1     
ALCOHOL MODIFICATIONS

2     
2017 GENERAL SESSION

3     
STATE OF UTAH

4     
Chief Sponsor: Jerry W. Stevenson

5     
House Sponsor: Brad R. Wilson

6     

7     LONG TITLE
8     General Description:
9           This bill modifies provisions related to alcohol regulation.
10     Highlighted Provisions:
11          This bill:
12          ▸      defines terms;
13          ▸     reduces the permissible proximity of a restaurant licensee to a community location;
14          ▸     repeals the Alcoholic Beverage Control Commission's authority to grant a variance
15     to a proximity requirement;
16          ▸     addresses the effect of a previously approved variance to a proximity requirement;
17          ▸     provides that a licensee may continue to operate, regardless of whether a person
18     establishes a community location closer to the licensee than is otherwise
19     permissible; and
20          ▸     makes technical changes.
21     Money Appropriated in this Bill:
22          None
23     Other Special Clauses:
24          This bill provides a coordination clause.
25     Utah Code Sections Affected:
26     AMENDS:
27          32B-1-202, as last amended by Laws of Utah 2016, Chapter 176
28          32B-6-203, as last amended by Laws of Utah 2016, Chapter 82
29          32B-6-303, as last amended by Laws of Utah 2016, Chapter 82
30          32B-6-903, as enacted by Laws of Utah 2011, Chapter 334
31          32B-8a-302, as last amended by Laws of Utah 2016, Chapter 82
32     Utah Code Sections Affected by Coordination Clause:
33          32B-1-202, as last amended by Laws of Utah 2016, Chapter 176
34          32B-8a-302, as last amended by Laws of Utah 2016, Chapter 82
35     

36     Be it enacted by the Legislature of the state of Utah:
37          Section 1. Section 32B-1-202 is amended to read:
38          32B-1-202. Proximity to community location.
39          (1) [For purposes of] As used in this section[, "outlet" means]:
40          (a) (i) "Outlet" means:
41          [(a)] (A) a state store;
42          [(b)] (B) a package agency; or
43          [(c)] (C) a retail licensee[, except an airport lounge licensee].
44          (ii) "Outlet" does not include:
45          (A) an airport lounge licensee; or
46          (B) a restaurant.
47          (b) "Restaurant" means:
48          (i) a full-service restaurant licensee;
49          (ii) a limited-service restaurant licensee; or
50          (iii) a beer-only restaurant licensee.
51          [(2) Except as otherwise provided in this section, the premises of an outlet may not be
52     located:]
53          (2) (a) The commission may not issue a license for an outlet if, on the date the
54     commission takes final action to approve or deny the application, there is a community
55     location:
56          [(a)] (i) within 600 feet of [a community location] the proposed outlet , as measured
57     from the nearest entrance of the proposed outlet by following the shortest route of ordinary
58     pedestrian travel to the property boundary of the community location; or
59          [(b)] (ii) within 200 feet of [a community location] the proposed outlet , measured in a
60     straight line from the nearest entrance of the proposed outlet to the nearest property boundary
61     of the community location.
62          (b) The commission may not issue a license for a restaurant if, on the date the
63     commission takes final action to approve or deny the application, there is a community
64     location:
65          (i) within 300 feet of the proposed restaurant, as measured from the nearest entrance of
66     the proposed restaurant by following the shortest route of ordinary pedestrian travel to the
67     property boundary of the community location; or
68          (ii) within 200 feet of the proposed restaurant, measured in a straight line from the
69     nearest entrance of the proposed restaurant to the nearest property boundary of the community
70     location.
