804 KAR 11:010E. Equipment and supplies

      Section 1. Definition. "Refrigerated cooler" means an electrical appliance that has:

      (1) No more than twenty-five (25) cubic feet of storage space;

      (2) Adjustable temperature controls; and

      (3) Adjustable shelving inside the appliance.

 

      Section 2. (1) A brewer or distributor may furnish the following equipment to retail licensees that sell draft malt beverages:

      (a) Tapping accessories;

      (b) Rods

      (c) Vents:

      (d) Taps;

      (e) Hoses;

      (f) Washers;

      (g) Couplings;

      (h) Vent tongues;

      (i) Check valves; and

      (j) Tap knobs.

      (2) If tap knobs, or similar devices, bearing brand names are furnished they shall not be used to dispense malt beverages of a different brand from that designated on the knob. Other equipment shall not be furnished to retail malt beverage licensees.

 

      Section 3.[2.] A brewer or distributor may furnish vats, tubs, tanks, or portable dispensing units to special temporary licensees, picnics, bazaars and carnivals. The equipment may bear a trade name, trademark, trade slogan or a facsimile of a product, container or display, associated with a particular brand that is visible to the consumer.

 

      Section 4. A brewer or distributor may furnish a refrigerated cooler to a retail licensee that sells malt beverages.

 

STEVEN A. EDWARDS, Commissioner

DAVID A. DICKERSON, Secretary

      APPROVED BY AGENCY: July 15, 2016

      FILED WITH LRC: July 15, 2016 at 11 a.m.

      CONTACT PERSON: Melissa McQueen, Staff Attorney, Department of Alcoholic Beverage Control, 1003 Twilight Trail, Frankfort, Kentucky 40601, phone [phone], fax [phone], email [e-mail].

 

REGULATORY IMPACT ANALYSIS AND TIERING STATEMENT

 

Contact Person: Melissa McQueen

      (1) Provide a brief summary of:

      (a) What this administrative regulation does: This administrative regulation defines the term refrigerated coolers in KRS 244.590.

      (b) The necessity of this administrative regulation: This regulation is necessary to define the term refrigerated coolers until such time as an ordinary regulation can be promulgated.

      (c) How this administrative regulation conforms to the content of the authorizing statutes: 241.060(1) authorizes the promulgation of administrative regulations to define this term.

      (d) How this administrative regulation currently assists or will assist in the effective administration of the statutes: This administrative regulation defines the term refrigerated coolers in KRS 244.590.

      (2) If this is an amendment to an existing administrative regulation, provide a brief summary of:

      (a) How the amendment will change this existing administrative regulation: This amendment defines refrigerated coolers to provide needed clarity until such time as an ordinary regulation is promulgated.

      (b) The necessity of the amendment to this administrative regulation: This amendment is necessary as a result of the amendment of KRS 243.590.

      (c) How the amendment conforms to the content of the authorizing statutes: KRS 241.060(1) authorizes the promulgation of administrative regulations to define this term.

      (d) How the amendment will assist in the effective administration of the statutes: This administrative regulation provides needed clarity until such time as an ordinary regulation is promulgated on this subject.

      (3) List the type and number of individuals, businesses, organizations, or state and local governments affected by this administrative regulation: Brewers, distributors and malt beverage retailers will be affected by this administrative regulation. The Department of Alcoholic Beverage Control will also be affected by this regulation.

      (4) Provide an analysis of how the entities identified in question (3) will be impacted by either the implementation of this administrative regulation, if new, or by the change, if it is an amendment, including:

      (a) List the actions that each of the regulated entities identified in question (3) will have to take to comply with this administrative regulation or amendment: In order to comply with the regulation, the regulated entities will have to consult the definition provided for refrigerated coolers.

      (b) In complying with this administrative regulation or amendment, how much will it cost each of the entities identified in question (3): There are no costs associated with complying with this administrative regulation amendment.

      (c) As a result of compliance, what benefits will accrue to the entities identified in question (3): There are no financial benefits to this administrative regulation amendment.

      (5) Provide an estimate of how much it will cost the administrative body to implement this administrative regulation:

      (a) Initially: There are no costs to implement this administrative regulation.

      (b) On a continuing basis: There are no continuing costs to implement this administrative regulation.

      (6) What is the source of the funding to be used for the implementation and enforcement of this administrative regulation: There are no additional costs associated with implementation and enforcement of this administrative regulation.

