! The Capitol Complex is closed to the public due to COVID-19. All meetings will be held virtually online. View procedures and guidelines for remote public comment

Download Zipped Amended WordPerfect HB0350.ZIP
[Introduced][Status][Bill Documents][Fiscal Note][Bills Directory]

H.B. 350

This document includes House Committee Amendments incorporated into the bill on Thu, Feb 28, 2013 at 11:39 AM by lerror. -->              1     

AMENDMENTS RELATED TO ALCOHOL

             2     
2013 GENERAL SESSION

             3     
STATE OF UTAH

             4     
Chief Sponsor: Curtis Oda

             5     
Senate Sponsor: Jerry W. Stevenson

             6     
             7      LONG TITLE
             8      General Description:
             9          This bill modifies the Alcoholic Beverage Control Act to address the regulation of
             10      heavy beer.
             11      Highlighted Provisions:
             12          This bill:
             13          .    modifies definition provisions;
             14          .    modifies powers and duties of the commission;
             15          .    modifies powers and duties of the department;
             16          .    modifies powers and duties of the director;
             17          .    enacts a provision related to markup on heavy beer;
             18          .    amends a provision on unlawful sale or furnishing;
             19          .    addresses unlawful possession by licensee or permittee;
             20          .    modifies from whom a retail licensee may purchase liquor;
             21          .    amends specific operational requirements for single event permits;
             22          .    amends general operational requirements for special use permits;
             23          .    modifies specific operational requirements for a public service permit;
             24          .    addresses requirements for a certificate of approval for a brewer;
             25          .    modifies general operational requirements for a manufacturing license;
             26          .    amends authority and operational requirements for a brewery manufacturing license;
             27          .    amends provisions related to local industry representatives;


             28          .    modifies the commission's power to issue a liquor warehousing license;
             29          .    modifies the commission's power to issue a beer wholesaling license;
             30          .    changes application requirements for a beer wholesaling license;
             31          .    modifies general operational requirements for a beer wholesaling license;
             32          .    amends the Utah Beer Industry Distribution Act to include heavy beer; and
             33          .    makes technical and conforming amendments.
             34      Money Appropriated in this Bill:
             35          None
             36      Other Special Clauses:
             37           H. [ None ] This bill takes effect on July 1, 2013. .H
             38      Utah Code Sections Affected:
             39      AMENDS:
             40          32B-1-102, as last amended by Laws of Utah 2011, Second Special Session, Chapter 2
             41          32B-2-202, as last amended by Laws of Utah 2012, Chapter 365
             42          32B-2-204, as enacted by Laws of Utah 2010, Chapter 276
             43          32B-2-206, as last amended by Laws of Utah 2012, Chapter 365
             44          32B-4-401, as enacted by Laws of Utah 2010, Chapter 276
             45          32B-4-417, as enacted by Laws of Utah 2010, Chapter 276
             46          32B-5-303, as last amended by Laws of Utah 2011, Chapter 307
             47          32B-9-305, as last amended by Laws of Utah 2011, Chapters 307 and 334
             48          32B-10-206, as enacted by Laws of Utah 2010, Chapter 276
             49          32B-10-304, as last amended by Laws of Utah 2011, Chapter 334
             50          32B-11-201, as last amended by Laws of Utah 2011, Chapter 334
             51          32B-11-208, as enacted by Laws of Utah 2010, Chapter 276
             52          32B-11-503, as last amended by Laws of Utah 2011, Chapter 334
             53          32B-11-608, as last amended by Laws of Utah 2011, Chapters 307 and 334
             54          32B-12-201, as enacted by Laws of Utah 2010, Chapter 276
             55          32B-13-201, as last amended by Laws of Utah 2011, Chapter 334
             56          32B-13-202, as last amended by Laws of Utah 2011, Chapter 334
             57          32B-13-301, as last amended by Laws of Utah 2011, Chapter 334
             58          32B-14-101, as enacted by Laws of Utah 2010, Chapter 276


             59          32B-14-102, as enacted by Laws of Utah 2010, Chapter 276
             60          32B-14-201, as enacted by Laws of Utah 2010, Chapter 276
             61          32B-14-302, as enacted by Laws of Utah 2010, Chapter 276
             62          32B-14-303, as enacted by Laws of Utah 2010, Chapter 276
             63      ENACTS:
             64          32B-2-304.5, Utah Code Annotated 1953
             65     
             66      Be it enacted by the Legislature of the state of Utah:
             67          Section 1. Section 32B-1-102 is amended to read:
             68           32B-1-102. Definitions.
             69          As used in this title:
             70          (1) "Airport lounge" means a business location:
             71          (a) at which an alcoholic product is sold at retail for consumption on the premises; and
             72          (b) that is located at an international airport with a United States Customs office on the
             73      premises of the international airport.
             74          (2) "Airport lounge license" means a license issued in accordance with Chapter 5,
             75      Retail License Act, and Chapter 6, Part 5, Airport Lounge License.
             76          (3) "Alcoholic beverage" means the following:
             77          (a) beer; or
             78          (b) liquor.
             79          (4) (a) "Alcoholic product" means a product that:
             80          (i) contains at least .5% of alcohol by volume; and
             81          (ii) is obtained by fermentation, infusion, decoction, brewing, distillation, or other
             82      process that uses liquid or combinations of liquids, whether drinkable or not, to create alcohol
             83      in an amount equal to or greater than .5% of alcohol by volume.
             84          (b) "Alcoholic product" includes an alcoholic beverage.
             85          (c) "Alcoholic product" does not include any of the following common items that
             86      otherwise come within the definition of an alcoholic product:
             87          (i) except as provided in Subsection (4)(d), an extract;
             88          (ii) vinegar;
             89          (iii) cider;


             90          (iv) essence;
             91          (v) tincture;
             92          (vi) food preparation; or
             93          (vii) an over-the-counter medicine.
             94          (d) "Alcoholic product" includes an extract containing alcohol obtained by distillation
             95      when it is used as a flavoring in the manufacturing of an alcoholic product.
             96          (5) "Alcohol training and education seminar" means a seminar that is:
             97          (a) required by Chapter 5, Part 4, Alcohol Training and Education Act; and
             98          (b) described in Section 62A-15-401 .
             99          (6) "Banquet" means an event:
             100          (a) that is held at one or more designated locations approved by the commission in or
             101      on the premises of a:
             102          (i) hotel;
             103          (ii) resort facility;
             104          (iii) sports center; or
             105          (iv) convention center;
             106          (b) for which there is a contract:
             107          (i) between a person operating a facility listed in Subsection (6)(a) and another person;
             108      and
             109          (ii) under which the person operating a facility listed in Subsection (6)(a) is required to
             110      provide an alcoholic product at the event; and
             111          (c) at which food and alcoholic products may be sold, offered for sale, or furnished.
             112          (7) (a) "Bar" means a surface or structure:
             113          (i) at which an alcoholic product is:
             114          (A) stored; or
             115          (B) dispensed; or
             116          (ii) from which an alcoholic product is served.
             117          (b) "Bar structure" means a surface or structure on a licensed premises if on or at any
             118      place of the surface or structure an alcoholic product is:
             119          (i) stored; or
             120          (ii) dispensed.


             121          (8) (a) Subject to Subsection (8)(d), "beer" means a product that:
             122          (i) contains at least .5% of alcohol by volume, but not more than 4% of alcohol by
             123      volume or 3.2% by weight; and
             124          (ii) is obtained by fermentation, infusion, or decoction of malted grain.
             125          (b) "Beer" may or may not contain hops or other vegetable products.
             126          (c) "Beer" includes a product that:
             127          (i) contains alcohol in the percentages described in Subsection (8)(a); and
             128          (ii) is referred to as:
             129          (A) beer;
             130          (B) ale;
             131          (C) porter;
             132          (D) stout;
             133          (E) lager; or
             134          (F) a malt or malted beverage.
             135          (d) "Beer" does not include a flavored malt beverage.
             136          (9) "Beer-only restaurant license" means a license issued in accordance with Chapter 5,
             137      Retail License Act, and Chapter 6, Part 9, Beer-only Restaurant License.
             138          (10) "Beer retailer" means a business:
             139          (a) that is engaged, primarily or incidentally, in the retail sale of beer to a patron,
             140      whether for consumption on or off the business premises; and
             141          (b) to whom a license is issued:
             142          (i) for an off-premise beer retailer, in accordance with Chapter 7, Part 2, Off-premise
             143      Beer Retailer Local Authority; or
             144          (ii) for an on-premise beer retailer, in accordance with Chapter 5, Retail License Act,
             145      and Chapter 6, Part 7, On-premise Beer Retailer License.
             146          (11) "Beer wholesaling license" means a license:
             147          (a) issued in accordance with Chapter 13, Beer Wholesaling License Act; and
             148          (b) (i) to import for sale, or sell beer in wholesale or jobbing quantities to one or more
             149      retail licensees or off-premise beer retailers[.]; or
             150          (ii) to import for sale, or sell heavy beer in wholesale or jobbing quantities to:
             151          (A) one or more retail licensees who are authorized to sell, offer for sale, or furnish


             152      heavy beer;
             153          (B) one or more single event permittees;
             154          (C) the department;
             155          (D) military installations; and
             156          (E) public service permittees.
             157          (12) "Billboard" means a public display used to advertise, including:
             158          (a) a light device;
             159          (b) a painting;
             160          (c) a drawing;
             161          (d) a poster;
             162          (e) a sign;
             163          (f) a signboard; or
             164          (g) a scoreboard.
             165          (13) "Brewer" means a person engaged in manufacturing:
             166          (a) beer;
             167          (b) heavy beer; or
             168          (c) a flavored malt beverage.
             169          (14) "Brewery manufacturing license" means a license issued in accordance with
             170      Chapter 11, Part 5, Brewery Manufacturing License.
             171          (15) "Certificate of approval" means a certificate of approval obtained from the
             172      department under Section 32B-11-201 .
             173          (16) "Chartered bus" means a passenger bus, coach, or other motor vehicle provided by
             174      a bus company to a group of persons pursuant to a common purpose:
             175          (a) under a single contract;
             176          (b) at a fixed charge in accordance with the bus company's tariff; and
             177          (c) to give the group of persons the exclusive use of the passenger bus, coach, or other
             178      motor vehicle, and a driver to travel together to one or more specified destinations.
             179          (17) "Church" means a building:
             180          (a) set apart for worship;
             181          (b) in which religious services are held;
             182          (c) with which clergy is associated; and


             183          (d) that is tax exempt under the laws of this state.
             184          (18) (a) "Club license" means a license issued in accordance with Chapter 5, Retail
             185      License Act, and Chapter 6, Part 4, Club License.
             186          (b) "Club license" includes:
             187          (i) a dining club license;
             188          (ii) an equity club license;
             189          (iii) a fraternal club license; or
             190          (iv) a social club license.
             191          (19) "Commission" means the Alcoholic Beverage Control Commission created in
             192      Section 32B-2-201 .
             193          (20) "Commissioner" means a member of the commission.
             194          (21) "Community location" means:
             195          (a) a public or private school;
             196          (b) a church;
             197          (c) a public library;
             198          (d) a public playground; or
             199          (e) a public park.
             200          (22) "Community location governing authority" means:
             201          (a) the governing body of the community location; or
             202          (b) if the commission does not know who is the governing body of a community
             203      location, a person who appears to the commission to have been given on behalf of the
             204      community location the authority to prohibit an activity at the community location.
             205          (23) "Container" means a receptacle that contains an alcoholic product, including:
             206          (a) a bottle;
             207          (b) a vessel; or
             208          (c) a similar item.
             209          (24) "Convention center" means a facility that is:
             210          (a) in total at least 30,000 square feet; and
             211          (b) otherwise defined as a "convention center" by the commission by rule.
             212          (25) (a) Subject to Subsection (25)(b), "counter" means a surface or structure in a
             213      dining area of a licensed premises where seating is provided to a patron for service of food.


