of the licensee, at any time during which the same are
8 open for the transaction of business to its members.
9 (22) A private club may not pay any person or entity any fee, salary, rent, or other payment
10 of any kind in excess of the fair market value for the service rendered, goods furnished, or facilities
11 or equipment rented. It is the intention of this Subsection (22) to insure that no officer, managing
12 agent, employee, or other person derives a principal economic benefit from the operation of a club.
13 (23) A private club may not engage in any public solicitation or public advertising
14 calculated to increase its membership.
15 (24) Each private club shall comply with the following operational restrictions:
16 (a) The liquor storage and sales area shall remain locked at all times when it is not open
17 for business.
18 (b) (i) Liquor may not be purchased by a private club liquor licensee except from state
19 stores or package agencies.
20 (ii) Liquor [so] purchased in accordance with Subsection (24)(b)(i) may be transported by
21 the licensee from the place of purchase to the licensed premises.
22 (iii) Payment for liquor shall be made in accordance with rules established by the
23 commission.
24 (c) [Beginning July 1, 1991, a] A private club liquor licensee may not sell or provide any
25 primary liquor except in one ounce quantities dispensed through a calibrated metered dispensing
26 system approved by the department in accordance with commission rules adopted under this title,
27 except that:
28 (i) liquor need not be dispensed through a calibrated metered dispensing system if used
29 as a secondary flavoring ingredient in a beverage subject to the following restrictions:
30 (A) the beverage shall contain liquor from a lawfully purchased container;
31 (B) the secondary ingredient is not the only liquor in the beverage;

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1 (C) the licensee shall designate a location where flavorings are stored on the floor plan
2 provided to the department; and
3 (D) all flavoring containers shall be plainly and conspicuously labeled "flavorings";
4 (ii) liquor need not be dispensed through a calibrated metered dispensing system if used
5 as a flavoring on desserts and in the preparation of flaming food dishes, drinks, and desserts;
6 (iii) wine may be served by the glass in quantities not exceeding five ounces per glass; and
7 (iv) heavy beer may be served in standard containers not exceeding one liter.
8 (d) (i) Private clubs licensed to sell liquor may sell beer in any size container not
9 exceeding two liters, and on draft without obtaining a separate on-premise beer retailer license
10 from the commission.
11 (ii) Private clubs licensed under this chapter that sell beer pursuant to Subsection (24)(d)(i)
12 shall comply with all appropriate operational restrictions under [Title 32A,] Chapter 10, Beer
13 Retailer Licenses, that apply to on-premise beer retailers except when those restrictions are
14 inconsistent with or less restrictive than the operational restrictions under this chapter.
15 (iii) Failure to comply with the operational restrictions under [Title 32A,] Chapter 10, Beer
16 Retailer Licenses, as set forth in Subsection (24)(d)(ii) may result in a suspension or revocation
17 of the private club's state liquor license and its alcoholic beverage license issued by the local
18 authority.
19 (e) Wine may be served in accordance with commission rule in containers not exceeding
20 750 ml.
21 (f) A private club may not charge for the service or supply of glasses, ice, or mixers unless
22 the charges are fixed in the house rules of the club and a copy of the rules is kept on the club
23 premises and available at all times for examination by the members, guests, and visitors to the
24 club.
25 (g) Minors may not be employed by any club to sell, dispense, or handle any alcoholic
26 beverage.
27 (h) An officer, director, managing agent, employee, and any other person employed by or
28 acting for or in behalf of any licensee, may not sell, deliver, or furnish, or cause or permit to be
29 sold, delivered, or furnished any liquor to any:
30 (i) minor;
31 (ii) person actually, apparently, or obviously drunk;

