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| Montana Administrative Register Notice 42-2-876 | No. 9 05/10/2012 | |
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BEFORE THE DEPARTMENT OF REVENUE OF THE STATE OF MONTANA
TO: All Concerned Persons 1. On June 4, 2012, at 1:00 p.m., a public hearing will be held in the Third Floor Reception Area Conference Room of the Sam W. Mitchell Building, Helena, Montana, to consider the adoption and amendment of the above-stated rules. Individuals planning to attend the hearing shall enter the building through the east doors of the Sam W. Mitchell Building, 125 North Roberts, Helena, Montana. 2. The Department of Revenue will make reasonable accommodations for persons with disabilities who wish to participate in this public hearing or need an alternative accessible format of this notice. If you require an accommodation, contact the Department of Revenue no later than 5:00 p.m., May 25, 2012, to advise us of the nature of the accommodation that you need. Please contact Cleo Anderson, Department of Revenue, Director's Office, P.O. Box 7701, Helena, Montana 59604-7701; telephone (406) 444-5828; fax (406) 444-4375; or e-mail canderson@mt.gov. 3. The department is proposing to amend current rules and adopt new rules to increase the public's and licensees' understanding of liquor licensing laws. The goal is to eliminate any potential confusion by applicants, licensees, and the public of the premises suitability requirements for each license type where alcoholic beverages may be served or sold for either on-premises consumption or off-premises consumption, and to reflect legislative changes. The department's intention is to achieve this goal by making the rules clearly understandable and thoroughly complete. The Legislature has established the Montana Alcoholic Beverage Code (MABC) as an exercise of the police power of the state for the protection of the welfare, health, and safety of the people of the state, and the provisions of the MABC must be broadly construed to accomplish the purposes of (a) promoting temperance, (b) creating orderly markets, and (c) aiding in the collection of taxes. The legislatively determined policy of the state regarding alcoholic beverages is that transactions involving alcoholic beverages are illegal unless specifically permitted by the MABC. There is no presumption that a transaction involving alcohol is legal unless it is specifically authorized. Therefore, any practice to the contrary does not imply a practice is permissible. The absence of explicit permission in the MABC to engage in a particular transaction means that such a transaction is prohibited. The sale of alcoholic beverages and the privileges for each license type are to only occur as provided by the MABC. These rules seek to reflect current state law to describe related privileges and conditions for each license type. The department does not have discretionary authority to authorize additional privileges; the authority is only granted through legislative approval. Public convenience and necessity are governing principles of the MABC, with regard to on-premises licenses. Public convenience and necessity are determined to exist when evidence indicates that issuance of the license will materially promote the public's ability to engage in the licensed activity, i.e., the on-premises consumption of alcoholic beverages. Gambling is regulated under separate code provisions by a different agency. Issuance of the license accordingly must be consistent with the public's demand for alcoholic beverages. A licensee may not minimize the sale of alcoholic beverages to promote other business interests or activities, including those licensed under separate code provisions. Demand for the "licensed activity" involves the purchase of alcoholic beverages for on-premises consumption in a business licensed to sell alcoholic beverages at retail. Public convenience and necessity pertains to the ability of the public to engage in the on-premises consumption of alcoholic beverages, by the drink, in a licensed public setting, whether or not people choose to engage in gambling. In addition to the general applicability of this law, this is specifically applicable in implementing New Rules II and IV, and amending ARM 42.12.122, Determination of Suitability of Premises. The proposed new rules and amendments seek to improve the transparency of the department's process to the public and licensees by rearranging and adding more complete and understandable rules pertaining to the premises requirements for each license type and the respective privileges. The rules also address changes made by the 2011 Legislature with the enactment of Senate Bill 203, Chapter 77, (16-3-303, MCA), which allows for beer containers known as "growlers" to be sold for off-premises consumption by additional license types beyond the manufacturer. The rules further address changes made by the 2009 Legislature with the enactment of Senate Bill 511, Chapter 414, (16-4-313, MCA), which established a sacramental wine license for the retail sale of sacramental wine for religious purposes. Finally, the rules address statutory amendments made by the 2007 Legislature with the enactment of House Bill 113, Chapter 197, (16-4-401, MCA), which requires anyone with ownership interest of 10 percent or more in an alcoholic beverages license to first apply and qualify for the license. 4. The proposed new rules do not replace or modify any section currently found in the Administrative Rules of Montana. The proposed new rules provide as follows: NEW RULE I EDUCATIONAL MATERIALS (1) The department maintains educational materials for each type of alcoholic beverage license along with the trade practices that are permitted by Montana law and rules. Montana law provides that transactions involving alcoholic beverages are illegal unless specifically permitted by law. (2) Licensees should seek guidance from the department concerning whether actions not listed in the department materials are allowed before engaging in such transactions. Unless the department provides written guidance citing explicit authority, the licensee should treat all transactions not in the educational materials as prohibited. IMP: 16-1-301, 16-1-302, 16-1-304, 16-3-101, 16-6-301, MCA
REASONABLE NECESSITY: The department is proposing to adopt New Rule I to make it clear to licensees and the public what the allowed practices are for an alcoholic beverage licensee as specifically authorized by the MABC. Public welfare, health, and safety cannot be protected from the ill effects of the misuse of alcohol if licensees are permitted to expand the allowed activities under the MABC beyond those explicitly permitted by the MABC. Also, the education materials provide clear instruction as to the permitted practices under the MABC. NEW RULE II CONDITIONS AND QUALIFICATIONS SPECIFIC FOR AN ALL-BEVERAGES LICENSE (1) In addition to the provisions stated in ARM 42.12.122, which pertain to every type of alcoholic beverage license, with regard to an all-beverages license, a party applying for either a new license, transfer of ownership of an existing license, transfer of location of an existing license, or approval of an alteration to the premises: (a) must operate at a premises recognizable as a bar or tavern with designated space and accommodation for the individual sale and consumption of beer, wine, and distilled spirits; or a restaurant (not including a coffee or beverage shop, bakery, or kiosk) with designated space and accommodations where, in consideration of payment, food is routinely furnished to the public; (b) must offer individual sales of beer, wine, and distilled spirits by the drink and; (c) may sell alcoholic beverages for off-premises consumption only in their original packages, an individual serving, or beer in refillable growlers. AUTH: 16-1-303, MCA IMP: 16-3-303, 16-3-311, 16-4-402, 16-4-404, 16-4-405, MCA REASONABLE NECESSITY: On-premises liquor licenses are in place for the benefit of the public. These licenses allow, within guidelines, for alcohol to be made available by the drink to the public. Therefore, the department is proposing to adopt New Rule II to provide greater public and licensee understanding on suitability requirements specific to an all-beverage license type beyond the general on-premises licenses suitability requirements in ARM 42.12.122. In addition, the rule seeks to eliminate any potential confusion regarding which alcoholic beverages can be sold by an all-beverage license type for off-premises consumption. Alcoholic beverages must be sold in their original packages, in a limited individual single service size, or beer in refillable growlers. To reflect statutory changes made by the 2011 Legislature, by the enactment of Chapter 77, L. 2011 (16-3-303 MCA), beer containers known as "growlers" are allowed to be sold for off-premises consumption by these license types. Mixed beverages may not be sold for off-premises consumption in containers larger than a single-serving size. This proposed rule is consistent with current application of the law and with responses the department has provided to questions of this nature. The department has approved individual serving sizes of not more than 16 ounces of beer, not more than 2 ounces of liquor, or not more than 7 ounces of wine. No combination of beer, liquor, or wine may exceed the equivalent limits A licensee may petition the department to establish a larger quantity if it can demonstrate that it can reliably meet the obligations of the licensee's responsibility to not over-serve an individual, as stated in 16-6-304, MCA.
