Rep. Norm Thurston — Voting Record

Bill

Number

H.B. 157 First Substitute (2020GS)

Sponsor

Rep. McKell, M.

Final action

Governor Signed 3/28/2020

Outcome

Became law — signed by Gov. Gary R. Herbert

Summary

What it does

• This bill:
• defines terms;
• requires the Department of Alcoholic Beverage Control (department) to establish and administer a wine subscription program in which:
• the department purchases a wine subscription on behalf of an individual;
• an individual pays to the department the cost of the wine subscription plus, in addition to any tax or fee, an established markup;
• wine purchased through the wine subscription program is shipped or transported to a department warehouse;
• the department ships or transports wine purchased through the wine subscription program to a state store or package agency; and
• an individual collects the wine from a state store or package agency;
• permits the department to charge a fee to cover costs of administering the wine subscription program;
• grants the commission rulemaking authority;
• removes the requirement that a person moving the person's residence into the state obtain department approval before bringing liquor for personal consumption into the state;
• removes the requirement that a person who inherits liquor that is located outside the state obtain department approval before bringing the liquor into the state; and
• makes technical and conforming changes.

Every vote on this bill

Bill text

WINE SERVICES AND AMENDMENTS
GENERAL SESSION
STATE OF UTAH
Chief Sponsor: Michael K. McKell
Senate Sponsor: 
Curtis S. Bramble
LONG TITLE
General Description:
This bill amends the Alcoholic Beverage Control Act to establish a wine subscription
program.
Highlighted Provisions:
This bill:
▸ defines terms;
▸ requires the Department of Alcoholic Beverage Control (department) to establish
and administer a wine subscription program in which:
• the department purchases a wine subscription on behalf of an individual;
• an individual pays to the department the cost of the wine subscription plus, in
addition to any tax or fee, an established markup;
• wine purchased through the wine subscription program is shipped or transported
to a department warehouse;
• the department ships or transports wine purchased through the wine subscription
program to a state store or package agency; and
• an individual collects the wine from a state store or package agency;
▸ permits the department to charge a fee to cover costs of administering the wine
subscription program;
▸ grants the commission rulemaking authority;
▸ removes the requirement that a person moving the person's residence into the state
obtain department approval before bringing liquor for personal consumption into
the state;
▸ removes the requirement that a person who inherits liquor that is located outside the
state obtain department approval before bringing the liquor into the state; and
▸ makes technical and conforming changes.
Money Appropriated in this Bill:
None
Other Special Clauses:
None
Utah Code Sections Affected:
AMENDS:
32B-2-304
, as last amended by Laws of Utah 2019, Chapter 403
32B-4-414
, as enacted by Laws of Utah 2010, Chapter 276
ENACTS:
32B-2-701
, Utah Code Annotated 1953
32B-2-702
, Utah Code Annotated 1953
32B-2-703
, Utah Code Annotated 1953
Be it enacted by the Legislature of the state of Utah:
Section 1. Section 
32B-2-304
 is amended to read:
32B-2-304.
Liquor price -- School lunch program -- Remittance of markup.
(1) For purposes of this section:
(a) (i) "Landed case cost" means:
(A) the cost of the product; and
(B) inbound shipping costs incurred by the department.
(ii) "Landed case cost" does not include the outbound shipping cost from a warehouse
of the department to a state store.
(b) "Proof gallon" means the same as that term is defined in 26 U.S.C. Sec. 5002.
(c) Notwithstanding Section 
32B-1-102
, "small brewer" means a brewer who
manufactures in a calendar year less than 40,000 barrels of beer, heavy beer, and flavored malt
beverage.
(2) Except as provided in [
Subsection
] 
Subsections
 (3) 
and (4)
:
(a) spirituous liquor sold by the department within the state shall be marked up in an
amount not less than 88% above the landed case cost to the department;
(b) wine sold by the department within the state shall be marked up in an amount not
less than 88% above the landed case cost to the department;
(c) heavy beer sold by the department within the state shall be marked up in an amount
not less than 66.5% above the landed case cost to the department; and
(d) a flavored malt beverage sold by the department within the state shall be marked up
in an amount not less than 88% above the landed case cost to the department.
(3) (a) Liquor sold by the department to a military installation in Utah shall be marked
up in an amount not less than 17% above the landed case cost to the department.
(b) Except for spirituous liquor sold by the department to a military installation in
Utah, spirituous liquor that is sold by the department within the state shall be marked up 49%
above the landed case cost to the department if:
(i) the spirituous liquor is manufactured by a manufacturer producing less than 30,000
proof gallons of spirituous liquor in a calendar year; and
(ii) the manufacturer applies to the department for a reduced markup.
(c) Except for wine sold by the department to a military installation in Utah, wine that
is sold by the department within the state shall be marked up 49% above the landed case cost to
the department if:
(i) (A) except as provided in Subsection (3)(c)(i)(B), the wine is manufactured by a
manufacturer producing less than 20,000 gallons of wine in a calendar year; or
(B) for hard cider, the hard cider is manufactured by a manufacturer producing less
than 620,000 gallons of hard cider in a calendar year; and
(ii) the manufacturer applies to the department for a reduced markup.
(d) Except for heavy beer sold by the department to a military installation in Utah,
heavy beer that is sold by the department within the state shall be marked up 32% above the
landed case cost to the department if:
(i) a small brewer manufactures the heavy beer; and
(ii) the small brewer applies to the department for a reduced markup.
(e) The department shall verify an amount described in Subsection (3)(b), (c), or (d)
pursuant to a federal or other verifiable production report.
