Assigned to CED                                                                                                  FOR CAUCUS & FLOOR ACTION

ARIZONA STATE SENATE

Forty-seventh Legislature, Second Regular Session

AMENDED

FACT SHEET FOR H.B. 2740

liquor; restaurant license for grills

(NOW:  spirituous liquors; restaurant license; grills)

Purpose

            Modifies requirements of restaurant liquor licenses for the Arizona Department of Liquor Licenses and Control and the penalties for specific driving or actual physical control while under the influence violations (DUI).

Background

Restaurant Liquor Licenses

            A restaurant license (series 12) allows a licensee to sell and serve spirituous liquor only for consumption on the premises and is exempt from the 300-foot prohibition from being near a church or school.  In order to qualify for a restaurant license, an establishment must derive at least 40 percent of its gross revenue from the sale of food.    Included with the application filed with the Arizona Department of Liquor Licenses and Control (ADLLC), an applicant must file a copy of its Restaurant Operation Plan that includes information regarding: 

a) the make, model and capacity of the kitchen appliances.

b) the menu, including prices.

c) the seating capacity of the restaurant area and bar area with additional questions asking if the restaurant has a bar area distinct and separate from the restaurant seating and the percentage of the public premises used for restaurant dining.

d) type of dinner and utensils utilized (reusable or disposable).

e) how many games or televisions are at the premises and information about live entertainment and dancing.

f) a list of employee positions and their duties to staff the restaurant.

            The Director of ADLLC (Director) may require a restaurant to submit to an audit of its records to ensure compliance of the 40 percent gross revenue from the sale of food requirement.  If the licensee does not meet the requirements, ADLLC is required to revoke the license.  According to ADLLC, it does allow a licensee that has failed an audit six months to find either a bar license or beer and wine bar license.

Driving Under the Influence

            It is unlawful for any person who is under the influence of intoxicating liquor or drugs to drive or be in actual physical control of a motor vehicle.  This is commonly referred to as driving under the influence or DUI.  If a person’s blood alcohol content (BAC) is 0.08 or more, it is presumed in a trial that the person was under the influence.  A person commits a DUI if the person has a BAC of 0.08 or more within two hours of driving or being in actual physical control of the vehicle.  A person commits an extreme DUI if the person has a BAC of 0.15 or more within two hours of driving or being in actual physical control of the vehicle.

            Additionally, Arizona penalizes certain DUI offenses depending on the circumstances involved.  For example, an aggravated DUI may occur in three primary manners.  One of the ways to commit aggravated DUI is if a person commits a third or subsequent DUI, extreme DUI or aggravated DUI, and within the past 60 months has been convicted of any combination of those offenses.  If a person commits this type of aggravated DUI and has two prior DUI violations, the person must spend a minimum of four months in prison.  And if a person commits this type of aggravated DUI and has three or more prior DUI violations, the person must spend a minimum of eight months in prison.  Additionally, the person must complete an alcohol or other drug screening, education or treatment program, has his or her license revoked for three years, has his or vehicle equipped with a certified ignition interlock device when the person is permitted to drive again and is ordered to pay fines and assessments.

            The fiscal impact associated with this legislation regarding DUI offenses is unknown.  Law enforcement and prosecutorial agencies workloads may increase and county jails and the Arizona Department of Corrections may have an increased population as a result of this legislation.  However, fines and assessments collected as a result of possible increased DUI convictions will also increase.

            There is no anticipated fiscal impact to the state General Fund associated with this measure regarding the restaurant liquor licenses.  However, there is a potential positive fiscal impact to ADLLC and to the Oversight Council on Driving or Operating under the Influence, the administrator of the DUI Abatement Fund.  H.B. 2740 allows ADLLC to permit a restaurant licensee to continue operation as a restaurant if the restaurant falls below the 40 percent gross revenue requirement from food sales if specified requirements are met.  The Director is allowed to establish an additional fee for the modified restaurant license and retain 90 percent of the amount.  The remaining 10 percent is required to be transferred to the DUI Abatement Fund.

Provisions

Restaurant Licenses

1. Allows a restaurant licensee whose audit resulted in a determination that at least 30 percent but less than 37 percent of the gross proceeds were derived from the sale of food, within six-months, to either:

a) replace the license with a bar or beer and wine bar license.  At the end of six months, the restaurant license is revoked or surrendered.

b) obtain permission from ADLLC to continue to operate with a modified restaurant license if it meets the qualifications.

2. Allows a restaurant licensee whose audit resulted in a determination that at least 37 percent but less than 40 percent of the gross proceeds were derived from the sale of food to be granted a period of one year to increase the food percentage to at least 40 percent.  If the licensee does not increase the percentage of food sales to 40 percent, the licensee is allowed to either:

a) replace the license with a bar or beer and wine bar license within six months.  At the end of six months, the restaurant license is revoked or surrendered.

b) obtain permission from ADLLC to continue to operate with a modified restaurant license if it meets the qualifications.

