Administrative Rules of the State of Montana

BEFORE THE DEPARTMENT OF REVENUE

OF THE STATE OF MONTANA

In the matter of the adoption of New Rule I and amendment of ARM 42.12.145 and 42.13.103 pertaining to access control systems (ACS)

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NOTICE OF PUBLIC HEARING ON PROPOSED ADOPTION AND AMENDMENT

TO: All Concerned Persons

1. On October 15, 2019, at 1:30 p.m., the Department of Revenue will hold a public hearing in the Third Floor Reception Area Conference Room of the Sam W. Mitchell Building, located at 125 North Roberts, Helena, Montana, to consider the proposed adoption and amendment of the above-stated rules. The conference room is most readily accessed by entering through the east doors of the building.

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, please advise the department of the nature of the accommodation needed, no later than 5 p.m. on September 27, 2019. Please contact Todd Olson, Department of Revenue, Director's Office, P.O. Box 7701, Helena, Montana 59604-7701; telephone (406) 444-7905; fax (406) 444-3696; or [email protected].

3. GENERAL STATEMENT OF REASONABLE NECESSITY: The department proposes to adopt New Rule I and amend ARM 42.12.145 and 42.13.103 to implement Senate Bill 119 (2019) (SB 119) amendments to 16-6-103, MCA, by the 66th Montana Legislature regarding access control systems (ACS) at a retail alcoholic beverage licensee's licensed premises. An ACS restricts access to a licensed premises by locking its main entrance and requires access by approval and action of a licensee or its employees.

The department believes the proposed rulemaking under New Rule I is necessary to provide licensees with a minimal and uniform process of reporting necessary information to the department and local law enforcement since a licensee's implementation of an ACS directly impacts examination of a licensed retail premises pursuant to 16-6-103, MCA. The proposed amendments to ARM 42.12.145 and 42.13.103 are necessary to provide an exception to the unrestricted access policy for licensed premises that meet the requirements of 16-6-103, MCA. If the department did not adopt the proposed amendments, it would introduce conflicting provisions between 16-6-103, MCA, New Rule I, and ARM 42.12.145 and 42.13.103 as to when a licensee is complying with use of an ACS at their premises.

The necessity for specific section proposals in New Rule I is provided at the end of the rule.

4. The rule as proposed to be adopted provides as follows:

NEW RULE I ACCESS CONTROL SYSTEMS (ACS) (1) A licensee who uses an ACS at the licensee's licensed premises, as provided in 16-6-103, MCA, shall notify the department using a form provided by the department:

(a) at least three business days prior to the licensee implementing the ACS; and

(b) no later than July 1 of the renewal period after the licensee ceases using the ACS.

(2) Notification information shall include:

(a) the date of activation, or deactivation, of the ACS; and

(b) acknowledgment from a local law enforcement agency with jurisdiction over the licensed premises that the agency was notified.

(3) A licensee is in violation of this rule and is subject to administrative action if the licensee fails to:

(a) notify the department and local law enforcement prior to implementing an ACS;

(b) notify the department and local law enforcement when the licensee ceases to use an ACS; or

AUTH: 16-1-303, 16-6-103, MCA

IMP: 16-6-103, MCA

REASONABLE NECESSITY: Section (1) proposes to require the licensee to submit the notification request on a form provided by the department to ensure the department receives the information necessary to update its license data system. The department proposes to require the form at least three days prior to implementing an ACS to allow the department adequate processing time and to notify the Department of Justice, Gambling Control Division. The department also proposes to require licensee notification to the department no later than July 1 of the renewal period after the licensee ceases to use an ACS, which is necessary for the department to efficiently process the change during the annual license renewal cycle.

Section (2) proposes to reference the information that is required on the notification form for ACS tracking purposes and local law enforcement agency notification compliance.

Section (3) proposes to include circumstances which would cause a licensee to be in violation of the rule. The proposed list includes only those statutorily required and necessary items because a licensee's implementation of an ACS, and failure to meet these reporting requirements, directly impacts the ability of the department and it agents and local law enforcement to adequately enforce 16-6-103, MCA, and New Rule I(1) and (2).

5. The rules as proposed to be amended provide as follows, new matter underlined, deleted matter interlined:

42.12.145 ON-PREMISES CONSUMPTION BEER AND ALL-BEVERAGE LICENSE - PREMISES SUITABILITY REQUIREMENTS (1) remains the same.

(2) The premises of an on-premises consumption beer or all-beverage retailer may be considered suitable only if:

(a) through (f) remain the same.

(g) the premises are located on regular police beats and can be properly policed by local authorities, which includes the premises being located on property to which law enforcement has unrestricted access, except as provided in 16-6-103, MCA;

(h) through (5) remain the same.

AUTH: 16-1-303, MCA

IMP: 16-3-244, 16-3-309, 16-3-311, 16-4-402, 16-4-405, MCA

42.13.103 DEPARTMENT EXAMINATIONS (1) remains the same.

(2) Any authorized representative designated in (3) shall have immediate access to all parts of the licensed premises. ~~Doors~~ Except as provided in 16-6-103, MCA, doors of licensed premises shall not be locked while persons other than the licensee or the licensee's employees are within or upon the licensed premises.

(3) remains the same.

AUTH: 16-1-303, MCA

IMP: 16-6-103, MCA

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: Todd Olson, Department of Revenue, Director's Office, P.O. Box 7701, Helena, Montana 59604-7701; telephone (406) 444-7905; fax (406) 444-3696; or e-mail [email protected] and must be received no later than 5:00 p.m., October 18, 2019.

7. Todd Olson, Department of Revenue, Director's Office, has been designated to preside over and conduct the hearing.

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 notice regarding particular subject matter or matters. Notices will be sent by e-mail unless a mailing preference is noted in the request. A written request may be mailed or delivered to the person in number 6 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. An electronic copy of this notice is available on the department's web site at revenue.mt.gov, or through the Secretary of State's web site at sosmt.gov/ARM/register.

10. The bill sponsor contact requirements of 2-4-302, MCA, apply and have been fulfilled. The primary bill sponsor was contacted by email on May 22, 2019 and September 4, 2019.

11. With regard to the requirements of 2-4-111, MCA, the department has determined that the adoption and amendment of the above-referenced rules will not significantly and directly impact small businesses.

/s/ Todd Olson /s/ Gene Walborn

Todd Olson Gene Walborn

Rule Reviewer Director of Revenue

Certified to the Secretary of State September 10, 2019.