NEW RULE III CONDITIONS AND QUALIFICATIONS SPECIFIC FOR A RESTAURANT BEER AND WINE LICENSE (1) In addition to the provisions stated in ARM 42.12.122, which pertain to every type of alcoholic beverage license, with regard to a restaurant beer and wine license, a party applying for either a new license, transfer of ownership of an existing license, transfer of location of an existing license, or approval of an alteration to a premises: (a) must operate at a premises clearly recognizable as a restaurant, as defined in ARM 42.12.401; and (b) must not provide alcoholic beverages to any person for off-premises consumption. (2) The term restaurant, as defined in ARM 42.12.401, does not include a coffee or beverage shop, bakery, kiosk, or a fast-food restaurant that, excluding any carry-out business, serves a majority of its food and drink in disposable containers not reused in the same restaurant. AUTH: 16-1-303, MCA IMP: 16-3-311, 16-4-402, 16-4-404, 16-4-405, 16-4-420, MCA REASONABLE NECESSITY: The department is proposing to adopt New Rule III to provide greater understanding to the public and licensees of the suitability requirements specific to a restaurant beer and wine license, beyond the general on-premises license suitability requirement. Many of these requirements for a restaurant beer and wine license are outlined elsewhere in laws and rules; however, the department feels it is beneficial to combine all of the requirements into one rule for transparency and completeness.
NEW RULE IV CONDITIONS AND QUALIFICATIONS SPECIFIC FOR A BEER LICENSE AND A BEER LICENSE WITH WINE AMENDMENT FOR ON-PREMISES CONSUMPTION (1) In addition to the provisions stated in ARM 42.12.122, which pertain to every type of alcoholic beverage license, with regard to beer licenses for on-premises consumption, a party applying for either a new license, transfer of ownership of an existing license, transfer of location of an existing license, or approval of an alteration to the premises: (a) must operate at a premises recognizable as a bar or tavern with designated space and accommodation for the individual sale and consumption of beer and/or wine; (b) for a beer license with a wine amendment, must meet the standards for premises operated as either a restaurant or a prepared food business (not including a coffee or beverage shop, bakery, or kiosk); or operate at a premises with designated space and accommodations where, in consideration of payment, food is routinely furnished to the public; (c) must offer individual sales of beer and/or wine by the drink; and (d) may sell alcoholic beverages for off-premises consumption only in their original packages, as an individual serving, or beer in refillable growlers.
AUTH: 16-1-303, MCA IMP: 16-3-303, 16-3-311, 16-4-105, 16-4-402, 16-4-404, 16-4-405, MCA REASONABLE NECESSITY: The department is proposing to adopt New Rule IV to provide a better description for the public and licensees as to the specific requirements for a beer license, and a beer license with a wine amendment. These specific requirements are in addition to the general suitability rules for on-premises license types in ARM 42.12.122. In addition, the rule seeks to improve the understanding in an effort to eliminate any potential confusion regarding what alcoholic beverages can be sold by a beer license, and a beer license with a wine amendment for off-premises consumption. Alcoholic beverages must be sold in their original packages or in a limited individual single service size. To reflect statutory changes made by the 2011 Legislature by the enactment of Chapter 77, L. 2011 (16-3-303, MCA), beer containers known as "growlers" are allowed to be sold for off-premises consumption by these license types. Other large containers more than individual servings containing beer and wine are not allowed to be sold for off-premises consumption. This proposed rule is consistent with current application of the law and with responses the department has provided to questions of this nature. NEW RULE V CONDITIONS AND QUALIFICATIONS SPECIFIC FOR AN OFF-PREMISES BEER LICENSE AND/OR WINE LICENSE (1) In addition to the provisions stated in ARM 42.12.122, which pertain to every type of alcoholic beverage license, with regard to a license for off-premises consumption, a party applying for either a new license, transfer of ownership of an existing license, transfer of location of an existing license, or approval of an alteration to a premises must: (a) operate at a premises recognized as a grocery store, or a pharmacy, as described in ARM 42.12.126; (b) sell beer and/or wine for off-premises consumption only in their original packages; and (c) be physically separated from any business not directly related to the sale of beer and/or wine for off-premises consumption by four permanent walls. This includes a separate on-premises alcohol beverage business. The walls must be floor-to-ceiling and shall not be moved without department approval of alterations to the premises pursuant to ARM 42.13.106. The premises can have inside access to each business conducted in the building through a doorway no larger than six feet wide with a door that can be closed and locked when not in use. (2) All beer and wine inventory must be stored on-site in an area identified on the floor plan. (3) Beer and/or wine purchased from the off-premises licensee may not be consumed anywhere on property owned or leased by the licensee that is part of, adjacent to, or used in connection with the licensed off-premises business. By example this includes a patio, deck, sitting area, designated smoking areas, sports or play area, parking lots, and any other area that is adjacent to the licensed premises and is under the control of the licensee. AUTH: 16-1-303, MCA IMP: 16-4-115, 16-4-402, 16-4-405, MCA
REASONABLE NECESSITY: The department is proposing to adopt New Rule V to educate the public and licensees as to the off-premises suitability requirements, in addition to the suitability rules for off-premises license types as described in ARM 42.12.122. The rule seeks to eliminate any potential confusion regarding what alcoholic beverages can be sold, what constitutes acceptable alcohol beverage storage areas, and where alcoholic beverages cannot be consumed to ensure proper control by the licensee for public welfare, health, and safety, and to maintain the distinction between on-premises and off-premises licenses. NEW RULE VI CONDITIONS AND QUALIFICATIONS SPECIFIC FOR A BEER WHOLESALER AND/OR TABLE WINE DISTRIBUTOR LICENSE AND SUBWAREHOUSES (1) In addition to the provisions stated in ARM 42.12.122, which pertain to every type of alcoholic beverage license, with regard to a beer wholesaler, table wine distributor, and/or a subwarehouse license, a party applying for either a new license, transfer of ownership of an existing alcoholic beverages license, transfer of location of an existing license, or approval of an alteration to a premises must: (a) maintain a fixed place of business, and the facilities, storehouse, receiving house, or warehouse for the receiving of, storage, handling, and moving of beer and wine in large quantities for distribution and sale in original packages to other licensed wholesalers and distributors or licensed retailers; (b) have sufficient space for the storage and distribution of beer and/or table wine in large quantities; and (c) the premises must be physically separated by permanent walls from any other business located in the same building.
