Only two proposed amendments to Utah’s Alcoholic Beverage Control Act passed during the most recent session of the Utah Legislature, which concluded on March 14th.  H.B. 240 passed earlier in the session and addresses the “intent to dine” issue we reported on previously.  Under the change, a restaurant licensee must confirm that a patron has an intent to order food prior to selling or furnishing a drink. It is unclear, however, what type of “confirmation” will be sufficient to comply.

The second bill to pass was hammered out during a House and Senate conference committee that met on the last day of the session. The compromise bill was introduced as a substitute to H.B. 228.   The House and Senate ultimately approved the substituted H.B. 228 before the session ended. Governor Herbert is expected to sign both Substitute H.B. 228 and H.B. 240. 

Most notably, Substitute H.B. 228 authorizes master licenses for full and limited service restaurants. To qualify, restaurants must be commonly owned and the owner must include at least five locations under the master license. Master license fees are $10,000 for full service restaurants and $5,000 for limited service restaurants, plus the initial license fees required for each newly licensed location ($2,200 for full service and $825 for limited service restaurants). As previously reported, enforcement across locations was a concern for the restaurant industry. The bill addresses these concerns somewhat by limiting the scope of enforcement actions. Under the bill, DABC may take disciplinary actions against a single location, individual staff at a single location or a combination of the two. Disciplinary action may be taken against the master licensee or staff of the master licensee if 25% of the locations covered by the master license have committed grave or serious violations or if 50% of the locations have committed any violations. The master license and all locations under it will count as one retail license for quota purposes. While a master licensing scheme may free up additional restaurant licenses, the current availability of restaurant licenses may make it unlikely that chains will adopt the new license format until licenses are no longer available.      

Substitute H.B. 228 also makes several other changes, including:

  • Allowing DABC to issue a conditional license for any type of retail license;
  • Extending the time period for conditional licenses from six months to nine months, with a possible extension of three additional months;
  • Allowing existing fraternal clubs to admit and serve guests without a club host if they derive at least 60% of gross sales from food;
  • Postponing the effective date of the Transfer of Retail License Act until July 1, 2014; and
  • Clarifying certain financial and audit provisions related to the DABC.