             214          (b) "Counter" does not include a surface or structure if on or at any point of the surface
             215      or structure an alcoholic product is:
             216          (i) stored; or
             217          (ii) dispensed.
             218          (26) "Department" means the Department of Alcoholic Beverage Control created in
             219      Section 32B-2-203 .
             220          (27) "Department compliance officer" means an individual who is:
             221          (a) an auditor or inspector; and
             222          (b) employed by the department.
             223          (28) "Department sample" means liquor that is placed in the possession of the
             224      department for testing, analysis, and sampling.
             225          (29) "Dining club license" means a license issued in accordance with Chapter 5, Retail
             226      License Act, and Chapter 6, Part 4, Club License, that is designated by the commission as a
             227      dining club license.
             228          (30) "Director," unless the context requires otherwise, means the director of the
             229      department.
             230          (31) "Disciplinary proceeding" means an adjudicative proceeding permitted under this
             231      title:
             232          (a) against a person subject to administrative action; and
             233          (b) that is brought on the basis of a violation of this title.
             234          (32) (a) Subject to Subsection (32)(b), "dispense" means:
             235          (i) drawing of an alcoholic product:
             236          (A) from an area where it is stored; or
             237          (B) as provided in Subsection 32B-6-205 (12)(b)(ii), 32B-6-305 (12)(b)(ii),
             238      32B-6-805 (15)(b)(ii), or 32B-6-905 (12)(b)(ii); and
             239          (ii) using the alcoholic product described in Subsection (32)(a)(i) on the premises of
             240      the licensed premises to mix or prepare an alcoholic product to be furnished to a patron of the
             241      retail licensee.
             242          (b) The definition of "dispense" in this Subsection (32) applies only to:
             243          (i) a full-service restaurant license;
             244          (ii) a limited-service restaurant license;


             245          (iii) a reception center license; and
             246          (iv) a beer-only restaurant license.
             247          (33) "Distillery manufacturing license" means a license issued in accordance with
             248      Chapter 11, Part 4, Distillery Manufacturing License.
             249          (34) "Distressed merchandise" means an alcoholic product in the possession of the
             250      department that is saleable, but for some reason is unappealing to the public.
             251          (35) "Educational facility" includes:
             252          (a) a nursery school;
             253          (b) an infant day care center; and
             254          (c) a trade and technical school.
             255          (36) "Equity club license" means a license issued in accordance with Chapter 5, Retail
             256      License Act, and Chapter 6, Part 4, Club License, that is designated by the commission as an
             257      equity club license.
             258          (37) "Event permit" means:
             259          (a) a single event permit; or
             260          (b) a temporary beer event permit.
             261          (38) "Exempt license" means a license exempt under Section 32B-1-201 from being
             262      considered in determining the total number of a retail license that the commission may issue at
             263      any time.
             264          (39) (a) "Flavored malt beverage" means a beverage:
             265          (i) that contains at least .5% alcohol by volume;
             266          (ii) that is treated by processing, filtration, or another method of manufacture that is not
             267      generally recognized as a traditional process in the production of a beer as described in 27
             268      C.F.R. Sec. 25.55;
             269          (iii) to which is added a flavor or other ingredient containing alcohol, except for a hop
             270      extract; and
             271          (iv) (A) for which the producer is required to file a formula for approval with the
             272      federal Alcohol and Tobacco Tax and Trade Bureau pursuant to 27 C.F.R. Sec. 25.55; or
             273          (B) that is not exempt under Subdivision (f) of 27 C.F.R. Sec. 25.55.
             274          (b) "Flavored malt beverage" is considered liquor for purposes of this title.
             275          (40) "Fraternal club license" means a license issued in accordance with Chapter 5,


             276      Retail License Act, and Chapter 6, Part 4, Club License, that is designated by the commission
             277      as a fraternal club license.
             278          (41) "Full-service restaurant license" means a license issued in accordance with
             279      Chapter 5, Retail License Act, and Chapter 6, Part 2, Full-service Restaurant License.
             280          (42) (a) "Furnish" means by any means to provide with, supply, or give an individual
             281      an alcoholic product, by sale or otherwise.
             282          (b) "Furnish" includes to:
             283          (i) serve;
             284          (ii) deliver; or
             285          (iii) otherwise make available.
             286          (43) "Guest" means an individual who meets the requirements of Subsection
             287      32B-6-407 (9).
             288          (44) "Health care practitioner" means:
             289          (a) a podiatrist licensed under Title 58, Chapter 5a, Podiatric Physician Licensing Act;
             290          (b) an optometrist licensed under Title 58, Chapter 16a, Utah Optometry Practice Act;
             291          (c) a pharmacist licensed under Title 58, Chapter 17b, Pharmacy Practice Act;
             292          (d) a physical therapist licensed under Title 58, Chapter 24b, Physical Therapy Practice
             293      Act;
             294          (e) a nurse or advanced practice registered nurse licensed under Title 58, Chapter 31b,
             295      Nurse Practice Act;
             296          (f) a recreational therapist licensed under Title 58, Chapter 40, Recreational Therapy
             297      Practice Act;
             298          (g) an occupational therapist licensed under Title 58, Chapter 42a, Occupational
             299      Therapy Practice Act;
             300          (h) a nurse midwife licensed under Title 58, Chapter 44a, Nurse Midwife Practice Act;
             301          (i) a mental health professional licensed under Title 58, Chapter 60, Mental Health
             302      Professional Practice Act;
             303          (j) a physician licensed under Title 58, Chapter 67, Utah Medical Practice Act;
             304          (k) an osteopath licensed under Title 58, Chapter 68, Utah Osteopathic Medical
             305      Practice Act;
             306          (l) a dentist or dental hygienist licensed under Title 58, Chapter 69, Dentist and Dental


             307      Hygienist Practice Act; and
             308          (m) a physician assistant licensed under Title 58, Chapter 70a, Physician Assistant Act.
             309          (45) (a) "Heavy beer" means a product that:
             310          (i) contains more than 4% alcohol by volume; and
             311          (ii) is obtained by fermentation, infusion, or decoction of malted grain.
             312          (b) "Heavy beer" is considered liquor for the purposes of this title.
             313          (46) "Hotel" is as defined by the commission by rule.
             314          (47) "Identification card" means an identification card issued under Title 53, Chapter 3,
             315      Part 8, Identification Card Act.
             316          (48) "Industry representative" means an individual who is compensated by salary,
             317      commission, or other means for representing and selling an alcoholic product of a
             318      manufacturer, supplier, or importer of liquor.
             319          (49) "Industry representative sample" means liquor that is placed in the possession of
             320      the department for testing, analysis, and sampling by a local industry representative on the
             321      premises of the department to educate the local industry representative of the quality and
             322      characteristics of the product.
             323          (50) "Interdicted person" means a person to whom the sale, offer for sale, or furnishing
             324      of an alcoholic product is prohibited by:
             325          (a) law; or
             326          (b) court order.
             327          (51) "Intoxicated" means that a person:
             328          (a) is significantly impaired as to the person's mental or physical functions as a result of
             329      the use of:
             330          (i) an alcoholic product;
             331          (ii) a controlled substance;
             332          (iii) a substance having the property of releasing toxic vapors; or
             333          (iv) a combination of Subsections (51)(a)(i) through (iii); and
             334          (b) exhibits plain and easily observed outward manifestations of behavior or physical
             335      signs produced by the over consumption of an alcoholic product.
             336          (52) "Investigator" means an individual who is:
             337          (a) a department compliance officer; or


             338          (b) a nondepartment enforcement officer.
             339          (53) "Invitee" is as defined in Section 32B-8-102 .
             340          (54) "License" means:
             341          (a) a retail license;
             342          (b) a license issued in accordance with Chapter 11, Manufacturing and Related
             343      Licenses Act;
             344          (c) a license issued in accordance with Chapter 12, Liquor Warehousing License Act;
             345      or
             346          (d) a license issued in accordance with Chapter 13, Beer Wholesaling License Act.
             347          (55) "Licensee" means a person who holds a license.
             348          (56) "Limited-service restaurant license" means a license issued in accordance with
             349      Chapter 5, Retail License Act, and Chapter 6, Part 3, Limited-service Restaurant License.
             350          (57) "Limousine" means a motor vehicle licensed by the state or a local authority, other
             351      than a bus or taxicab:
             352          (a) in which the driver and a passenger are separated by a partition, glass, or other
             353      barrier;
             354          (b) that is provided by a business entity to one or more individuals at a fixed charge in
             355      accordance with the business entity's tariff; and
             356          (c) to give the one or more individuals the exclusive use of the limousine and a driver
             357      to travel to one or more specified destinations.
             358          (58) (a) (i) "Liquor" means a liquid that:
             359          (A) is:
             360          (I) alcohol;
             361          (II) an alcoholic, spirituous, vinous, fermented, malt, or other liquid;
             362          (III) a combination of liquids a part of which is spirituous, vinous, or fermented; or
             363          (IV) other drink or drinkable liquid; and
             364          (B) (I) contains at least .5% alcohol by volume; and
             365          (II) is suitable to use for beverage purposes.
             366          (ii) "Liquor" includes:
             367          (A) heavy beer;
             368          (B) wine; and


             369          (C) a flavored malt beverage.
             370          (b) "Liquor" does not include beer.
             371          (59) "Liquor Control Fund" means the enterprise fund created by Section 32B-2-301 .
             372          (60) "Liquor warehousing license" means a license that is issued:
             373          (a) in accordance with Chapter 12, Liquor Warehousing License Act; and
             374          (b) to a person, other than a licensed manufacturer, who engages in the importation for
             375      storage, sale, or distribution of liquor regardless of amount.
             376          (61) "Local authority" means:
             377          (a) for premises that are located in an unincorporated area of a county, the governing
             378      body of a county; or
             379          (b) for premises that are located in an incorporated city or a town, the governing body
             380      of the city or town.
             381          (62) "Lounge or bar area" is as defined by rule made by the commission.
             382          (63) "Manufacture" means to distill, brew, rectify, mix, compound, process, ferment, or
             383      otherwise make an alcoholic product for personal use or for sale or distribution to others.
             384          (64) "Member" means an individual who, after paying regular dues, has full privileges
             385      in an equity club licensee or fraternal club licensee.
             386          (65) (a) "Military installation" means a base, air field, camp, post, station, yard, center,
             387      or homeport facility for a ship:
             388          (i) (A) under the control of the United States Department of Defense; or
             389          (B) of the National Guard;
             390          (ii) that is located within the state; and
             391          (iii) including a leased facility.
             392          (b) "Military installation" does not include a facility used primarily for:
             393          (i) civil works;
             394          (ii) a rivers and harbors project; or
             395          (iii) a flood control project.
             396          (66) "Minor" means an individual under the age of 21 years.
             397          (67) "Nondepartment enforcement agency" means an agency that:
             398          (a) (i) is a state agency other than the department; or
             399          (ii) is an agency of a county, city, or town; and


             400          (b) has a responsibility to enforce one or more provisions of this title.
             401          (68) "Nondepartment enforcement officer" means an individual who is:
             402          (a) a peace officer, examiner, or investigator; and
             403          (b) employed by a nondepartment enforcement agency.
             404          (69) (a) "Off-premise beer retailer" means a beer retailer who is:
             405          (i) licensed in accordance with Chapter 7, Part 2, Off-premise Beer Retailer Local
             406      Authority; and
             407          (ii) engaged in the retail sale of beer to a patron for consumption off the beer retailer's
             408      premises.
             409          (b) "Off-premise beer retailer" does not include an on-premise beer retailer.
             410          (70) "On-premise banquet license" means a license issued in accordance with Chapter
             411      5, Retail License Act, and Chapter 6, Part 6, On-premise Banquet License.
             412          (71) "On-premise beer retailer" means a beer retailer who is:
             413          (a) authorized to sell, offer for sale, or furnish beer under a license issued in
             414      accordance with Chapter 5, Retail License Act, and Chapter 6, Part 7, On-premise Beer
             415      Retailer License; and
             416          (b) engaged in the sale of beer to a patron for consumption on the beer retailer's
             417      premises:
             418          (i) regardless of whether the beer retailer sells beer for consumption off the licensed
             419      premises; and
             420          (ii) on and after March 1, 2012, operating:
             421          (A) as a tavern; or
             422          (B) in a manner that meets the requirements of Subsection 32B-6-703 (2)(e)(i).
             423          (72) "Opaque" means impenetrable to sight.
             424          (73) "Package agency" means a retail liquor location operated:
             425          (a) under an agreement with the department; and
             426          (b) by a person:
             427          (i) other than the state; and
             428          (ii) who is authorized by the commission in accordance with Chapter 2, Part 6, Package
             429      Agency, to sell packaged liquor for consumption off the premises of the package agency.
             430          (74) "Package agent" means a person who holds a package agency.


             431          (75) "Patron" means an individual to whom food, beverages, or services are sold,
             432      offered for sale, or furnished, or who consumes an alcoholic product including:
             433          (a) a customer;
             434          (b) a member;
             435          (c) a guest;
             436          (d) an attendee of a banquet or event;
             437          (e) an individual who receives room service;
             438          (f) a resident of a resort;
             439          (g) a public customer under a resort spa sublicense, as defined in Section 32B-8-102 ;
             440      or
             441          (h) an invitee.
             442          (76) "Permittee" means a person issued a permit under:
             443          (a) Chapter 9, Event Permit Act; or
             444          (b) Chapter 10, Special Use Permit Act.
             445          (77) "Person subject to administrative action" means:
             446          (a) a licensee;
             447          (b) a permittee;
             448          (c) a manufacturer;
             449          (d) a supplier;
             450          (e) an importer;
             451          (f) one of the following holding a certificate of approval:
             452          (i) an out-of-state brewer;
             453          (ii) an out-of-state importer of beer, heavy beer, or flavored malt beverages; or
             454          (iii) an out-of-state supplier of beer, heavy beer, or flavored malt beverages; or
             455          (g) staff of:
             456          (i) a person listed in Subsections (77)(a) through (f); or
             457          (ii) a package agent.
             458          (78) "Premises" means a building, enclosure, or room used in connection with the
             459      storage, sale, furnishing, consumption, manufacture, or distribution, of an alcoholic product,
             460      unless otherwise defined in this title or rules made by the commission.
             461          (79) "Prescription" means an order issued by a health care practitioner when:


             462          (a) the health care practitioner is licensed under Title 58, Occupations and Professions,
             463      to prescribe a controlled substance, other drug, or device for medicinal purposes;
             464          (b) the order is made in the course of that health care practitioner's professional
             465      practice; and
             466          (c) the order is made for obtaining an alcoholic product for medicinal purposes only.
             467          (80) (a) "Private event" means a specific social, business, or recreational event:
             468          (i) for which an entire room, area, or hall is leased or rented in advance by an identified
             469      group; and
             470          (ii) that is limited in attendance to people who are specifically designated and their
             471      guests.
             472          (b) "Private event" does not include an event to which the general public is invited,
             473      whether for an admission fee or not.
             474          (81) (a) "Proof of age" means:
             475          (i) an identification card;
             476          (ii) an identification that:
             477          (A) is substantially similar to an identification card;
             478          (B) is issued in accordance with the laws of a state other than Utah in which the
             479      identification is issued;
             480          (C) includes date of birth; and
             481          (D) has a picture affixed;
             482          (iii) a valid driver license certificate that:
             483          (A) includes date of birth;
             484          (B) has a picture affixed; and
             485          (C) is issued:
             486          (I) under Title 53, Chapter 3, Uniform Driver License Act; or
             487          (II) in accordance with the laws of the state in which it is issued;
             488          (iv) a military identification card that:
             489          (A) includes date of birth; and
             490          (B) has a picture affixed; or
             491          (v) a valid passport.
             492          (b) "Proof of age" does not include a driving privilege card issued in accordance with