AUTH: 16-1-303, MCA IMP: 16-4-106, 16-4-108, 16-4-402, 16-4-415, MCA REASONABLE NECESSITY: The department is seeking to adopt New Rule VI to educate the public and licensees as to the requirements for beer wholesalers, wine distributors, and subwarehouse premises, in addition to the suitability rules for these license types as described in ARM 42.12.122. In addition, the department seeks to provide the same standards for beer wholesalers' and wine distributors' subwarehouse premises to ensure the interest of the public's welfare, health, and safety is met. These proposed standards match the department's current application.
NEW RULE VII CONDITIONS AND QUALIFICATIONS SPECIFIC FOR A MANUFACTURER OF BEER, WINE, OR DISTILLED SPIRITS LICENSE (1) In addition to the provisions stated in ARM 42.12.122, which pertain to every type of alcoholic beverage license, with regard to a license for the manufacture of beer, wine, or distilled spirits, a party applying for either a new license, transfer of ownership or location of an existing license, or approval of an alteration to a premises, upon approval of its license by the department: (a) must operate at a premises recognizable as a manufacturing facility of beer, wine, or distilled spirits; (b) must be physically separated from any other business, not directly related to a manufacturing facility located in the same building; (c) must not allow alcoholic beverages to be provided to the customer through automatic dispensing or vending machines or self-service devices, and the licensee or employees must have direct involvement in the service of alcohol for on- or off-premises consumption; and (d) when provided for in law, may serve sample products manufactured on the licensed premises in one sample room. The sample room must: (i) be located on the licensed premises; (ii) must restrict access by unauthorized persons to the manufacturing areas; and (iii) have licensee's or employee's direct involvement in the service of alcohol for on- and off-premises consumption. No alcoholic beverages can be provided to the customer through self-service vending machines, self-service reach-in coolers, self-service open shelving, or self-service devices.
AUTH: 16-1-303, MCA IMP: 16-3-213, 16-3-214, 16-3-411, 16-4-102, 16-4-107, 16-4-311, 16-4-312, 16-4-402, MCA REASONABLE NECESSITY: The department is seeking to adopt New Rule VII to educate the public and licensees as to the premises requirements for a manufacturer of beer, wine, or distilled spirits license in addition to the suitability rules for these license types as described in ARM 42.12.122. These proposed standards match the department's current application approval process and, for transparency, are listed out in this proposed rule to eliminate any confusion by applicants. NEW RULE VIII SACRAMENTAL WINE LICENSE (1) An establishment in Montana desiring to sell sacramental wine pursuant to 16-4-313, MCA, may apply to the department by submitting an off-premises wine license application accompanied by a $200 fee, of which $100 is a processing fee and $100 is an annual license fee. (2) An applicant must qualify for licensure under 16-4-401, MCA. (3) The premises must meet suitability requirements for the retail sale of wine for off-premises consumption, excluding the requirements to operate as a bona fide grocery store or pharmacy. (4) This type of license is nontransferrable and not subject to the quota system as described in 16-4-105, MCA. (5) Sacramental wine containing not more than 16 percent alcohol by volume must be purchased by a sacramental wine licensee from an agency liquor store or licensed Montana wine distributor or winery in Montana. Sacramental wine that is more than 16 percent alcohol by volume must be purchased by a sacramental wine licensee from an agency liquor store. (6) Licensees must adhere to all laws and rules relating to the retail sale of wine for off-premises consumption.
AUTH: 16-1-303, MCA IMP: 16-4-105, 16-4-313, 16-4-316, 16-4-401, 16-5-501, MCA REASONABLE NECESSITY: The department is proposing to adopt New Rule VIII to reflect the statutory changes made by the 2009 Legislature with Senate Bill 511, L. 2009. Senate Bill 511 (16-4-313, MCA) established a sacramental wine license for the retail sale of sacramental wine for religious purposes. Establishments located in Montana wishing to sell sacramental wine only, now have the ability to apply for an off-premises consumption sacramental wine license. 5. The rules proposed to be amended provide as follows, stricken matter interlined, new matter underlined: 42.12.101 APPLICATION FOR LICENSE (1) All applications for licenses to sell, manufacture or distribute alcoholic beverages (2) Applications for licenses shall be in the names of all persons with an ownership interest or to have an ownership interest in the business to be operated under the license. An owner of 10 percent or more, or who will have an ownership interest of 10 percent or more in the license, in the business, or in the entity owning the license, must meet the requirements as described in 16-4-401, MCA. If no single owner's interest is 10 percent or more, then persons whose combined ownership totals, or will total, 51 percent must meet the requirements as described in 16-4-401, MCA. The names of all such persons shall appear on the licenses. The disqualification of any one or more applicants to hold the license disqualifies all. (3) In addition to other information required on the application form, the department may require an applicant to submit all information necessary to determine qualifications, including, but not limited to (a) personal history statements and authorization to access state and federal income tax information for all persons who appear to have an ownership interest or control over the business operated or to be operated under the license; and (b) in the case of a license to be operated seasonally, the applicant may be required to submit sufficient information for the department to determine whether the criteria for seasonal operation, as described in 16-3-310, MCA, and ARM 42.13.108, are met. (4) Upon receipt of an application for a license to sell, manufacture, or distribute alcoholic beverages, the department shall make a thorough investigation as to the qualifications of the applicant and the suitability of the premises proposed for licensing. If, upon such investigation, it appears that the applicant is qualified under the law, and the premises is suitable for licensing under the laws of the state and the rules of the department, the department shall issue the license if all other requirements of the law and these rules are fulfilled. Temporary authority may be granted to applicants for a retail alcoholic beverages license if the requirements of ARM 42.12.208 are met. (5) Except as provided in (6) (a) the processing fee required for the applicable license as stated in ARM 42.12.111; (b) a copy of the proposed agreement to transfer the interest in the license, if applicable; (c) proof of possessory interest in the premises by the applicant; (d) any (e) the premises floor plan; (f) taxpayer identification number; (g) bank account authorization and signature documents; (h) proof of assumed business name, if applicable; (i) additional documentation required for entity applicants as stated in ARM 42.12.103; (j) proof that all filings and payments related to Montana income, corporation, withholding, business, and other taxes, are current for the applicant in all cases, and if the application is for a sale of the license, for the seller (current licensee);
(7) To be considered "complete" for processing, applications for licenses to sell alcoholic beverages for off-premises consumption only must include: (a) the processing fee as required in ARM 42.12.111, and the license fee stated in 16-4-501, MCA; (b) proof of possessory interest in the premises by the applicant; (c) the premises floor plan; (d) taxpayer identification number; (e) bank account authorization and signature documents; (f) proof of assumed business name, if applicable; (g) grocery inventory; (h) any other documentation required to determine licensing or premises qualifications; (i) proof that all filings and payments related to Montana income, corporation, withholding, business, and other taxes, are current for the applicant in all cases; and (j) two complete sets of fingerprints, provided on the department's form FD-258 (obtained and certified by a local law enforcement agency, the department, or a private security company which has been approved by the department), for each person required to complete a personal history statement as specified by this rule. (7) and (8) remain the same, but are renumbered (8) and (9).
(a) the transfer of a security interest in a licensed liquor operation; or (b) (10) remains the same, but is renumbered (11).
