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 pertaining to limited all-beverages licenses for continuing care retirement communities

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NOTICE OF PUBLIC HEARING ON PROPOSED ADOPTION

TO: All Concerned Persons

1. On January 22, 2020 at 11:00 a.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 of the above-stated rule. 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 January 3, 2020. 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. The rule as proposed to be adopted provides as follows:

NEW RULE I LIMITED ALL-BEVERAGES LICENSE FOR CONTINUING CARE RETIREMENT COMMUNITY - PREMISES SUITABILITY REQUIREMENTS AND CONDITIONS FOR OPERATING (1) The department shall determine the suitability of the premises when a continuing care retirement community applies to obtain a limited all-beverage license provided in 16-4-315, MCA, changes the location where the license will be operated, or makes alterations to the department-approved premises. The privileges granted under a license extend only to the premises depicted in the floor plan approved by the department.

(2) The continuing care retirement community premises may be considered suitable only if:

(a) the applicant or licensee has possessory interest in the premises;

(b) the applicant or licensee has adequate control over the premises;

(d) the premises are identified by a unique address;

(e) the premises are located within one building or a specific portion of one building. The interior of the premises must be a continuous area that is not broken by any area in which the applicant or licensee does not have adequate control, such as another business or a common area shared with other building tenants;

(f) building, health, and fire code approvals are obtained;

(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;

(h) the premises are not located where a local government ordinance prohibits the sale of alcoholic beverages;

(i) the premises complies with the licensing restrictions provided in 16-3-306, MCA;

(j) there are no signs, posters, or advertisements displayed on the exterior of the premises that identify any brewer, beer importer, or wholesaler in any manner. This prohibition extends to buildings adjacent to the premises only if the retailer has possessory interest in the adjacent building. This prohibition does not apply to temporary advertisements allowed under 16-3-244, MCA;

(k) the floor plan accurately states the dimensions of the premises, includes the applicant or licensee's name; alcoholic beverage license number, if applicable; physical address and date of application; and identifies the central dining area, any stationary drink preparation area, and any storage areas. A plat of the continuing care retirement community campus must also be provided to the department that shows the campus boundaries and any other structures located on the campus;

(l) the interior of the premises includes at least one stationary drink preparation area. The central dining area may have more than one drink preparation area, including moveable drink preparation areas, subject to department approval;

(m) all storage areas are located in the interior of the premises;

(n) alcoholic beverages will not be sold through a drive-up window;

(o) the physical layout and equipment utilized provide sufficient physical safeguards to prevent the self-service of alcoholic beverages at any drink preparation area; and

(p) self-service devices and vending machines are not used to serve alcoholic beverages.

(3) The premises must meet and maintain compliance with all suitability standards in place at the time the premises was last approved by the department. The department may, at any time, verify that the premises remain in compliance with those suitability standards. Upon determining that the premises does not meet all applicable suitability standards, the department may deny an application or take administrative action against the licensee, including license revocation.

(4) The licensee shall follow the process in ARM 42.13.106 for a premises alteration. Alterations to residential areas or other areas where alcoholic beverages are not sold or served from do not require submittal or approval from the department.

(5) In addition to all other alcoholic beverage licensing requirements, a limited all-beverages continuing care retirement community licensee shall:

(a) only purchase and possess on the premises liquor and fortified wine from an agency liquor store, beer from a beer wholesaler or brewery, and table wine from a table wine distributor or winery, except for alcoholic beverages obtained elsewhere by residents of the continuing care retirement community for consumption in residential areas;

(b) sell or serve alcoholic beverages only from an approved drink preparation area;

(d) prevent the consumption or possession of alcoholic beverages outside of residential areas between 2 a.m. and 11 a.m. by removing all alcoholic beverages from individuals' possession by 2 a.m.;

(e) prevent the consumption or possession of alcoholic beverages on the premises by persons who are under 21 years of age, or actually, apparently, or obviously intoxicated, in accordance with 16-3-301, MCA; and

(f) prevent the on-premises consumption of alcoholic beverages not sold or provided at the premises except for alcoholic beverages obtained elsewhere by residents of the continuing care retirement community for consumption in residential areas.