71          [(3) With respect to the location of an outlet, the commission may authorize a variance
72     to reduce the proximity requirement of Subsection (2) if:]
73          [(a) when the variance reduces the proximity requirement of Subsection (2)(b), the
74     community location at issue is:]
75          [(i) a public library; or]
76          [(ii) a public park;]
77          [(b) except with respect to a state store, the local authority gives its written consent to
78     the variance;]
79          [(c) the commission finds that alternative locations for locating that type of outlet in
80     the community are limited;]
81          [(d) a public hearing is held in the city, town, metro township, or county, and when
82     practical in the neighborhood concerned;]
83          [(e) after giving full consideration to the attending circumstances and the policies
84     stated in Subsections 32B-1-103(3) and (4), the commission determines that locating the outlet
85     in that location would not be detrimental to the public health, peace, safety, and welfare of the
86     community;]
87          [(f) (i) the community location governing authority gives its written consent to the
88     variance; or]
89          [(ii) if the community location governing authority does not give its written consent to
90     a variance, the commission finds the following for a state store, or if the outlet is a package
91     agency or retail licensee, the commission finds that the applicant establishes the following:]
92          [(A) there is substantial unmet public demand to consume an alcoholic product:]
93          [(I) within the geographic boundary of the local authority in which the outlet is to be
94     located; and]
95          [(II) for an outlet that is a retail licensee, in a public setting;]
96          [(B) there is no reasonably viable alternative for satisfying the substantial unmet
97     demand other than through locating that type of outlet in that location; and]
98          [(C) there is no reasonably viable alternative location within the geographic boundary
99     of the local authority in which the outlet is to be located for locating that type of outlet to
100     satisfy the unmet demand.]
101          [(4) With respect to the premises of a package agency or retail licensee that undergoes
102     a change of ownership, the commission may waive or vary the proximity requirements of
103     Subsection (2) in considering whether to issue the package agency or same type of retail license
104     to the new owner of the premises if:]
105          [(a) the premises previously received a variance reducing the proximity requirement of
106     Subsection (2)(a);]
107          [(b) the premises received a variance reducing the proximity requirement of Subsection
108     (2)(b) on or before May 4, 2008; or]
109          [(c) a variance from proximity requirements was otherwise allowed under this title.]
110          (3) For an outlet or a restaurant that holds a license on May 9, 2017, and operates under
111     a previously approved variance to one or more proximity requirements in effect before May 9,
112     2017, subject to the other provisions of this title, that outlet or restaurant, or another outlet or
113     restaurant with the same type of license as that outlet or restaurant, may operate under the
114     previously approved variance regardless of whether:
115          (a) the outlet or restaurant changes ownership;
116          (b) the property on which the outlet or restaurant is located changes ownership; or
117          (c) there is a lapse in the use of the property as an outlet or a restaurant with the same
118     type of license, unless during the lapse, the property is used for a different purpose.
119          (4) (a) If, after an outlet or a restaurant obtains a license under this title, a person
120     establishes a community location on a property that puts the outlet or restaurant in violation of
121     the proximity requirements in effect at the time the license is issued or a previously approved
122     variance described in Subsection (3), subject to the other provisions of this title, that outlet or
123     restaurant, or an outlet or a restaurant with the same type of license as that outlet or restaurant,
124     may operate at the premises regardless of whether:
125          (i) the outlet or restaurant changes ownership;
126          (ii) the property on which the outlet or restaurant is located changes ownership; or
127          (iii) there is a lapse in the use of the property as an outlet or a restaurant with the same
128     type of license, unless during the lapse the property is used for a different purpose.
129          (b) The provisions of this Subsection (4) apply regardless of when the outlet's or
130     restaurant's license is issued.
131          (5) Nothing in this section prevents the commission from considering the proximity of
132     an educational, religious, and recreational facility, or any other relevant factor in reaching a
133     decision on a proposed location of an outlet.
134          Section 2. Section 32B-6-203 is amended to read:
135          32B-6-203. Commission's power to issue full-service restaurant license.
136          (1) Before a person may store, sell, offer for sale, furnish, or allow the consumption of
137     an alcoholic product on its premises as a full-service restaurant, the person shall first obtain a
138     full-service restaurant license from the commission in accordance with this part.
