Tales from the DABC – legislation update

HSL, five dollar cocktails
New liquor laws incoming, mines a double

The infamous HB 442 wrapped up this week, causing consternation all around; not to mention a good deal of confusion. Here are the key points to take away if anyone still has any lingering queries:

* Restaurants can serve alcohol from 10.30 a.m. on Saturdays and Sundays | I’ll call this one a win actually. I still vividly recall sitting around a bar with thirty or so other glum patrons in Atlanta one time. Every last one us sat forlornly with nothing more than a glass of water, while maniacally glaring at the clock, trying to use ESP to force the hands ever closer to noon – when the good stuff flowed.

* Tax on all alcohol across the board will be raised 2% | It doesn’t matter how much taxes are raised, or how they’re spent, no one is going to cheer. That said, 2% doesn’t feel too onerous all said, my usual 12 pack of Cutthroat looks set to go up by a doable 25 cents.

* Dining club licenses are going away, businesses can choose either a bar or restaurant license. Restaurants are limited to generating 30% of their sales through booze | A mixed bag. No doubt this will simplify the licensing side of things a great deal, and we can finally remove more of that confusing club language that still throws visitors off. And for those restaurants who need to scramble to adjust…

* A transition period util 2021 for dining clubs moving to restaurant licenses, who need to reduce their alcohol sales | See notes below over how and when, but businesses will have some time to transition to the new revenue mix. The message is clear from the legislature, you’re a bar or you’re a restaurant, choose which one you want to be.

* The Zion Wall can now come tumbling down | Provided restaurants are happy with introducing a replacement Zion Moat, essentially meaning kids can’t be seated within 10ft of the bar. A third option is available too, limiting kids 5″ from the bar if there’s a 42″ high barrier between them and the hard stuff. This third option apparently mirrors state law in Washington and some other control states.

* Businesses previously exempt from the Zion Wall will lose that status | Come 2022 everyone has to comply with these new rules, grandfathered status or not. This one could particularly suck for some older businesses with unique spaces. Time will tell on this one.

* The proximity of booze to certain community buildings falls from 600 to 300 feet (on foot) but variances are eliminated | Good and bad. Lowering the proximity sounds great in theory, and will enable far more business to open with ease. Removing the option of variances though means the DABC will have no latitude on this matter at all. Previously businesses could demonstrate a pent up demand not being met, and in turn be granted a variance to open. From here on out it’s all black and white, no discretion. Those businesses already issued variances can keep them as is.

The Utah Restaurant Association (URA) provided the following more detailed guidance by email as well, emphasized text theirs:

The 2017 legislative session ended yesterday, March 9, 2017 at midnight. As many of you know HB 442 – Alcohol Amendments passed through the legislative process Wednesday, March 8, 2017, offering several different policies restaurants can implement which allows for the removal of the “Zion Wall”.

The Bill’s sponsors Representative Brad Wilson and Senator Jerry Stevenson worked tirelessly this session to understand all aspects of alcohol policy as it relates to our food service industry. They sought to understand and address issues where policy had led to consumer confusion and where operational issues arose with past laws and licensing. The goal of the Utah Restaurant Association is always to negotiate and fight on your behalf and to find a middle ground where we can all work together to improve Utah’s liquor laws for the better while trying to mitigate the least amount of negative effects to our restaurant community as possible. An effective negotiation is one where all parties leave
with something on the table.

The process of this session was long, arduous and hard fought with many conversations and vested stake holders. Throughout the course of the last several years we have worked with Representative Wilson and Senator Stevenson educating them on our issues and we know they are dedicated to being fair and equitable to all segments of our industry and community. We know they will continue the conversation moving forward and address any unforeseen
issues that might arise.

The bill addresses many issues including two majors points for restaurants:

1. The “Zion Wall” – allowing a restaurant to choose to take down their Zion wall, or maintain their open dispensing area while implementing a policy which prohibits an unaccompanied minor (Under 21) from dining within a chosen distance from the dispensing area.