(a) when an existing (b) when an individual or entity is proposed to be added to the license as a less than 10 percent owner; (c) when an existing owner, member, partner, or shareholder of a licensee entity that was previously qualified gifts some or all of their ownership interest to another existing owner, member, partner, or shareholder of a licensee entity that was previously qualified; or (d) for a transfer of location of a current licensee. There cannot be other changes to the licensee, such as changes in ownership structure or creditors other than the lessor. (12) remains the same, but is renumbered (13).
AUTH: 16-1-303, MCA IMP: 16-3-310, 16-4-105, 16-4-201, 16-4-204, 16-4-207, 16-4-210, REASONABLE NECESSITY: The department is proposing to amend ARM 42.12.101 to reflect the statutory amendments made to 16-4-401, MCA, by the 2007 Legislature, through the enactment of House Bill 113, L. 2011. Section 16-4- The department is also proposing amendments to (3) to eliminate confusion and to ensure consistent treatment of liquor licensees in the application of liquor laws with regard to "seasonal" status. Section 16-3-310, MCA, and ARM 42.13.108, establish criteria for the granting of seasonal status, and the additional information submitted with the application will enable the department to determine whether such criteria are met. In addition, the department is proposing the amendments in (6) to better inform applicants of the application requirements, and to ease the process for the applicant that can be at times complex and challenging, by listing for them all the documents that are necessary when completing an application. The department is proposing an amendment in new (10) to enhance liquor licensees' understanding when the provisions of this rule do not apply. In the case of a death of a licensee, for example, the rules in ARM 42.12.204 apply instead. The department is also proposing to amend new (12) to simplify the license process by eliminating the need for full applications in those situations when a simplified form would suffice and not compromise the integrity of the process. A simplified application will be used when an owner is being removed from the license, when a proposed owner of less than 10 percent is being added to the license, when gifting or sales of shares to a previously qualified owner, or for certain transfer of locations. Only a simplified form is necessary in these circumstances. The department also proposes to update the implementing statutes to correspond with the proposed amendments to the rule. 42.12.103 SUPPORTING DOCUMENTATION -- (a) the names, dates of birth (b) the number of shares (c) Certificate of Existence or Certificate of Fact, as applicable; (d) Articles of Incorporation or Organization; (e) stock certificates; (f) stock ledger or membership units register; (g) by-laws; (h) organization minutes; and (i) any other documentation required to determine licensing qualifications. (2) (a) the names, dates of birth, social security numbers, and residence addresses of all directors and officers, and all owners of 10 (b) the number of shares of stock, membership units, or percentage of partnership interest held by each (c) in addition, the entity applicant must supply the documents required in (1)(c) through (1)(i). AUTH: 16-1-303, MCA IMP: 16-4-203, 16-4-205, 16-4-401, MCA REASONABLE NECESSITY: The department is proposing to amend ARM 42.12.103 to reflect the statutory amendments made to 16-4-401, MCA, by House Bill 113, L. 2007. Section 16-4-401, MCA, allows out-of-state residents to apply for liquor licenses, and includes other business entity types such as limited liability companies and limited liability partnerships in addition to corporations. It also applies the same licensing requirements to the additional business types as is currently required of corporations. The proposed amendments replace the word "corporation" with "entity" to encompass all business entity types within the rule. In addition, the department is proposing amendments to enhance taxpayer understanding of what is required for applicants and licensees that are entities. The proposed amendments to this subchapter will help to eliminate confusion among applicants and licensees who are entities but are not corporations. 42.12.106 DEFINITIONS The following definitions apply to this (1) remains the same. (2) "Bar preparation area" means a bar area where alcoholic beverages can be purchased and consumed. The area must have sufficient seating and must include supplies to prepare, consume, and deliver alcoholic beverages. (2) through (7) remain the same, but are renumbered (3) through (8).
(9) remains the same, but is renumbered (10). (11) "Fair" means a county, state, or regional fair that occurs no more than once per year, is held on a publicly owned fairgrounds, and is officially sanctioned by a government entity. (12) "Individual serving" means not more than 16 ounces of beer, not more than 2 ounces of liquor, not more than 7 ounces of wine, or a proportional combination thereof (for example, 1 ounce of liquor mixed with 8 ounces of beer).
(11) and (12) remain the same but are renumbered (14) and (15).
(14) and (15) remain the same, but are renumbered (17) and (18). (19) "Patio/Deck" means an outdoor area that is part of the licensed premises, specifically designated on a floor plan, with a perimeter barrier and immediately adjacent to, and accessible from, the indoor portion of the licensed premises. (20) "Perimeter barrier" means a barrier enclosing the perimeter of the patio/deck portion of a licensed premises, which defines the boundary of the licensed premises in a way that: (a) clearly marks for patrons, licensees, licensees' employees, investigators, local law enforcement, or other interested parties, where consumption of alcohol is allowed; (b) impedes access to the service areas by underage persons or others who may attempt to enter the premises without the licensee's knowledge; and (c) consists of a fence or wall at least three feet high, or an alternative barrier that accomplishes the same purposes and is approved by the department. A perimeter barrier may be with or without entrances from the parking lot, sidewalk, or other areas beyond the patio or deck regardless of whether those areas beyond the licensed premises are land or water. In the case of a patio/deck which abuts a river, lake, or other body of water, the edge of the water may serve as a portion of the perimeter barrier, subject to department approval. (16) and (17) remain the same but are renumbered (21) and (22).
(24) "Retail alcoholic beverages license" means a license operated by an establishment for the retail sale of alcoholic beverage for either on- or off-premises consumption but does not include brewery, winery, or distillery licenses. (25) "Sacramental wine" means wine that is manufactured and sold exclusively for use as sacramental wine or for other religious purposes.
(27) "Special event," as it relates to all special permits and catering, means a short, infrequent, out-of-the-ordinary occurrence such as a picnic, fair, festival, reception, seasonal event, or sporting event for which there is an outcome, conclusion, or result. By example, a community winter holiday stroll held on four consecutive weekends, or a community summer gathering held one night a week all summer long that ceases in fall, is a seasonal special event. (20) through (22) remain the same, but are renumbered (28) through (30).
AUTH: 16-1-303, MCA IMP: 16-1-106, 16-3-311, 16-4-105, 16-4-205, 16-4-207, 16-4-301, 16-4-401, 16-4-402, 16-4-404, 16-4-413, 16-4-420, 16-4-423, MCA REASONABLE NECESSITY: The department is proposing to amend ARM 42.12.106 to include definitions of terms that are used in other rules contained in Chapter 12, and to enhance the definition of existing terms for better clarity and understanding. New (13) also includes a format correction to add a missing quotation mark into the existing language. Additionally, the department proposes to update the implementing citations to include 16-4-401, MCA, regarding entities as licensees. 42.12.110 SERVICE OF NOTICES (1) A notice of proposed adverse action issued pursuant to 16-4-107, 16-4-406, 16-4-407, or 16-4-1008, MCA, shall be served upon the licensee or registrant of record or, in the case of an application for a new license, on the applicant, by sending a copy of the notice to the licensee, registrant, or applicant by certified mail to the mailing address on file with the department. (2) remains the same. (3) The licensee, registrant, or applicant must respond to the department in writing within 20 days of service of the notice of proposed adverse action. Failure to respond will result in the enforcement of the administrative action proposed in the notice.
