 |
ARIZONA STATE SENATE
Fifty-Fourth Legislature, First Regular Session
liquor omnibus
Purpose
Makes various changes related to liquor licenses and the Arizona Department of Liquor Licenses and Control (DLLC).
Background
Liquor Regulation
The DLLC issues 19 license types, or series, to regulate the production, distribution and sale of alcoholic beverages. A separate license is required for each specific type of business and is issued only after a satisfactory showing of the capability, qualifications and reliability of the applicant. With the exception of wholesaler, producer, government or club licensees, issuance also requires a satisfactory showing that the public convenience and best interest of the community will be substantially served by the issuance of the license (A.R.S. § 4-203).
Purchaser Identification
If a licensee, an employee of a licensee or any other person questions or has reason to question that a person ordering, purchasing, attempting to purchase or otherwise procuring or attempting to procure the serving or delivery of spirituous liquor or entering a portion of a licensed premises when the primary use is the sale or service of spirituous liquor is under the legal drinking age, the licensee, employee of the licensee or other person must: 1) demand identification; 2) examine the identification to determine validity; 3) examine the photograph and determine that the person reasonably appears to be the same person; and 4) determine the date of birth indicates the person is not under the legal drinking age. Acceptable types of identification include: 1) an unexpired Arizona driver license, except a driver license issued to a person before a person was 21 years of age; 2) an unexpired, out-of-state driver license with a picture and date of birth; 3) an unexpired nonoperating identification license; 4) an out-of-state form of identification license; 5) an unexpired armed forces identification card with a picture and date of birth; and 6) a valid, unexpired passport or a valid, unexpired resident alien card with a picture and date of birth (A.R.S. § 4-241).
Liquor Licenses
Certain liquor licenses are categorized as having off-sale and on-sale privileges. An off‑sale retailer is any person operating a retail liquor store that sells spirituous liquors, wines and beer, and any established retail store also selling other commodities. Spirituous liquor at an off-sale retailer must be sold in the original, unbroken package and be taken away from the premises of the retailer for consumption. An on-sale retailer is any person selling spirituous liquor in the original container for consumption on or off the premises or in individual portions for consumption on the premises (A.R.S. § 4-101).
There is no anticipated fiscal impact to the state General Fund associated with this legislation.
Provisions
Biometric Identity Verification Device
1. Allows a licensee, employee of a licensee or other person to use a biometric identity verification device to determine a person's age when a person is attempting to purchase spirituous alcohol or entering a portion of a licensed premises when the primary use is the sale or service of spirituous liquor.
2. Requires an attempted purchase, procurement or entry to be denied in any instance where the biometric identity verification device indicates a person is under the legal drinking age.
3. Defines biometric identity verification device as a DLLC-authorized device that instantly references the person's identity and age against specified records, verifies the identity and age of a person by an electronic scan of a biometric of the person through a fingerprint, iris image, facial image, other biometric characteristic, or any combination of these characteristics and meets the following conditions:
a) the authenticity of the record was previously verified by an electronic authentication process;
b) the identity of and information about the record holder was previously verified through either:
i. a secondary, electronic authentication process or set of processes utilizing commercially-available data, such as a public records query or a knowledge-based authentication quiz; or
ii. utilization of a state or federal government system of record for digital authentication; and
c) the authentication record was securely linked to biometrics contemporaneously collected from the verified record holder and is stored in a centralized, highly-secured, encrypted biometric database.
Retail Licensee
4. Allows the holder of an Arizona retail license with off-sale privileges to take orders by telephone, mail, fax, catalog, through the internet or other means for the sale and delivery of spirituous liquor off the licensed premises to a person in Arizona.
5. Specifies that the placement and payment of an order is not a sale until delivery has been made.
6. Allows a retailer with off-sale privileges to receive and process orders, accept payment or package, load or otherwise prepare spirituous liquor for delivery at any time, if the actual deliveries are made between 6:00 a.m. and 2:00 a.m.
7. Requires a retail licensee, at the time the order is placed, to inform the purchaser that Arizona law requires a purchaser of spirituous liquor to be at least 21 years of age and that the person accepting delivery of the spirituous liquor is required to provide acceptable identification.
8. Allows a retail licensee to contract with one or more independent contractors and with a common carrier for delivery of spirituous liquor, if the spirituous liquor is loaded for delivery at the premises of the retail licensee and delivered in Arizona.
9. Requires all containers of spirituous liquor delivered from a retail licensee to be conspicuously labeled:
Contains alcohol, signature of person who is 21 years of age or older is required for delivery.
10. Specifies that the retail licensee is responsible for violations of Arizona liquor law or any rule adopted pursuant to statute committed in connection with any sale or delivery of spirituous liquor, rather than only violations made by an employee who is at least 21 years of age.
11. Requires delivery to be made by a retail licensee employee or other authorized person who is at least 21 years of age to a customer who is at least 21 years of age and who displays authorized identification at the time of delivery.