2. The Dining Club License & Dual Licenses – we were told early on that the Dining Club license was going to be eliminated. To address the confusion these licenses create in the hospitality industry, our legislative body decided that all restaurants need to operate under the same policies and all bars need to have uniform operational policies regarding their alcohol license. Once informed that the dining club license would no longer be issued or renewed, the URA began formulating strategies to offer our legislators. The URA worked dillegently to create a plan to phase out the dining club license over the course of the next five years and develop policies that help alleviate and address as many concerns as we possibly could. The URA has recommended at every opportunity a blending of the Full Service Restaurant License and the Dining Club License. This, in the opinion of the URA, would be the best resolution to the confusion created by the different operations requirements of these two licenses.

We will be providing several forums for you, our members regarding the legislation of 2017 along with providing you help and any assistance in this process. Please do not hesitate to call our offices. Over the course of the last two weeks, confusion has surrounded this bill and we would like to dispel any misinformation and clarify the points that were negotiated on behalf of our industry:

Alcohol Amendments HB 442 (House Sponsor: Brad Wilson – Senate Sponsor: Jerry Stevenson) relating to changes in the alcohol policy and license
structure for all restaurant operations.

1. Reduces the proximity of a restaurant to a community location 600 feet to 300 feet measured from the entrance of the restaurant along the normal walking distance and 200 feet if measured on a straight line from the entrance to the property line of any community center, church, school, playground and removes the authority of the Commission to grant a variance to these distances. Any restaurant that has been granted a variance prior to May 9, 2017 will be allowed to keep their variance in place as long as the restaurant is in continuous operation. This will be the “firm” standard and the Commission cannot alter this distance restriction for any reason.

2. Increases the mark up by 2% on all alcoholic products sold by the UDABC – Revenue to be earmarked for training and education.

3. Requires every retail licensee to submit a Responsible Alcohol Service Plan to the Department when they apply for or renew their license.

4. Prohibits more than one type of retail license for the same room – Eliminates dual licenses in the same room at the same time. A restaurant may have more than one license type but may only use one license at a time for any room.

5. Flat fee for a full-service restaurant license

6. Scanning is required at the dispensing structure (bar) for anyone who looks to be under 35

7. The restaurant may store and dispense alcoholic product at a dispensing structure (bar) in view of the public;
A. Keep the wall that is currently required in a non-grandfathered restaurant; OR
B. Beginning on July 1, 2018, a minor may not sit, remain, or consume food or beverages within 10 feet of a grandfathered bar structure unless this is only seating available and the minor is accompanied by an individual 21 years of age or older. Restaurants will need to have a policy in place to: Seat MINORS at least 10 feet from the dispensing structure (bar); OR
C. MINORS can be seated 60 inches (5 feet) from the front of the dispensing structure (bar) if accompanied by someone over the age of 21 and the restaurant has a physical separation that is at least 42 inches high. Every category of restaurant licensee will be required as of July 1, 2022 to be using one of the above standards; A), B) or C).

8. Removes grandfathered bar structures beginning on July 1, 2022

9. Beginning on July 1, 2018, a minor may not sit, remain in, or consume food or beverages within 10 feet of a grandfathered bar structure unless this is only seating available and the minor is accompanied by an individual 21 years of age or older. (This applies until on July 1, 2022 when there are no more grandfathered bar structures)

10. Restaurants will be allowed to sell alcohol beginning at 10:30 a.m. on Saturday’s, Sunday’s, and legal holidays.

11. A restaurant does not have to include the cost of any bottle of wine that is in excess of $175 in calculating the percentage of 70/30. A bottle of wine that is sold for any amount over $175 is reported at $175.

12. An individual portion of wine is considered one alcohol product. A patron can have no more than two alcohol products at a time on the table. A patron may not have a white wine, a red wine (and consider this “wine” as one alcohol because they are both wine) and then another alcoholic product. One portion of wine is considered one alcohol product.

13. Requires a restaurant licensee or a bar licensee to display a sign that informs a patron upon entrance if the establishment is a Restaurant or a Bar

14. Prohibits the Commission from issuing or renewing a Dining Club license as of
July 1, 2017

15. Requires a Dining Club to convert to a Restaurant License or a Bar License by
July 1, 2018
A. Ratio on July 1, 2018 64% to 36%
B. Ratio on July 1, 2019 68% to 32%
C. Ratio on July 1, 2021 70% to 30%
1. Intent to Dine will be the rule in all Restaurants
2. 70% food to 30% food sales will be the ratio in all restaurants by
July 1, 2021

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