AUTH: 16-1-303, MCA IMP: 2-4-601, 16-4-107, 16-4-404.htm" target="MCA">16-4-406, 16-4-407, 16-4-1008, MCA REASONABLE NECESSITY: The department is proposing to amend ARM 42.12.110 to enhance alcoholic beverage licensees' understanding and eliminate any confusion of the department's business practice on the time allowed for a licensee to respond to a proposed adverse action notice. The proposed addition of (3) will make it clear to licensees that they have 20 days to respond to a proposed adverse action. Section 2-4-601, MCA, requires that reasonable notice be provided to parties against whom administrative action is proposed. The department considers 20 days to be reasonable notice. Additionally, the department proposes to update the implementing citations to include the statutes that correspond with the proposed amendments.
42.12.111 PROCESSING FEES (1) The following are the fees to be charged for processing endorsement and license applications:
(a) All-beverages license (including veterans' or fraternal)........................ $200 (b) All-beverages license with catering endorsement (when applied for concurrently)........................................................... $200 (c) Beer importer's license................................................................................. $100 (d) Beer wholesaler and table wine distributor license................................ $100 (e) Beer wholesaler beer subwarehouse license......................................... $100 (f) Beer wholesaler license............................................................................... $100 (g) Brewer's license............................................................................................ $100 (h) Brewery storage depot license................................................................... $100 (j) Catering endorsement (all-beverages, restaurant beer and wine, and beer) .................................................................................. $100 (j) Domestic distillery license............................................................................ $100 (k) Resort all-beverages license....................................................................... $200 (l) Restaurant beer and wine license.............................................................. $200 (m) Retail off-premises beer and table wine license (when applied for concurrently).................................................................................... $100 (n) Retail off-premises beer license................................................................ $100 (o) Retail off-premises table wine license...................................................... $100 (p) Retail on-premises beer license and wine amendment (when applied for concurrently)........................................... $200 (q) Retail on-premises beer license (including veterans' or fraternal)...................................................................................................... $200 (r) Sacramental wine license............................................................................ $100 (s) Table wine distributor license..................................................................... $100 (t) Table wine distributor subwarehouse........................................................ $100 (u) Tour boat endorsement............................................................................... $100 (v) Wine amendment (for use with existing on-premises retail beer license)........................................................................ $100 (w) Winery license.............................................................................................. $100 (2) through (5) remain the same. AUTH: 16-1-303, MCA IMP: 16-1-302, 16-1-303, 16-4-313, 16-4-414, 16-4-420, MCA REASONABLE NECESSITY: The department is proposing to amend ARM 42.12.111 to include all types of licenses in the processing fee schedule to match current department practice and to reflect the statutory changes made through the enactment of Senate Bill 511, L. 2009, (16-4-313, MCA), which allows for a sacramental wine license. In addition, the proposed rule amendments revise the license titles in the rule to match the statutory language for Restaurant Beer and Wine, and Beer Wholesaler licenses. 42.12.115 ASSESSMENT OF LICENSE RENEWAL LATE-PAYMENT (2) The department may waive a license renewal late-payment (a) a department error; (b) the department mailed a license renewal notice less than two weeks prior to the due date; (c) a delay in payment caused by the death or serious illness of the licensee; (d) a United States (e) a renewal application and fee was erroneously mailed to the (f) a delay in payment due to bankruptcy or foreclosure action; or (g) the late payment is the only late payment within the most recent five consecutive years or since the license was acquired, whichever is less, and payment was received at the department within 30 days after the due date. (3) remains the same. AUTH: 16-1-303, MCA IMP: 16-4-501, MCA REASONABLE NECESSITY: The department is proposing to amend ARM 42.12.115 to support the statutory language found in 16-4-501, MCA, regarding late-payment fees, and to eliminate inconsistent language. The proposed amendment to the rule changes the wording from late-payment penalty fee to late-payment fee. In addition, the proposed rule amendment adds consistency with the timing of payment, as on or before the due date. The department's intent with the proposed amendment to the language in (2), to read the "Alcohol and Tobacco Tax and Trade Bureau," is to eliminate confusion by mirroring the terminology used by the Internal Revenue Service.
42.12.122 CONDITIONS, QUALIFICATIONS, AND DETERMINATION OF SUITABILITY OF LICENSED PREMISES (1) A party applying for either a new (2) The premises (a) it meets the standards of the
(b) the investigator can easily
(c) for retail establishments, alcoholic beverages are advertised and displayed as being available for purchase; (d) the premises (e) the layout of the premises allows for licensee- and/or employee-only control over the preparation, sale, service, and/or distribution of alcoholic beverages; (f) the investigator can verify to the department that the dimensions shown on the floor plan accurately represent the physical layout of the premises; (g) the applicant has demonstrated that adequate safeguards are in place to prevent the sale, delivery, or giving away of alcoholic beverages to (h) the premises are not located where local government zoning restrictions or ordinances prohibit the sale and/or consumption of alcohol; (i) the premises are not located off regular police beats and can be properly policed by local authorities; (j) the sale of alcoholic beverages does not occur through the use of a drive-up window;
(3)
(a) must be operated at a premises clearly recognizable as a business established for the on-premises consumption of alcoholic beverages or other business directly related to the on-premises consumption of alcoholic beverages, such as a bowling alley, hotel, gambling casino, or restaurant; (b) must be operated at premises that are physically separated by permanent walls from any business not directly related to the on-premises consumption of alcoholic beverages. This includes a separate off-premises alcoholic beverage business operated by the on-premises licensee. The walls must be floor-to-ceiling and shall not be moved without department approval of alterations to the premises pursuant to ARM 42.13.106. The premises can have inside access to each business conducted in the building through a doorway no larger than six feet wide with a door that can be closed and locked when not in use; (c) except for restaurant beer and wine licenses, must be used at premises that have a bar preparation area where alcohol can be purchased and consumed and sufficient seating to encourage patrons to remain on the premises and consume the alcoholic beverages sold by the drink. Sufficient seating must consist of not less than twelve seats at a bar, tables, booths, gaming areas, or any combination of the above. The twelve seats required are independent of any seats at gaming machines; (d) may be used at premises that include a patio/deck, if it has the required perimeter barrier and is in compliance with fire regulations, except that a license used at a golf course does not require a perimeter barrier around a patio/deck because alcohol may be consumed at any place within the boundaries of the golf course; (e) must be operated at premises where no alcoholic beverages can be provided to the customer from self-service devices, self-service vending machines, self-service reach-in coolers, or self-service open shelving (except for off-premises consumption) as provided in (f), and where the licensee or employees have direct involvement in the service of alcohol for on- or off-premises consumption; and (f) except for restaurant beer and wine licenses, allows the licensee to sell alcoholic beverages for off-premises consumption, and the premises may include self-service open shelving or reach-in coolers for off-premises sales only if the off-premises sales area is contiguous with the on-premises sales area, but is physically separated with walls. (4) A shed, warehouse, or other temporary or permanent enclosure used to store alcoholic beverage inventory must be: (a) connected to the licensed premises; (b) accessible only from inside the licensed premises; and (c) listed on the floor plan provided to the department and be on property owned or leased by the licensee.
