Representative Steve Eliason proposes the following substitute bill:





Chief Sponsor: Steve Eliason

Senate Sponsor: Curtis S. Bramble


9     General Description:
10          This bill creates the Operations Investigation Program for the Department of Alcoholic
11     Beverage Control.
12     Highlighted Provisions:
13          This bill:
14          ▸     defines terms;
15          ▸     creates and provides funding for the Operations Investigation Program to covertly
16     observe and evaluate customer contacts with the Department of Alcoholic Beverage
17     Control;
18          ▸     establishes program responsibilities;
19          ▸     establishes reporting requirements; and
20          ▸     designates certain records as private records.
21     Money Appropriated in this Bill:
22          None
23     Other Special Clauses:
24          This bill provides a special effective date.
25     Utah Code Sections Affected:

26     AMENDS:
27          32B-2-301, as last amended by Laws of Utah 2013, Chapter 349
28     ENACTS:
29          63J-4-701, Utah Code Annotated 1953
30          63J-4-702, Utah Code Annotated 1953
31          63J-4-703, Utah Code Annotated 1953
32          63J-4-704, Utah Code Annotated 1953
33          63J-4-705, Utah Code Annotated 1953
34          63J-4-706, Utah Code Annotated 1953

36     Be it enacted by the Legislature of the state of Utah:
37          Section 1. Section 32B-2-301 is amended to read:
38          32B-2-301. State property -- Liquor Control Fund -- Markup Holding Fund.
39          (1) The following are property of the state:
40          (a) the money received in the administration of this title, except as otherwise provided;
41     and
42          (b) property acquired, administered, possessed, or received by the department.
43          (2) (a) There is created an enterprise fund known as the "Liquor Control Fund."
44          (b) Except as provided in Sections 32B-3-205 and 32B-2-304, money received in the
45     administration of this title shall be transferred to the Liquor Control Fund.
46          (3) (a) There is created an enterprise fund known as the "Markup Holding Fund."
47          (b) In accordance with Section 32B-2-304, the State Tax Commission shall deposit
48     revenue remitted to the State Tax Commission from the markup imposed under Section
49     32B-2-304 into the Markup Holding Fund.
50          (c) Money deposited into the Markup Holding Fund may be expended:
51          (i) to the extent appropriated by the Legislature; and
52          (ii) to fund the deposits required by Subsection 32B-2-304(4) and Subsection
53     32B-2-305(4).
54          (4) The department may draw from the Liquor Control Fund only to the extent
55     appropriated by the Legislature or provided for by statute, except that the department may draw
56     by warrant without an appropriation from the Liquor Control Fund for an expenditure that is

57     directly incurred by the department:
58          (a) to purchase an alcoholic product;
59          (b) to transport an alcoholic product from the supplier to a warehouse of the
60     department; and
61          (c) for variances related to an alcoholic product.
62          (5) The department shall transfer annually from the Liquor Control Fund and the State
63     Tax Commission shall transfer annually from the Markup Holding Fund to the General Fund a
64     sum equal to the amount of net profit earned from the sale of liquor since the preceding transfer
65     of money under this Subsection (5). The transfers shall be calculated by no later than
66     September 1 and made by no later than September 30 after a fiscal year. The Division of
67     Finance may make year-end closing entries in the Liquor Control Fund and the Markup
68     Holding Fund in order to comply with Subsection 51-5-6(2).
69          (6) (a) By the end of each day, the department shall:
70          (i) make a deposit to a qualified depository, as defined in Section 51-7-3; and
71          (ii) report the deposit to the state treasurer.
72          (b) A commissioner or department employee is not personally liable for a loss caused
73     by the default or failure of a qualified depository.
74          (c) Money deposited in a qualified depository is entitled to the same priority of
75     payment as other public funds of the state.
76          (7) If the cash balance of the Liquor Control Fund is not adequate to cover a warrant
77     drawn against the Liquor Control Fund by the department, the cash resources of the General
78     Fund may be used to the extent necessary. At no time may the fund equity of the Liquor
79     Control Fund fall below zero.
80          (8) For the fiscal year beginning July 1, 2017, only, the department shall use the first
81     $176,000 in net profits that exceed the amount transferred from the Liquor Control Fund to the
82     General Fund for the previous fiscal year to pay the costs of running the Operations
83     Investigation Program created in Section 63J-4-703.
84          Section 2. Section 63J-4-701 is enacted to read:
Part 7. Operations Investigation Program

86          63J-4-701. Title.
87          This part is known as the "Operations Investigation Program."

88          Section 3. Section 63J-4-702 is enacted to read:
89          63J-4-702. Definitions.
90          As used in this section:
91          (1) "Covert observation" or "covertly observe" means an act taken by the program to
92     directly observe and evaluate the service offered by a subject store without the knowledge of
93     the subject store.
94          (2) "Interaction" means an individual act under the program to covertly observe a
95     subject store in a manner authorized by this part.
96          (3) "Program" means the Citizens' Customer Satisfaction Program created under
97     Section 63J-4-703.
98          (4) "Subject department" means the Department of Alcoholic Beverage Control.
99          (5) "Subject store" means a store created under Title 32B, Chapter 2, Part 5, State
100     Store, by the Alcoholic Beverage Control Commission.
101          Section 4. Section 63J-4-703 is enacted to read:
102          63J-4-703. Creation.
103          (1) There is created within the office the Operations Investigation Program.
104          (2) The executive director may procure the services of a nonpublic entity in accordance
105     with Title 63G, Chapter 6a, Utah Procurement Code, to administer the program.
106          Section 5. Section 63J-4-704 is enacted to read:
107          63J-4-704. Program duties and responsibilities -- Data collection.
108          (1) The executive director shall ensure that the program, through covert observation,
109     evaluates each store's:
110          (a) quality of customer service;
111          (b) cleanliness;
112          (c) customer satisfaction;
113          (d) product availability; and
114          (e) compliance with laws controlling the sale of alcoholic beverages.
115          (2) Before January 1 of each year, the executive director shall consult with the director
116     of the subject department to:
117          (a) identify categories, including those described in Subsection (1), that are subject to
118     the program's assessment;