             493      Section 53-3-207 .
             494          (82) (a) "Public building" means a building or permanent structure that is:
             495          (i) owned or leased by:
             496          (A) the state; or
             497          (B) a local government entity; and
             498          (ii) used for:
             499          (A) public education;
             500          (B) transacting public business; or
             501          (C) regularly conducting government activities.
             502          (b) "Public building" does not include a building owned by the state or a local
             503      government entity when the building is used by a person, in whole or in part, for a proprietary
             504      function.
             505          (83) "Public conveyance" means a conveyance to which the public or a portion of the
             506      public has access to and a right to use for transportation, including an airline, railroad, bus,
             507      boat, or other public conveyance.
             508          (84) "Reception center" means a business that:
             509          (a) operates facilities that are at least 5,000 square feet; and
             510          (b) has as its primary purpose the leasing of the facilities described in Subsection (84)
             511      (a) to a third party for the third party's event.
             512          (85) "Reception center license" means a license issued in accordance with Chapter 5,
             513      Retail License Act, and Chapter 6, Part 8, Reception Center License.
             514          (86) (a) "Record" means information that is:
             515          (i) inscribed on a tangible medium; or
             516          (ii) stored in an electronic or other medium and is retrievable in a perceivable form.
             517          (b) "Record" includes:
             518          (i) a book;
             519          (ii) a book of account;
             520          (iii) a paper;
             521          (iv) a contract;
             522          (v) an agreement;
             523          (vi) a document; or


             524          (vii) a recording in any medium.
             525          (87) "Residence" means a person's principal place of abode within Utah.
             526          (88) "Resident," in relation to a resort, is as defined in Section 32B-8-102 .
             527          (89) "Resort" is as defined in Section 32B-8-102 .
             528          (90) "Resort facility" is as defined by the commission by rule.
             529          (91) "Resort license" means a license issued in accordance with Chapter 5, Retail
             530      License Act, and Chapter 8, Resort License Act.
             531          (92) "Restaurant" means a business location:
             532          (a) at which a variety of foods are prepared;
             533          (b) at which complete meals are served to the general public; and
             534          (c) that is engaged primarily in serving meals to the general public.
             535          (93) "Retail license" means one of the following licenses issued under this title:
             536          (a) a full-service restaurant license;
             537          (b) a limited-service restaurant license;
             538          (c) a club license;
             539          (d) an airport lounge license;
             540          (e) an on-premise banquet license;
             541          (f) an on-premise beer license;
             542          (g) a reception center license; or
             543          (h) a beer-only restaurant license.
             544          (94) "Room service" means furnishing an alcoholic product to a person in a guest room
             545      of a:
             546          (a) hotel; or
             547          (b) resort facility.
             548          (95) "Serve" means to place an alcoholic product before an individual.
             549          (96) (a) "School" means a building used primarily for the general education of minors.
             550          (b) "School" does not include an educational facility.
             551          (97) "Sell" or "offer for sale" means a transaction, exchange, or barter whereby, for
             552      consideration, an alcoholic product is either directly or indirectly transferred, solicited, ordered,
             553      delivered for value, or by a means or under a pretext is promised or obtained, whether done by
             554      a person as a principal, proprietor, or as staff, unless otherwise defined in this title or the rules


             555      made by the commission.
             556          (98) "Sexually oriented entertainer" means a person who while in a state of seminudity
             557      appears at or performs:
             558          (a) for the entertainment of one or more patrons;
             559          (b) on the premises of:
             560          (i) a social club licensee; or
             561          (ii) a tavern;
             562          (c) on behalf of or at the request of the licensee described in Subsection (98)(b);
             563          (d) on a contractual or voluntary basis; and
             564          (e) whether or not the person is designated as:
             565          (i) an employee;
             566          (ii) an independent contractor;
             567          (iii) an agent of the licensee; or
             568          (iv) a different type of classification.
             569          (99) "Single event permit" means a permit issued in accordance with Chapter 9, Part 3,
             570      Single Event Permit.
             571          (100) "Small brewer" means a brewer who manufactures less than 60,000 barrels of
             572      beer, heavy beer, and flavored malt beverages per year.
             573          (101) "Social club license" means a license issued in accordance with Chapter 5, Retail
             574      License Act, and Chapter 6, Part 4, Club License, that is designated by the commission as a
             575      social club license.
             576          (102) "Special use permit" means a permit issued in accordance with Chapter 10,
             577      Special Use Permit Act.
             578          (103) (a) "Spirituous liquor" means liquor that is distilled.
             579          (b) "Spirituous liquor" includes an alcoholic product defined as a "distilled spirit" by
             580      27 U.S.C. Sec. 211 and 27 C.F.R. Sec. 5.11 through 5.23.
             581          (104) "Sports center" is as defined by the commission by rule.
             582          (105) (a) "Staff" means an individual who engages in activity governed by this title:
             583          (i) on behalf of a business, including a package agent, licensee, permittee, or certificate
             584      holder;
             585          (ii) at the request of the business, including a package agent, licensee, permittee, or


             586      certificate holder; or
             587          (iii) under the authority of the business, including a package agent, licensee, permittee,
             588      or certificate holder.
             589          (b) "Staff" includes:
             590          (i) an officer;
             591          (ii) a director;
             592          (iii) an employee;
             593          (iv) personnel management;
             594          (v) an agent of the licensee, including a managing agent;
             595          (vi) an operator; or
             596          (vii) a representative.
             597          (106) "State of nudity" means:
             598          (a) the appearance of:
             599          (i) the nipple or areola of a female human breast;
             600          (ii) a human genital;
             601          (iii) a human pubic area; or
             602          (iv) a human anus; or
             603          (b) a state of dress that fails to opaquely cover:
             604          (i) the nipple or areola of a female human breast;
             605          (ii) a human genital;
             606          (iii) a human pubic area; or
             607          (iv) a human anus.
             608          (107) "State of seminudity" means a state of dress in which opaque clothing covers no
             609      more than:
             610          (a) the nipple and areola of the female human breast in a shape and color other than the
             611      natural shape and color of the nipple and areola; and
             612          (b) the human genitals, pubic area, and anus:
             613          (i) with no less than the following at its widest point:
             614          (A) four inches coverage width in the front of the human body; and
             615          (B) five inches coverage width in the back of the human body; and
             616          (ii) with coverage that does not taper to less than one inch wide at the narrowest point.


             617          (108) (a) "State store" means a facility for the sale of packaged liquor:
             618          (i) located on premises owned or leased by the state; and
             619          (ii) operated by a state employee.
             620          (b) "State store" does not include:
             621          (i) a package agency;
             622          (ii) a licensee; or
             623          (iii) a permittee.
             624          (109) (a) "Storage area" means an area on licensed premises where the licensee stores
             625      an alcoholic product.
             626          (b) "Store" means to place or maintain in a location an alcoholic product from which a
             627      person draws to prepare an alcoholic product to be furnished to a patron, except as provided in
             628      Subsection 32B-6-205 (12)(b)(ii), 32B-6-305 (12)(b)(ii), 32B-6-805 (15)(b)(ii), or
             629      32B-6-905 (12)(b)(ii).
             630          (110) "Sublicense" is as defined in Section 32B-8-102 .
             631          (111) "Supplier" means a person who sells an alcoholic product to the department.
             632          (112) "Tavern" means an on-premise beer retailer who is:
             633          (a) issued a license by the commission in accordance with Chapter 5, Retail License
             634      Act, and Chapter 6, Part 7, On-premise Beer Retailer License; and
             635          (b) designated by the commission as a tavern in accordance with Chapter 6, Part 7,
             636      On-premise Beer Retailer License.
             637          (113) "Temporary beer event permit" means a permit issued in accordance with
             638      Chapter 9, Part 4, Temporary Beer Event Permit.
             639          (114) "Temporary domicile" means the principal place of abode within Utah of a
             640      person who does not have a present intention to continue residency within Utah permanently or
             641      indefinitely.
             642          (115) "Translucent" means a substance that allows light to pass through, but does not
             643      allow an object or person to be seen through the substance.
             644          (116) "Unsaleable liquor merchandise" means a container that:
             645          (a) is unsaleable because the container is:
             646          (i) unlabeled;
             647          (ii) leaky;


             648          (iii) damaged;
             649          (iv) difficult to open; or
             650          (v) partly filled;
             651          (b) (i) has faded labels or defective caps or corks;
             652          (ii) has contents that are:
             653          (A) cloudy;
             654          (B) spoiled; or
             655          (C) chemically determined to be impure; or
             656          (iii) contains:
             657          (A) sediment; or
             658          (B) a foreign substance; or
             659          (c) is otherwise considered by the department as unfit for sale.
             660          (117) (a) "Wine" means an alcoholic product obtained by the fermentation of the
             661      natural sugar content of fruits, plants, honey, or milk, or other like substance, whether or not
             662      another ingredient is added.
             663          (b) "Wine" is considered liquor for purposes of this title, except as otherwise provided
             664      in this title.
             665          (118) "Winery manufacturing license" means a license issued in accordance with
             666      Chapter 11, Part 3, Winery Manufacturing License.
             667          Section 2. Section 32B-2-202 is amended to read:
             668           32B-2-202. Powers and duties of the commission.
             669          (1) The commission shall:
             670          (a) consistent with the policy established by the Legislature by statute, act as a general
             671      policymaking body on the subject of alcoholic product control;
             672          (b) adopt and issue policies, rules, and procedures;
             673          (c) set policy by written rules that establish criteria and procedures for:
             674          (i) issuing, denying, not renewing, suspending, or revoking a package agency, license,
             675      permit, or certificate of approval; and
             676          (ii) determining the location of a state store, package agency, or retail licensee;
             677          (d) decide within the limits, and under the conditions imposed by this title, the number
             678      and location of state stores, package agencies, and retail licensees in the state;


             679          (e) issue, deny, suspend, revoke, or not renew the following package agencies, licenses,
             680      permits, or certificates of approval for the purchase, storage, sale, offer for sale, furnishing,
             681      consumption, manufacture, and distribution of an alcoholic product:
             682          (i) a package agency;
             683          (ii) a full-service restaurant license;
             684          (iii) a limited-service restaurant license;
             685          (iv) a club license;
             686          (v) an airport lounge license;
             687          (vi) an on-premise banquet license;
             688          (vii) a resort license, under which four or more sublicenses may be included;
             689          (viii) an on-premise beer retailer license;
             690          (ix) a reception center license;
             691          (x) a beer-only restaurant license;
             692          (xi) subject to Subsection (4), a single event permit;
             693          (xii) subject to Subsection (4), a temporary beer event permit;
             694          (xiii) a special use permit;
             695          (xiv) a manufacturing license;
             696          (xv) a liquor warehousing license;
             697          (xvi) a beer wholesaling license; and
             698          (xvii) one of the following that holds a certificate of approval:
             699          (A) an out-of-state brewer;
             700          (B) an out-of-state importer of beer, heavy beer, or flavored malt beverages; and
             701          (C) an out-of-state supplier of beer, heavy beer, or flavored malt beverages;
             702          (f) in accordance with Section 32B-5-205 , issue, deny, suspend, or revoke one of the
             703      following conditional licenses for the purchase, storage, sale, furnishing, consumption,
             704      manufacture, and distribution of an alcoholic product:
             705          (i) a conditional full-service restaurant license; or
             706          (ii) a conditional limited-service restaurant license;
             707          (g) prescribe the duties of the department in assisting the commission in issuing a
             708      package agency, license, permit, or certificate of approval under this title;
             709          (h) to the extent a fee is not specified in this title, establish a fee allowed under this title


             710      in accordance with Section 63J-1-504 ;
             711          (i) fix prices at which liquor is sold that are the same at all state stores, package
             712      agencies, and retail licensees[;], except that subject to Section 32B-2-304.5 , the commission
             713      may not set the price at which a beer wholesaler licensee may sell heavy beer;
             714          (j) issue and distribute price lists showing the price to be paid by a purchaser for each
             715      class, variety, or brand of liquor kept for sale by the department;
             716          (k) (i) require the director to follow sound management principles; and
             717          (ii) require periodic reporting from the director to ensure that:
             718          (A) sound management principles are being followed; and
             719          (B) policies established by the commission are being observed;
             720          (l) (i) receive, consider, and act in a timely manner upon the reports, recommendations,
             721      and matters submitted by the director to the commission; and
             722          (ii) do the things necessary to support the department in properly performing the
             723      department's duties;
             724          (m) obtain temporarily and for special purposes the services of an expert or person
             725      engaged in the practice of a profession, or a person who possesses a needed skill if:
             726          (i) considered expedient; and
             727          (ii) approved by the governor;
             728          (n) prescribe the conduct, management, and equipment of premises upon which an
             729      alcoholic product may be stored, sold, offered for sale, furnished, or consumed;
             730          (o) make rules governing the credit terms of:
             731          (i) beer sales within the state to retail licensees; and
             732          (ii) heavy beer sales within the state to retail licensees authorized to sell, offer for sale,
             733      or furnish heavy beer; and
             734          (p) in accordance with Chapter 3, Disciplinary Actions and Enforcement Act, take
             735      disciplinary action against a person subject to administrative action.
             736          (2) Consistent with the policy established by the Legislature by statute, the power of the
             737      commission to do the following is plenary, except as otherwise provided by this title, and not
             738      subject to review:
             739          (a) establish a state store;
             740          (b) issue authority to act as a package agent or operate a package agency; and