139          (2) The commission may issue a full-service restaurant license to establish full-service
140     restaurant licensed premises at places and in numbers the commission considers proper for the
141     storage, sale, offer for sale, furnishing, and consumption of an alcoholic product on premises
142     operated as a full-service restaurant.
143          (3) Subject to Section 32B-1-201:
144          (a) The commission may not issue a total number of full-service restaurant licenses that
145     at any time exceeds the number determined by dividing the population of the state by 4,467.
146          (b) The commission may issue a seasonal full-service restaurant license in accordance
147     with Section 32B-5-206.
148          (c) (i) If the location, design, and construction of a hotel may require more than one
149     full-service restaurant sales location within the hotel to serve the public convenience, the
150     commission may authorize the sale, offer for sale, or furnishing of an alcoholic product at as
151     many as three full-service restaurant locations within the hotel under one full-service restaurant
152     license if:
153          (A) the hotel has a minimum of 150 guest rooms; and
154          (B) the locations under the full-service restaurant license are:
155          (I) within the same hotel; and
156          (II) on premises that are managed or operated, and owned or leased, by the full-service
157     restaurant licensee.
158          (ii) A facility other than a hotel shall have a separate full-service restaurant license for
159     each full-service restaurant where an alcoholic product is sold, offered for sale, or furnished.
160          (4) [(a)] Except as otherwise provided in [Subsection (4)(b)] Section 32B-1-202, the
161     commission may not issue a full-service restaurant license for premises that do not meet the
162     proximity requirements of [Section 32B-1-202] Subsection 32B-1-202(2).
163          [(b) With respect to the premises of a full-service restaurant license issued by the
164     commission that undergoes a change of ownership, the commission shall waive or vary the
165     proximity requirements of Subsection 32B-1-202(2) in considering whether to issue a
166     full-service restaurant license to the new owner of the premises if:]
167          [(i) when a full-service restaurant license was issued to a previous owner, the premises
168     met the proximity requirements of Subsection 32B-1-202(2);]
169          [(ii) the premises has had a full-service restaurant license at all times since the
170     full-service restaurant license described in Subsection (4)(b)(i) was issued without a variance;
171     and]
172          [(iii) the community location was located within the proximity requirements of
173     Subsection 32B-1-202(2) after the day on which the full-service restaurant license described in
174     Subsection (4)(b)(i) was issued.]
175          Section 3. Section 32B-6-303 is amended to read:
176          32B-6-303. Commission's power to issue limited-service restaurant license.
177          (1) Before a person may store, sell, offer for sale, furnish, or allow the consumption of
178     wine, heavy beer, or beer on its premises as a limited-service restaurant, the person shall first
179     obtain a limited-service restaurant license from the commission in accordance with this part.
180          (2) (a) The commission may issue a limited-service restaurant license to establish
181     limited-service restaurant licensed premises at places and in numbers the commission considers
182     proper for the storage, sale, offer for sale, furnishing, and consumption of wine, heavy beer, or
183     beer on premises operated as a limited-service restaurant.
184          (b) A person may not sell, offer for sale, furnish, or allow the consumption of the
185     following on the licensed premises of a limited-service restaurant licensee:
186          (i) spirituous liquor; or
187          (ii) a flavored malt beverage.
188          (3) Subject to Section 32B-1-201:
189          (a) The commission may not issue a total number of limited-service restaurant licenses
190     that at any time exceeds the number determined by dividing the population of the state by
191     6,817.
192          (b) The commission may issue a seasonal limited-service restaurant license in
193     accordance with Section 32B-5-206.
194          (c) (i) If the location, design, and construction of a hotel may require more than one
195     limited-service restaurant sales location within the hotel to serve the public convenience, the
196     commission may authorize the sale of wine, heavy beer, and beer at as many as three
197     limited-service restaurant locations within the hotel under one limited-service restaurant license
198     if:
199          (A) the hotel has a minimum of 150 guest rooms; and
200          (B) the locations under the limited-service restaurant license are:
201          (I) within the same hotel; and
202          (II) on premises that are managed or operated, and owned or leased, by the
203     limited-service restaurant licensee.
