Bill
Number: H.B. 2773
Mesnard
Floor Amendment
Reference
to: House engrossed bill
Amendment
drafted by: Laura Benitez
FLOOR
AMENDMENT EXPLANATION
Off-Sale
Privilege Leases
1.
Authorizes a
bar, beer and wine bar or liquor store licensee, including non-use status
licensees, to lease in one-year terms the off-sale privileges associated with
the license, except to-go mixed cocktails, to a restaurant licensee located in
the same county.
2.
Requires the
Department of Liquor Licenses and Control (DLLC) to establish a minimum of four
lease windows in a calendar year during which licensees may agree to an
off-sale privileges lease.
3.
Allows a
restaurant licensee to apply to lease a bar, beer and wine bar or liquor store
licensee's off-sale privileges (off-sale privileges lease) on a form prescribed
and provided by the Director at least 30 days before the end of a lease window.
4.
Requires a
restaurant licensee applying for an off-sale privileges lease to provide DLLC a
completed lease agreement signed by the lessor and lessee.
5. Directs the
Director of DLLC (Director), upon approval of an off-sale privileges lease and
for the lease term, to transfer the lessor's off-sale privileges, except to-go
mixed cocktails, to the restaurant lessee, and prohibits a bar or liquor store
lessor from using the leased off-sale privileges associated with their license
during the term of an off-sale privileges lease.
6.
Subjects the
off-sale use of a restaurant licensee with an off-sale privileges lease to the
limitation of 30 percent of the on-premises spirituous liquor sales, as
prescribed for bars.
7.
Directs DLLC
to establish and publish an off-sale privileges lease amount that fairly
recognizes and is derived from the commercial value of selling spirituous
liquor for off-premises consumption.
8.
Allows DLLC
to establish separate amounts for off-sale privileges leases in urban and rural
counties and to designate counties for each amount.
9.
Allows an
off-sale privileges lessor and lessee to agree to a lease amount that is
different than the DLLC-established amount.
To-Go
Mixed Cocktails Privileges
10.
Extends, to
liquor stores and restaurants leasing a to-go mixed cocktails privilege, the
to-go mixed cocktails exemption from the prohibition on allowing spirituous
liquor to be removed from the licensed premises except in the original,
unbroken package.
11.
Requires the
Director, beginning January 1, 2026, to make to-go mixed cocktail permits
available for a restaurant licensee to purchase from DLLC equal in number to
the total number of bar and liquor store licensees and requires the permit to
be noted on the license and in DLLC records.
12.
Directs bar
and liquor store licensees, through December 31, 2025, to lease to a restaurant
licensee, through the DLLC, the privilege of selling mixed cocktails for
off-premises consumption (to-go mixed cocktails lease).
13.
Allows a
restaurant licensee to apply for a to-go mixed cocktails lease from a bar or
liquor store licensee on a form prescribed and provided by the Director.
14.
Requires the
Director, upon approval of a restaurant licensee's application, to randomly
select a bar or liquor store license for the lease to the restaurant of the
licensee's to-go mixed cocktail privileges.
15.
Subjects the
off-sale use of a restaurant licensee with a to-go mixed cocktails lease to the
limitation of 30 percent of the on-premises spirituous liquor sales, as
prescribed for bars.
16.
Allows a bar
or liquor store lessor to sell to-go mixed cocktails during the term of a to-go
mixed cocktails lease.
17.
Requires DLLC
to establish a to-go mixed cocktails lease amount that fairly recognizes and is
derived from the commercial value of the privilege to sell mixed cocktails for
off-premises consumption.
18.
Repeals to-go
mixed cocktails leasing and lease administration requirements on January 1,
2026.
19.
Requires
to-go mixed cocktails to be tamper proof sealed by the licensee's
employee, rather than sealed.
Lease Administration
20. Allows the Director to establish and
charge the following to be used for associated administrative and enforcement
costs:
a)
a to-go mixed
cocktails lease or permit application fee and a permit annual renewal fee; and
b)
an off-sale
privileges lease application fee.
21. Requires all violations and liability
for liquor service under the leased off-sale or to-go mixed cocktails
privileges during the lease term to be attributed only to the leasing
restaurant licensee.
22. Directs a restaurant that ceases regular
kitchen service for food to cease selling spirituous liquor for off-premises
consumption, including mixed cocktails.
23. Directs DLLC to establish a process to
facilitate and approve lease conveyance for to-go cocktails and off-sale
privileges and to govern the lease, including:
a) a standard form of lease;
b) the responsibilities of the lessor and
lessee;
c) the term of the lease, which must be one
year except for the first lease year, and the established lease amount;
d) the lease may be transferred to another
restaurant licensee if the new licensee purchases the original lessee's
business during a lease term;
e) the privileges conveyed to the lessee
during the lease term continue if the lessor's license is suspended or revoked;
f) if the lessor sells its license during a
lease term, the license purchaser becomes the new lessor;
g) Alcoholic Beverages statutes and rules
apply to both the lessor and lessee;
h) all violations and liability for liquor
service under the lease must be attributed only to the restaurant leasing the
off-sale or to-go cocktails privileges; and
i)
the
restaurant lessee is not responsible for violations committed by the lessor.
24. Specifies that the
lease period for a to-go mixed cocktails privilege or off-sale privileges lease
is for a period of one year and is renewable for successive, one-year terms.
25. Allows the Director, during the first
year of a lease, to set a lease term that is less than one year to align the
lease renewal date with the renewal date of the restaurant license and allows
the first-year lease payment amount to be prorated.
26. Allows DLLC to adopt a procedure for
payment of a lease amount to the lessor and utilize the Arizona Department of
Administration to facilitate the payments.
27. Allows the Director to:
a) deny approval of a lease based on the
proposed location or history of the lessee; and
b)
immediately
suspend a lease for any violation by a restaurant licensee of Alcoholic
Beverages statutes or related rules.
28. Requires a restaurant licensee to pay
all lease payments in full, in advance.
29. Requires all to-go mixed cocktails
permit holders, rather than applicants, and their employees, managers and
agents to complete alcohol training approved by the Director.
30. Requires the
Director, if a restaurant does not renew a to-go mixed cocktails lease, to
return the lessor to the bar or liquor store lessor to the random selection
process.
31.
Requires the
Director, if a to-go mixed cocktails lessor has its license suspended or
revoked, to transfer the lease to another bar or liquor store licensee at the
end of the lease term.
Orders
for Delivery
32.
Adds beer and
wine bars to licensees authorized to take orders for the sale and delivery of
spirituous liquor off the licensed premises.
33.
Authorizes a
bar, beer and wine bar, or restaurant with a lease or permit to maintain a
delivery service and specifies that the existing statutory authorization for a
retail licensee with off-sale privileges to contract with an independent
contractor does not apply to a bar, beer and wine bar or restaurant.
34. Authorizes a bar, beer and wine bar,
liquor store, beer and wine store or restaurant with a lease or permit to
contract with one or more registered alcohol delivery contractors for
spirituous liquor delivery that is:
a)
packaged and
tamper proof sealed by the licensee or the licensee's employee;
b)
loaded for
delivery at the premises; and
c) delivered in Arizona on the same
business day.
35.
Applies the payment,
delivery, age verification and spirituous liquor delivery labeling requirements
to spirituous liquor deliveries from a bar, beer and wine bar and restaurant
licensee and deliveries by a registered alcohol delivery contractor.
36.
