ARIZONA STATE SENATE
Forty-seventh Legislature, Second Regular Session
FINAL AMENDED
FACT SHEET FOR S.B. 1322
motor vehicle repair
facilities
(NOW: domestic micro-brewery; licensure)
Purpose
Modifies the domestic microbrewery license.
Background
The Arizona Department of Liquor Licenses and Control (ADLLC) regulates domestic microbreweries. The domestic microbrewery license (series 3) is available to microbreweries that produce between 10,000 and 310,000 gallons of beer annually. A person seeking a domestic microbrewery license must apply to the ADLLC and pay the $300 license fee. A licensed domestic microbrewery may sell beer produced or manufactured on the premises for consumption on or off the premises and can make sales and deliveries of beer to persons licensed to sell beer, including wholesalers. A microbrewery can also serve its beer for the purpose of sampling the beer. Domestic microbreweries are required to annually report the amount of beer manufactured during the year to the ADLLC. According to the ADLLC, as of June 30, 2005, there are 27 licensed domestic microbreweries.
A luxury tax is imposed on the sale of beer. The luxury tax is $0.16 per gallon of malt liquor and at a proportionate rate for any lesser or greater quantity. Domestic microbreweries are required to pay the luxury tax on all sales of malt liquor at retail or to a retail licensee.
The fiscal impact associated with this measure is unknown; however, there is a potential positive fiscal impact to the state General Fund. The modifications made to the domestic microbrewery license may increase the number of licensees, which could increase the amount of luxury tax collected from the new licensees’ potential sales.
Provisions
1. Defines a domestic microbrewery as a brewery that is located in the U.S. or in a territory or possession of the U.S.
2. Decreases the minimum amount a microbrewery needs to produce in order to qualify as a domestic microbrewery, from 10,000 to 5,000 gallons of beer in a calendar year.
3. Increases the maximum amount a microbrewery can produce in order to continue to qualify as a domestic microbrewery, from 310,000 gallons to 620,000 gallons of beer in a calendar year.
4. Permits a licensed domestic microbrewery to sell and deliver beer to persons licensed to sell beer in another state if it is lawful in that state.
5. Allows a domestic microbrewery to make sales and deliveries of beer that it has produced directly to retail licensees that are under common ownership with the microbrewery in any amount.
6. Allows a domestic microbrewery to sell and deliver up to 93,000 gallons of beer that it has produced directly to licensed retailers in any calendar year.
7. Requires domestic microbreweries to report annually to the ADLLC at the end of each calendar year, instead of at the end of the fiscal year, and requires the amount delivered directly to licensed retailers in the calendar year by a domestic microbrewery to be included in the microbrewery’s report to the ADLLC.
8. Removes the ability for both a domestic farm winery license and a domestic microbrewery license to be issued for a common location.
9. Separates the domestic microbrewery statutes from the domestic farm winery statutes.
10. Makes technical and conforming changes.
11. Becomes effective on the general effective date.
Amendments Adopted by House of Representatives
· Adopted the strike everything amendment.
Senate Action House Action
FIN 2/9/06 DP 9-0-0-0 FII 3/23/06 W/D
3rd Read 3/1/06 28-0-2-0 COM 3/29/06 DPA/SE 7-0-0-2
Final Read 5/22/06 22-5-3-0 3rd Read 4/17/06 50-4-6-0
Signed by the Governor 5/26/06
Chapter 302
Prepared by Senate Research
June 2, 2006
BP/jas