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| Montana Administrative Register Notice 42-2-810 | No. 20 10/29/2009 | |
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BEFORE THE DEPARTMENT OF REVENUE OF THE STATE OF
TO: All Concerned Persons 1. On November 18, 2009, at 10:00 a.m., a public hearing will be held in the Third Floor Reception Conference Room of the Individuals planning to attend the hearing shall enter the building through the east doors of the 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., November 9, 2009, to advise us of the nature of the accommodation that you need. Please contact Cleo Anderson, Department of Revenue, Director's Office, 3. 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 BEER LABEL APPROVALS (1) Except as provided in (a), a brewer or beer importer who wishes to sell beer in the state must provide labels for each brand to the department for approval prior to selling or distributing beer within the state. All label changes must be preapproved for both in-state and out-of-state brewers or importers. (a) A brewer or beer importer of malted beverages who is not subject to the labeling provisions in the regulations of the Tobacco Tax and Trade Bureau (TTB), United States Department of the Treasury as set forth in 27 CFR, as revised on April 1, 2009, is not required to provide the department with labels. (2) Beer containing more than 8.75% alcohol by volume must be approved by the department prior to being sold or distributed within the state. Beer containing more than 8.75% alcohol by volume must be made by the alcoholic fermentation of an infusion or decoction, or a combination of both, in potable brewing water, of malted cereal grain, in which the sugars used for fermentation of the alcoholic beverage are at least 75% derived from malted cereal grain measured as a percentage of the total dry weight of the fermentable ingredients. (3) To obtain approval from the department for all beer or formula changes that meet the criteria in (2), the following documents are required: (a) The brewer or beer importer must file form BeerSS, a sworn statement attesting the formula meets the requirement in (2). (b) If the brewer or beer importer is required by federal law or regulations to file its formula with TTB, the brewer or beer importer is also required to send a copy of the formula filed with the TTB to the department. (c) At the department's request and sole discretion, brewers or beer importers must file a formula for verification of its compliance with (d) All formulas filed with the department are protected by the privacy act and will not be released by the department unless otherwise required by law or by court order. (4) A cover letter requesting approval of the labels and formulations shall be sent to the Liquor Control Division, P.O. 1712, (5) The department will process the request and provide approval or denial in writing within 30 days. AUTH: 16-1-303, MCA REASONABLE NECESSITY: The department is proposing to adopt New Rule I both to reflect the department's current practice of requiring review and approval of labels for beer to be sold within the state and to reflect statutory changes made by the 2009 Legislature within House Bill 400, (Ch. 197, L. 2009). House Bill 400 changed the definition of "beer" to include an alternate class of beer in order to permit the sale of certain specialty crafted beers in the state. The definition of "beer" was revised to a malt beverage containing not more than 8.75% alcohol by volume; or an alcoholic beverage containing not more than 14% alcohol by volume: (a) that is made by the alcoholic fermentation of an infusion or decoction, or a combination of both, in potable brewing water, of malted cereal grain; and (b) in which the sugars used for fermentation of the alcoholic beverage are at least 75% derived from malted cereal grain measured as a percentage of the total dry weight of the fermentable ingredients. To ensure public health and safety, the new rule outlines how beer with the higher alcohol content will be approved for sale within the state of NEW RULE II WINERY – SAMPLES (1) Product samples may only be provided in the sample room as shown on the floor plan, which has been submitted and approved by the department. (2) A winery located in (3) A sample room may include a deck or patio, as long as the deck or patio is immediately adjacent to the winery sample room and can only be accessed from the winery. The deck or patio must be enclosed in such a manner as to restrict its access and view from the general public on the street or sidewalk. AUTH: 16-1-303, MCA IMP: 16-4-201, MCA REASONABLE NECESSITY: The department is proposing to adopt New Rule II to plainly outline to in-state wineries and the public where wine samples are allowed at a licensed winery. 4. The rules proposed to be amended provide as follows, stricken matter interlined, new matter underlined: 42.13.101 COMPLIANCE WITH LAWS AND RULES (1) through (7) remain the same. (8) Aggravating circumstances may result in the imposition of maximum monetary penalties, maximum suspension time or revocation, and will not bind the department to the progressive penalty framework indicated in (3) or (13). (9) through (11) remain the same. (12) For sale to a minor violations, the progressive penalty schedule in (3) shall apply except in the case of a licensee who meets the criteria described in this section, in which case the penalty schedule in (13) shall apply. To qualify for the penalty schedule in (13), a licensee must meet the following criteria: (a) a licensee must, on at least an annual basis, provide responsible server training, as defined in ARM 42.13.111, to all employees and owners of the license who personally sell or serve alcoholic beverages; (b) all new employees must be given responsible server training within 30 days of the date of hire; and (c) any licensee or specific employee of the licensee who sold, served, or gave an alcoholic beverage to a person under the age of 21 years must have successfully completed responsible server training within the 12 months preceding the date of the violation, and the licensee must provide documentary evidence of completion of the training to the department; or (d) if an employee commits a sale to a minor violation within 30 days of hire, the licensee must provide the department records evidencing the date of the employee's hire and demonstrating the licensee meets the requirements in (12)(a) and (b). (13) For sale to minor violations only, for licensees who meet the criteria described in (12), the following penalty chart will be used for multiple violations within any three-year period in place of the chart at (3):