Specifies
that a liquor store or beer and wine store may contract with one or more
independent contractors for delivery as statutorily authorized, if the
spirituous liquor is loaded for delivery at the liquor store or beer and wine
store premises and delivered in Arizona on the same business day.
37. Specifies that the
licensee is responsible for any violation of Alcoholic Beverages statutes or
related rules committed in connection with sale and delivery.
Alcohol Delivery Contractor Registration
38. Replaces the
establishment of a third-party facilitator license with authorization for the
Director to register any person in Arizona as an alcohol delivery contractor to
deliver spirituous liquor from a bar, beer and wine bar, liquor store, beer and
wine store or restaurant licensee to a consumer in Arizona.
39. Allows a registered
alcohol delivery contractor to:
a)
deliver spirituous liquor to a consumer in Arizona on
behalf of a bar, beer and wine bar, liquor store, beer and wine store or restaurant if the registered alcohol delivery
contractor complies with statutory Alcoholic Beverages requirements; and
b) contract with
independent contractors for liquor delivery to a consumer on behalf of a bar,
beer and wine bar, liquor store, beer
and wine store or restaurant.
40. Allows DLLC to require
new registered alcohol delivery contractors to complete an approved alcohol
training course and subjects a registered alcohol delivery contractor to the
Director's authority to examine a licensee's books, records and papers.
41. Authorizes DLLC, in
addition to all other actions authorized for violations, to limit a
contractor's right to deliver for a licensee for up to one year and requires
the alcohol delivery contractor to register with DLLC to resume delivery.
42. Deems, as a penalty that
is appealable to the State Liquor Board, a limitation of an alcohol delivery
contractor's right to deliver.
43. Directs DLLC to maintain
a list of registered alcohol delivery contractors that are not in penalty
status.
44. Deems,
when making a spirituous liquor delivery for a licensee, an alcohol delivery
contractor, subcontractor of an alcohol delivery contractor or the employee of
the contractor or subcontractor to be acting on behalf of the licensee.
45. Requires
a person to apply to be a registered alcohol delivery contractor on a Director-prescribed
form and directs the Director to require an applicant to provide:
a) the controlling person's
identification; and
b) any background
information necessary to identify the person and demonstrate proof of the
person's authority to conduct business in Arizona, including copies of required
state or local business licenses or permits.
46. Allows the Director to
refuse to register a person as an alcohol delivery contractor for good cause.
47. Prohibits the Director
from registering, as an alcohol deliver contractor, a person who has been
convicted of a felony in Arizona or any other state within the five years
immediately preceding application.
48. Allows the Director to
establish and charge an alcohol delivery contractor registration and renewal
fee to be used for associated administrative and enforcement costs.
49. Subjects
a registered alcohol delivery contractor to statutory requirements related to:
a)
grounds
for license revocation, suspension and refusal to renew;
b) complaints and hearings;
c)
the
Director's authority to impose a civil penalty between $200 and $3,000 for
violations; and
d) the prohibition on
selling, disposing of, delivering or giving spirituous liquor to an individual
purchaser between 2 a.m. and 6 a.m.
50. Removes the
authorization for a bar or restaurant licensee to take orders for the sale and
delivery of spirituous liquor through a third-party facilitator and for a
third-party facilitator to collect payment for spirituous liquor.
Definitions
51. Redefines mixed
cocktail as a drink combined at the premises of an authorized licensee that
contains spirituous liquor, is combined with at least one other ingredient
besides water and contains more than one-half percent of alcohol by volume when
combined.
52. Excludes, from the definition
of mixed cocktail, a drink sold in an original manufacturer's package or
a drink poured from an original manufacturer's package without the addition of
all of the cocktail's other ingredients at the licensed premises.
53. Defines menu food
item as a food item from a regular menu, special menu or happy hour menu
that is prepared by the licensee or the licensee's employee.
54. Defines registered
alcohol delivery contractor as a person who delivers spirituous liquor to a
consumer on behalf of a bar, beer and wine bar, liquor store, beer and wine
store or restaurant.
55. Excludes, from the
definition of registered alcohol delivery contractor:
a)
a
motor carrier, which is defined as a person who operates or causes to be
operated a commercial motor vehicle on a public highway; and
b)
an independent contractor, subcontractor of an
independent contractor, or an independent contractor's or subcontractor's
employee delivering spirituous liquor according to existing statutory
requirements on behalf of a retail licensee with off-sale privileges, besides a
bar, beer and wine bar or restaurant.
56.
Defines tamper-proof
sealed as designed to prevent consumption without the removal of a
tamper-proof cap, seal, cork or closure that has a device, mechanism or
adhesive that clearly shows whether a container has been opened.
57. Modifies the definition
of gross revenue relating to the limit on restaurant spirituous liquor
sales to include spirituous liquor sold for off-sale consumption.
58.
Defines business
day, for the purposes of spirituous liquor delivery, as between the
hours of 6:00 a.m. of one day 2:00 a.m. of the next day.
Miscellaneous
59.
Delays the
effective date until October 1, 2021, with a retroactive provision as noted.
60.
Exempts,
retroactive to July 1, 2020, from Alcoholic Beverages statutes, the manufacture
or sale of bitters products that have been classified and approved as a
nonbeverage product or unfit for beverage purposes by the U.S. Alcohol and
Tobacco, Tax and Trade Bureau (U.S. TTB) and specifies that the exemption is
consistent with U.S. TTB classification guidelines.
61.
Adds a
severability clause.
62.
Makes
technical and conforming changes.
Page 4, after line 43, insert:
"24. "menu food item" means a food item from a
regular menu, special menu or happy hour menu that is prepared by the licensee
or the licensee's employee."
Renumber to conform
Page 5,
strike lines 4 through 7, insert:
"26. "MIXED COCKTAIL":
(a) MEANS
ANY DRINK COMBINED AT THE PREMISES OF an authorized licensee that CONTAINS A
SPIRITUOUS LIQUOR and THAT IS COMBINED WITH AT LEAST ONE OTHER INGREDIENT,
which MAY INCLUDE ADDITIONAL SPIRITuOUS LIQUORS, FRUIT JUICE, VEGETABLE JUICE,
MIXERS, CREAM, FLAVORED SYRUP OR OTHER INGREDIENTS EXCEPT WATER, AND THAT WHEN
COMBINED CONTAINS MORE THAN ONE-HALF OF ONE PERCENT OF ALCOHOL BY VOLUME.
(b) DOES
NOT INCLUDE A DRINK SOLD IN AN ORIGINAL MANUFACTURER'S PACKAGING OR ANY DRINK
POURED FROM AN ORIGINAL MANUFACTURER'S PACKAGE WITHOUT THE ADDITION OF ALL OF
THE COCKTAIL'S OTHER INGREDIENTS AT THE PREMISES OF the LICENSED BAR, LIQUOR
STORE OR RESTAURANT."
Renumber to
conform
Between
lines 31 and 32, insert:
"32. "REGISTERED ALCOHOL DELIVERY CONTRACTOR":
(a) MEANS
A PERSON WHO DELIVERS SPIRITUOUS LIQUOR TO A CONSUMER ON BEHALF OF A BAR, BEER
AND WINE BAR, LIQUOR STORE, beer and wine store OR RESTAURANT.
(b) DOES
NOT INCLUDE:
(i) A
MOTOR CARRIER AS DEFINED in SECTION 28-5201.
(ii) An
independent contractor, a subcontractor of an independent contractor, an
employee of an independent contractor or an employee of a subcontractor as
provided in section 4-203, subsection J."