119          (b) establish performance measures for the categories identified under Subsection
120     (2)(a) that the program will measure, including a scoring system by which the program will
121     evaluate each subject store's performance in each category; and
122          (c) establish goals for all subject stores' customer service, using the performance
123     measures established under Subsection (2)(b).
124          (3) Before January 1 of each year, the executive director shall create a plan, based upon
125     the performance measures established under Subsection (2)(b), by which the program will
126     covertly observe and evaluate each subject store's performance.
127          (4) The program shall:
128          (a) collect detailed data on each interaction conducted under the program, including the
129     name of each subject store employee who is contacted during the interaction; and
130          (b) score the subject store according to the scoring system for each performance
131     measure established under Subsection (2)(b).
132          (5) (a) The executive director:
133          (i) shall ensure that the program covertly observes the customer service offered by each
134     subject store through an in-person interaction at least once per month; and
135          (ii) may also authorize the program to covertly observe the customer service offered by
136     a subject store through an interaction conducted by telephone or through electronic
137     communication.
138          (b) The executive director may authorize the program to covertly record an interaction.
139          (c) The executive director may not authorize the program to purposely covertly observe
140     or record a direct interaction between a subject store and another person unless the person is
141     associated with the program or the department.
142          (6) The executive director may pay a stipend to a person that:
143          (a) performs an interaction for the program; and
144          (b) is not otherwise associated with the program or the office.
145          Section 6. Section 63J-4-705 is enacted to read:
146          63J-4-705. Reporting and tracking results -- Online database.
147          (1) The executive director shall prepare a detailed report each month that contains:
148          (a) the performance measures and goals established under Subsection 63J-4-704(2) for
149     all subject stores;

150          (b) for each subject store:
151          (i) a compilation, analysis, and interpretation of the data collected and scores recorded
152     under Subsection 63J-4-704(4);
153          (ii) an assessment of how the subject store's performance relates to the performance
154     measures and goals established under Subsection 63J-4-704(2); and
155          (iii) a description of each interaction, including:
156          (A) the name of each of the subject store's employees who were contacted during the
157     interaction; and
158          (B) the scores recorded under Subsection 63J-4-704(4)(b) for the interaction;
159          (c) an explanation of any observed patterns of a subject store's or the subject
160     department's practices that do not appear to be in compliance with state law, rule, or policy or
161     with generally accepted customer service practices; and
162          (d) any recommended changes needed to bring a subject store or the subject department
163     into compliance with state law, rule, or policy or with generally accepted customer service
164     practices.
165          (2) The executive director shall, within 30 days after the day on which the executive
166     director prepares a report described in Subsection (1), send the report to the director of the
167     subject department.
168          (3) (a) The director of the subject department shall create a repository to store and track
169     the information that the director of the subject department receives under Subsection (2).
170          (b) Any record created under this part that identifies an employee of the subject
171     department or a subject store is a private record, for purposes of Title 63G, Chapter 2,
172     Government Records Access and Management Act, unless the record:
173          (i) relates to criminal conduct by the employee; or
174          (ii) is a record described in Subsection 63J-4-706(2)(c).
175          Section 7. Section 63J-4-706 is enacted to read:
176          63J-4-706. Subject department responsibilities -- Incentives.
177          (1) (a) Upon receipt of a report described in Subsection 63J-4-705(2), the director of
178     the subject department shall:
179          (i) identify each employee described in Subsection 63J-4-705(1)(b)(iii)(A); and
180          (ii) place a copy of the portions of the report that pertain to the employee in the

181     employee's personnel file.
182          (b) An employee may challenge the content of a report placed in the employee's
183     personnel file under Subsection (1)(a)(ii), or placement of the report in the employee's
184     personnel file, by following the grievance procedures described in Title 67, Chapter 19a,
185     Grievance Procedures.
186          (2) (a) The director of the subject department may establish a pecuniary incentive to
187     award to a subject store employee:
188          (i) who takes part in an interaction under the program; and
189          (ii) whose performance, as measured under the program, meets or exceeds the goals
190     established under Subsection 63J-4-704(2)(c) for the entity.
191          (b) If the director of the subject department establishes a pecuniary incentive under
192     Subsection (2)(a), the director of the subject department shall distribute, in writing, to each
193     employee eligible to receive the incentive:
194          (i) a description of the incentive; and
195          (ii) a description of requirements that an employee must meet to receive the incentive.
196          (c) When the director of the subject department awards a pecuniary incentive to a
197     subject store's employee, the director of the subject department shall distribute, in writing, to
198     each of the subject department's employees who is eligible for the incentive:
199          (i) the name of each employee who was awarded the incentive;
200          (ii) a description of how the employee described in Subsection (2)(c)(i) met the
201     requirements established under Subsection (2)(b)(ii); and
202          (iii) a description of the incentive the individual was awarded.
203          Section 8. Effective date.
204          This bill takes effect on July 1, 2017.