AUTH: 16-1-303, MCA IMP: 16-3-311, 16-4-402, 16-4-404, 16-4-405, 16-4-420, MCA
REASONABLE NECESSITY: The department is proposing to amend ARM 42.12.122, in addition to adding new rules for enhancement, to provide for better understanding, add clarity, and eliminate any potential confusion by applicants, licensees, and the public of the suitability requirements for a premises to be licensed; and where alcoholic beverages may be served and sold for on-premises consumption or off-premises consumption. On-premises alcoholic beverage licenses are in place for the benefit of the public, and are intended to provide the public with the ability to consume alcoholic beverages by the drink, at the licensed premises, whether or not the public also engages in gambling. These licenses allow, within guidelines, for alcohol to be made available by the drink to the public. In the interest of protecting public welfare, health, and safety in administering the liquor laws, the department is also proposing to add new (3) for on-premises licenses, including new language regarding a deck or patio, and new (4) regarding storage of alcoholic beverages. The proposed amendments are the department's effort to be responsive after learning that it is not always clear to the public who is operating the liquor license in situations where alcohol is being served on certain premises; for example, decks and patios. Additionally, current licensed premises that do not meet the suitability standards in ARM 42.12.122, will be required to come into compliance with the standards when the premises are altered, or when the license changes ownership. The proposed amendments add this clarity to the rule.
42.12.126 OFF-PREMISES SALE OF BEER OR TABLE WINE (1) A retail alcoholic beverages license to sell beer or table wine in the original packages for off-premises consumption only may be issued to any person (2) remains the same. AUTH: 16-1-303, MCA
REASONABLE NECESSITY: The department is proposing to amend ARM 42.12.126(1) to include the new language for "retail alcoholic beverages license" also being proposed in ARM 42.12.106, the definitions rule. Section 16-4-401, MCA, allows out-of-state residents to apply for liquor licenses, and includes other business entity types such as limited liability companies and limited liability partnerships in addition to corporations. It also applies the same licensing requirements to the additional business types as is currently required of corporations. The proposed amendments replace the word "corporation" with "entity" to encompass all business entity types within the rule. The department also proposes to update the implementing citations to include 16-4-401, MCA, regarding entities as licensees. 42.12.128 CATERING ENDORSEMENT (1) Any licensee having obtained a catering endorsement under the provisions of 16-4-111 or 16-4-204, MCA, is authorized to sell alcoholic beverages authorized under the license to persons attending a special event (2) remains the same. (3) A catered event may only last for a maximum of three days, except that each licensee may have one special event per year that lasts up to seven days for a fair. A fair is defined in ARM 42.12.106. (3) remains the same, but is renumbered (4).
IMP: 16-3-103, 16-4-111, 16-4-204, MCA REASONABLE NECESSITY: The department is proposing to amend ARM 42.12.128 to ensure consistent and equitable treatment in the application of liquor control laws by further describing how a catering endorsement is to be used and the length of time an event can be catered. In addition, the department is requesting the sponsor of the event be included in the monthly report for transparency purposes. The department further proposes the amendment in (1) to correct a grammatical error. 42.12.129 DETERMINATION OF PROXIMITY TO PLACE OF WORSHIP OR SCHOOL (1) and (2) remain the same. (3) The distance between entrance doors is measured by a geometric straight line, regardless of intervening property and buildings. An entrance is considered to be a means of ingress to the premises generally used by the public. This does not include egress-only doors, delivery, or service entrances. (4) and (5) remain the same.
AUTH: 16-1-303, MCA IMP: 16-3-306, MCA
REASONABLE NECESSITY: The department is proposing to amend ARM 42.12.129 to enhance the public's understanding of what is considered a "public entrance." This issue was raised to the department in a request for a legal opinion. The proposed amendments to the language incorporate the primary conclusion of that legal opinion, which will add clarity and make the distinction readily available to the public as part of the rule. 42.12.130 DETERMINATION OF LICENSE QUOTA AREAS (1) Any applicant applying to the department for a new license or transfer of location of an existing license under the quota limitations provided for under 16-4-105, (2) If the location of the proposed premises is not within the boundaries of an incorporated city or incorporated town, the (a) The distance must be measured by radial survey method from the nearest corporate city boundary to the nearest entrance of the proposed premises. (3) remains the same. AUTH: 16-1-303, MCA IMP: 16-4-105, 16-4-201, 16-4-409, 16-4-420, 16-4-501, MCA REASONABLE NECESSITY: The department is proposing to amend ARM 42.12.130 to ensure consistent and equitable treatment of liquor licensees in the application of liquor control laws. The department requires a qualified surveyor to determine the exact location of a premises proposed for licensing and requires both a legal description and street address of the proposed premises. Therefore, the department is removing the option to use local government officials to attest to the location of the licensed premises. The words "or incorporated town" are being added to reflect the language of 16-4-105 and 16-4-201, MCA. Additionally, the department proposes to update the implementing citations to correspond with the proposed amendments.
42.12.132 MANAGEMENT AGREEMENTS (1) and (2) remain the same. (3) The department will review the agreement for compliance with the following standards: (a) the licensee must retain the possessory interest in the premises through ownership, lease, rent, or other agreement with the owner of the premises; (b) while the agreement may delegate duties to the manager, the licensee must retain ultimate control, liability, responsibility, and accountability for the retail (i) control of business hours, types of alcoholic beverage products sold, selling price, level of inventory maintained, and overall business atmosphere; (ii) exclusive authority over business accounts and operation funds; (iii) authority to remodel or otherwise make changes in the business operation requiring nonroutine actions; (iv) ultimate decision-making authority regarding the hiring, firing, advancement or promotion, or any other change of status of other employees; (v) liability for all business expenses and losses, either directly or through an indemnification agreement with the licensee. The licensee may require the manager to do the ministerial act of paying the expenses, but this must be accomplished by using the licensee's funds; and (vi) ownership of the inventory or the right to use or dispose of it at will. (c) the licensee must maintain an active participation in the business operation sufficient to (d) the agreement may not be assignable by the manager to a successor manager without the written consent of the licensee; (e) the agreement may not place any restrictions on the licensee's right to transfer, mortgage, hypothecate, or alienate the license, or change the location of the operation; (f) the agreement must be terminable upon the licensee transferring the license, selling the business, or otherwise ceasing business operations at the licensee's option; (g) the agreement must provide for compensation either as a fixed amount, a percentage of gross sales, or a combination of fixed amount and percentage of gross sales; (h) the compensation of the manager must be commensurate with the duties performed, cannot consist of (i) the management agreement must establish a principal agent, employer-employee, or other type of agency relationship, making the manager responsible to the licensee for the performance of assigned duties, while the licensee is responsible for the proper performance of the manager. (4) remains the same. AUTH: 16-1-303, MCA REASONABLE NECESSITY: The department is proposing to amend ARM 42.12.132, by striking the word "all" in (3)(h), to improve licensee and managers' understanding that a manager may not receive any net profits of the business. Owner-managers receive net profits through other means as owners. Receipt of any net profits by a non-owner manager constitutes an undisclosed ownership. The department further proposes to amend ARM 42.12.132, to correct a grammatical error by replacing the word insure with ensure.