             741          (c) issue or deny a license, permit, or certificate of approval.
             742          (3) If the commission is authorized or required to make a rule under this title, the
             743      commission shall make the rule in accordance with Title 63G, Chapter 3, Utah Administrative
             744      Rulemaking Act.
             745          (4) Notwithstanding Subsections (1)(e)(xi) and (xii), the director or deputy director
             746      may issue an event permit in accordance with Chapter 9, Event Permit Act.
             747          Section 3. Section 32B-2-204 is amended to read:
             748           32B-2-204. Powers and duties of the department -- Immunity.
             749          (1) (a) The department shall control liquor merchandise inventory including:
             750          [(a)] (i) listing and delisting a product;
             751          [(b)] (ii) the procedures for testing a new product;
             752          [(c)] (iii) purchasing policy;
             753          [(d)] (iv) turnover requirements for a regularly coded product to be continued; and
             754          [(e)] (v) the disposition of discontinued, distressed, or unsaleable merchandise.
             755          (b) The department shall list and delist heavy beer that may be sold by a beer
             756      wholesaler licensee.
             757          (2) (a) The department shall report to the governor on the administration of this title:
             758          (i) as the governor may require; and
             759          (ii) annually by no later than November 30, for the fiscal year ending June 30 of the
             760      year in which the report is made.
             761          (b) A report under this Subsection (2) shall contain:
             762          (i) a statement of the nature and amount of the business transacted by the department
             763      during the year;
             764          (ii) a statement of the department's assets and liabilities including a profit and loss
             765      account, and other accounts and matters necessary to show the results of operations of the
             766      department for the year;
             767          (iii) general information on the application of this title in the state; and
             768          (iv) any other information requested by the governor.
             769          (c) The department shall submit a copy of a report described in this Subsection (2) to
             770      the Legislature.
             771          (3) The department shall maintain insurance against loss on each motor vehicle


             772      operated by it on any public highway. A motor vehicle shall be covered for:
             773          (a) liability imposed by law upon the department for damages from bodily injuries
             774      suffered by one or more persons by reason of the ownership, maintenance, or use of the motor
             775      vehicle; and
             776          (b) liability or loss from damage to or destruction of property of any description,
             777      including liability of the department for the resultant loss of use of the property, which results
             778      from accident due to the ownership, maintenance, or use of the motor vehicle.
             779          (4) (a) The department may sue, be sued, and defend in a proceeding, in a court of law
             780      or otherwise, in the name of the department.
             781          (b) An action may not be taken:
             782          (i) against the commission; or
             783          (ii) in the name of a commissioner.
             784          (5) The department is liable to respond in damages in a case if a private corporation
             785      under the same circumstances would be liable.
             786          (6) (a) Title 63G, Chapter 7, Governmental Immunity Act of Utah, applies in an action
             787      commenced against the department for damages sustained as a result of department ownership,
             788      maintenance, or use of a motor vehicle under Subsections (4) and (5).
             789          (b) In an action described in Subsection (6)(a), the commission and each commissioner
             790      are immune from suit.
             791          Section 4. Section 32B-2-206 is amended to read:
             792           32B-2-206. Powers and duties of the director.
             793          Subject to the powers and responsibilities of the commission under this title, the
             794      director:
             795          (1) (a) shall prepare and propose to the commission general policies, rules, and
             796      procedures governing the administrative activities of the department; and
             797          (b) may submit other recommendations to the commission as the director considers in
             798      the interest of the commission's or the department's business;
             799          (2) within the general policies, rules, and procedures of the commission, shall:
             800          (a) provide day-to-day direction, coordination, and delegation of responsibilities in the
             801      administrative activities of the department's business; and
             802          (b) make internal department policies and procedures relating to:


             803          (i) department personnel matters; and
             804          (ii) the day-to-day operation of the department;
             805          (3) subject to Section 32B-2-207 , shall appoint or employ personnel as considered
             806      necessary in the administration of this title, and with regard to the personnel shall:
             807          (a) prescribe the conditions of employment;
             808          (b) define the respective duties and powers; and
             809          (c) fix the remuneration in accordance with Title 67, Chapter 19, Utah State Personnel
             810      Management Act;
             811          (4) shall establish and secure adherence to a system of reports, controls, and
             812      performance in matters relating to personnel, security, department property management, and
             813      operation of:
             814          (a) a department office;
             815          (b) a warehouse;
             816          (c) a state store; and
             817          (d) a package agency;
             818          (5) within the policies, rules, and procedures approved by the commission and
             819      provisions of law, shall purchase, store, keep for sale, sell, import, and control the storage, sale,
             820      furnishing, transportation, or delivery of an alcoholic product;
             821          (6) shall prepare for commission approval:
             822          (a) recommendations regarding the location, establishment, relocation, and closure of a
             823      state store or package agency;
             824          (b) recommendations regarding the issuance, denial, nonrenewal, suspension, or
             825      revocation of a license, permit, or certificate of approval;
             826          (c) an annual budget, proposed legislation, and reports as required by law and sound
             827      business principles;
             828          (d) plans for reorganizing divisions of the department and the functions of the
             829      divisions;
             830          (e) manuals containing commission and department policies, rules, and procedures;
             831          (f) an inventory control system;
             832          (g) any other report or recommendation requested by the commission;
             833          (h) rules described in Subsection 32B-2-202 (1)(o) governing the credit terms of the


             834      sale of beer or heavy beer;
             835          (i) rules governing the calibration, maintenance, and regulation of a calibrated metered
             836      dispensing system;
             837          (j) rules governing the display of a list of types and brand names of liquor furnished
             838      through a calibrated metered dispensing system;
             839          (k) price lists issued and distributed showing the price to be paid for each class, variety,
             840      or brand of liquor kept for sale at a state store, package agency, or retail licensee;
             841          (l) policies or rules prescribing the books of account maintained by the department and
             842      by a state store, package agency, or retail licensee; and
             843          (m) a policy prescribing the manner of giving and serving a notice required by this title
             844      or rules made under this title;
             845          (7) shall make available through the department to any person, upon request, a copy of
             846      a policy made by the director;
             847          (8) shall make and maintain a current copy of a manual that contains the rules and
             848      policies of the commission and department available for public inspection;
             849          (9) (a) after consultation with the governor, shall determine whether an alcoholic
             850      product should not be sold, offered for sale, or otherwise furnished in an area of the state
             851      during a period of emergency that is proclaimed by the governor to exist in that area; and
             852          (b) shall issue a necessary public announcement or policy with respect to the
             853      determination described in Subsection (9)(a);
             854          (10) issue event permits in accordance with Chapter 9, Event Permit Act; and
             855          (11) shall perform any other duty required by the commission or by law.
             856          Section 5. Section 32B-2-304.5 is enacted to read:
             857          32B-2-304.5. Heavy beer price -- Remittance of markup.
             858          (1) For purposes of this section;
             859          (a) "Landed case cost" means:
             860          (i) the cost of the product; and
             861          (ii) inbound shipping costs incurred by a beer wholesaler licensee.
             862          (b) "Landed case cost" does not include:
             863          (i) the outbound shipping cost from a warehouse of the beer wholesaler licensee to a
             864      retail licensee; or


             865          (ii) the tax imposed under Title 59, Chapter 15, Beer Tax.
             866          (2) (a) A beer wholesaler licensee shall mark up above the landed case cost of heavy
             867      beer sold by the beer wholesaler licensee within the state at an amount not less than the markup
             868      required of the department under Section 32B-2-304 .
             869          (b) If a beer wholesaler licensee sells heavy beer to the department, the heavy beer is
             870      subject to only the markup imposed by the department.
             871          (3) (a) A beer wholesaler licensee shall collect the markup and remit the markup
             872      collected by the beer wholesaler licensee under this section:
             873          (i) to the State Tax Commission monthly on or before the last day of the month
             874      immediately following the last day of the previous month; and
             875          (ii) using a form prescribed by the State Tax Commission.
             876          (b) The State Tax Commission shall deposit revenues remitted to it under Subsection
             877      (3)(a) into the Markup Holding Fund created in Section 32B-2-301 .
             878          (c) The assessment, collection, and refund of a markup under this section shall be in
             879      accordance with Title 59, Chapter 1, Part 14, Assessment, Collections, and Refunds Act.
             880          (d) A beer wholesaler licensee, if it fails to comply with this Subsection (3), is subject
             881      to penalties as provided in Section 59-1-401 and interest as provided in Section 59-1-402 .
             882          (e) The State Tax Commission may make rules, in accordance with Title 63G, Chapter
             883      3, Utah Administrative Rulemaking Act, to establish procedures under this Subsection (3).
             884          Section 6. Section 32B-4-401 is amended to read:
             885           32B-4-401. Unlawful sale or furnishing.
             886          (1) It is unlawful for a retail licensee, a permittee, or staff of a retail licensee or
             887      permittee to keep for sale, or to directly or indirectly, sell, offer for sale, or furnish to another,
             888      an alcoholic product, except as otherwise provided by this title.
             889          (2) It is unlawful for a person in the business of selling liquor, a manufacturer, a
             890      supplier, an importer of liquor, or staff of the person, manufacturer, supplier, or importer to
             891      sell, ship, transport, or cause to be sold, shipped, or transported liquor from an out-of-state
             892      location directly or indirectly into this state except to the extent authorized by this title to:
             893          (a) the department;
             894          (b) a military installation;
             895          (c) a holder of a special use permit, to the extent authorized in the special use permit;


             896      [or]
             897          (d) a liquor warehouser licensee licensed to distribute and transport liquor to:
             898          (i) the department; or
             899          (ii) an out-of-state wholesaler or retailer[.]; or
             900          (e) a beer wholesaler licensee to distribute and transport heavy beer to:
             901          (i) a retail licensee authorized to sell, offer for sale, or furnish heavy beer;
             902          (ii) a single event permittee;
             903          (iii) the department;
             904          (iv) a military installation; or
             905          (v) a public service permittee.
             906          (3) (a) It is unlawful for a person in the business of selling beer, a manufacturer, a
             907      supplier, an importer of beer, or staff of the person, manufacturer, or importer to sell, ship,
             908      transport, or cause to be sold, shipped, or transported beer from an out-of-state location directly
             909      or indirectly into this state except to the extent authorized by this title to:
             910          (i) a beer wholesaler licensee;
             911          (ii) a military installation; or
             912          (iii) a holder of a special use permit, to the extent authorized in the special use permit.
             913          (b) Subsection (3)(a) does not preclude a small brewer that holds a certificate of
             914      approval from selling, shipping, or transporting beer to the extent authorized by Subsection
             915      32B-11-503 (5) directly to:
             916          (i) a beer retailer; or
             917          (ii) an event permittee.
             918          (4) (a) It is unlawful for a manufacturer, supplier, or importer of liquor in this state, or
             919      staff of the manufacturer, supplier, or importer to sell, ship, transport, or cause to be sold,
             920      shipped, or transported liquor directly or indirectly to a person in this state except to the extent
             921      authorized by this title to:
             922          (i) the department;
             923          (ii) a military installation;
             924          (iii) a holder of a special use permit, to the extent authorized in the special use permit;
             925      [or]
             926          (iv) a liquor warehouser licensee who is licensed to distribute and transport liquor to:


             927          (A) the department; or
             928          (B) an out-of-state wholesaler or retailer[.]; or
             929          (v) a beer wholesaler licensee to distribute and transport heavy beer to:
             930          (A) a retail licensee authorized to sell, offer for sale, or furnish heavy beer;
             931          (B) a single event permittee;
             932          (C) the department;
             933          (D) a military installation; or
             934          (E) a public service permittee.
             935          (b) Subsection (4)(a) does not preclude a winery manufacturing licensee located in this
             936      state from selling wine to a person on its winery premises:
             937          (i) to the extent authorized by Subsection 32B-11-303 (4)(c); or
             938          (ii) under a package agency issued by the commission on the winery premises.
             939          (5) (a) It is unlawful for a manufacturer, supplier, or importer of beer in this state, or
             940      staff of the manufacturer, supplier, or importer to sell, ship, transport, or cause to be sold,
             941      shipped, or transported beer directly or indirectly to a person in this state except to the extent
             942      authorized by this title to:
             943          (i) a beer wholesaler licensee;
             944          (ii) a military installation; or
             945          (iii) a holder of a special use permit, to the extent authorized in the special use permit.
             946          (b) Subsection (5)(a) does not preclude:
             947          (i) a small brewer who is a brewery manufacturing licensee located in this state from
             948      selling, shipping, and transporting beer to the extent authorized by Subsection 32B-11-503 (5)
             949      directly to one of the following in this state:
             950          (A) a beer retailer; or
             951          (B) an event permittee; or
             952          (ii) a brewery manufacturing licensee from selling beer to a person on its
             953      manufacturing premises under Subsection 32B-11-503 (4)(c).
             954          (6) It is unlawful for a person other than a person described in Subsection (2) or (3) to
             955      sell, ship, transport, or cause to be sold, shipped, or transported an alcoholic product from an
             956      out-of-state location directly or indirectly into this state, except as otherwise provided by this
             957      title.