1st offense 2nd offense 3rd offense 4th offense 5th offense 6th offense Written $100 $250 $750 $1,500 Revocation Reprimand and/or 2-day suspension
(14) The department may verify employee responsible server training documentation supplied by the licensee with the records of the server training organization. (a) A qualified server training program must be a substantive program to include subjects dealing with (b) To obtain preapproval, a full copy of the curriculum including any training material such as videos, handouts, and testing material must be provided to the department. The department will review and provide approval in writing within 45 days. (15) The penalty schedule in (13) does not apply to any violations except for a sale to a minor violation. If a licensee commits other violations in conjunction with a sale to a minor violation or during the same three-year period, the penalty schedule in (3) shall apply to the other violations, based on the order in which the violations occurred. (a) For example, if a licensee meeting the criteria of (12) commits an open after hours violation in January, then a sale to a minor violation in March, then a denial of right to inspect violation in May, the penalty schedules would apply as follows: (i) the January violation would be a first violation, with a $150 penalty, based on the schedule in (3); (ii) the March violation would be a second violation, with a $100 penalty, based on the schedule in (13); and (iii) the May violation would be a third violation, with a $1,000 penalty and/or a 12-day suspension, based on the schedule in (3). (16) A licensee must meet the criteria in (12) at the time of a sale to a minor violation in order for the schedule in (13) to apply. If the licensee does not meet the criteria at the time of a particular sale to minor violation, the schedule in (3) applies to that violation. (a) For example, if a licensee meets the criteria in (12) at the time of a sale to a minor violation in October, but subsequently commits a second sale to a minor violation in December while not meeting the criteria of (12), the penalty schedules would apply as follows: (i) the October violation would be a first violation, with a written reprimand, based on the schedule in (13); and (ii) the December violation would be a second violation, with a $1,000 penalty, based on the schedule in (3). (17) At the time of a sale to a minor violation, licensees are responsible for notifying the department in writing when the licensee or specific employee meets the criteria of (12)(b) or (d) and are encouraged to provide such notice as soon as possible after the licensee or licensee's employee is issued a citation for a sale to a minor. If licensee demonstrates to the department the licensee or specific employee meets the requirements of (12)(b) or (d), the department will issue a violation notice based on the penalty schedule in (13). (18) For any violations occurring on or after July 1, 2011, the progressive penalty schedule in (3) shall apply. The provisions of (12) through (17) do not apply in the case of any violations occurring on or after July 1, 2011. AUTH: 16-1-303, MCA IMP: 16-3-301, 16-4-105, 16-4-406, 16-6-305, 16-6-314, MCA REASONABLE NECESSITY: The department is proposing to amend ARM 42.13.101 to reflect a compromise rule based on the proposed HB 211 introduced but not passed by the 2009 Legislature. Although House Bill 211 was not passed during the session, the department worked with interested licensees to provide a more flexible way to implement volunteer server training with reduced penalties for the licensees if they provide responsible alcohol seller and server training to all employees within 30 days of hire and again to all employees on an annual basis. The proposed rule establishes a period for testing this new approach to reducing alcohol sales to minors with the test period extending through June 30, 2011. Based on a survey conducted by the state of The department will analyze the benefits and/or impacts of sections (12) through (17) on sales to minors within the state. The rule as amended provides an opportunity for the department to determine if the training works to reduce underage sales. The department will be working with interested parties to determine the most effective way to evaluate the impact of this revision to the rules on sales to minors and other issues related to compliance with the alcohol beverage laws. At the end of the test period, based on the results, the department will determine whether to extend and/or amend the rules. 42.13.111 DEFINITIONS The following definitions apply to this (1) through (4) remain the same. (5) "Patio/Deck" means a specific area designated on a floor plan which shall be completely enclosed by at least a 3-foot fence or wall, immediately adjacent to and only accessible from the licensed premises. (5) through (7) remain the same but are renumbered (6) through (8). (9) "Responsible server training" means any server training program conducted by the department or the department designee, or a qualified server training program that has been preapproved in writing by the department. (10) " (8) remains the same but is renumbered (11).