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1 (iii) known habitual drunkard; or
2 (iv) known interdicted person.
3 (i) (i) Liquor may not be sold or offered for sale at any private club during the following
4 days or hours:
5 (A) on the day of any regular general election, regular primary election, or statewide
6 special election until after the polls are closed; and
7 (B) on the day of any municipal, special district, or school election, but only:
8 (I) within the boundaries of the municipality, special district, or school district[,]; and
9 [only]
10 (II) if closure is required by local ordinance[; and].
11 [(C) on Sunday and any state or federal legal holiday after 12 midnight and before 12
12 noon.]
13 (ii) The hours of beer sales are those specified in Chapter 10, Beer Retailer Licenses, for
14 on-premise beer licensees.
15 (j) On all other days the liquor storage and sales area in the club shall be closed from 1
16 a.m. until 10 a.m.
17 (k) Liquor may not be sold except at prices fixed by the commission. Mixed drinks and
18 wine may not be sold at discount prices on any date or at any time.
19 (l) [Beginning July 1, 1991, no] No more than one ounce of primary liquor may be served
20 to a member, guest, or visitor at a time, except:
21 (i) wine as provided in Subsection (24)(c)(iii); and
22 (ii) heavy beer as provided in Subsection (24)(c)(iv).
23 (m) (i) [Beginning January 1, 1991, a] A person may not bring onto the premises of a
24 private club liquor licensee any alcoholic beverage for on-premise consumption, except a person
25 may bring, subject to the discretion of the licensee, cork-finished wine onto the premises of any
26 private club liquor licensee and consume wine pursuant to Subsection (24)(n).
27 (ii) [Beginning January 1, 1991, a] A private club or its officers, managers, employees, or
28 agents may not allow a person to bring onto the private club premises any alcoholic beverage for
29 on-premise consumption, except cork-finished wine under Subsection (24)(m)(i).
30 (iii) [Beginning January 1, 1991, if] If any private club licensee or any of its officers,
31 managers, employees, or agents violates this subsection:

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1 (A) the commission may immediately suspend or revoke the private club's liquor license
2 [and];
3 (B) the private club licensee is subject to criminal prosecution under Chapter 12, Criminal
4 Offenses; and
5 [(B)] (C) the local authority may immediately suspend or revoke:
6 (I) the private club's local liquor license[,];
7 (II) local consent under Subsection 32A-5-102(1)(c)[,]; or
8 (III) local business license.
9 (n) (i) A wine service may be performed and a service charge assessed by the private club
10 as authorized by commission rule for wine purchased at the private club or carried in by a member,
11 guest, or visitor.
12 (ii) If wine is carried in by a member, guest, or visitor, the member, guest, or visitor shall
13 deliver the wine to a server or other representative of the licensee upon entering the licensee
14 premises.
15 (o) A member, guest, or visitor to a club may not carry from a club premises an open
16 container used primarily for drinking purposes containing any alcoholic beverage.
17 (p) Each private club liquor licensee shall display in a prominent place in the private club:
18 (i) the private club liquor license that is issued by the department;
19 (ii) a list of the types and brand names of liquor being served through its calibrated
20 metered dispensing system; and
21 (iii) a sign in large letters stating: "Warning: The consumption of alcoholic beverages
22 purchased in this establishment may be hazardous to your health and the safety of others."
23 (q) The following acts or conduct in a private club licensed under this chapter are
24 considered contrary to the public welfare and morals, and are prohibited upon the premises:
25 (i) employing or using any person in the sale or service of alcoholic beverages while the
26 person is unclothed or in attire, costume, or clothing that exposes to view any portion of the female
27 breast below the top of the areola or any portion of the pubic hair, anus, cleft of the buttocks,
28 vulva, or genitals;
29 (ii) employing or using the services of any person to mingle with the patrons while the
30 person is unclothed or in attire, costume, or clothing described in Subsection (24)(q)(i);
31 (iii) encouraging or permitting any person to touch, caress, or fondle the breasts, buttocks,