             958          (7) It is unlawful for a person in this state other than a person described in Subsection
             959      (4) or (5) to sell, ship, transport, or cause to be sold, shipped, or transported an alcoholic
             960      product directly or indirectly to another person in this state, except as otherwise provided by
             961      this title.
             962          (8) (a) A violation of Subsection (1) is a class B misdemeanor, except when otherwise
             963      provided by this title.
             964          (b) A violation of Subsection (2), (3), (4), or (5) is a third degree felony.
             965          (c) A violation of Subsection (6) or (7) is a class B misdemeanor.
             966          Section 7. Section 32B-4-417 is amended to read:
             967           32B-4-417. Unlawful possession by licensee or permittee.
             968          Except as authorized by Section 32B-4-415 , other provisions of this title, or the rules of
             969      the commission, a licensee or permittee may not possess, store, or allow consumption of liquor
             970      on its premises if the liquor is not purchased from:
             971          (1) the department;
             972          (2) a state store; [or]
             973          (3) a package agency[.]; or
             974          (4) in the case of heavy beer, a beer wholesaler licensee.
             975          Section 8. Section 32B-5-303 is amended to read:
             976           32B-5-303. Purchase and storage of an alcoholic product by a retail licensee.
             977          (1) (a) A retail licensee may not purchase liquor except from:
             978          (i) a state store [or];
             979          (ii) package agency[.]; or
             980          (iii) in the case of heavy beer, a beer wholesaler licensee.
             981          (b) A retail licensee may transport liquor purchased from a state store or package
             982      agency from the place of purchase to the licensed premises.
             983          (c) A retail licensee shall pay for liquor in accordance with rules established by the
             984      commission.
             985          (2) (a) (i) A retail licensee may not purchase, acquire, possess for the purpose of resale,
             986      or sell beer except beer that the retail licensee purchases from:
             987          (A) a beer wholesaler licensee; or
             988          (B) a small brewer that manufactures the beer.


             989          (ii) Violation of this Subsection (2)(a) is a class A misdemeanor.
             990          (b) (i) If a retail licensee purchases beer under Subsection (2)(a) from a beer wholesaler
             991      licensee, the retail licensee shall purchase beer only from a beer wholesaler licensee who is
             992      designated by the manufacturer to sell beer in the geographical area in which the retail licensee
             993      is located, unless an alternate wholesaler is authorized by the department to sell to the retail
             994      licensee as provided in Section 32B-13-301 .
             995          (ii) Violation of Subsection (2)(b) is a class B misdemeanor.
             996          (3) A retail licensee may not store, sell, offer for sale, or furnish an alcoholic product in
             997      a place other than as designated in the retail licensee's application, unless the retail licensee
             998      first applies for and receives approval from the department for a change of location within the
             999      licensed premises.
             1000          (4) A liquor storage area shall remain locked at all times other than those hours and
             1001      days when liquor sales are authorized by law.
             1002          Section 9. Section 32B-9-305 is amended to read:
             1003           32B-9-305. Specific operational requirements for single event permit.
             1004          (1) (a) In addition to complying with Section 32B-9-204 , a single event permittee or a
             1005      person involved in the storage, sale, offer for sale, or furnishing of an alcoholic product at the
             1006      event shall comply with this section.
             1007          (b) Failure to comply as provided in Subsection (1)(a):
             1008          (i) may result in:
             1009          (A) disciplinary action in accordance with Chapter 3, Disciplinary Actions and
             1010      Enforcement Act, against:
             1011          (I) a single event permittee;
             1012          (II) a person involved in the storage, sale, offer for sale, or furnishing of an alcoholic
             1013      product at the event; or
             1014          (III) any combination of persons listed in this Subsection (1)(b);
             1015          (B) immediate revocation of the single event permit;
             1016          (C) forfeiture of a bond; or
             1017          (D) immediate seizure of an alcoholic product present at the event; and
             1018          (ii) if the single event permit is revoked, disqualifies the single event permittee from
             1019      applying for a single event permit or temporary beer event permit for a period of three years


             1020      from the date of revocation of the single event permit.
             1021          (c) An alcoholic product seized under this Subsection (1) shall be returned to the single
             1022      event permittee after an event if forfeiture proceedings are not instituted under Section
             1023      32B-4-206 .
             1024          (2) (a) A single event permittee shall make and maintain an expense and revenue
             1025      ledger or record showing:
             1026          (i) expenditures made for:
             1027          (A) liquor;
             1028          (B) beer;
             1029          (C) set-ups; and
             1030          (D) an ingredient or component of an alcoholic product other than a set-up; and
             1031          (ii) the revenue from the sale of an alcoholic product.
             1032          (b) Section 32B-1-205 applies to a record required to be made or maintained in
             1033      accordance with this Subsection (2).
             1034          (3) A single event permittee shall purchase liquor stored, sold, offered for sale,
             1035      furnished, or consumed at an event from:
             1036          (a) a state store [or];
             1037          (b) a package agency[.]; or
             1038          (c) in the case of heavy beer, a beer wholesaler licensee.
             1039          (4) (a) A single event permittee may not sell, offer for sale, or furnish a primary
             1040      spirituous liquor in a quantity that exceeds 1.5 ounces per beverage, except that additional
             1041      spirituous liquor may be used in a beverage if:
             1042          (i) used as a secondary flavoring ingredient;
             1043          (ii) used in conjunction with the primary spirituous liquor;
             1044          (iii) the secondary ingredient is not the only spirituous liquor in the beverage; and
             1045          (iv) subject to Subsection 32B-9-204 (18):
             1046          (A) a patron has no more than 2.5 ounces of spirituous liquor at a time before the
             1047      patron; and
             1048          (B) a patron has no more than one spirituous liquor drink at a time before the patron.
             1049          (b) Spirituous liquor need not be dispensed through a calibrated metered dispensing
             1050      system.


             1051          (5) (a) A single event permittee may sell, offer for sale, or furnish wine by the glass or
             1052      an individual portion, except that a glass or individual portion may not exceed five ounces.
             1053          (b) A single event permittee may furnish an individual portion served to a patron in
             1054      more than one glass if the total amount of wine does not exceed five ounces.
             1055          (c) An individual portion of wine is considered to be one alcoholic product under
             1056      Subsection 32B-9-204 (18).
             1057          (d) A single event permittee may sell, offer for sale, or furnish wine in a container not
             1058      exceeding 1.5 liters at a price fixed by the commission.
             1059          (6) A single event permittee may sell, offer for sale, or furnish heavy beer in an original
             1060      container at a price fixed by the commission, except that the original container may not exceed
             1061      one liter.
             1062          (7) A single event permittee may sell, offer for sale, or furnish a flavored malt beverage
             1063      in an original container at a price fixed by the commission, except that the original container
             1064      may not exceed one liter.
             1065          (8) A single event permittee may sell liquor only at a price fixed by the commission.
             1066          (9) A single event permittee may perform a service and assess a service charge as
             1067      authorized by commission rule for liquor purchased at an event.
             1068          Section 10. Section 32B-10-206 is amended to read:
             1069           32B-10-206. General operational requirements for special use permit.
             1070          (1) (a) A special use permittee and staff of the special use permittee shall comply with
             1071      this title and rules of the commission, including the relevant part of the chapter that applies to
             1072      the type of special use permit held by the special use permittee.
             1073          (b) Failure to comply as provided in Subsection (1)(a) may result in disciplinary action
             1074      in accordance with Chapter 3, Disciplinary Actions and Enforcement Act, against:
             1075          (i) a special use permittee;
             1076          (ii) individual staff of a special use permittee; or
             1077          (iii) a special use permittee and staff of the special use permittee.
             1078          (c) The commission may suspend or revoke a special use permit with or without cause.
             1079          (2) (a) If there is a conflict between this part and the relevant part under this chapter for
             1080      the specific type of special use permit, the relevant part under this chapter governs.
             1081          (b) Notwithstanding that this part may refer to "liquor" or an "alcoholic product," a


             1082      special use permittee may only purchase, use, store, sell, offer for sale, allow consumption, or
             1083      manufacture an alcoholic product authorized for the special use permit that is held by the
             1084      special use permittee.
             1085          (c) Notwithstanding that this part or the relevant part under this chapter for the type of
             1086      special use permit held by a special use permittee refers to "special use permittee," a person
             1087      involved in the purchase, use, store, sell, offer for sale, allow consumption, or manufacture of
             1088      an alcoholic product for which the special use permit is issued is subject to the same
             1089      requirement or prohibition.
             1090          (3) (a) A special use permittee shall make and maintain a record, as required by
             1091      commission rule, of any alcoholic product purchased, used, sold, or manufactured.
             1092          (b) Section 32B-1-205 applies to a record required to be made or maintained in
             1093      accordance with this Subsection (3).
             1094          (4) (a) Except as otherwise provided in this title, a special use permittee may not
             1095      purchase liquor except from:
             1096          (i) a state store [or];
             1097          (ii) a package agency[.]; or
             1098          (iii) in the case of heavy beer, a beer wholesaler licensee.
             1099          (b) A special use permittee may transport liquor purchased by the special use permittee
             1100      in accordance with this Subsection (4) from the place of purchase to the special use permittee's
             1101      premises.
             1102          (c) A special use permittee shall purchase liquor at prices set by the commission.
             1103          (d) When authorized by a special use permit, a special use permittee may purchase and
             1104      receive an alcoholic product directly from a manufacturer for a purpose that is industrial,
             1105      educational, scientific, or manufacturing.
             1106          (e) A health care facility may purchase and receive an alcoholic product directly from a
             1107      manufacturer for use at the health care facility.
             1108          (5) A special use permittee may not use, mix, store, sell, offer for sale, furnish,
             1109      manufacture, or allow consumption of an alcoholic product in a location other than as
             1110      designated in a special use permittee's application.
             1111          (6) Except as otherwise provided, a special use permittee may not sell, offer for sale, or
             1112      furnish an alcoholic product to:


             1113          (a) a minor;
             1114          (b) a person actually, apparently, or obviously intoxicated;
             1115          (c) a known interdicted person; or
             1116          (d) a known habitual drunkard.
             1117          (7) A special use permittee may not employ a minor to handle an alcoholic product.
             1118          (8) (a) The location specified in a special use permit may not be transferred from one
             1119      location to another location, without prior written approval of the commission.
             1120          (b) A special use permittee may not sell, transfer, assign, exchange, barter, give, or
             1121      attempt in any way to dispose of the permit to another person whether for monetary gain or not.
             1122          (9) A special use permittee may not purchase, use, mix, store, sell, offer for sale,
             1123      furnish, consume, or manufacture an alcoholic product for a purpose other than that authorized
             1124      by the special use permit.
             1125          (10) The commission may prescribe by policy or rule consistent with this title, the
             1126      general operational requirements of a special use permittee relating to:
             1127          (a) physical facilities;
             1128          (b) conditions of purchase, use, storage, sale, consumption, or manufacture of an
             1129      alcoholic product;
             1130          (c) purchase, storage, and sales quantity limitations; and
             1131          (d) other matters considered appropriate by the commission.
             1132          Section 11. Section 32B-10-304 is amended to read:
             1133           32B-10-304. Specific operational requirements for a public service permit.
             1134          (1) (a) In addition to complying with Section 32B-10-206 , a public service permittee
             1135      and staff of the public service permittee shall comply with this section.
             1136          (b) Failure to comply as provided in Subsection (1)(a) may result in disciplinary action
             1137      in accordance with Chapter 3, Disciplinary Actions and Enforcement Act, against:
             1138          (i) a public service permittee;
             1139          (ii) individual staff of a public service permittee; or
             1140          (iii) both a public service permittee and staff of the public service permittee.
             1141          (2) (a) A public service permittee whose public conveyances operate on an interstate
             1142      basis may do the following:
             1143          (i) purchase an alcoholic product outside of the state;


             1144          (ii) bring an alcoholic product purchased outside of the state into the state; and
             1145          (iii) sell, offer for sale, and furnish an alcoholic product purchased outside of the state
             1146      to a passenger traveling on the public service permittee's public conveyance for consumption
             1147      while en route on the public conveyance.
             1148          (b) A public service permittee whose public conveyance operates solely within the
             1149      state, to sell, offer for sale, or furnish to a passenger traveling on the public service permittee's
             1150      public conveyance for consumption while en route on the public conveyance, shall purchase:
             1151          (i) liquor from:
             1152          (A) a state store [or];
             1153          (B) a package agency; [and] or
             1154          (C) in the case of heavy beer, a beer wholesaler licensee; and
             1155          (ii) beer from a beer wholesaler licensee.
             1156          (3) (a) A public service permittee may establish a hospitality room in which an
             1157      alcoholic product may be stored, sold, offered for sale, furnished, and consumed, if:
             1158          (i) the room is located within a depot, terminal, or similar facility adjacent to and
             1159      servicing the public service permittee's airline, railroad, bus, boat, or other public conveyance;
             1160          (ii) the room is completely enclosed and the interior is not visible to the public;
             1161          (iii) the sale, offer for sale, or furnishing of an alcoholic product is made only to a
             1162      person:
             1163          (A) then in transit using the host company's airline, railroad, bus line, or other public
             1164      conveyance; and
             1165          (B) holding a valid boarding pass or similar travel document issued by the host
             1166      company; and
             1167          (iv) (A) liquor is purchased from:
             1168          (I) a state store; [or]
             1169          (II) a package agency; [and] or
             1170          (III) in the case of heavy beer, a beer wholesaler licensee; and
             1171          (B) beer is purchased from a beer wholesaler licensee.
             1172          (b) (i) A public service permittee operating a hospitality room shall display in a
             1173      prominent place in the hospitality room, a sign in large letters that consists of text in the
             1174      following order:


             1175          (A) a header that reads: "WARNING";
             1176          (B) a warning statement that reads: "Drinking alcoholic beverages during pregnancy
             1177      can cause birth defects and permanent brain damage for the child.";
             1178          (C) a statement in smaller font that reads: "Call the Utah Department of Health at
             1179      [insert most current toll-free number] with questions or for more information.";
             1180          (D) a header that reads: "WARNING"; and
             1181          (E) a warning statement that reads: "Driving under the influence of alcohol or drugs is
             1182      a serious crime that is prosecuted aggressively in Utah."
             1183          (ii) (A) The text described in Subsections (3)(b)(i)(A) through (C) shall be in a
             1184      different font style than the text described in Subsections (3)(b)(i)(D) and (E).
             1185          (B) The warning statements in the sign described in Subsection (3)(b)(i) shall be in the
             1186      same font size.
             1187          (iii) The Department of Health shall work with the commission and department to
             1188      facilitate consistency in the format of a sign required under this section.
             1189          (c) A hospitality room shall be operated in accordance with this chapter and rules
             1190      adopted by the commission.
             1191          Section 12. Section 32B-11-201 is amended to read:
             1192           32B-11-201. Commission's power to issue a manufacturing license -- Certificates
             1193      of approval.
             1194          (1) (a) Except as provided in Section 32B-11-202 , before a person may manufacture an
             1195      alcoholic product in this state, the person shall obtain an alcoholic product manufacturing
             1196      license issued by the commission in accordance with this part.
             1197          (b) A separate license is required for each place of storage, sale, and manufacture of an
             1198      alcoholic product.
             1199          (c) A violation of this Subsection (1) is a class B misdemeanor.
             1200          (2) The commission may issue an alcoholic product manufacturing license to a
             1201      manufacturer whose business is located in this state for the storage, sale, and manufacture of an
             1202      alcoholic product for each type of manufacturing license provided by this chapter.
             1203          (3) The types of manufacturing licenses issued under this chapter are known as:
             1204          (a) a winery manufacturing license;
             1205          (b) a distillery manufacturing license; and


             1206          (c) a brewery manufacturing license.
             1207          (4) (a) A brewer located outside the state is not required to be licensed under this
             1208      chapter.
             1209          (b) A brewer described in Subsection (4)(a) shall obtain a certificate of approval from
             1210      the department before selling or delivering:
             1211          (i) beer to a beer wholesaler licensee in this state;
             1212          (ii) a flavored malt beverage to:
             1213          (A) the department; or
             1214          (B) a military installation; [or]
             1215          (iii) heavy beer to:
             1216          (A) a beer wholesaler licensee in this state;
             1217          (B) the department; or
             1218          (C) a military installation; or
             1219          [(iii)] (iv) if a small brewer, beer to one of the following in the state:
             1220          (A) a beer wholesaler licensee;
             1221          (B) a beer retailer; or
             1222          (C) an event permittee.
             1223          (c) To obtain a certificate of approval, a brewer shall submit to the department:
             1224          (i) a written application in a form prescribed by the department;
             1225          (ii) a nonrefundable $75 application fee;
             1226          (iii) an initial certificate of approval fee of $300 that is refundable if a certificate of
             1227      approval is not issued;
             1228          (iv) evidence of authority from the federal Alcohol and Tobacco Tax and Trade Bureau
             1229      of the United States Department of the Treasury to brew beer, heavy beer, or a flavored malt
             1230      beverage; and
             1231          (v) any other information the commission or department may require.
             1232          (d) (i) One of the following shall sign and verify a written application under this
             1233      Subsection (4) by oath or affirmation:
             1234          (A) a partner if the brewer is a partnership; or
             1235          (B) an executive officer, manager, or person specifically authorized by a corporation or
             1236      limited liability company to sign the application.


             1237          (ii) A brewer filing an application shall attach to the application written evidence of the
             1238      authority of the person described in Subsection (4)(d)(i) to sign the application.
             1239          (e) (i) A certificate of approval under this Subsection (4) expires on December 31 of
             1240      each year.
             1241          (ii) A brewer desiring to renew its certificate of approval shall submit to the
             1242      department by no later than November 30 of the year the certificate of approval expires:
             1243          (A) a completed renewal application in the form prescribed by the department; and
             1244          (B) a renewal fee of $250.
             1245          (iii) Failure to meet the renewal requirements results in an automatic forfeiture of the
             1246      certificate of approval effective on the date the existing certificate of approval expires.
             1247          (5) (a) An importer or supplier of beer, heavy beer, or flavored malt beverages who is
             1248      not required to be licensed under this title shall obtain a certificate of approval from the
             1249      department before selling or delivering:
             1250          (i) beer to a beer wholesaler licensee in this state; [or]
             1251          (ii) heavy beer or a flavored malt beverage to:
             1252          (A) the department; or
             1253          (B) a military installation[.]; or
             1254          (iii) heavy beer to a beer wholesaler licensee in this state.
             1255          (b) To obtain a certificate of approval, an importer or supplier described in Subsection
             1256      (5)(a) shall submit to the department:
             1257          (i) a written application in a form prescribed by the department;
             1258          (ii) a nonrefundable $75 application fee;
             1259          (iii) an initial certificate of approval fee of $300 that is refundable if a certificate of
             1260      approval is not issued;
             1261          (iv) evidence of authority from the federal Alcohol and Tobacco Tax and Trade Bureau
             1262      of the United States Department of the Treasury to brew beer, heavy beer, or a flavored malt
             1263      beverage; and
             1264          (v) any other information the commission or department may require.
             1265          (c) (i) One of the following shall sign and verify a written application under this
             1266      Subsection (5) by oath or affirmation:
             1267          (A) a partner if the importer or supplier is a partnership; or


             1268          (B) an executive officer, manager, or person specifically authorized by a corporation or
             1269      limited liability company to sign the application.
             1270          (ii) An importer or supplier filing an application under this Subsection (5) shall attach
             1271      to the application written evidence of the authority of the person described in Subsection
             1272      (5)(c)(i) to sign the application.
             1273          (d) (i) A certificate of approval under this Subsection (5) expires on December 31 of
             1274      each year.
             1275          (ii) An importer or supplier desiring to renew its certificate of approval shall submit to
             1276      the department by no later than November 30 of the year the certificate of approval expires:
             1277          (A) a completed renewal application in the form prescribed by the department; and
             1278          (B) a renewal fee of $250.
             1279          (iii) Failure to meet the renewal requirements results in an automatic forfeiture of the
             1280      certificate of approval effective on the date the existing certificate of approval expires.
             1281          (6) (a) Subject to Subsection (7), a brewer, importer, or supplier required to hold a
             1282      certificate of approval under this section may not distribute beer or heavy beer in this state
             1283      except under a written agreement with a beer wholesaler licensee in this state or, for purposes
             1284      of heavy beer, to the department or a military installation.
             1285          (b) An agreement described in Subsection (6)(a) shall:
             1286          (i) create a restricted exclusive sales territory that is mutually agreed upon by the
             1287      persons entering into the agreement;
             1288          (ii) designate the one or more brands that may be distributed in the sales territory; and
             1289          (iii) set forth the exact geographical area of the sales territory.
             1290          (c) A brewer, importer of beer or heavy beer, or supplier of beer or heavy beer may
             1291      have more than one agreement described in this Subsection (6) if each brand of the brewer,
             1292      importer, or supplier distributed in the state is covered by one exclusive sales territory.
             1293          (d) A brewer, importer of beer or heavy beer, or supplier of beer or heavy beer may not
             1294      enter into an agreement with more than one beer wholesaler licensee to distribute the same
             1295      brand of beer or heavy beer in the same sales territory or any portion of the sales territory.
             1296          (7) A small brewer is not subject to the requirements of Subsection (6).
             1297          Section 13. Section 32B-11-208 is amended to read:
             1298           32B-11-208. General operational requirements for manufacturing license.


             1299          (1) (a) A manufacturing licensee and staff of the manufacturing licensee shall comply
             1300      with this title and the rules of the commission, including the relevant part of this chapter
             1301      applicable to the type of manufacturing license held by the manufacturing licensee.
             1302          (b) Failure to comply as provided in Subsection (1)(a) may result in disciplinary action
             1303      in accordance with Chapter 3, Disciplinary Actions and Enforcement Act, against:
             1304          (i) a manufacturing licensee;
             1305          (ii) individual staff of a manufacturing licensee; or
             1306          (iii) a manufacturing licensee and staff of the manufacturing licensee.
             1307          (2) A manufacturing licensee shall prominently display the manufacturing license on
             1308      the licensed premises.
             1309          (3) (a) A manufacturing licensee shall make and maintain the records required by the
             1310      department.
             1311          (b) Section 32B-1-205 applies to a record required to be made or maintained in
             1312      accordance with this Subsection (3).
             1313          (4) A manufacturing licensee may not sell liquor within the state except to:
             1314          (a) the department; [or]
             1315          (b) a military installation[.]; or
             1316          (c) in the case of heavy beer, a beer wholesaler licensee.
             1317          (5) A manufacturing license may not be transferred from one location to another
             1318      location, without prior written approval of the commission.
             1319          (6) (a) A manufacturing licensee may not sell, transfer, assign, exchange, barter, give,
             1320      or attempt in any way to dispose of the license to another person, whether for monetary gain or
             1321      not.
             1322          (b) A manufacturing license has no monetary value for any type of disposition.
             1323          (7) A manufacturing licensee may not advertise its product in violation of this title or
             1324      any other federal or state law, except that nothing in this title prohibits the advertising or
             1325      solicitation of an order for industrial alcohol from a holder of a special use permit.
             1326          (8) A manufacturing licensee shall from time to time, on request of the department,
             1327      furnish for analytical purposes a sample of the alcoholic product that the manufacturing
             1328      licensee has:
             1329          (a) for sale; or


             1330          (b) in the course of manufacture for sale in this state.
             1331          (9) The commission may prescribe by policy or rule, consistent with this title, the
             1332      general operational requirements of a manufacturing licensee relating to:
             1333          (a) physical facilities;
             1334          (b) conditions of storage, sale, or manufacture of an alcoholic product;
             1335          (c) storage and sales quantity limitations; and
             1336          (d) other matters considered appropriate by the commission.
             1337          Section 14. Section 32B-11-503 is amended to read:
             1338           32B-11-503. Specific authority and operational requirements for brewery
             1339      manufacturing license.
             1340          (1) A brewery manufacturing license allows a brewery manufacturing licensee to:
             1341          (a) store, manufacture, brew, transport, or export beer, heavy beer, and flavored malt
             1342      beverages;
             1343          (b) sell heavy beer and a flavored malt beverage to:
             1344          (i) the department;
             1345          (ii) a military installation; or
             1346          (iii) an out-of-state customer;
             1347          (c) sell heavy beer to a beer wholesaler licensee;
             1348          [(c)] (d) sell beer to a beer wholesaler licensee;
             1349          [(d)] (e) in the case of a small brewer, in accordance with Subsection (5), sell beer
             1350      manufactured by the small brewer to:
             1351          (i) a retail licensee;
             1352          (ii) an off-premise beer retailer; or
             1353          (iii) an event permittee; and
             1354          [(e)] (f) warehouse on its premises an alcoholic product that the brewery manufacturing
             1355      licensee manufactures or purchases for manufacturing purposes.
             1356          (2) A brewery manufacturing licensee may not sell the following to a person within the
             1357      state except the department or a military installation:
             1358          (a) heavy beer, except heavy beer sold to a beer wholesaler licensee; or
             1359          (b) a flavored malt beverage.
             1360          (3) If considered necessary, the commission or department may require:


             1361          (a) the alteration of the plant, equipment, or licensed premises;
             1362          (b) the alteration or removal of any unsuitable alcoholic product-making equipment or
             1363      material;
             1364          (c) a brewery manufacturing licensee to clean, disinfect, ventilate, or otherwise
             1365      improve the sanitary and working conditions of the plant, licensed premises, and equipment; or
             1366          (d) that a record pertaining to the materials and ingredients used in the manufacture of
             1367      an alcoholic product be available to the commission or department upon request.
             1368          (4) A brewery manufacturing licensee may not permit any beer, heavy beer, or flavored
             1369      malt beverage to be consumed on the licensed premises, except under the circumstances
             1370      described in this Subsection (4).
             1371          (a) A brewery manufacturing licensee may allow its off-duty staff to consume beer,
             1372      heavy beer, or a flavored malt beverage on its premises without charge.
             1373          (b) A brewery manufacturing licensee may allow a person who can lawfully purchase
             1374      the following for wholesale or retail distribution to consume a bona fide sample of the brewery
             1375      manufacturing licensee's product on the licensed premises:
             1376          (i) beer;
             1377          (ii) heavy beer; or
             1378          (iii) a flavored malt beverage.
             1379          (c) (i) A brewery manufacturing licensee may operate on its licensed premises a retail
             1380      facility allowing consumption on premises of beer in a bottle or on draft if food is also
             1381      available.
             1382          (ii) A retail facility located on the licensed premises of a brewery manufacturing
             1383      licensee shall be operated or supervised by the brewery manufacturing licensee.
             1384          (iii) In operating a retail facility under this Subsection (4)(c), a brewery manufacturing
             1385      licensee shall comply with the requirements of Chapter 7, Part 2, Off-premise Beer Retailer
             1386      Local Authority.
             1387          (5) (a) A small brewer shall own, lease, or maintain and control a warehouse facility
             1388      located in this state for the storage of beer to be sold to a person described in Subsection
             1389      (1)[(d)](e) if the small brewer:
             1390          (i) (A) (I) is located in this state; and
             1391          (II) holds a brewery manufacturing license; or