12. Requires a retail licensee to collect payment from the purchaser for the full price of the spirituous liquor at the time that the order is placed, rather than at the time of delivery.
13. Allows a licensed producer or wholesaler to:
a) help sponsor a special event by making a monetary donation to a nonprofit entity that is issued a daily on-sale or off-sale special event license; and
b) issue a check payable to either the special event licensee or the approved special event contractor that is contracted to conduct the special event if the contractor does not hold an active bar license, beer and wine bar license, hotel-motel license or restaurant license.
14. Allows, notwithstanding any DLLC rule, business establishments that rely on a DLLC-issued form that provides for a small restaurant exemption for 50 or fewer seats before January 31, 2019, to continue to maintain the capacity of 50 or fewer seats for the duration of the business.
Farm Winery (Series 13)
15. Removes the cap of 1,000 gallons in a calendar year for a farm winery licensee and craft distiller licensee to produce distilled spirits from fruit processed at the winery for the primary purpose of making wine.
16. Excludes, from the licensed farm winery premises, the production and storage space of a farm winery and specifies it is not a public area unless that space is also used for the sale of wine to the public, consumption or sampling of wine by the public or to provide other services to the public.
17. Includes the production and storage space of a farm winery in the space the Director of the DLLC (Director), the Director's agents and any peace officer may visit during occupied hours to inspect the premises of a licensee.
18. Defines public area, for the purposes of a farm winery, as a place within a farm winery that is accessible to the public and in which the farm winery authorizes the presence of members of the public.
Direct Shipment (Series 17) or Farm Winery (Series 13)
19. Allows a direct shipment licensee or a farm winery licensee to receive and process orders, accept payment, package, load or otherwise prepare wine for delivery at any time without age identification, if the actual deliveries to individual purchasers are made between 6:00 a.m. and 2:00 a.m. and the licensees are properly licensed.
20. Specifies that it is unlawful for a direct shipment licensee, a farm winery licensee or an employee of those licensees to sell, dispose of, deliver or give spirituous liquor to an individual purchaser between 2:00 a.m. and 6:00 a.m.
Craft Distiller (Series 18)
21. Allows a craft distiller licensee to hold a farm winery license and subjects the holder to all requirements of licensure for both licenses.
22. Allows a craft distiller who also holds a farm winery license to provide sampling and retail sales of distilled spirits that are produced or manufactured on the premises on the same premises as the wine sampling and retail sales.
23. Excludes, from the public area of a licensed craft distiller premises, the production and storage space of a craft distiller and allows the Director, the Director's agents or any peace officer to inspect the production and storage space.
24. Defines production and storage spaces as bonded areas, tax-paid storage areas and areas that provide no services to the public.
25. Defines public area, for the purposes of a craft distiller, as a place within a licensed and bonded craft distiller that is accessible to the public and in which the craft distiller sells and samples tax-paid product and authorizes the presence of members of the public.
New Liquor Licenses
26. Allows the Director to issue five new bar, liquor store or beer and wine bar licenses plus an additional number of new licenses equivalent to 20 percent of the difference between the number of revoked or reverted licenses per year and five, rather than 20 percent of the total of the revoked and reverted licenses per year.
Multiple Licensees with Joint Premises
27. Allows one or more on-sale spirituous liquor licensees with the same type of bar, beer and wine bar, restaurant, or farm winery license, including a farm winery tasting room license, to apply to the Director for a joint premises permit.
28. Requires the premises of each applicant to be adjacent to and fully contiguous to the joint premises.
29. Requires an application for a joint premises permit to be on a form prescribed by the Director.
30. Requires an applicant licensee to submit a:
a) copy of the application to the city or town clerk or to the county clerk if the applicant licensee is located in an unincorporated area; and
b) security plan that addresses outlined requirements.
31. Allows a city, town or county clerk to review the application and provide an advisory recommendation to the Director.
32. Allows the Director to approve or deny the application or approve the application for some but not all of the applicants based on the applicants' demonstration of ability to comply with the outlined requirements.
33. Requires, if the application is approved, the joint premises area to be considered an extension of premises for each of the approved applicants, subject to the licensees:
a) implementing security measures necessary to ensure that an individual under the legal drinking age does not purchase, possess or consume spirituous liquor on the licensed premises; and
b) installing and maintaining temporary or permanent physical barriers around the joint premises or other security measures, including electronic surveillance and the use of security personnel and signage, that are fully in place while spirituous liquor is served and consumed.
34. Requires barriers or other security measures to be placed to achieve the following purposes:
a) to control spirituous liquor service;
b) to delineate the licensed premises;
c) to control the ingress and egress from the licensed premises;
d) to provide for the safety of patrons;
e) to prevent underage possession and consumption of spirituous liquor;
f) to prevent the removal of spirituous liquor from the premises;
g) to prevent the unauthorized carrying of spirituous liquor onto the premises; and
h) to prevent the unauthorized consumption of spirituous liquor in a public area or thoroughfare.