Renumber to
conform
Page
6, strike lines 18 through 21, insert:
"38. "TAMPER PROOF SEALED" MEANS DESIGNED TO
PREVENT CONSUMPTION WITHOUT THE REMOVAL OF A TAMPER-PROOF CAP, SEAL, CORK OR
CLOSURE THAT HAS A DEVICE, MECHANISM OR ADHESIVE THAT CLEARLY SHOWS WHETHER A
CONTAINER HAS BEEN OPENED."
Renumber to
conform
Page 9, line
34, after "privileges" insert ", except a bar,
beer and wine bar or restaurant licensee,"
Page 11,
line 20, after "bar" insert ", beer and wine bar, liquor store, beer and wine store"
Line 22,
strike "through a third-party facilitator,"
Line 25,
strike "or" insert "and"
Between
lines 26 and 27, insert:
"2. BEER AND WINE BAR LICENSEES FOR BEER AND WINE.
3. liquor
store licensees for beer, wine, distilled spirits and mixed cocktails.
4. Beer
and wine store licensees for beer and wine."
Renumber to
conform
Line 27, strike
"either" insert "any"
Line 28,
strike "Food" insert "menu
food items"
Line 30,
strike "J" insert "k
and section 4-203.07 or A lease pursuant to section 4-203.06"
Between
lines 32 and 33, insert:
"(c) BEER, WINE and DISTILLED SPIRITS
IF THE RESTAURANT HOLDS AN OFF-SALE PRIVILEGES LEASE WITH A BAR OR LIQUOR STORE
PURSUANT TO SECTION 4-203.07.
(d) BEER
and WINE IF THE RESTAURANT HOLDS AN OFF-SALE PRIVILEGES LEASE WITH A BEER AND
WINE BAR PURSUANT TO SECTION 4-203.07."
Page 11,
line 42, strike "third-party facilitators licensed"
insert "alcohol delivery contractors registered"
Line 43,
after "is" insert "packaged
and tamper proof sealed by the bar, beer and wine bar, liquor store, beer and
wine store or restaurant licensee or the licensee's employee and is"
Line 44,
after "restaurant" insert ",
beer and wine bar, liquor store, beer and wine store"
Line 45,
after "state" insert "on
the same business day"; after the period insert "a liquor store or beer and wine store licensee may contract with one
or more independent contractors as provided in subsection j of this section for
delivery of spirituous liquor if the spirituous liquor is loaded for delivery
at the premises of the liquor store or beer and wine store licensee in this
state and delivered in this state on the same business day."
Page 12,
line 1, after "be" insert "tamper
proof sealed and"
Line 6,
after "liquor" strike remainder of line
Line 7,
strike "a licensed third-party facilitator"
Line 8,
after the second "or" insert "authorized"; strike "an authorized"
Line 9,
strike "third-party facilitator" insert "a registered alcohol delivery contractor"
Line 13,
after "restaurant" insert ",
beer and wine bar, liquor store, beer and wine store"; strike
"or third-party facilitator"
Line 16,
strike "liquors" insert "liquor"
Line 20,
after "or" strike remainder of line
Line 21,
strike "facilitator" insert "a registered alcohol delivery contractor"
Line 25,
after the period insert "an alcohol delivery contractor, a
subcontractor of an alcohol delivery contractor, an employee of an alcohol
delivery contractor or an employee of a subcontractor is deemed to be acting on
behalf of the licensee when making a delivery of spirituous liquor for the
licensee. For the purposes of this subsection, "business
day" means between the hours of 6:00 a.m. of one day and
2:00 a.m. of the next day."
Page 12,
between lines 25 and 26, insert:
"Sec.
3. Title 4, chapter 2, article 1, Arizona Revised Statutes, is
amended by adding sections 4-203.06 and 4-203.07, to read:
START_STATUTE4-203.06. Mixed
cocktails; off-sale privileges; leases; fees
A. NOTWITHSTANDING
SECTION 4-203, SUBSECTION E and section 4-210, subsection A, paragraph 6,
THROUGH DECEMBER 31, 2025, BAR AND LIQUOR STORE LICENSEES, THROUGH THE
DEPARTMENT, shall lease TO RESTAURANT LICENSEES THE PRIVILEGE OF SELLING MIXED
COCKTAILS FOR CONSUMPTION OFF THE LICENSED PREMIses in accordance with SECTION
4-244, PARAGRAPH 32, SUBDIVISION (d). THE LEASE SHALL BE FOR A PERIOD OF ONE YEAR AND SHALL BE RENEWABLE
FOR SUCCESSIVE TERMS OF ONE YEAR. THE DEPARTMENT SHALL establish a
LEASE AMOUNT THAT FAIRLY RECOGNIZES, AND IS DERIVED FROM, THE COMMERCIAL VALUE
OF THE privilege TO SELL MIXED COCKTAILS FOR CONSUMPTION OFF THE LICENSED
PREMISES.
B. LEASES
MADE PURSUANT TO SUBSECTION A OF THIS SECTION ARE SUBJECT TO THE FOLLOWING
CONDITIONS:
1. A
RESTAURANT LICENSEE MAY APPLY TO THE DEPARTMENT ON A FORM PRESCRIBED AND PROVIDED
BY THE DEPARTMENT FOR A LEASE pursuant to this section. The
department may establish and charge an application fee for administrative and
enforcement costs associated with this section.
2. ON
THE DIRECTOR APPROVING THE APPLICATION OF A RESTAURANT LICENSEE, THE DIRECTOR
SHALL RANDOMLY SELECT A BAR OR LIQUOR STORE LICENSE FOR THE LEASE OF THE BAR OR
LIQUOR STORE LICENSEE'S mixed cocktail off-sale privileges TO THE RESTAURANT
LICENSEE THROUGH THE DEPARTMENT.
3. THE
DEPARTMENT SHALL ESTABLISH A PROCESS TO FACILITATE and approve THE LEASE
CONVEYANCE AND TO GOVERN THE LEASES, INCLUDING the following:
(a) A
STANDARD FORM OF LEASE.
(b) tHE
TERM OF THE LEASE, WHICH SHALL BE ONE YEAR EXCEPT for THE FIRST YEAR OF THE
LEASE. DURING THE FIRST YEAR OF THE LEASE, THE DIRECTOR MAY SET A LEASE TERM
THAT IS LESS THAN A YEAR IN ORDER TO ALIGN THE LEASE RENEWAL DATE WITH THE
RENEWAL DATE OF THE RESTAURANT LICENSE. the lease payment amount for
the first year may be prorated.
(c) The
amount of THE LEASE established BY THE DIRECTOR PURSUANT TO SUBSECTION A OF
THIS SECTION.
(d) The
RESPONSIBILITIES OF THE LESSOR AND LESSEE.
(e) THE
LEASE MAY BE TRANSFERRED TO ANOTHER RESTAURANT LICENSEE IF a NEW RESTAURANT
LICENSEE PURCHASES THE BUSINESS OF THE ORIGINAL LESSEE DURING THE TERM OF THE
LEASE.
(f) THE
PRIVILEGES CONVEYED TO THE LESSEE DURING THE TERM OF THE LEASE WILL CONTINUE IF
THE BAR OR LIQUOR STORE LESSOR HAS its LICENSE SUSPENDED OR REVOKED.