(f) For purposes of determining whether an alcoholic product qualifies for a markup
under this Subsection (3), the department shall evaluate whether the manufacturer satisfies the
applicable production requirement without considering the manufacturer's production of any
other type of alcoholic product.
(4) Wine the department purchases on behalf of a subscriber through the wine
subscription program established in Section 
32B-2-702
 shall be marked up not less than 88%
above the cost of the subscription for the interval in which the wine is purchased.
[
(4)
] 
(5)
 The department shall deposit 10% of the total gross revenue from sales of
liquor with the state treasurer to be credited to the Uniform School Fund and used to support
the school lunch program administered by the State Board of Education under Section
53E-3-510
.
[
(5)
] 
(6)
 This section does not prohibit the department from selling discontinued items
at a discount.
Section 2. Section 
32B-2-701
 is enacted to read:
 32B-2-701.
Definitions.
As used in this part:
(1) "Subscriber" means an individual who subscribes to a wine subscription as
described in Subsection 
32B-2-702
(2).
(2) "Subscription program" means the wine subscription program established in
Section 
32B-2-702
.
(3) "Wine subscription" means an arrangement in which a customer pays a recurring
price at regular intervals for a product that involves the shipment or transportation of wine.
(4) "Wine subscription business" means a person that:
(a) sells or offers for sale a wine subscription; and
(b) contracts with the department to participate in the subscription program.
Section 3. Section 
32B-2-702
 is enacted to read:
 32B-2-702.
Wine subscription program.
(1) The department shall establish and administer a wine subscription program as
described in this part.
(2) The subscription program shall permit an individual to subscribe to a wine
subscription that a wine subscription business sells or offers for sale by:
(a) enrolling in the wine subscription program in a manner the department prescribes;
(b) authorizing the department to purchase the wine subscription in the individual's
name;
(c) paying the department, in a manner the department prescribes:
(i) the price of the wine subscription;
(ii) in addition to any tax, the markup described in Subsection 
32B-2-304
(4); and
(iii) a fee the department charges in accordance with Subsection 
32B-2-703
(1); and
(d) designating the state store or package agency at which the individual would prefer
to collect the wine.
(3) The department shall:
(a) designate by contract with a wine subscription business the department warehouse
to which the wine subscription business ships or transports wine under the subscription
program;
(b) deliver wine purchased through the subscription program to the appropriate state
store or package agency; and
(c) notify a subscriber when wine purchased through the subscription program is ready
for the subscriber to collect from the state store or package agency described in Subsection
(3)(b).
Section 4. Section 
32B-2-703
 is enacted to read:
 32B-2-703.
Fees -- Rulemaking.
(1) The department may charge a fee as part of the subscription program:
(a) in accordance with Section 
63J-1-504
; and
(b) to cover costs to the department for administering the subscription program.
(2) The commission may make rules in accordance with Title 63G, Chapter 3, Utah
Administrative Rulemaking Act, for the administration of this part, including rules designating
which package agencies may receive from the department wines that are purchased through the
subscription program.
Section 5. Section 
32B-4-414
 is amended to read:
32B-4-414.
Unlawful possession -- Exceptions.
[
(1)
] A person may not possess liquor within this state unless authorized by this title or
the rules of the commission, except that:
[
(a)
] 
(1)
 a person who clears United States Customs when entering this country may
possess for personal consumption and not for sale or resale, a maximum of [
two
] 
nine
 liters of
liquor purchased from without the United States;
(2) a person who enters this state may possess for personal consumption and not for
sale or resale, a maximum of nine liters of liquor purchased from without the state;
[
(b)
] 
(3)
 a person who moves the person's residence to this state from outside of this
state may possess for personal consumption and not for sale or resale, liquor previously
purchased outside the state and brought into this state during the move[
, if the person: (i)
obtains department approval before moving the liquor into the state; and (ii) pays the
department a reasonable administrative handling fee as determined by the commission
];
[
(c)
] 
(4)
 a person who inherits liquor as a beneficiary of an estate that is located outside
the state, may possess the liquor and transport or cause the liquor to be transported into the
state if the person[
: (i) obtains department approval before moving the liquor into the state;
(ii)
] provides sufficient documentation to the department to establish the person's legal right to
the liquor as a beneficiary; [
and (iii) 
(b)
 pays the department a reasonable administrative
handling fee as determined by the commission;
] or
[
(d)
] 
(5)
 a person may transport or possess liquor if:
[
(i)
] 
(a)
 the person transports or possesses the liquor:
[
(A)
] 
(i)
 for personal household use and consumption; and
[
(B)
] 
(ii)
 not for:
[
(I)
] 
(A)
 sale;
[
(II)
] 
(B)
 resale;
[
(III)
] 
(C)
 gifting to another; or
[
(IV)
] 
(D)
 consumption on premises licensed by the commission;
[
(ii)
] 
(b)
 the liquor is purchased from a store or facility on a military installation; and
[
(iii)
] 
(c)
 the maximum amount the person transports or possesses under this
Subsection [
(1)(d)
] 
(5)
 is:
[
(A)
] 
(i)
 two liters of:
[
(I)
] 
(A)
 spirituous liquor;
[
(II)
] 
(B)
 wine; or
[
(III)
] 
(C)
 a combination of spirituous liquor and wine; and
[
(B) (I)
] 
(ii) (A)
 one case of heavy beer that does not exceed 288 ounces; or
[
(II)
] 
(B)
 one case of a flavored malt beverage that does not exceed 288 ounces.
[
(2) (a) Approval under Subsection (1)(b) may be obtained by a person who:
]
[
(i) is transferring the person's permanent residence to this state; or
]
[
(ii) maintains separate residences both in and out of this state.
]
[
(b) A person may not obtain approval to transfer liquor under Subsection (1)(b) more
than one time.
]