IMP: 16-1-424, 16-3-302, 16-3-311, 16-4-312, 16-4-404, 16-6-104, MCA
REASONABLE NECESSITY: The department is proposing to amend ARM 42.13.111 to add definitions to this chapter to reflect rule additions and amendments. The department is proposing to add the definition of patio/deck to define what is considered a patio and deck and add definitions for "responsible server training" and "sale to a minor violation" due to the new amendments made to ARM 42.13.101. 42.13.201 LABELING REQUIREMENTS (1) remains the same. (2) Alcohol content by AUTH: 16-1-303, MCA IMP: 16-1-102, 16-1-106, 16-1-303, MCA
REASONABLE NECESSITY: The department is proposing to amend ARM 42.13.201 to reflect statutory change made by the 2009 Legislature in House Bill 400 (Ch. 197, L. 2009). House Bill 400 (Ch. 197, L. 2009), changed the definition of "beer" to allow an alternate class of beer of specialty crafted beers in the state. To clearly provide adult consumers with information on the alcohol volume of "beer", the amended rule now requires all packaged malt beverages with alcohol content of more than 8.75% to be noted on the labels of packaged malt beverage sold or manufactured in 42.13.301 STORAGE OF ALCOHOLIC BEVERAGES (1) remains the same. (2) Only those alcoholic beverages for which the premises are specifically licensed may be received, accepted, or stored. All alcoholic beverages must be purchased through an agency liquor store, AUTH: 16-1-303, MCA IMP: 16-1-302, 16-3-201, 16-3-301, 16-6-301, 16-6-303, MCA REASONABLE NECESSITY: The department is proposing to amend ARM 42.13.301 to remove the word "domestic" and add terminology that is consistent with the statutory language. 42.13.402 WINE DISTRIBUTOR'S MONTHLY REPORTS (1) Each table wine distributor shall file with the department a table wine distributor's monthly tax (2) (3) Failure to file the AUTH: 16-1-303, MCA IMP: 15-1-216, 16-1-411, 16-3-404, 16-4-406, MCA REASONABLE NECESSITY: The department is proposing to amend ARM 42.13.402 to correct form titles, remove an incorrect address and bring the language in line with the applicable statutory language. The amendments also coincide with current department practice and the use of return forms. 42.13.404 WINE REPORTING REQUIREMENTS (1) Each winery located outside of (a) A winery that sells wine directly to a retailer located in Montana must pay the tax due, pursuant to 16-3-411, MCA, on or before the 15th of each month for wine sold in the previous month and complete Montana tax return Form WIT; and (b) A winery that sells wine directly to a retailer shall report on or before the 15th of each month the amount of wine sold directly to retailers in the previous month on Form WIT-3
(2) and (3) remain the same but are renumbered (3) and (4). AUTH: 16-1-303, MCA REASONABLE NECESSITY: The department is proposing to amend ARM 42.13.404 to make it clearer that the winery must "complete" as well as file monthly reports with the department. The reports must be provided to the department on forms provided to the winery by the department. 5. 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) 444-3696; or e-mail canderson@mt.gov and must be received no later than November 30, 2009. 6. 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 of Public Hearing is available through the department's site on the World Wide Web at www.mt.gov/revenue, under "for your reference"; "DOR administrative rules"; and "upcoming events and proposed rule changes." The department strives to make the electronic copy of this Notice of Public Hearing 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 5 above or faxed to the office at (406) 444-3696, 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 bill sponsor was contacted on July 28, 2009, by regular mail. /s/ Cleo Anderson /s/ Dan R. Bucks CLEO ANDERSON DAN R. BUCKS Rule Reviewer Director of Revenue Certified to Secretary of State October 19, 2009
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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.