(g) IF
THE BAR OR LIQUOR STORE LESSOR SELLS its LICENSE DURING THE TERM OF THE LEASE,
THE PURCHASER OF THE BAR OR LIQUOR STORE LICENSE BECOMEs THE NEW LESSOR.
(h) THIS
TITLE AND RULES ADOPTED PURSUANT TO THIS TITLE APPLY TO BOTH THE LESSOR AND
LESSEE.
(i) DURING
THE TERM OF THE LEASE, ALL VIOLATIONS AND LIABILITY FOR LIQUOR SERVICE UNDER
THE lease SHALL BE ATTRIBUTED ONLY TO THE RESTAURANT LICENSEE LEASING THE mixed
cocktail off-sale privilege. The restaurant licensee leasing the
off-sale privilege is not responsible for violations committed by the lessor.
4. THE
DIRECTOR MAY DENY APPROVAL OF A LEASE BASED ON THE PROPOSED LOCATION OR HISTORY
OF THE PROPOSED LESSEE.
5. THE
RESTAURANT LICENSEE SHALL PAY to the department ALL LEASE PAYMENTS IN FULL IN
ADVANCE.
6. the
department of liquor licenses and control may adopt a procedure to pay the
lease amount to the lessor and may use the department of administration to
facilitate the payments.
7. DURING
THE TERM OF THE LEASE, ALL VIOLATIONs AND LIABILITY FOR THE LIQUOR SERVICE
UNDER THE LEASE SHALL BE ATTRIBUTED ONLY TO THE RESTAURANT LICENSEE LEASING THE
Privilege. PUrsuant to section 4-210, THE DIRECTOR MAY IMMEDIATELY
SUSPEND A LEASE FOR ANY VIOLATION OF THIS TITLE OR ANY RULE ADOPTED PURSUANT TO
THIS TITLE by the restaurant licensee. The restaurant licensee
leasing the off-sale privilege is not responsible for violations committed by
the lessor.
8. DURING
THE TERM OF the LEASE, A BAR OR LIQUOR STORE LESSOR MAY CONTINUE TO SELL
SPIRITUOUS LIQUOR AS AUTHORIZED BY THE BAR OR LIQUOR STORE LICENSE AND MIXED
COCKTAILS FOR OFF-PREMISES CONSUMPTION PURSUANT TO SECTION 4-244, PARAGRAPH 32,
SUBDIVISION (d).
9. the
restaurant licensee leasing the off-sale privilege is subject to the limit on
off-sale use by the restaurant licensee's total spirituous liquor sales as
prescribed in section 4-206.01, subsection g.
C. IF
A RESTAURANT LICENSEE DOES NOT RENEW A LEASE, THE DIRECTOR SHALL RETURN THE BAR
OR LIQUOR STORE LESSOR TO THE RANDOM SELECTION PROCESS PURSUANT TO SUBSECTION
B, PARAGRAPH 2 OF THIS SECTION.
D. IF
a BAR OR LIQUOR STORE LESSOR HAS its LICENSE SUSPENDED OR REVOKED, THE DIRECTOR
SHALL TRANSFER THE LEASE TO ANOTHER BAR OR LIQUOR STORE LICENSEE AT THE END OF
THE LEASE TERM PURSUANT TO SUBSECTION B, PARAGRAPH 2 OF THIS SECTION. END_STATUTE
START_STATUTE4-203.07. Off-sale
privileges; leases; mixed cocktails; permits; fees
A. NOTWITHSTANDING
SECTION 4-203, SUBSECTION E and section 4-210, subsection A, paragraph 6, A
BAR, BEER AND WINE BAR AND LIQUOR STORE LICENSEE MAY LEASE THE OFF-SALE
PRIVILEGES ASSOCIATED WITH THE licensee's LICENSE, except the privilege to sell
mixed cocktails for off-premises consumption pursuant to section 4-244,
paragraph 32, subdiviSion (d), TO A RESTAURANT LICENSEE. THE LEASE SHALL BE FOR A PERIOD OF ONE
YEAR AND MAY BE RENEWABLE FOR SUCCESSIVE TERMS OF ONE YEAR. THE OFF-SALE
PRIVILEGES OF A BAR, BEER AND WINE BAR OR LIQUOR STORE LICENSE that are HELD IN
NON-USE STATUS MAY also BE LEASED PURSUANT TO THIS SECTION.
B. LEASES
MADE PURSUANT TO THIS SECTION ARE SUBJECT TO THE FOLLOWING CONDITIONS:
1. THE
DEPARTMENT SHALL establish A MINIMUM of FOUR LEASE WINDOWS THROUGHOUT THE
CALENDAR YEAR DURING WHICH A LEASE MAY BE AGREED TO BETWEEN A BAR, BEER AND
WINE BAR OR LIQUOR STORE LICENSEE AND A RESTAURANT LICENSEE FOR THE LEASE OF
OFF-SALE PRIVILEGES.
2. A
RESTAURANT LICENSEE MAY APPLY TO THE DEPARTMENT FOR APPROVAL OF A LEASE AT
LEAST THIRTY DAYS before THE END OF THE LEASE WINDOW. THE RESTAURANT
LICENSEE SHALL PROVIDE A COMPLETED LEASE AGREEMENT SIGNED BY BOTH THE LESSOR
AND LESSEE. The department may establish and charge an application
fee for administrative and enforcement costs associated with this section.
3. ON
THE DIRECTOR APPROVING THE LEASE, THE DIRECTOR SHALL TRANSFER THE LESSOR'S
OFF-SALE PRIVILEGES, except the privilege to sell mixed cocktails for
off-premises consumption pursuant to section 4-244, paragraph 32, subdivision (d), TO THE
RESTAURANT LESSEE FOR THE TERM OF THE LEASE.
4. THE
DEPARTMENT SHALL ESTABLISH A PROCESS TO FACILITATE and approve THE LEASE
CONVEYANCE AND TO GOVERN THE LEASEs, including the following:
(a) A
STANDARD FORM OF LEASE.
(b) THE
TERM OF THE LEASE SHALL BE ONE YEAR EXCEPT for THE FIRST YEAR OF THE LEASE.
DURING THE FIRST YEAR OF THE LEASE, THE DIRECTOR MAY establish A LEASE TERM
THAT IS LESS THAN A YEAR IN ORDER TO ALIGN THE LEASE RENEWAL DATE WITH THE
RENEWAL DATE OF THE RESTAURANT LICENSE.
(c) The
RESPONSIBILITIES OF THE LESSOR AND LESSEE.
(d) THE
LEASE MAY BE TRANSFERRED TO ANOTHER RESTAURANT LICENSEE IF THE NEW RESTAURANT
LICENSEE PURCHASES THE BUSINESS OF THE ORIGINAL LESSEE DURING THE TERM OF THE
LEASE.
(e) THE
PRIVILEGES CONVEYED TO THE LESSEE DURING THE TERM OF THE LEASE WILL CONTINUE IF
THE BAR, BEER AND WINE BAR OR LIQUOR STORE LESSOR HAS its LICENSE SUSPENDED OR
REVOKED.
(f) IF
THE BAR, BEER AND WINE BAR OR LIQUOR STORE LESSOR SELLS its LICENSE DURING THE
TERM OF THE LEASE, THE PURCHASER OF THE BAR, BEER AND WINE BAR OR LIQUOR STORE
LICENSE BECOMEs THE NEW LESSOR.
(g) THIS
TITLE AND RULES ADOPTED PURSUANT TO THIS TITLE APPLY TO BOTH THE LESSOR AND
LESSEE.