204          (ii) A facility other than a hotel shall have a separate limited-service restaurant license
205     for each limited-service restaurant where wine, heavy beer, or beer is sold, offered for sale, or
206     furnished.
207          (4) [(a)] Except as otherwise provided in [Subsection (4)(b)] Section 32B-1-202, the
208     commission may not issue a limited-service restaurant license for premises that do not meet the
209     proximity requirements of [Section 32B-1-202] Subsection 32B-1-202(2).
210          [(b) With respect to the premises of a limited-service restaurant license issued by the
211     commission that undergoes a change of ownership, the commission shall waive or vary the
212     proximity requirements of Subsection 32B-1-202(2) in considering whether to issue a
213     limited-service restaurant license to the new owner of the premises if:]
214          [(i) when a limited-service restaurant license was issued to a previous owner, the
215     premises met the proximity requirements of Subsection 32B-1-202(2);]
216          [(ii) the premises has had a limited-service restaurant license at all times since the
217     limited-service restaurant license described in Subsection (4)(b)(i) was issued without a
218     variance; and]
219          [(iii) the community location was located within the proximity requirements of
220     Subsection 32B-1-202(2) after the day on which the limited-service restaurant license
221     described in Subsection (4)(b)(i) was issued.]
222          Section 4. Section 32B-6-903 is amended to read:
223          32B-6-903. Commission's power to issue beer-only restaurant license.
224          (1) Before a person may store, sell, offer for sale, furnish, or allow the consumption of
225     beer on its premises as a beer-only restaurant, the person shall first obtain a beer-only
226     restaurant license from the commission in accordance with this part.
227          (2) (a) The commission may issue a beer-only restaurant license to establish beer-only
228     restaurant licensed premises at places and in numbers the commission considers proper for the
229     storage, sale, offer for sale, furnishing, and consumption of beer on premises operated as a
230     beer-only restaurant.
231          (b) A person may not sell, offer for sale, furnish, or allow the consumption of liquor on
232     the licensed premises of a beer-only restaurant licensee.
233          (3) (a) Only one beer-only restaurant license is required for each building or resort
234     facility owned or leased by the same person.
235          (b) A separate license is not required for each beer-only restaurant license dispensing
236     location in the same building or on the same resort premises owned or operated by the same
237     person.
238          (4) [(a)] Except as otherwise provided in [Subsection (4)(b) or (c)] Section 32B-1-202,
239     the commission may not issue a beer-only restaurant license for premises that do not meet the
240     proximity requirements of [Section 32B-1-202] Subsection 32B-1-202(2).
241          [(b) With respect to the premises of a beer-only restaurant license issued by the
242     commission that undergoes a change of ownership, the commission shall waive or vary the
243     proximity requirements of Subsection 32B-1-202(2) in considering whether to issue a
244     beer-only restaurant license to the new owner of the premises if:]
245          [(i) when a beer-only restaurant license was issued to a previous owner, the premises
246     met the proximity requirements of Subsection 32B-1-202(2);]
247          [(ii) the premises has had a beer-only restaurant license at all times since the beer-only
248     restaurant license described in Subsection (4)(b)(i) was issued without a variance; and]
249          [(iii) the community location was located within the proximity requirements of
250     Subsection 32B-1-202(2) after the day on which the beer-only restaurant license described in
251     Subsection (4)(b)(i) was issued.]
252          [(c) The location of the licensed premises of an on-premise beer retailer who is
253     licensed as of July 1, 2011, is grandfathered and not required to meet the proximity
254     requirements of Section 32B-1-202 if the on-premise beer retailer obtains a beer-only
255     restaurant license by not later than March 1, 2012. A location grandfathered under this
256     Subsection (4)(c) is considered grandfathered notwithstanding that the beer-only restaurant
257     license undergoes a change of ownership.]