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1 anus, or genitals of any other person;
2 (iv) permitting any employee or person to wear or use any device or covering, exposed to
3 view, that simulates the breast, genitals, anus, pubic hair, or any portion of these;
4 (v) permitting any person to use artificial devices or inanimate objects to depict any of the
5 prohibited activities described in this subsection;
6 (vi) permitting any person to remain in or upon the premises who exposes to public view
7 any portion of his or her genitals or anus; or
8 (vii) showing films, still pictures, electronic reproductions, or other visual reproductions
9 depicting:
10 (A) acts or simulated acts of sexual intercourse, masturbation, sodomy, bestiality, oral
11 copulation, flagellation, or any sexual acts prohibited by Utah law;
12 (B) any person being touched, caressed, or fondled on the breast, buttocks, anus, or
13 genitals;
14 (C) scenes wherein artificial devices or inanimate objects are used to depict, or drawings
15 are used to portray, any of the prohibited activities described in this subsection; or
16 (D) scenes wherein a person displays the vulva or the anus or the genitals.
17 (r) Nothing in Subsection (24)(q) precludes a local authority from being more restrictive
18 of acts or conduct of the type prohibited in Subsection (24)(q).
19 (s) (i) Although live entertainment is permitted on the premises of a club liquor licensee,
20 a licensee may not allow any person to perform or simulate sexual acts prohibited by Utah law,
21 including sexual intercourse, masturbation, sodomy, bestiality, oral copulation, flagellation, or the
22 touching, caressing, or fondling of the breast, buttocks, anus, or genitals, or the displaying of the
23 pubic hair, anus, vulva, or genitals. Entertainers shall perform only upon a stage or at a designated
24 area approved by the commission.
25 (ii) Nothing in Subsection (24)(s)(i) precludes a local authority from being more restrictive
26 of acts or conduct of the type prohibited in Subsection (24)(s)(i).
27 (25) A private club may not engage in or permit any form of gambling, as defined and
28 proscribed in Title 76, Chapter 10, Part 11, Gambling, on the premises of the private club.
29 (26) (a) A private club may not close or cease operation for a period longer than 240 hours,
30 unless [written notice is given to]:
31 (i) the private club licensee notifies the department in writing at least seven days before

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1 the closing[,]; and
2 (ii) the closure or cessation of operation is first approved by the department.
3 (b) [In] Notwithstanding Subsection (26)(a), in the case of emergency closure, immediate
4 notice of closure shall be made to the department by telephone.
5 (c) The department may authorize a closure or cessation of operation for a period not to
6 exceed 60 days. The department may extend the initial period an additional 30 days upon written
7 request of the private club and upon a showing of good cause. A closure or cessation of operation
8 may not exceed a total of 90 days without commission approval.
9 (d) Any notice shall include:
10 (i) the dates of closure or cessation of operation[,];
11 (ii) the reason for the closure or cessation of operation[,]; and
12 (iii) the date on which the licensee will reopen or resume operation.
13 (e) Failure of the licensee to provide notice and to obtain department authorization prior
14 to closure or cessation of operation shall result in an automatic forfeiture of:
15 (i) the license; and [the forfeiture of]
16 (ii) the unused portion of the license fee for the remainder of the license year effective
17 immediately.
18 (f) Failure of the licensee to reopen or resume operation by the approved date shall result
19 in an automatic forfeiture of:
20 (i) the license; and [the forfeiture of]
21 (ii) the unused portion of the club's license fee for the remainder of the license year.
22 (27) Each private club shall conduct its affairs so that it is not operated for a pecuniary
23 profit.
24 (28) A private club may not transfer a private club liquor license from one location to
25 another, without prior written approval of the commission.
26 (29) A person, having been granted a private club liquor license, may not sell, exchange,
27 barter, give, or attempt in any way to dispose of the license, whether for monetary gain or not. A
28 private club liquor license has no monetary value for the purpose of any type of disposition.


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Legislative Review Note
as of 1-7-97 10:34 AM

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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