(h) DURING
THE TERM OF THE LEASE, ALL VIOLATIONS AND LIABILITY FOR LIQUOR SERVICE UNDER
THE LEASE SHALL BE ATTRIBUTED ONLY TO THE RESTAURANT LICENSEE LEASING THE
PRIVILEGE. The restaurant licensee leasing the off-sale
privilege is not responsible for violations committed by the lessor.
5. The
Restaurant licensee shall pay to the department all lease payments in full in
advance.
6. the department of liquor licenses and
control may adopt a procedure to pay the lease amount to the lessor and may use
the department of administration to facilitate the payments.
7. DURING
THE TERM OF THE LEASE, ALL VIOLATIONs AND LIABILITY FOR THE LIQUOR SERVICE
UNDER THE LEASE SHALL BE ATTRIBUTED ONLY TO THE RESTAURANT LICENSEE LEASING THE
PRIVILEGE. Pursuant to section 4-210, THE DIRECTOR MAY IMMEDIATELY SUSPEND
A LEASE FOR ANY VIOLATION OF THIS TITLE OR ANY RULE ADOPTED PURSUANT TO THIS
TITLE BY THE RESTAURANT LICENSEE. The restaurant licensee leasing
the off-sale privilege is not responsible for violations committed by the
lessor.
8. DURING
THE TERM OF the LEASE, A BAR, BEER AND WINE BAR OR LIQUOR STORE LESSOR may NOT
SELL SPIRITuOUS LIQUOR FOR OFF-PREMISES CONSUMPTION, EXCEPT A BAR OR LIQUOR
STORE LICENSEE MAY SELL MIXED COCKTAILS FOR OFF-PREMISES CONSUMPTION
PURSUANT TO SECTION 4-244, PARAGRAPH 32, SUBDIVISION (d).
9. the restaurant licensee leasing the
off-sale privilege is subject to the limit on off-sale use by the restaurant
licensee's total spirituous liquor sales as prescribed in section 4-206.01,
subsection g.
10. A
lessor may lease its off-sale privileges only TO A RESTAURANT LICENSEE LOCATED
IN THE SAME COUNTY.
C. THE
DIRECTOR SHALL PUBLISH A LEASE AMOUNT FOR LEASES MADE PURSUANT TO THIS
SECTION. The department shall establish a lease amount THAT FAIRLY
RECOGNIZES, AND IS DERIVED FROM, THE COMMERCIAL VALUE OF selling SPIRITUOUS
LIQUOR FOR CONSUMPTION OFF THE LICENSED PREMISES. THE department MAY
ESTABLISH SEPARATE LEASE AMOUNTs FOR URBAN AND RURAL COUNTIES AND MAY DESIGNATE
COUNTIES IN THIS STATE FOR EACH AMOUNT. THE LEASE AMOUNT applies
UNLESS THE LESSOR and LESSEE AGREE TO A DIFFERENT LEASE AMOUNT.
D. BEGINNING
JANUARY 1, 2026, THE DIRECTOR SHALL MAKE AVAILABLE FOR RESTAURANT LICENSEES TO
PURCHASE FROM THE DEPARTMENT PERMITS TO SELL MIXED COCKTAILS PURSUANT TO
SECTION 4-244, PARAGRAPH 32, SUBDIVISION (d) EQUAL IN NUMBER TO THE NUMBER OF
TOTAL BAR AND LIQUOR STORE LICENSES. THE DIRECTOR MAY SET THE APPLICATION AND
ANNUAL RENEWAL FEE FOR A MIXED COCKTAIL PERMIT to be used for administrative
and enforcement costs associated with the permit.
Sec. 4. Delayed repeal
Section 4-203.06, Arizona Revised Statutes, as added by this act, is
repealed from and after December 31, 2025."
Renumber to
conform
Page 13,
line 3, strike "30" insert "31"
Page 14,
between lines 11 and 12, insert:
"j. notwithstanding section 4-207, section 4-203, subsection
E and section 4-210, subsection A, paragraph 6, through december 31, 2025, a
restaurant applicant or licensee may apply to the department for a lease for
the PRIVILEGE of selling mixed cocktails for consumption off the licensed
premises pursuant to section 4-203.06 and section 4-244, paragraph 32,
subdivision (d)."
Reletter to
conform
Page 14,
line 12, after the comma insert "beginning january 1, 2026,"
Line 14,
after "to" insert "section
4-203.07 and"
Line 17,
strike "Food" insert "menu
food items"
Line 21,
strike "applicants for the"; after "permit" insert "holders"
Line 22,
strike "managing"
Strike lines
27 through 31, insert:
"L. A RESTAURANT LICENSEE SHALL CEASE selling SPIRITUOUS
LIQUOR, including mixed cocktails, FOR OFF-PREMISES CONSUMPTION WHEN THE
LICENSEE ceases REGULAR KITCHEN SERVICE FOR food."
Reletter to conform
Line 33,
after the second quotation mark insert ":
(a)"
Between
lines 37 and 38, insert:
"(b) Includes revenue derived from
spirituous liquor sold for off-sale consumption."
Strike page
15
Page
16, strike lines 1 through 21, insert:
"Sec.
6. Title 4, chapter 2, article 1, Arizona Revised Statutes, is
amended by adding section 4-205.13, to read:
START_STATUTE4-205.13. Registered
alcohol delivery contractor; issuance; fee; regulatory provisions
A. THE
DIRECTOR MAY REGISTER ANY PERSON IN THIS STATE AS AN ALCOHOL DELIVERY
CONTRACTOR FOR THE PURPOSES OF DELIVERING SPIRITuOUS LIQUOR FROM A BAR, BEER
AND WINE BAR, LIQUOR STORE, beer and wine store OR RESTAURANT LICENSEE TO A
CONSUMER IN THIS STATE PURSUANT TO SECTION 4-203, SUBSECTIONs S AND T.
B. A
PERSON SHALL APPLY TO BE A REGISTERED ALCOHOL DELIVERY CONTRACTOR ON A FORM
PRESCRIBED BY THE DIRECTOR. THE DIRECTOR SHALL REQUIRE AN APPLICANT
TO PROVIDE THE CONTROLLING PERSON'S IDENTIFICATION AND ANY BACKGROUND
INFORMATION DEEMED NECESSARY TO IDENTIFY THE PERSON AND TO DEMONSTRATE PROOF OF
THE PERSON'S AUTHORITY TO CONDUCT BUSINESS IN THIS STATE, INCLUDING COPIES OF
ANY REQUIRED STATE OR LOCAL BUSINESS LICENSES OR PERMITS. THE
DIRECTOR MAY ESTABLISH AND CHARGE A REGISTRATION FEE AND A RENEWAL FEE TO BE
USED FOR ADMINISTRATIVE AND ENFORCEMENT COSTS ASSOCIATED WITH ALCOHOL DELIVERY
CONTRACTORS.
C. THE
DEPARTMENT SHALL MAINTAIN A LIST OF REGISTERED ALCOHOL DELIVERY CONTRACTORS
THAT ARE NOT OTHERWISE IN PENALTY STATUS PURSUANT TO SUBSECTION G OF THIS
SECTION.
D. THE
DEPARTMENT MAY REQUIRE NEW REGISTERED ALCOHOL DELIVERY CONTRACTORS TO COMPLETE
AN APPROVED TRAINING COURSE IN ACCORDANCE WITH SECTION 4-112, SUBSECTION G,
PARAGRAPH 2. A REGISTERED ALCOHOL DELIVERY CONTRACTOR IS SUBJECT TO
EXAMINATIONS CONDUCTED PURSUANT TO SECTION 4-112, SUBSECTION G, PARAGRAPH 1.