42.12.133 CONCESSION AGREEMENTS (1) All new concession agreements must be submitted to the department for review and approval prior to their execution and/or effective date, and must set forth the following: (a) the nature of the agreement is one that arises from a mutually beneficial situation only; (b) the agreement gives the licensee (c) a copy of the licensee's amended floor plan, including the new service area (d) the licensee is responsible for the sales and service of all alcoholic beverages; (e) the parties may share the employees. In the event of shared employees, the licensee must retain the right to discipline or otherwise sanction any employee in relation to the service of alcohol. Any violation of (f) the compensation to be paid for shared employees. The compensation may not be based on a percentage of alcohol sales;
(j) any proceeds of alcoholic beverages sales that are collected by the concessionaire must be returned to the licensee not less than every two weeks. (2) In addition to the general suitability rule requirements in ARM 42.12.122, and other rules specific to the license type, the premises for any license operated under a concession agreement can only be considered suitable for the retail sale of alcoholic beverages if the existence of a concession agreement and the names of the parties to the concession agreement are plainly disclosed to the public both inside and outside of the licensed premises by signage as follows: (a) at least one sign inside the licensed premises, measuring not less than 8 1/2 by 11 inches and with printing in a font size not smaller than 72, must be clearly visible to customers, and must plainly disclose: (i) the existence of a concession agreement; (ii) the names of the persons or entities which are party to the concession agreement and the assumed business names as filed with the Montana Secretary of State, including which party is the licensee; and (iii) the fact that the licensee is responsible for the service of alcoholic beverages within the premises; and (b) at least one sign outside the licensed premises so the public can easily determine that alcoholic beverages are available. (3) The requirements of (2) regarding signage must be met for all licenses operating under a concession agreement and must be complied with for any such license to be issued or renewed for the license year beginning July 1, 2012, or thereafter. (4) The licensee must maintain a physical possessory interest as required in ARM 42.12.133.
(3) remains the same, but is renumbered (6).
AUTH: 16-1-303, MCA IMP: 16-3-305, 16-3-311, 16-4-401, 16-4-402, MCA
REASONABLE NECESSITY: The department is proposing to amend ARM 42.12.133 to require concession agreements to include the compensation to be paid for shared employees. The proposed amendments will make it clear to licensees and concessionaries that compensation may not be based on a percentage of alcohol sales. Concession agreements are agreements under which an all-beverages licensee or an on-premises consumption beer licensee uses their license in an otherwise nonlicensed establishment within the confines of their current building. For illustration purposes, Chili's and Macaroni Grill in Helena are two separate businesses that are physically conjoined. It is possible for Chili's and Macaroni Grill to have a concession agreement where Chili's owns the alcoholic beverages license, but Macaroni Grill is also allowed to serve alcoholic beverages under the same license. The department is proposing the addition of new language in (1)(j) to increase public understanding that only the licensee of record may receive and expend funds from the alcohol enterprise. Current practices of concession agreements normally include one party collecting all revenues from food and alcohol sales. These are then turned over to the proper licensee in a given time period that can vary considerably. A lengthy period of time of withholding of alcohol revenues may cause undisclosed ownership issues. The department acknowledges the practice of "layered" management and concession agreements as common, but seeks to make it clear within the rule that the revenues from alcoholic beverage sales belong to the licensee alone and the sooner they are placed in the licensee's account, the better. The department is proposing the addition of language to (2) to enhance licensees' understanding of the signage requirements in the suitability of a premises. The department seeks to notify the public that alcoholic beverages are available at the premises and identify the licensee and concessionaire who provide service of that alcohol on the premises. The department has received concerns that there is not proper notice of who is operating the license; thus, by amending this rule it can provide transparency to the public and proper notice for the public's right to know. The proposed amendment to (4) addresses the additional advice response time the department could potentially need in situations where an agreement is submitted for approval with incomplete information or missing required documentation; or when the Department of Justice is conducting an audit review. Either situation has the potential to otherwise extend the notification beyond the routine seven working days. 42.12.141 (a) (b) (c) the applicant must be current on all filings and payments related to Montana income, corporation, withholding, business, and other taxes.
AUTH: 16-1-303, MCA IMP: 16-4-401, MCA
EASONABLE NECESSITY: The department is proposing to amend ARM 42.12.141 to reflect the statutory amendments made to 16-4-401, MCA, through the enactment of House Bill 113, L. 2007. Section 16-4-401, MCA, allows out-of-state residents to apply for liquor licenses, and includes business entity types such as limited liability companies and limited liability partnerships in addition to corporations. It also applies the same license qualification requirements to the additional business types as is currently required of corporations. The proposed amendments replace the word "corporation" with "entity" to encompass all business entity types within the rule. In addition, the department is proposing to amend the rule to include a requirement for applicants to be current on all income, corporation, withholding, and business taxes and filings, to reflect the department's current policy when processing licensing applications, and to improve the applicant's ease and convenience in meeting their responsibilities under the law. 42.12.143 RESTRICTION ON INTEREST IN OTHER LICENSES (1) For purposes of this rule, any ownership interest in a business which operates in conjunction with a license issued under the Montana Alcoholic Beverage Code is considered to be an ownership interest in the license itself. Except as provided in 16-4-205, MCA, any person (a) another all-beverages (b) a Montana beer wholesaler license (c) a Montana table wine distributor (d) an alcoholic beverage manufacturer; (e) an importer of alcoholic beverages; or (f) a state agency liquor store. (2) Any person holding ownership interest in a Montana retail alcoholic beverages license is not qualified to own an interest in: (a) a Montana beer wholesaler license; (b) a Montana table wine distributor license; (c) an alcoholic beverage manufacturer; (d) an importer of alcoholic beverages; or (e) a state agency liquor store.
(a) another (b) an alcoholic beverage manufacturer; (c) an importer of alcoholic beverages; (d) a Montana retail alcoholic beverages license; or (e) a state agency liquor store.
(a) another Montana table wine distributor's license (b) an alcoholic beverage manufacturer; (c) an importer of alcoholic beverages; (d) a Montana retail alcoholic beverages license; or (e) a state agency liquor store. (5) Any person holding an ownership interest in a Montana alcoholic beverage manufacturer pursuant to 16-4-401, MCA, is not qualified to own an interest in: (a) a Montana retail alcoholic beverage license; (b) a Montana beer wholesaler license; (c) a Montana table wine distributor license; or (d) a state agency liquor store.
AUTH: 16-1-303, MCA
REASONABLE NECESSITY: The department is proposing to amend ARM 42.12.143 to adjust the language to reflect the statutory changes to 16-4-401, MCA, enacted by the 2007 Montana Legislature. Section 16-4-401, MCA, allows out-of-state residents to apply for liquor licenses. It also includes licensing requirements for other business entity types, such as limited liability companies and limited liability partnerships, in addition to corporations. The proposed amendments update the rule to reflect that business entities, other than corporations, can own liquor licenses. In addition, the proposed amendments are to improve the understanding of the separation requirements of the three-tier system. The three-tier system, (manufacturer, distributer, and retailer) is set into place to prevent coercion and inducement of alcohol sales. The rule supports the three-tier system in Montana and ensures the separation is understandable to the public.
