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 ADOPTION

 

TO: All Concerned Persons

 

1. On December 27, 2019, the Department of Revenue published MAR Notice No. 42-1016 pertaining to the public hearing on the proposed adoption of the above-stated rule at page 2333 of the 2019 Montana Administrative Register, Issue Number 24.

 

2. On January 22, 2020, a public hearing was held to consider the proposed adoption. No proponents were present, no proponent oral testimony was received, and the department received no written comments in support. The following opponents were present and provided oral testimony: Margaret Morgan, Retirement Communities Coalition, and Joseph May, Executive Director, Touchmark on Saddle Drive. The following persons also provided written comments: Margaret Morgan, Retirement Communities Coalition; Jason Cronk, Chief Executive Officer, Immanuel Lutheran Communities; and House District 56 Representative Sue Vinton, sponsor of House Bill 613 (2019) (HB 613).

 

3. The department has adopted the following rule as proposed, but with the following changes from the original proposal, new matter underlined, deleted matter interlined:

 

NEW RULE I (42.12.151)  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 except on-premises consumption may extend across the continuing care retirement community's campus, as provided in 16-4-315, MCA.

(2) through (5) remain as proposed.

 

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.

 

4. The department has thoroughly considered the comments and testimony received. A summary of the comments received, and the department's responses are as follows:

 

COMMENT 1: Ms. Morgan and Mr. May expressed overall appreciation of the department's efforts to understand continuing care retirement communities (CCRCs) and the social togetherness of their residents in the proposal of New Rule I to implement HB 613.

 

RESPONSE 1: The department thanks the commenters for their comments.

 

COMMENT 2: All commenters expressed concern and objected to the department's proposed text in New Rule I(2)(e). All commenters stated that the department erred in the drafting of the proposed text in (2)(e) as it articulated the premises suitability requirements for operating a limited all-beverages license for a CCRC. Representative Vinton and Ms. Morgan referred to section 1(6)(c) of HB 613 which defines "on-premises" to mean ". . . [w]ithin the confines of the continuing care retirement community campus."

 

Ms. Morgan and Mr. Cronk contend it would be inefficient and confusing for the rule to have one definition of "premises" while the law has another considering the new license type covers the entire campus of a CCRC, which is why section 1(6)(c) of HB 613 is worded the way it is.

 

Representative Vinton stated the proposed rule text did not reflect legislative intent. Both Representative Vinton and Ms. Morgan request the department replace the language in New Rule I(2)(e) with that from section 1(6)(c) of HB 613.

 

RESPONSE 2: Facially, "premises" and "on-premises" are somewhat similar, but their respective applications under the Montana Alcoholic Beverage Code (Section 16-1-101, MCA, et. seq.) (Code) and the department's pertinent administrative rules (rules) are substantially different, cannot be interchanged as the commenters request, and the department declines to do so for the reasons provided below.

The language adopted by HB 613 (codified as 16-4-315, MCA) unambiguously indicates that a CCRC must have a " . . . [c]entral dining area at which the alcoholic beverages may be served or purchased for on-premises consumption." Section 16-4-315(1)(b), MCA. The purchase of any alcoholic beverages must be made in that central dining area but may be consumed anywhere on the CCRC campus since 16-4-315(6)(c), MCA, permits expanded

on-premises consumption. To interpret "on-premises" in 16-4-315(1)(b), MCA, as the ability to sell anywhere within the CCRC campus conflicts with this statute and with other licensing requirements throughout the Code and rules. An example of such a conflict is the premises suitability requirements provided in 16-3-311 and 16-4-402, MCA - reflected in New Rule I(2)(e) - compared to 16-4-315(6)(c), MCA.  

"Premises," defined in ARM 42.12.106(33), means ". . . [t]he area identified in the floor plan approved by the department on which the activities authorized under the license may be conducted."  "On-premises" refers to consumption, where the department licenses a person and a premises so that the public may engage in the lawful consumption of alcoholic beverages while on the licensed premises.  Section 16-3-311, MCA, defines what a suitable premises is for operating an

on-premises consumption license and 16-4-402, MCA, requires premises suitability compliance for a license issued under the chapter - which includes the special license type for CCRCs. Section 16-4-315(1), MCA, even incorporates 16-4-402, MCA, to establish the same licensing compliance for a CCRC license as for other license types. Based on the premises suitability requirements and overall compliance with the Code that 16-4-315(1), MCA, recognizes, New Rule I is consistent with the Code, the plain language of 16-4-315, MCA, and also comports with the rules pertaining to alcoholic beverage licensing. And to reiterate that New Rule I adheres to the Code, rules, and the plain language of 16-4-415, MCA, the department has inserted additional verbiage into (1) regarding the statutory expansion of on-premises consumption of alcoholic beverages to the entire CCRC campus.

The department encourages the commenters and the Montana Legislature to consider amendments to 16-3-311, 16-4-315, or 16-4-402, MCA, or other relevant portions of the Code to resolve or to except out the conflicts that this new license type presents.  The department offers its expertise in the advance review of any such proposals should they present themselves.

 

 

/s/ Todd Olson                                              /s/ Gene Walborn                                        

Todd Olson                                                   Gene Walborn

Rule Reviewer                                              Director of Revenue

 

Certified to the Secretary of State March 3, 2020.