E. THE
DIRECTOR MAY REFUSE TO REGISTER A PERSON AS AN ALCOHOL DELIVERY CONTRACTOR FOR
GOOD CAUSE AND MAY NOT REGISTER ANY PERSON AS AN ALCOHOL DELIVERY CONTRACTOR IF
THE PERSON HAS BEEN CONVICTED OF A FELONY IN THIS STATE OR ANY OTHER STATE
WITHIN FIVE YEARS IMMEDIATELY PRECEDING THE APPLICATION.
F. A
REGISTERED ALCOHOL DELIVERY CONTRACTOR MAY DELIVER SPIRITUOUS LIQUOR TO A
CONSUMER IN THIS STATE ON BEHALF OF A BAR, BEER and WINE BAR, LIQUOR STORE,
beer and wine store OR RESTAURANT IN THIS STATE PURSUANT TO SECTION 4-203,
SUBSECTIONS S AND T, IF THE REGISTERED ALCOHOL DELIVERY CONTRACTOR COMPLIES
WITH THIS TITLE. A REGISTERED ALCOHOL DELIVERY CONTRACTOR MAY
CONTRACT WITH ONE OR MORE INDEPENDENT subCONTRACTORS FOR THE DELIVERY OF
SPIRITUOUS LIQUOR TO A CONSUMER IN THIS STATE ON BEHALF OF A BAR, BEER AND WINE
BAR, LIQUOR STORE, beer and wine store OR RESTAURANT IN THIS STATE PURSUANT TO
SECTION 4-203, SUBSECTIONS S AND T. an alcohol delivery contractor,
a subcontractor of an alcohol delivery contractor, an employee of an alcohol
delivery contractor or an employee of a subcontractor is deemed to be acting on
behalf of the licensee when making a delivery of spirituous liquor for the
licensee.
G. IN
ADDITION TO ALL OTHER ACTION THAT MAY BE TAKEN BY THE DIRECTOR FOR A VIOLATION
OF THIS TITLE OR THE RULES ADOPTED PURSUANT TO THIS TITLE BY A REGISTERED
ALCOHOL DELIVERY CONTRACTOR and its EMPLOYEES OR subcontractors and employees
of subcontractors, THE DEPARTMENT MAY LIMIT THE RIGHT OF THE registered alcohol
delivery CONTRACTOR TO DELIVER SPIRITUOUS LIQUOR ON BEHALF OF A LICENSEE FOR A
PERIOD OF UP TO ONE YEAR, AFTER WHICH THE ALCOHOL DELIVERY CONTRACTOR SHALL
REGISTER WITH THE DEPARTMENT TO RESUME DELIVERY OF SPIRITUOUS
LIQUOR. ANY PENALTY ISSUED PURSUANT TO THIS SUBSECTION MAY BE
APPEALED TO THE BOARD PURSUANT TO SECTION 4-210.02."
Page
18, line 41, strike "l" insert "m"
Page 20,
strike lines 16 through 18
Line 45,
after "to" insert "section
4-203.07 and"; strike "j" insert
"k and leases pursuant to sections 4-203.06 and 4-203.07"
Page 22, line
1, after "to" insert "section
4-203.07 and"; strike "j" insert
"k"
Line 2,
after the period insert "the director may establish and
charge fees for lease applications pursuant to sections 4-203.06 and 4-203.07."
Line 13,
strike "a third-party facilitator"
Line 14,
strike "license" insert "registering
an alcohol delivery contractor"
Page 23, line 17, after "to"
insert "section 4-203.07 and"
Line 18,
strike "J." insert "K. The director
may charge annual lease amounts pursuant to sections 4-203.06 and 4-203.07."
Line 30,
after "annual" insert "registration"
Line 31,
strike "third-party facilitator license" insert
"registered alcohol delivery contractor"
Page
25, line 8, strike "a permit" insert "application fees for permits"
Line
9, strike "j and" insert "k,"; strike "a license issued"
insert "leases pursuant to sections 4-203.06 and 4-203.07
and registrations"
Line 10,
strike ", including the annual renewal fees,"
Line 11,
after "permit" insert ",
registration"; strike "license"
insert "lease"
Line 12, strike
"section" insert "chapter"
Between
lines 12 and 13, insert:
"Sec. 9. Section
4-210, Arizona Revised Statutes, is amended to read:
START_STATUTE4-210. Grounds
for revocation, suspension and refusal to renew; notice; complaints; hearings;
defense
A. After
notice and hearing, the director may suspend, revoke or refuse to renew any
license, registration, lease or permit issued pursuant to
this chapter for any of the following reasons:
1. There
occurs on the licensed premises repeated acts of violence.
2. The
licensee, registrant, lessee or permittee fails to
satisfactorily maintain the capability, qualifications and reliability
requirements of an applicant for a license, registration, lease
or permit prescribed in section 4-202, or 4-203, 4-203.06, 4-203.07 or 4-205.13.
3. The
licensee, registrant, lessee, permittee or controlling
person knowingly files with the department an application or other document
that contains material information that is false or misleading or while under
oath knowingly gives testimony in an investigation or other proceeding under
this title that is false or misleading.
4. The
licensee, registrant, lessee, permittee or controlling
person is on the premises habitually intoxicated.
5. The
licensed, registered, leased or permitted business is delinquent for more than one hundred twenty days in the
payment of taxes, penalties or interest in an amount that exceeds $250 to the this state or to any political
subdivision of the this state.
6. The
licensee or controlling person obtains, assigns,
transfers or sells a spirituous liquor license without compliance with this
title or leases or subleases a license.
7. The
licensee, registrant, lessee or permittee fails to keep
for two years and make available to the department on reasonable request all
invoices, records, bills or other papers and documents relating to the
purchase, sale and delivery of spirituous liquors and, in the case of a
restaurant or hotel-motel licensee, all invoices, records, bills or other
papers and documents relating to the purchase, sale and delivery of food.
8. The
licensee, registrant, lessee, permittee or controlling
person is convicted of a felony provided that for a conviction of a corporation
to serve as a reason for any action by the director, conduct that constitutes
the corporate offense and was the basis for the felony conviction must have
been engaged in, authorized, solicited, commanded or recklessly tolerated by
the directors of the corporation or by a high managerial agent acting within
the scope of employment.
9. The
licensee, registrant, lessee, permittee or controlling
person violates or fails to comply with this title, any rule adopted pursuant
to this title or any liquor law of this state or any other state.
10. The
licensee, registrant, lessee or permittee fails to take
reasonable steps to protect the safety of a customer of the licensee, registrant, lessee or permittee or any other person entering,
leaving or remaining on the licensed premises when the licensee knew or
reasonably should have known of the danger to the person, or the licensee fails
to take reasonable steps to intervene by notifying law enforcement officials or
otherwise to prevent or break up an act of violence occurring on the licensed
premises or immediately adjacent to the premises when the licensee knew or
reasonably should have known of the acts of violence.
11. The
licensee, REGISTRANT, LESSEE, PERMITTEE or controlling
person lacks good moral character.