             1392          (B) (I) is located outside this state; and
             1393          (II) holds a certificate of approval to sell beer in this state; and
             1394          (ii) sells beer manufactured by the small brewer directly to a person described in
             1395      Subsection (1)[(d)](e).
             1396          (b) A small brewer may not sell beer to a person described in Subsection (1)[(d)](e)
             1397      unless the beer:
             1398          (i) is manufactured by the small brewer; and
             1399          (ii) is first placed in the small brewer's warehouse facility in this state.
             1400          (c) (i) A small brewer warehouse shall make and maintain complete beer importation,
             1401      inventory, tax, distribution, sales records, and other records as the department and State Tax
             1402      Commission may require.
             1403          (ii) The records described in Subsection (5)(c)(i) are subject to inspection by:
             1404          (A) the department; and
             1405          (B) the State Tax Commission.
             1406          (iii) Section 32B-1-205 applies to a record required to be made or maintained in
             1407      accordance with this Subsection (5), except that the provision is considered to include an action
             1408      described in Section 32B-1-205 made for the purpose of deceiving the State Tax Commission,
             1409      or an official or employee of the State Tax Commission.
             1410          (6) Subject to Subsection (7):
             1411          (a) A brewery manufacturing licensee may not sell beer or heavy beer in this state
             1412      except under a written agreement with a beer wholesaler licensee in this state or, for purposes
             1413      of heavy beer, to the department or a military installation.
             1414          (b) An agreement described in Subsection (6)(a) shall:
             1415          (i) create a restricted exclusive sales territory that is mutually agreed upon by the
             1416      persons entering into the agreement;
             1417          (ii) designate the one or more brands that may be distributed in the sales territory; and
             1418          (iii) set forth the exact geographical area of the sales territory.
             1419          (c) A brewery manufacturing licensee may have more than one agreement described in
             1420      this Subsection (6) if each brand of the brewery manufacturing licensee is covered by one
             1421      exclusive sales territory.
             1422          (d) A brewery manufacturing licensee may not enter into an agreement with more than


             1423      one beer wholesaler licensee to distribute the same brand of beer or heavy beer in the same
             1424      sales territory or any portion of the sales territory.
             1425          (7) A small brewer is not subject to the requirements of Subsection (6).
             1426          Section 15. Section 32B-11-608 is amended to read:
             1427           32B-11-608. Operational requirements for local industry representative license.
             1428          (1) (a) A local industry representative licensee, staff of the local industry representative
             1429      licensee, or staff of a manufacturer, supplier, or importer who is conducting business in the
             1430      state, shall comply with this title and rules of the commission.
             1431          (b) If a person knowingly violates Subsection (1)(a):
             1432          (i) the violation may result in disciplinary action in accordance with Chapter 3,
             1433      Disciplinary Actions and Enforcement Act, against:
             1434          (A) a local industry representative licensee;
             1435          (B) individual staff of a local industry representative licensee; or
             1436          (C) both a local industry representative licensee and staff of the local industry
             1437      representative licensee; and
             1438          (ii) if the conditions of Subsection (1)(c) are met, the commission may order:
             1439          (A) the removal of the manufacturer's, supplier's, or importer's products from the
             1440      department's sales list; and
             1441          (B) a suspension of the department's purchase of those products for a period
             1442      determined by the commission.
             1443          (c) Subsection (1)(b)(ii) applies if the manufacturer, supplier, or importer:
             1444          (i) directly commits the violation; or
             1445          (ii) solicits, requests, commands, encourages, or intentionally aides another to engage
             1446      in the violation.
             1447          (2) A local industry representative licensee shall display its license in the local industry
             1448      representative licensee's principal place of business.
             1449          (3) (a) A local industry representative licensee shall maintain on file with the
             1450      department a current accounts list of the names and addresses of the manufacturers, suppliers,
             1451      and importers the local industry representative licensee represents.
             1452          (b) A local industry representative licensee shall notify the department in writing of a
             1453      change to its accounts list within 14 days from the date the local industry representative


             1454      licensee:
             1455          (i) acquires the account of a manufacturer, supplier, or importer; or
             1456          (ii) loses the account of a manufacturer, supplier, or importer.
             1457          (4) (a) A local industry representative licensee shall make and maintain the records the
             1458      department requires for at least three years.
             1459          (b) Section 32B-1-205 applies to a record required to be made or maintained in
             1460      accordance with this Subsection (4).
             1461          (5) Staff of a local industry representative licensee may not be:
             1462          (a) a retail licensee that sells, offers for sale, or furnishes liquor;
             1463          (b) staff of a retail licensee that sells, offers for sale, or furnishes liquor; or
             1464          (c) a minor.
             1465          (6) (a) A local representative licensee may not sell, transfer, assign, exchange, barter,
             1466      give, or attempt in any way to dispose of the license to another person, whether for monetary
             1467      gain or not.
             1468          (b) A local industry representative license has no monetary value for any type of
             1469      disposition.
             1470          (7) A local industry representative licensee, staff of the local industry representative
             1471      licensee, or staff of a manufacturer, supplier, or importer who is conducting business in the
             1472      state:
             1473          (a) only to the extent authorized by Chapter 4, Criminal Offenses and Procedure Act,
             1474      may:
             1475          (i) assist the department in:
             1476          (A) ordering, shipping, and delivering merchandise;
             1477          (B) providing new product notification;
             1478          (C) obtaining listing and delisting information;
             1479          (D) receiving price quotations;
             1480          (E) providing product sales analysis;
             1481          (F) conducting shelf management; and
             1482          (G) conducting educational seminars; and
             1483          (ii) to acquire new listings:
             1484          (A) solicit orders from the department; and


             1485          (B) submit to the department price lists and samples of the products of the
             1486      manufacturer, supplier, or importer;
             1487          (b) may not sell liquor within the state except to:
             1488          (i) the department; [and]
             1489          (ii) a military installation; and
             1490          (iii) a beer wholesaler licensee, in the case of heavy beer;
             1491          (c) may not ship or transport, or cause to be shipped or transported, liquor into this
             1492      state or from one place to another within this state;
             1493          (d) may not sell or furnish any liquor to any person within this state other than to:
             1494          (i) the department; [or]
             1495          (ii) a military installation; or
             1496          (iii) a beer wholesaler licensee, in the case of heavy beer;
             1497          (e) except as otherwise provided, may not advertise a product the local industry
             1498      representative licensee represents in violation of this title or any other federal or state law;
             1499          (f) shall comply with the trade practices provided in Chapter 4, Part 7, Trade Practices
             1500      Act; and
             1501          (g) may only provide a sample of a product of the manufacturer, supplier, or importer
             1502      for tasting and sampling purposes as provided in Section 32B-4-705 by the department.
             1503          (8) A local industry representative licensee may, to become educated as to the quality
             1504      and characteristics of a liquor that the licensee represents, taste and analyze an industry
             1505      representative sample under the conditions listed in this Subsection (8).
             1506          (a) A local industry representative licensee may not receive more than two industry
             1507      representative samples of a particular type, vintage, and production lot of a particular branded
             1508      product within a consecutive 120-day period.
             1509          (b) (i) An industry representative sample of liquor may not exceed one liter.
             1510          (ii) Notwithstanding Subsection (8)(b)(i), an industry representative sample of the
             1511      following may not exceed 1.5 liters unless that exact product is only commercially packaged in
             1512      a larger size, not to exceed 5 liters:
             1513          (A) wine;
             1514          (B) heavy beer; or
             1515          (C) a flavored malt beverage.


             1516          (c) An industry representative sample may only be of a product not presently listed on
             1517      the department's sales list.
             1518          (d) (i) An industry representative sample shall be shipped:
             1519          (A) prepaid by the manufacturer, supplier, or importer;
             1520          (B) by common carrier and not via United States mail; and
             1521          (C) directly to the department's central administrative warehouse office.
             1522          (ii) An industry representative sample may not be shipped to any other location within
             1523      the state.
             1524          (e) An industry representative sample shall be accompanied by a letter from the
             1525      manufacturer, supplier, or importer:
             1526          (i) clearly identifying the product as an "industry representative sample"; and
             1527          (ii) clearly stating:
             1528          (A) the FOB case price of the product; and
             1529          (B) the name of the local industry representative for whom it is intended.
             1530          (f) The department shall assess a reasonable handling, labeling, and storage fee for
             1531      each industry representative sample received.
             1532          (g) The department shall affix to a container a label clearly identifying the product as
             1533      an "industry representative sample."
             1534          (h) The department shall:
             1535          (i) account for and record each industry representative sample received;
             1536          (ii) account for the industry representative sample's disposition; and
             1537          (iii) maintain a record of the industry representative sample and its disposition for a
             1538      two-year period.
             1539          (i) An industry representative sample may not leave the premises of the department's
             1540      central administrative warehouse office.
             1541          (j) A local industry representative licensee's and a local industry representative
             1542      licensee's staff may, at regularly scheduled days and times established by the department, taste
             1543      and analyze one or more industry representative samples on the premises of the department's
             1544      central administrative warehouse office.
             1545          (k) The department shall destroy the unused contents of an opened product remaining
             1546      after a product is sampled under controlled and audited conditions established by the


             1547      department.
             1548          (l) An industry representative sample that is not tasted within 30 days of receipt by the
             1549      department shall be disposed of at the discretion of the department in one of the following
             1550      ways:
             1551          (i) the contents destroyed under controlled and audited conditions established by the
             1552      department; or
             1553          (ii) added to the inventory of the department for sale to the public.
             1554          Section 16. Section 32B-12-201 is amended to read:
             1555           32B-12-201. Commission's power to issue liquor warehousing license.
             1556          (1) (a) [Before] Except as provided in Chapter 13, Beer Wholesaling License Act,
             1557      before a person may warehouse, distribute, or transport liquor for resale to a wholesale or retail
             1558      customer, the person shall first obtain a liquor warehousing license issued by the commission
             1559      in accordance with this chapter.
             1560          (b) A separate liquor warehousing license is required for each warehousing facility.
             1561          (c) A violation of this Subsection (1) is a class B misdemeanor.
             1562          (2) The commission may issue a liquor warehousing license in accordance with this
             1563      chapter for the warehousing, distribution, and transportation of liquor.
             1564          Section 17. Section 32B-13-201 is amended to read:
             1565           32B-13-201. Commission's power to issue beer wholesaling license.
             1566          (1) (a) Before a person may purchase, store, sell, offer for sale, distribute, or import
             1567      beer or heavy beer to a person who sells at retail or acts in any way as a beer wholesaler, the
             1568      person shall first obtain a beer wholesaling license issued by the commission in accordance
             1569      with this chapter.
             1570          (b) A violation of Subsection (1)(a) is a class A misdemeanor.
             1571          (2) (a) The commission may issue a beer wholesaling license for the purchase, storage,
             1572      sale, distribution, transportation, and import of beer or heavy beer.
             1573          (b) A beer wholesaling license entitles the beer wholesaler licensee to:
             1574          (i) purchase and import beer into the state;
             1575          (ii) store beer in an approved warehouse; [and]
             1576          (iii) sell and distribute beer directly to:
             1577          (A) a beer retailer; or


             1578          (B) an event permittee[.]; and
             1579          (iv) (A) purchase and import heavy beer into the state;
             1580          (B) store heavy beer in an approved warehouse; and
             1581          (C) sell and distribute heavy beer directly to a retail licensee authorized to sell, offer
             1582      for sale, or furnish heavy beer, a single event permittee, the department, a military installation,
             1583      or a public service permittee.
             1584          (3) Nothing in this section precludes a small brewer from selling beer the small brewer
             1585      manufactures directly to:
             1586          (a) a retail licensee;
             1587          (b) an off-premise beer retailer; or
             1588          (c) an event permittee.
             1589          Section 18. Section 32B-13-202 is amended to read:
             1590           32B-13-202. Application requirements for beer wholesaling license.
             1591          To obtain a beer wholesaling license, a person shall submit to the department:
             1592          (1) a written application in a form prescribed by the department;
             1593          (2) a nonrefundable $300 application fee;
             1594          (3) an initial license fee of $2,300 that is refundable if a beer wholesaling license is not
             1595      issued;
             1596          (4) written consent of the local authority;
             1597          (5) a copy of the person's current business license;
             1598          (6) a bond as specified in Section 32B-13-206 ;
             1599          (7) (a) a statement of the brands of beer the person is authorized to sell and distribute;
             1600          (b) a statement of the brands of heavy beer the person is authorized to sell and
             1601      distribute;
             1602          (8) (a) a statement of the one or more sales territories in which the person is authorized
             1603      to sell and distribute beer under an agreement required by Section 32B-11-201 or 32B-11-503 ;
             1604      and
             1605          (b) a statement of the one or more sales territories in which the person is authorized to
             1606      sell and distribute heavy beer under an agreement required by Section 32B-11-201 or
             1607      32B-11-503 ;
             1608          (9) evidence that the person is carrying public liability insurance in an amount and


             1609      form satisfactory to the department;
             1610          (10) a signed consent form stating that the beer wholesaling licensee will permit any
             1611      authorized representative of the commission, department, or any law enforcement officer to
             1612      have unrestricted right to enter the licensed premises;
             1613          (11) if the person is an entity, proper verification evidencing that a person who signs
             1614      the application is authorized to sign on behalf of the entity; and
             1615          (12) any other information that the commission or department may require.
             1616          Section 19. Section 32B-13-301 is amended to read:
             1617           32B-13-301. General operational requirements for beer wholesaling license.
             1618          (1) (a) A beer wholesaler licensee and staff of the beer wholesaler licensee shall
             1619      comply with this title and the rules of the commission.
             1620          (b) Failure to comply as provided in Subsection (1)(a) may result in disciplinary action
             1621      in accordance with Chapter 3, Disciplinary Actions and Enforcement Act, against:
             1622          (i) a beer wholesaler licensee;
             1623          (ii) individual staff of a beer wholesaler licensee; or
             1624          (iii) both a beer wholesaler licensee and staff of the beer wholesaler licensee.
             1625          (2) (a) A beer wholesaler licensee shall make and maintain the records required by the
             1626      department.
             1627          (b) Section 32B-1-205 applies to a record required to be made or maintained in
             1628      accordance with this Subsection (2).
             1629          (3) A beer wholesaler licensee may not employ a minor to handle an alcoholic product.
             1630          (4) A beer wholesaler licensee may not sell, transfer, assign, exchange, barter, give, or
             1631      attempt in any way to dispose of the beer wholesaling license to a person, whether for monetary
             1632      gain or not, unless it is done:
             1633          (a) in accordance with the commission rules; and
             1634          (b) after written consent is given by the commission.
             1635          (5) A beer wholesaler licensee may not wholesale a beer or heavy beer manufactured
             1636      within the state by a brewer who is not licensed by the commission as a brewery manufacturing
             1637      licensee.
             1638          (6) A beer wholesaler licensee may not wholesale a beer or heavy beer manufactured
             1639      out of state by a brewer who has not obtained a certificate of approval from the department.