42.12.144 TRANSFERS BETWEEN QUOTA AREAS - PROCEDURES AND DOCUMENTATION (1) and (2) remain the same. (3) Documentation required under (1) and (2) includes: (a) (b)
(d) (4) (5) remains the same.
AUTH: 16-1-303, MCA REASONABLE NECESSITY: The department is proposing to reformat and amend ARM 42.12.144 to include all necessary items to obtain a license together for process simplification and improved applicant understanding. Additionally, the department is proposing to add language referencing the documents required to be considered for a complete application, to correspond with the proposed amendments to ARM 42.12.106. 42.12.302 DEFINITIONS The following terms will be used in this subchapter: (1) through (6) remain the same. (7) (8) through (12) remain the same. AUTH: 16-1-303, MCA IMP: 16-4-201, 16-4-202, 16-4-301, MCA REASONABLE NECESSITY: The department proposes to amend ARM 42.12.302 as a matter of housekeeping to properly format the rule. 42.12.401 DEFINITIONS The following terms will be used in this chapter. (1) remains the same. (2) The following terms specifically apply to restaurant beer and wine licenses: (a) "Evening dinner meal" means individually priced meals served at least four days a week for at least two hours a day between the hours of 5 p.m. and 11 p.m. (b) "Preference" means a priority provided to a restaurant beer and wine lottery applicant based upon eligibility. (c) "Restaurant" as it refers to a restaurant beer and wine license, means a public eating place: (i) where individually priced meals are prepared and served for on-premises consumption; (ii) where at least 65 percent of the restaurant's annual gross income from the operation is from the sale of food (including nonalcoholic beverages) and not from the sale of alcoholic beverages; (iii) that has a dining room, a kitchen, and the number and kinds of employees necessary for the preparation, cooking, and serving of meals in order to satisfy the department that the space is intended for use as a full-service restaurant; (iv) that serves an evening dinner meal at least four days a week for at least two hours a day between the hours of 5 p.m. and 11 p.m. This provision does not apply to a restaurant for which a restaurant beer and wine license is in effect as of April 9, 2009, or to subsequent renewals of that license; (v) that offers individual sales of beer and wine by the drink; (vi) that serves beer and wine only to a patron who orders food; (vii) where beer and wine purchases will be stated on the food bill; (viii) that has a service bar as defined in ARM 42.12.401, at which the consumption of alcoholic beverages by patrons or any other person is not permitted; (ix) that provides table service of alcoholic beverages from the service bar; and (x) that has sufficient seating to accommodate the number of patrons indicated by the restaurant beer and wine licensing fees indicated in 16-4-420, MCA.
(e) "Service bar" means an area where alcoholic beverages are stored and prepared for table service delivery to patrons for on-premises consumption. Consumption of alcoholic beverages by patrons or any other person is not permitted at the service bar. The table service area, including the eating counter, must be noticeably separated from, and not attached or connected to, the service bar. (f) "Table service" means service of alcoholic beverages to a table, booth, or eating counter by a licensee or licensee's employees.
AUTH: 16-1-303, MCA IMP: 16-4-105, 16-4-201, 16-4-204, 16-4-420, 16-4-502, MCA REASONABLE NECESSITY: The department is proposing to amend ARM 42.12.401 to include a definition for "restaurant" as it refers to a restaurant beer and wine license, and a definition for "table service," to make it clearer to the public and licensees that customers may not consume beer and wine at the service bar. The proposed amendments are in response to questions the department frequently receives regarding the criteria necessary to be considered an acceptable counter area for customers to sit at and consume beer and wine. This proposed amendment to the rule is consistent with current application of the law and with responses the department has provided to questions of this nature. The department further proposes to remove the term "seasonal restaurant" from this set of definitions because it is inconsistent with statute and with other liquor rule definitions.
42.13.101 COMPLIANCE WITH LAWS AND RULES (1) through (11) remain the same. (12) If the violation discovered is an undisclosed ownership interest, the department will consider aggravating circumstances described in (13) remains the same. AUTH: 16-1-303, 16-4-1009, MCA IMP: 16-3-301, 16-4-406, 16-4-1001, 16-4-1002, 16-4-1003, 16-4-1004, 16-4-1005, 16-4-1006, 16-4-1007, 16-4-1008, 16-6-305, 16-6-314, MCA REASONABLE NECESSITY: The department proposes to amend ARM 42.13.101, to correct a reference that was inadvertently not revised when sections within the rule were amended in MAR Notice Number 42-2-870, at page 122, of the 2012 Montana Administrative Register, Issue Number 1. 6. Concerned persons may submit their data, views, or arguments, either orally or in writing, at the hearing. Written data, views, or arguments may also be submitted to: Cleo Anderson, Department of Revenue, Director's Office, P.O. Box 7701, Helena, Montana 59604-7701; telephone (406) 444-5828; fax (406) 444-4375; or e-mail canderson@mt.gov and must be received no later than June 15, 2012. Cleo Anderson, Department of Revenue, Director's Office, has been designated to preside over and conduct the hearing. 7. An electronic copy of this notice is available on the department's web site at www.revenue.mt.gov. Locate "Legal Resources" in the left hand column, select the "Rules" link and view the options under the "Current Rulemaking Actions – Published Notices" heading. The department strives to make the electronic copy of this notice conform to the official version of the notice, as printed in the Montana Administrative Register, but advises all concerned persons that in the event of a discrepancy between the official printed text of the notice and the electronic version of the notice, only the official printed text will be considered. In addition, although the department strives to keep its web site accessible at all times, concerned persons should be aware that the web site may be unavailable during some periods, due to system maintenance or technical problems. 8. The Department of Revenue maintains a list of interested persons who wish to receive notices of rulemaking actions proposed by this agency. Persons who wish to have their name added to the list shall make a written request, which includes the name and e-mail or mailing address of the person to receive notices and specifies that the person wishes to receive notices regarding particular subject matter or matters. Notices will be sent by e-mail unless a mailing preference is noted in the request. Such written request may be mailed or delivered to the person in 6 above or faxed to the office at (406) 444-4375, or may be made by completing a request form at any rules hearing held by the Department of Revenue. 9. The bill sponsor contact requirements of 2-4-302, MCA, apply and have been fulfilled. The primary sponsor of House Bill 113, L. 2007, Representative Bill McChesney, and the primary sponsor of Senate Bill 511, L. 2009, Senator Mitch Tropila, were contacted on March 6, 2010, by electronic mail. The primary sponsor of Senate Bill 203, L. 2011, Senator Ryan Zinke, was contacted on August 23, 2011, by electronic mail. All three sponsors were subsequently notified on April 3, 2012, by both electronic and regular mail. /s/ Cleo Anderson /s/ Dan R. Bucks CLEO ANDERSON DAN R. BUCKS Rule Reviewer Director of Revenue Certified to Secretary of State April 30, 2012
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A directory of state agencies is available online at http://www.mt.gov/govt/agencylisting.asp.
For questions about the organization of the ARM or this web site, contact sosarm@mt.gov.