      (7) Provide an assessment of whether an increase in fees or funding will be necessary to implement this administrative regulation, if new, or by the change, if it is an amendment: No increase in fees or funding is necessary to implement this administrative regulation.

      (8) State whether or not this administrative regulation establishes any fees or directly or indirectly increased any fees: This administrative regulation amendment does not directly or indirectly increase any fees.

      (9) TIERING: Is tiering applied? No. No tiering is applied because the regulation applies equally to the regulated entities.

 

FISCAL NOTE ON STATE OR LOCAL GOVERNMENT

 

      (1) What units, parts or divisions of state or local government (including cities, counties, fire departments or school districts) will be impacted by this administrative regulation? The Department of Alcoholic Beverage Control is the only government agency impacted by this administrative regulation.

      (2) Identify each state or federal statute or federal regulation that requires or authorizes the action taken by the administrative regulation. KRS 244.590(1)(c) authorizes the promulgation of administrative regulations on this subject.

      (3) Estimate the effect of this administrative regulation on the expenditures and revenues of a state or local government agency (including cities, counties, fire departments, or school districts) for the first full year the administrative regulation is to be in effect. This amendment will not require any additional expenditure for the time it is in effect.

      (a) How much revenue will this administrative regulation generate for the state or local government (including cities, counties, fire departments, or school districts) for the first year? No revenue will be generated by this administrative regulation.

      (b) How much revenue will this administrative regulation generate for the state or local government (including cities, counties, fire departments, or school districts) for subsequent years? No revenue will be generated by this administrative regulation.

      (c) How much will it cost to administer this program for the first year? There are no additional costs to administer this amendment for the time it is in effect.

      (d) How much will it cost to administer this program for subsequent years? These emergency regulations will be replaced by an ordinary regulation on this subject.

      Note: If specific dollar estimates cannot be determined, provide a brief narrative to explain the fiscal impact of the administrative regulation:

      Revenues (+/-):

      Expenditures (+/-):

      Other Explanation: There are no additional costs to administer this amendment.

Notation

      During its 2016 regular session, the General Assembly passed Senate Bill 11, which amended numerous provisions within the statutory scheme that regulates the alcoholic beverage industry. See 2016 Ky Acts ch. 80. Senate Bill 11 is effective on July 15, 2016. KRS 244.590 generally prohibits brewers and distributors from furnishing, giving, renting, lending, or selling equipment, services, or other things of value to retailers, except as permitted by the director of the Division of Malt Beverages upon consideration of public health, the quantity and value of the articles involved, and the prevention of monopoly. Senate Bill 11 amended KRS 244.590 to permit a brewer or distributor to give, rent, loan, or sell certain retailers a refrigerated cooler that bears the advertising matter of the brewer or distributor. This emergency administrative regulation is required to define the term "refrigerated coolers" until such time as the department may establish the standards for giving, renting, loaning, or selling refrigerated coolers bearing advertising materials to a retailer. Without a definition for this term, the Department of Alcoholic Beverage Control would be without the standards necessary to enforce the provisions of Senate Bill 11 relating to refrigerated coolers. Therefore, this action is taken in accordance with KRS 13A.190(1)(a)(3) to meet a deadline for the promulgation of an administrative regulation that is established by state law. This emergency administrative regulation shall be replaced by an ordinary administrative regulation to be concurrently filed with the Regulations Compiler. The ordinary administrative regulation is not identical to this emergency administrative regulation.

MATTHEW G. BEVIN, Governor

DAVID A. DICKERSON, Secretary

STEVEN A. EDWARDS, Commissioner

      RELATES TO: KRS 244.500, 244.590

      STATUTORY AUTHORITY: KRS 241.060(1), 244.590(1)(c), (2)

      EFFECTIVE: July 14, 2016

      NECESSITY, FUNCTION, AND CONFORMITY: KRS 241.060(1) authorizes the Alcoholic Beverage Control Board to promulgate administrative regulations governing procedures relative to the supervision and control of the use, manufacture, sale, advertising, and trafficking of alcoholic beverages. KRS 244.590(1)(c) authorizes the administrator of the malt beverage unit to prescribe by administrative regulation the types of equipment or other things of value a brewer or distributor may furnish to a malt beverage retailer. This administrative regulation establishes the items that a brewer or distributor may furnish to a retail licensee and other licensees.