             1640          (7) (a) A beer wholesaler licensee may not sell or distribute beer to a person within the
             1641      state except to:
             1642          (i) a retail licensee;
             1643          (ii) an off-premise beer retailer; or
             1644          (iii) an event permittee.
             1645          (b) A beer wholesaler licensee may not sell or distribute heavy beer to a person within
             1646      the state except to:
             1647          (i) a retail licensee authorized to sell, offer for sale, or furnish heavy beer;
             1648          (ii) a single event permittee;
             1649          (iii) the department;
             1650          (iv) a military installation; or
             1651          (v) a public service permittee.
             1652          [(b)] (c) A violation of this Subsection (7) is a class A misdemeanor.
             1653          (8) (a) A beer wholesaler licensee may not sell or distribute a beer or heavy beer to a
             1654      person who sells the beer or heavy beer at retail outside of a sales territory designated on its
             1655      application and authorized by an agreement described in Subsection 32B-13-202 (8), except
             1656      that if a beer wholesaler licensee is temporarily unable to supply a person within the beer
             1657      wholesaler licensee's authorized sales territory, the department may grant temporary authority
             1658      to another beer wholesaler licensee who distributes the same brand in another sales territory to
             1659      supply:
             1660          (i) a retail licensee; or
             1661          (ii) an off-premise beer retailer.
             1662          (b) A violation of this Subsection (8) is a class B misdemeanor.
             1663          (9) (a) A beer wholesaler licensee shall own, lease, or otherwise control and maintain a
             1664      warehouse facility located in this state for the receipt, storage, and further distribution of beer
             1665      or heavy beer sold by the beer wholesaler licensee to a person within the state.
             1666          (b) A beer wholesaler licensee may not sell beer or heavy beer to a person in this state,
             1667      other than the department, unless the beer or heavy beer is first:
             1668          (i) physically removed from the vehicle used to transport the beer or heavy beer from
             1669      the supplier to the beer wholesaler licensee; and
             1670          (ii) delivered into the actual possession and control of the beer wholesaler licensee in


             1671      its warehouse or other facility.
             1672          (10) A beer wholesaler licensee may not sell or distribute an alcoholic product that has
             1673      not had its label and packaging approved by the department in accordance with Chapter 1, Part
             1674      6, Malted Beverage Act.
             1675          (11) The commission may prescribe by policy or rule, consistent with this title, the
             1676      general operational requirements of a beer [wholesaling] wholesaler licensee relating to:
             1677          (a) physical facilities; and
             1678          (b) the conditions of importation, purchase, storage, sale, offering for sale, distribution,
             1679      or transportation of beer or heavy beer within the state.
             1680          (12) A beer wholesaler licensee may sell or distribute only heavy beer approved by the
             1681      department in accordance with Section 32B-2-204 .
             1682          Section 20. Section 32B-14-101 is amended to read:
             1683           32B-14-101. Title -- Legislative intent.
             1684          (1) This chapter is known as the "Utah Beer Industry Distribution Act."
             1685          (2) (a) It is the policy of the Legislature to regulate and control the importation, sale,
             1686      and distribution of beer and heavy beer within the state in the exercise of its powers under the
             1687      Twenty-first Amendment to the Constitution of the United States and pursuant to the Utah
             1688      Constitution.
             1689          (b) In furtherance of the policy described in Subsection (2)(a), this chapter is enacted
             1690      to:
             1691          (i) promote good faith and fair dealing in the business relationships between suppliers,
             1692      wholesalers, and retailers of beer and heavy beer; and
             1693          (ii) provide for the establishment and maintenance of an orderly system for the
             1694      distribution of beer or heavy beer in accordance with the laws of the state regulating the sale
             1695      and distribution of beer or heavy beer to the public.
             1696          Section 21. Section 32B-14-102 is amended to read:
             1697           32B-14-102. Definitions.
             1698          As used in this chapter:
             1699          (1) "Affected party" means a supplier or wholesaler who is a party to a distributorship
             1700      agreement that a terminating party seeks to terminate or not renew.
             1701          (2) (a) "Distributorship agreement" means a written agreement between a supplier and


             1702      a wholesaler pursuant to which the wholesaler has the right to purchase, resell, and distribute in
             1703      a designated geographical area any brand of beer or heavy beer manufactured, imported, or
             1704      distributed by the supplier.
             1705          (b) For purposes of this chapter, a separate agreement between a supplier and a
             1706      wholesaler is considered to be part of a distributorship agreement if it relates to:
             1707          (i) the relationship between the supplier and the wholesaler; or
             1708          (ii) the duties of either the supplier or the wholesaler under a distributorship agreement.
             1709          (3) "Good cause" means the material failure by a supplier or a wholesaler to comply
             1710      with an essential, reasonable, and lawful requirement imposed by a distributorship agreement if
             1711      the failure occurs after the supplier or wholesaler acting in good faith provides notice of
             1712      deficiency and an opportunity to correct in accordance with Part 2, Termination.
             1713          (4) "Good faith" is as defined in Subsection 70A-1a-201 (2)(t).
             1714          (5) "Retailer" means a beer retailer or, for purposes of heavy beer, a retail licensee
             1715      authorized to sell, offer for sale, or furnish heavy beer.
             1716          (6) "Sales territory" means the geographic area of distribution and sale responsibility
             1717      designated by a distributorship agreement.
             1718          (7) "Supplier," notwithstanding Section 32B-1-102 , means a brewer or other person
             1719      who sells beer or heavy beer to a wholesaler for resale in this state.
             1720          (8) "Terminating party" means a supplier or wholesaler who:
             1721          (a) is a party to a distributorship agreement; and
             1722          (b) seeks to terminate or not renew the distributorship agreement.
             1723          Section 22. Section 32B-14-201 is amended to read:
             1724           32B-14-201. Termination of distributorship agreements.
             1725          (1) Except as provided in Subsection (2) or (3), a supplier or wholesaler may not:
             1726          (a) terminate a distributorship agreement; or
             1727          (b) fail to renew a distributorship agreement.
             1728          (2) A supplier or wholesaler may take an action prohibited by Subsection (1) if:
             1729          (a) the supplier or wholesaler has good cause for the action; and
             1730          (b) if notification is required by Section 32B-14-202 :
             1731          (i) the terminating party provides the affected party prior notification in accordance
             1732      with Section 32B-14-202 ; and


             1733          (ii) the affected party has not eliminated the reasons specified in the notification as the
             1734      reasons for the action within 90 days after the date the notification is mailed in accordance with
             1735      Section 32B-14-202 .
             1736          (3) A supplier may take an action prohibited by Subsection (1) if:
             1737          (a) the supplier gives the wholesaler 30 days written notice before termination or
             1738      nonrenewal;
             1739          (b) the supplier discontinues production or discontinues distribution throughout the
             1740      state of all brands of beer or heavy beer sold by the supplier to the wholesaler; and
             1741          (c) the termination or nonrenewal does not violate the distributorship agreement.
             1742          Section 23. Section 32B-14-302 is amended to read:
             1743           32B-14-302. Prohibited conduct of supplier.
             1744          (1) A supplier may not:
             1745          (a) induce or coerce, or attempt to induce or coerce, a wholesaler to engage in an illegal
             1746      act or course of conduct;
             1747          (b) impose a requirement that is discriminatory by its terms or in the methods of
             1748      enforcement as compared to requirements imposed by the supplier on similarly situated
             1749      wholesalers;
             1750          (c) prohibit a wholesaler from selling a product of another supplier;
             1751          (d) fix or maintain the price at which a wholesaler may resell beer or heavy beer;
             1752          (e) fail to execute with each wholesaler of its brands a written distributorship
             1753      agreement;
             1754          (f) require a wholesaler to accept delivery of beer, heavy beer, or any other item that is
             1755      not voluntarily ordered by the wholesaler;
             1756          (g) restrict or inhibit, directly or indirectly, the right of a wholesaler to participate in an
             1757      organization representing interests of wholesalers for a lawful purpose;
             1758          (h) require a wholesaler to participate in or contribute to a local, regional, or national
             1759      advertising fund or other promotional activity that:
             1760          (i) is not used for an advertising or promotional activity in the wholesaler's sales
             1761      territory; or
             1762          (ii) would require a contribution by the wholesaler in excess of the amounts specified
             1763      in the distributorship agreement;


             1764          (i) retaliate against a wholesaler that files a complaint with the department or the
             1765      applicable federal agency regarding an alleged violation by the supplier of a state or federal
             1766      statute or administrative rule;
             1767          (j) require without good cause a change in the manager of a wholesaler who has
             1768      previously been approved by the supplier;
             1769          (k) if a wholesaler changes its approved manager, prohibit the change unless the new
             1770      manager fails to meet the reasonable standards for similarly situated wholesalers of the supplier
             1771      as stated in the distributorship agreement; or
             1772          (l) refuse to deliver a beer product or heavy beer product covered by a distributorship
             1773      agreement to the wholesaler:
             1774          (i) in a reasonable quantity; and
             1775          (ii) within a reasonable time after receipt of the wholesaler's order.
             1776          (2) Notwithstanding Subsection (1)(l), the supplier may refuse to deliver a beer product
             1777      or heavy beer product if the refusal is due to:
             1778          (a) the wholesaler's failure to pay the supplier pursuant to the distributorship
             1779      agreement;
             1780          (b) an unforeseeable event beyond the supplier's control;
             1781          (c) a work stoppage or delay due to a strike or labor problem;
             1782          (d) a bona fide shortage of materials; or
             1783          (e) a freight embargo.
             1784          Section 24. Section 32B-14-303 is amended to read:
             1785           32B-14-303. Prohibited conduct of wholesaler.
             1786          (1) A wholesaler may not:
             1787          (a) induce or coerce, or attempt to induce or coerce, a retailer to engage in an illegal act
             1788      or course of conduct;
             1789          (b) impose a requirement that is discriminatory by its terms or in the methods of
             1790      enforcement as compared to requirements imposed by the wholesaler on similarly situated
             1791      retailers;
             1792          (c) prohibit a retailer from selling a product of another wholesaler;
             1793          (d) fix or maintain the price at which a retailer may resell beer or heavy beer;
             1794          (e) require a retailer to accept delivery of beer, heavy beer, or any other item that is not


             1795      voluntarily ordered by the retailer;
             1796          (f) restrict or inhibit, directly or indirectly, the right of a retailer to participate in an
             1797      organization representing interests of retailers for a lawful purpose;
             1798          (g) require a retailer to participate in or contribute to a local, regional, or national
             1799      advertising fund or other promotional activity;
             1800          (h) retaliate against a retailer that files a complaint with the department or the
             1801      applicable federal agency regarding an alleged violation by the wholesaler of a state or federal
             1802      statute or administrative rule; and
             1803          (i) refuse to deliver a beer product or heavy beer product carried by the wholesaler to a
             1804      properly licensed retailer who resides within the wholesaler's sales territory:
             1805          (i) in a reasonable quantity; and
             1806          (ii) within a reasonable time after receipt of the retailer's order.
             1807          (2) Notwithstanding Subsection (1)(i), the wholesaler may refuse to deliver a beer
             1808      product or heavy beer product if the refusal is due to:
             1809          (a) the retailer's failure to pay the wholesaler pursuant to Subsection 32B-4-704 (6);
             1810          (b) an unforeseeable event beyond the wholesaler's control;
             1811          (c) a work stoppage or delay due to a strike or labor problem;
             1812          (d) a bona fide shortage of materials; or
             1813          (e) a freight embargo.
             1813a      H. Section 29. Effective date.
             1813b      This bill takes effect on July 1, 2013. .H




Legislative Review Note
    as of 2-19-13 5:32 PM


Office of Legislative Research and General Counsel


[Bill Documents][Bills Directory]