3. Requires ADLLC to revoke a restaurant license if an audit conducted by ADLLC, determines less than 30 percent of gross proceeds are from the sale of food.

Modified Restaurant License

4. Allows ADLLC to permit a restaurant licensee to maintain its restaurant license as a modified license if an ADLLC audit determined at least 30 percent but less than 40 percent of the restaurant’s gross proceeds were derived from the sale of food and all of the following apply:

a) the restaurant has sufficient number of cooks, food preparation personnel and wait staff to prepare and provide restaurant services.

b) the restaurant’s equipment is a sufficient grade.

c) the size of the restaurant’s kitchen is appropriate to the menu offered.

d) the menu is consistent with the restaurant operation.

e) no more than 20 percent of the public area floor space consists of pool tables, dart or arcade games, barstools, cocktail tables and similar seating and all dance floors.

f) the restaurant name does not include terms such as bar, tavern, pub, spirits, club, lounge, cabaret, cantina or saloon.

g) does not allow disposable dinnerware, expect for outdoor areas.

5. Requires ADLLC to notify a city, town or county of its intent to approve of the restaurant license continuation.

6. Allows for the restaurant licensee to continue operating with a modified restaurant license, if the local jurisdiction does not object within 90 days.

7. Requires ADLLC to set a hearing before the Arizona State Liquor Board (Board) if ADLLC intends to disapprove of or the local jurisdiction objects to a restaurant’s continuation and requires the Board to determine whether the restaurant may continue its operation with a modified license.

8. Allows ADLLC to require the licensee to specifically acknowledge the representations made by the licensee regarding its restaurant operations if the licensee is allowed to continue its restaurant operations with a modified license.

9. Allows ADLLC to audit or revoke a license if the licensee changes its operation in any way that materially and detrimentally affects the representations made by the licensee.

10. Prohibits the Director from requiring an establishment to be audited more than once a year if the establishment is allowed to continue with a modified restaurant license.

11. Allows the Director to determine the fee for a modified restaurant license.

12. Requires ADLLC to retain 90 percent of the modified restaurant license fee.  The remaining 10 percent is transferred to the DUI Abatement Fund.

Driving Under the Influence

13. Prohibits an individual from driving or being in control of a vehicle if the person has a BAC of 0.05 or more within two hours of driving or being in actual control of the vehicle if within the previous 60 months the person was convicted of an aggravated DUI offense or an equivalent offense in another jurisdiction.

14. Requires a person be informed that the person’s license or permit to drive will be suspended or denied for at least 90 days if the test results show a BAC of 0.05 or more if the person was convicted of an aggravated DUI or an equivalent act in another jurisdiction within the previous 60 months.

15. Specifies that a person commits aggravated DUI when the person commits a third or subsequent violation of any type of DUI regardless of the time frame in which the DUI offenses occurred.

16. Applies the increased penalties to repeat DUI offenders, under the aggravated DUI laws, regardless of when the repeat DUIs occur, rather than requiring the DUIs to occur within 60 months of each other.

17. Makes conforming changes regarding the administrative suspension of an individual’s license.

Miscellaneous

18. States the changes to the restaurant license requirements and audits do not apply to audits or disciplinary action completed or any consent agreement signed before January 1, 2006.

19. Incorporates Legislative Council’s reviser’s corrections to the aggravated DUI statute, blending conflicting enactments from Laws 2005.

20. Makes technical and conforming changes.

21. Becomes effective on the general effective date.

Amendments Adopted by Committee

1. Removes the ability to replace a restaurant license with a bar or beer and wine bar license if the restaurant license is within 300 feet of a church or school that began operation after the issuance of the restaurant license.

2. Allows the local jurisdiction 90 days instead of 60 days to review a modified restaurant license continuation.

3. Specifies no more than 20 percent of the public area floor space consists of pool tables, dart or arcade games, barstools, cocktail tables and similar seating and all dance floors.

4. Removes the requirement that ADLLC immediately revoke a restaurant license if a restaurant licensee’s audit reveals that less than 30 percent of the gross revenue was derived from the sale of food.

5. Requires ADLLC to retain 90 percent of the additional fee for a modified restaurant license and deposit the remaining 10 percent in the DUI Abatement Fund.

6. Adds provisions regarding DUI offenses.

7. Incorporates Legislative Council’s reviser’s corrections to the aggravated DUI statute, blending conflicting enactments from Laws 2005.

House Action Senate Action

COM               2/22/06      DPA/SE    6-1-0-2-0         CED                3/29/06     DPA     5-3-0

3^rd Read           3/13/06                        32-28-0-0

Prepared by Senate Research

April 3, 2006

BP/HG/jas