12. The
licensee, REGISTRANT, LESSEE, PERMITTEE or controlling
person knowingly associates with a person who has engaged in racketeering, as
defined in section 13-2301, or who has been convicted of a felony, and
the association is of a nature as to create a reasonable risk that the licensee, REGISTRANT, LESSEE OR PERMITTEE will fail to conform to the
requirements of this title or of any criminal statute of this state.
13. A
licensee that is a liquor store as defined in section 46-297 violates the
restrictions on use of automatic teller machines or point-of-sale
terminals regarding electronic benefit transfer cards prescribed in section 4-242.01.
14. There
occurs on the licensed premises a serious act of violence. For the purposes of
this paragraph, "serious act of violence" means an act of violence in
which a serious injury causes the death or critical injury of a person and the
injuries would be obvious to a reasonable person.
15. The
licensee fails to report a serious act of violence that occurs on the licensed
premises. For the purposes of this paragraph, "serious act of
violence" means an act of violence in which a serious injury causes death
or critical injury of a person and the injuries would be obvious to a
reasonable person.
16. The
licensee, REGISTRANT, LESSEE OR PERMITTEE violates an
order of the board.
B. For
the purposes of:
1. Subsection
A, paragraph 8 of this section, "high managerial agent" means an
officer of a corporation or any other agent of the corporation in a position of
comparable authority with respect to the formulation of corporate policy.
2. Subsection
A, paragraphs 9 and 10 of this section, acts or omissions of an employee of a
licensee that violate this title or rules adopted pursuant to this title are
deemed to be acts or omissions of the licensee. Acts or omissions by an
employee or licensee committed during the time the licensed premises were
operated pursuant to an interim permit or without a license may be charged as
if they had been committed during the period the premises were duly licensed.
C. The
director may suspend, revoke or refuse to issue, transfer or renew a license, REGISTRATION, LEASE OR PERMIT under this section based solely
on the unrelated conduct or fitness of any officer, director, managing agent or
other controlling person if the controlling person retains any interest in or
control of the licensee, REGISTRANT, LESSEE OR PERMITTEE
after sixty days following written notice to the licensee,
REGISTRANT, LESSEE OR PERMITTEE. If the controlling person
holds stock in a corporate licensee, REGISTRANT, LESSEE OR
PERMITTEE or is a partner in a partnership licensee,
REGISTRANT, LESSEE OR PERMITTEE, the controlling person may only divest
himself of his the controlling person's
interest by transferring the interest to the existing stockholders or partners
who must demonstrate to the department that they meet all the requirements for
licensure, REGISTRATION, LEASING OR PERMITTING. For the
purposes of this subsection, the conduct or fitness of a controlling person is
unrelated if it would not be attributable to the licensee,
REGISTRANT, LESSEE OR PERMITTEE.
D. If
the director finds, based on clear and convincing evidence in the record, that
a violation involves the use by the licensee, registrant, lessee
or permittee of a drive-through or walk-up service window or
other physical feature of the licensed premises that allows a customer to
purchase spirituous liquor without leaving the customer's
vehicle or, with respect to a walk-up service window that prevents the
licensee, registrant, lessee or permittee from fully
observing the customer, and that the use of that drive-through or walk-up
service window or other physical feature caused the violation, the director may
suspend or terminate the licensee's, registrant's, lessee's or
permittee's use of the drive-through or walk-up service window or
other physical feature for the sale of spirituous liquor, in addition to any
other sanction.
E. The
director may refuse to transfer any license, REGISTRATION, LEASE
OR PERMIT or issue a new license, REGISTRATION, LEASE OR
PERMIT at the same location if the director has filed a complaint
against the license, REGISTRATION, LEASE, PERMIT or
location that has not been resolved alleging a violation of any of the grounds
stated in subsection A of this section until the time the complaint has been
finally adjudicated.
F. The
director shall receive all complaints of alleged violations of this chapter and
is responsible for the investigation of all allegations of a violation of, or
noncompliance with, this title, any rule adopted pursuant to this title or any
condition imposed on the licensee, REGISTRANT, LESSEE OR
PERMITTEE by the license, REGISTRATION, LEASE OR PERMIT. When
the director receives three complaints from any law enforcement agency
resulting from three separate incidents at a licensed, leased or permitted establishment or by a
registrant within a twelve-month period, the director shall
transmit a written report to the board setting forth the complaints, the
results of any investigation conducted by the law enforcement agency or the
department relating to the complaints and a history of all prior complaints
against the license, REGISTRATION, LEASE OR PERMIT and
their disposition. The board shall review the report and may direct
the director to conduct further investigation of a complaint or to serve a
licensee, REGISTRANT, LESSEE OR PERMITTEE with a
complaint and notice of a hearing pursuant to subsection G of this section.
G. On
the director's initiation of an investigation or on the receipt of a complaint
and an investigation of the complaint as deemed necessary, the director may
cause a complaint and notice of a hearing to be directed to the licensee, REGISTRANT, LESSEE OR PERMITTEE that states the violations
alleged against the licensee, REGISTRANT, LESSEE OR PERMITTEE
and directing the licensee, REGISTRANT, LESSEE OR PERMITTEE,
within fifteen days after service of the complaint and notice of a hearing, to
appear by filing with the director an answer to the complaint. Failure of the
licensee, REGISTRANT, LESSEE OR PERMITTEE to answer may
be deemed an admission by the licensee, REGISTRANT, LESSEE OR
PERMITTEE of commission of the act charged in the
complaint. The director may then vacate the hearing and impose any
sanction provided by this article. The director may waive any sanction for
good cause shown, including excusable neglect. With respect to any violation
of this title or any rule adopted pursuant to this title that is based on the
act or omission of a licensee's, REGISTRANT'S, LESSEE'S OR
PERMITTEE'S employee, the director shall consider evidence of mitigation
presented by the licensee, REGISTRANT, LESSEE OR PERMITTEE
and established by a preponderance of the evidence that the employee acted
intentionally and in violation of the express direction or policy adopted by
the licensee, REGISTRANT, LESSEE OR PERMITTEE and
communicated to the employee and that the employee successfully completed
training in a course approved by the director pursuant to section 4-112,
subsection G, paragraph 2. The director may set the hearing
before the director or an administrative law judge on any of the grounds stated
in subsection A of this section. Instead of issuing a complaint, the
director may provide for informal disposition of the matter by consent
agreement or may issue a written warning to the licensee,
REGISTRANT, LESSEE OR PERMITTEE. If a warning is issued, the licensee, REGISTRANT, LESSEE OR PERMITTEE may reply in writing and the
director shall keep a record of the warning and the reply.
H. A
hearing shall conform to the requirements of title 41, chapter 6, article
10. At the hearing an attorney or corporate officer or employee of a
corporation may represent the corporation. The revoking, suspending
or refusing to renew a license, REGISTRATION, LEASE OR PERMIT
for unpaid taxes, penalties or interest pursuant to subsection A,
paragraph 5 of this section is a contested case with the department of
revenue pursuant to section 42-1251.01.
I. The
expiration, cancellation, revocation, reversion, surrender, acceptance of
surrender or termination in any other manner of a license,
REGISTRATION, LEASE OR PERMIT does not prevent the initiation or
completion of a disciplinary proceeding pursuant to this section against the
licensee, REGISTRANT, LESSEE OR PERMITTEE or license, REGISTRATION, LEASE OR PERMIT. An order issued pursuant to a
disciplinary proceeding against a license, REGISTRATION, LEASE
OR PERMIT is enforceable against other licenses,
REGISTRATIONS, LEASES OR PERMITS or subsequent licenses,
REGISTRATIONS, LEASES OR PERMITS in which the licensee,
REGISTRANT, LESSEE, PERMITTEE or controlling person of the license, REGISTRATION, LEASE OR PERMIT has a controlling interest.