258          Section 5. Section 32B-8a-302 is amended to read:
259          32B-8a-302. Application -- Approval process.
260          (1) To obtain the transfer of a retail license from a retail licensee, the transferee shall
261     file a transfer application with the department that includes:
262          (a) an application in the form provided by the department;
263          (b) a statement as to whether the consideration, if any, to be paid to the transferor
264     includes payment for transfer of the retail license;
265          (c) a statement executed under penalty of perjury that the consideration as set forth in
266     the escrow agreement required by Section 32B-8a-401 is deposited with the escrow holder; and
267          (d) (i) an application fee of $300; and
268          (ii) a transfer fee determined in accordance with Section 32B-8a-303.
269          (2) If the intended transfer of a retail license involves consideration, at least 10 days
270     before the commission may approve the transfer, the department shall post a notice of the
271     intended transfer on the Public Notice Website created in Section 63F-1-701 that states the
272     following:
273          (a) the name of the transferor;
274          (b) the name and address of the business currently associated with the retail license;
275          (c) instructions for filing a claim with the escrow holder; and
276          (d) the projected date that the commission may consider the transfer application.
277          (3) (a) (i) Before the commission may approve the transfer of a retail license, the
278     department shall conduct an investigation and may hold public hearings to gather information
279     and make recommendations to the commission as to whether the transfer of the retail license
280     should be approved.
281          (ii) The department shall forward the information and recommendations described in
282     this Subsection (3)(a) to the commission to aid in the commission's determination.
283          (b) Before approving a transfer, the commission shall:
284          (i) determine that the transferee filed a complete application;
285          (ii) determine that the transferee is eligible to hold the type of retail license that is to be
286     transferred at the premises to which the retail license would be transferred;
287          (iii) determine that the transferee is not delinquent in the payment of an amount
288     described in Subsection 32B-8a-201(3);
289          (iv) determine that the transferee is not disqualified under Section 32B-1-304;
290          (v) consider the locality within which the proposed licensed premises is located,
291     including the factors listed in Section 32B-5-203 for the issuance of a retail license;
292          (vi) consider the transferee's ability to manage and operate the retail license to be
293     transferred, including the factors listed in Section 32B-5-203 for the issuance of a retail license;
294          (vii) consider the nature or type of retail licensee operation of the transferee, including
295     the factors listed in Section 32B-5-203 for the issuance of a retail license;
296          (viii) if the transfer involves consideration, determine that the transferee and transferor
297     have complied with Part 4, Protection of Creditors; and
298          (ix) consider any other factor the commission considers necessary.
299          (4) [(a)] Except as otherwise provided in [Subsection (4)(b)] Section 32B-1-202, the
300     commission may not approve the transfer of a retail license to premises that do not meet the
301     proximity requirements of [Section 32B-1-202] Subsection 32B-1-202(2).
302          [(b) If after a transfer of a retail license the transferee operates the same type of retail
303     license at the same location as did the transferor, the commission may waive or vary the
304     proximity requirements of Subsection 32B-1-202(2) in considering whether to approve the
305     transfer under the same circumstances that the commission may waive or vary the proximity
306     requirements in accordance with Subsection 32B-1-202(4) when considering whether to issue a
307     retail license.]
308          Section 6. Coordinating S.B. 279 with H.B. 442 -- Superseding technical and
309     substantive amendments.
310          If this S.B. 279 and H.B. 442, Alcohol Amendments, both pass and become law, it is
311     the intent of the Legislature that the amendments to Sections 32B-1-202 and 32B-8a-302 in this
312     bill supersede the amendments to Sections 32B-1-202 and 32B-8a-302 in H.B. 442, when the
313     Office of Legislative Research and General Counsel prepares the Utah Code database for
314     publication.