35. Requires each licensee that is approved for the joint premises to comply fully with all applicable liquor law requirements and rules.
36. Allows each joint licensee that shares a joint premises to be held liable for any violation of Arizona liquor law.
37. Allows one or more licensees to be cited for a violation of Arizona liquor law that occurs on the joint premises, if the circumstances warrant the citation.
38. Prohibits a licensee with joint premises privileges from allowing a person under the legal drinking age who is not accompanied by an adult to remain in an area on the joint premises during hours in which the primary use is the sale, dispensing or consumption of spirituous liquor after the licensee or licensee's employees know or should have known that the person is under the legal drinking age.
39. Allows the DLLC to:
a) consolidate complaints, proceedings and hearings with respect to complaints or matters against one or more licensees with joint premises permits; and
b) charge a fee in an amount prescribed by the Director for the review and processing of a joint premises permit application.
40. Allows the right of a licensee to use the joint premises to be limited or revoked by the Director for a violation of Arizona liquor law or DLLC rule.
41. Allows a joint premises permit to be suspended summarily and without appeal for up to 10 days if the Director determines that good cause exists for the suspension.
42. Specifies that a joint premises permit:
a) is not transferrable; and
b) will be issued for one year and may be annually renewed.
Gathering of Underage Persons
43. Specifies that a person of at least 18 years of age who knowingly hosts a gathering of two or more persons who are under the legal drinking age, rather than knowingly allows a gathering, is guilty of a class 1 misdemeanor.
44. Removes, from the number of guests at a gathering not counted towards the total number present, members of the immediate family of a person who hosts a gathering and persons residing with the host.
45. Defines hosts as allowing or promoting a party, gathering or event at a person's place of residence or other premises under the person's ownership or control where spirituous liquor is served to, in the possession of or consumed by an underage person.
Appeals of Suspension, Revocation or Refusal to Renew
46. States that the revocation, suspension or refusal to renew a license for unpaid taxes, penalties or interest of $250 or more that is delinquent for more than 120 days is a contested case with the Arizona Department of Revenue (ADOR).
47. Allows the aggrieved party to appeal the suspension, revocation or refusal to renew by the Director based on a contention that the business is:
a) not delinquent on any taxes, penalties or interest owed to the state or a political subdivision of the state;
b) delinquent on its taxes, penalties and interest for fewer than 120 days; or
c) delinquent on its taxes, penalties and interest in an amount that totals $250 or less.
48. Requires the aggrieved to file the appeal in writing with ADOR within 15 days after service of the notice of the Director's decision and suspends the Director's decision until the determination of any appeal by the Office of Administrative Hearings (OAH).
49. Requires an administrative law judge to conduct a hearing on the appeal and allows the administrative law judge to accept any relevant material evidence and testimony and exercise outlined actions.
50. Allows a corporation's attorney, corporate officer or employee to represent the corporation at the OAH hearing.
51. Specifies that a decision issued by the Director is not final for purposes of appeal to a superior court until a decision has been issued by OAH.
52. Allows OAH to affirm, reverse or modify any decision issued by the Director.
Miscellaneous
53. Specifies that an act of violence is an incident consisting of a riot, a fight, an altercation or tumultuous conduct, not including the use of nonlethal devices by a peace officer, and must be an incident:
a) in which bodily injuries are sustained by any person and the injuries would be obvious to a reasonable person;
b) of sufficient intensity as to require the intervention of a peace officer to restore normal order;
c) in which a weapon is brandished, displayed or used; or
d) where a licensee or an employee or contractor of the licensee fails to follow a clear and direct lawful order from a law enforcement officer or a fire marshal.
54. Allows a liquor store licensee or a beer and wine store licensee that holds a license with sampling privileges to charge a fee for bona fide educational classes conducted in a classroom by an instructor on the licensed premises where the sampling of any spirituous liquor product is incidental to the course taught and to the course materials presented.
55. Allows the Director to suspend or revoke the previous approval of trainers who do not adhere to course administration requirements prescribed by the DLLC or who do not meet course standards.
56. Allows, if the Director suspends or revokes the previous approval of a trainer, a trainer to appeal to the State Liquor Board as if the suspension or revocation was a sanction against a licensee.
57. Allows the business, stock-in-trade and spirituous liquor, for any sale of a business or change in ownership of a licensee's business directly or indirectly, to be transferred with the ownership, in compliance with applicable requirements.
58. Requires a person who files an application for a license within an incorporated city or town to file the application with the Director, rather than filing the application in triplicate with the Director.
59. Makes technical and conforming changes.
60. Becomes effective on the general effective date.
House Action
COM 2/05/19 DPA 9-0-0-0
3rd Read 3/04/19 59-0-1
Prepared by Senate Research
March 26, 2019
MG/gs