J. The
department shall provide the same notice as is provided to the licensee, REGISTRANT, LESSEE OR PERMITTEE to a lienholder, which has
provided a document under section 4-112, subsection B, paragraph 3, of
all disciplinary or compliance action with respect to a license,
REGISTRATION, LEASE OR PERMIT issued pursuant to this
title. The state is not liable for damages for any failure to
provide any notice pursuant to this subsection.
K. In
any disciplinary action pursuant to this title, a lienholder may participate in
the determination of the action. The director shall consider mitigation on
behalf of the lienholder if the lienholder proves all of the following by a
preponderance of the evidence:
1. That
the lienholder's interest is a bona fide security interest. For the purposes
of this paragraph, "bona fide security interest" means the lienholder
provides actual consideration to the licensee, REGISTRANT,
LESSEE OR PERMITTEE or the licensee's, REGISTRANT'S, LESSEE'S
OR PERMITTEE'S predecessor in interest in exchange for the lienholder's
interest. Bona fide security interest includes a lien taken by the seller of a
license, REGISTRATION, LEASE OR PERMIT as security for
the seller's receipt of all or part of the purchase price of the license, REGISTRATION, LEASE OR PERMIT.
2. That
a statement of legal or equitable interest was filed with the department before
the alleged conduct occurred that is the basis for the action against the
license, REGISTRATION, LEASE OR PERMIT.
3. That
the lienholder took reasonable steps to correct the licensee's,
REGISTRANT'S, LESSEE'S OR PERMITTEE'S prior actions, if any, or
initiated an action pursuant to available contract rights against the licensee, REGISTRANT, LESSEE OR PERMITTEE for the forfeiture of the
license, REGISTRATION, LEASE OR PERMIT after being
provided with notice by the department of disciplinary action as provided in
subsection J of this section.
4. That
the lienholder was free of responsibility for the conduct that is the basis for
the proposed revocation.
5. That
the lienholder reasonably attempted to remain informed by the licensee, REGISTRANT, LESSEE OR PERMITTEE about the business's conduct.
L. If
the director decides not to revoke the license, REGISTRATION,
LEASE OR PERMIT based on the circumstances provided in subsection K of
this section, the director may issue an order requiring either, or both, of the
following:
1. The
forfeiture of all interest of the licensee, REGISTRANT, LESSEE
OR PERMITTEE in the license, REGISTRATION, LEASE OR
PERMIT.
2. The
lienholder to pay any civil monetary penalty imposed on the licensee, REGISTRANT, LESSEE OR PERMITTEE.
M. If
any on-sale licensee proposes to provide large capacity entertainment
events or sporting events with an attendance capacity exceeding a limit
established by the director, the director may request a security plan from the
licensee that may include trained security officers, lighting and other
requirements. This subsection exclusively prescribes the security
requirements for a licensee and does not create any civil liability for the this state, its agencies, agents or
employees or a person licensed under this title or agents or employees of a
licensee.
N. The
director may consider as a mitigating factor or defense to a complaint against
a licensee for a violation of subsection A, paragraph 10 or 14 of this section
that the licensee acted reasonably, responsibly and as expeditiously as
possible by asking for intervention by a peace officer to prevent or to break
up a riot, a fight, an altercation or tumultuous conduct.END_STATUTE"
Renumber to conform
Page 25, line 17, after "and" insert "A registration pursuant
to"
Line 18, strike "e" insert "G"
Line 20, after "licensee"
insert "or registrant"
Strike lines
24 through 26, insert:
"b. the director may require a licensee or registrant to pay
a civil penalty assessed pursuant to subsection a of this section in a single
payment or in installment payments."
Line 28,
after "licensee" insert "or registrant"
Between
lines 29 and 30, insert:
"Sec. 11. Section
4-226, Arizona Revised Statutes, is amended to read:
START_STATUTE4-226. Exemptions
The
provisions of
This title do does not apply to the following:
1. Drugstores
selling spirituous liquors only on prescription.
2. Any
confectionery candy containing less than five per cent percent by weight of alcohol.
3. Ethyl
alcohol intended for use or used for the following purposes:
(a) Scientific,
chemical, mechanical, industrial and medicinal purposes. For the
purposes of this paragraph, medicinal purposes does do not include ethyl alcohol or spirituous liquor that contains
marijuana or usable marijuana as defined in section 36-2801.
(b) Use By those authorized to procure spirituous liquor or ethyl
alcohol tax-free, as provided by the acts of Congress and regulations
promulgated thereunder under the acts of
congress.
(c) In
the manufacture of denatured alcohol produced and used as provided by the acts
of Congress and regulations promulgated thereunder under the acts of congress.
(d) In
the manufacture of patented, patent, proprietary, medicinal, pharmaceutical,
antiseptic, toilet, scientific, chemical, mechanical and industrial
preparations or products, unfit and not used for beverage purposes.
(e) In
the manufacture of flavoring extracts and syrups unfit for beverage purposes.
4. The
purchase, storage, distribution, service or consumption of wine in connection
with the bona fide practice of a religious belief or as an integral part of a
religious exercise by a church recognized by the United States internal revenue
service under section 501(c)(3) of the internal revenue code and in a manner
not dangerous to public health or safety. This exemption does not
apply to any alleged violation of section 4-244, paragraph 9, 34, 35 or 41.
5. Beer
produced for personal or family use that is not for sale. The beer may be
removed from the premises where it was made and exhibited at organized affairs,
exhibitions or competitions such as homebrewers' contests, tasting or judging.END_STATUTE
6. the
manufacture or sale of bitters products that have been classified and approved
as a nonbeverage product or unfit for beverage purposes by the united states
alcohol and tobacco tax and trade bureau. this paragraph is consistent with
the classification guidelines as established and administered by the united
states alcohol and tobacco tax and trade bureau."
Renumber to
conform
Page 28,
line 11, after "retailer" insert "or an alcohol
delivery contractor"
Page 32,
line 9, after "bar" insert "or liquor store"
Line 10,
after "that" insert "leases
the privilege to sell mixed cocktails for consumption off the licensed premises
pursuant to section 4-203.06 or"; after
"to" insert "section
4-203.07 and"; strike "J" insert
"k"
Line 16,
after "premises" insert "of
the bar, liquor store or restaurant"
Page 32, line
17, strike "sealed" insert "tamper proof sealed by the licensee or the licensee's employee"
Line 19,
after "bar's" insert ",
liquor store's"
Line 23,
strike "food" insert "menu
food items"
Page
34, after line 10, insert:
"Sec.
13. Severability clause
If
a provision of this act or its application to any person or circumstance is
held invalid, the invalidity does not affect other provisions or applications
of the act that can be given effect without the invalid provisions or
application, and to this end the provisions of this act are severable.
Sec. 14. Effective date
Sections 4-101,
4-203, 4-205.02, 4-206.01, 4-209, 4-210, 4-210.01 and 4-244, Arizona Revised
Statutes, as amended by this act, and sections 4-203.06, 4-203.07 and
4-205.13, Arizona Revised Statutes, as added by this act, are effective from
and after September 30, 2021.
Sec. 15. Retroactivity
Section
4-226, Arizona Revised Statutes, as amended by this act, applies retroactively
to July 1, 2020."
Amend title to conform