AUTH: 16-1-303, 16-4-315, MCA

IMP: 16-3-244, 16-3-309, 16-3-311, 16-4-315, 16-4-402, 16-4-405, 16-6-303, MCA

REASONABLE NECESSITY: The department proposes to adopt New Rule I to implement 16-4-315, MCA, enacted under House Bill 613 by the 2019 Montana Legislature, which created a new quota-exempt limited all-beverages license for continuing care retirement communities. Adopting a new rule to address license-specific premises suitability requirements and conditions for operating is necessary because general suitability requirements and the conditions for operating an all-beverage license in ARM 42.12.145 and 42.13.1102 are not all applicable or need modification for this new license type.

Section (1) is proposed, similarly to ARM 42.12.145(1), to provide general authority and circumstances involving the department's determinations of a premises' suitability. The department believes (1) is necessary as an introductory part of the rule.

Section (2) proposes a list of requirements that must be met for the premises to be approved, which is necessary for developing premises-specific requirements for licensure.

The proposed requirements in (2)(a) through (j) are restatements of long-standing premises requirements from statute and rule that apply to on-premises alcoholic beverages license types, except where expressly provided elsewhere. The department believes the restatements of requirements are necessary as this new license type is bound to the same regulatory system as other license types, with exceptions or unique operating conditions provided in 16-4-315, MCA.

The department proposes (2)(k) to require that certain areas be labeled on the floor plan, which is necessary and consistent with licensing requirements for other alcoholic beverages licenses to enable department evaluation of premises suitability and alteration requests. However, since 16-4-315, MCA, also allows the consumption of alcoholic beverages on the campus of the continuing care retirement community, the department also proposes to require a plat of the entire campus, so it is readily determinable where the consumption of alcoholic beverages is allowed.

The department's proposal in (2)(l) requires the interior premises to have at least one stationary drink preparation area to comply with the requirement that all on-premises alcoholic beverages premises are recognizable as a place that offers alcoholic beverages for sale and consumption and to accurately identify on the floor plan the primary location where alcoholic beverages are prepared. The department proposes to allow additional drink preparation areas that are moveable to provide licensees the ability to serve residents in multiple locations of the central dining area.

The department's proposal in (2)(m) through (p) are restatements of long-standing alcoholic beverage service requirements from statute and rule that apply to on-premises alcoholic beverages license types. The department believes the restatements of requirements are necessary as this new license type is bound to the same regulatory system as other license types, with exceptions or unique operating conditions provided in 16-4-315, MCA.

Section (3) provides a requirement of the licensee that its premises must remain in compliance with the provisions of this rule that were in place at the time the premises was last approved by the department. This provision clarifies necessity for public safety and when, and under what circumstances, the department determined a licensee's premises suitable for licensure.

Section (4) provides the requirement that all alterations to the approved premises must follow the process described in ARM 42.13.106 that applies to other alcoholic beverage license types. This is provided to notify a licensee not to start an alteration to the premises without first seeking department approval. An exception to this requirement is proposed to include residential areas and other areas that are not a part of the licensed premises.

Section (5) proposes restatements of the statutory conditions a licensee must follow for operating a limited all-beverages license for a continuing care retirement community. The department believes the restatements of requirements are necessary as this new license type is bound to the same regulatory system as other license types, with exceptions or unique operating conditions provided in 16-4-315, MCA.

4. 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., January 31, 2020.

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

6. 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 4 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.

7. An electronic copy of this notice is available on the department's web site at www.mtrevenue.gov, or through the Secretary of State's web site at sosmt.gov/ARM/register.

8. The bill sponsor contact requirements of 2-4-302, MCA, apply and have been fulfilled. The primary bill sponsor was contacted by email on October 7, 2019 and December 11, 2019.

9. With regard to the requirements of 2-4-111, MCA, the department has determined that the adoption of the above-referenced rule 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 December 17, 2019.