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ARIZONA HOUSE OF REPRESENTATIVESFifty-fifth Legislature First Regular Session |
House: COM DPA 7-3-0-0 | 3rd Read 34-26-0-0Senate: COM DPA 8-0-1-0 | 3rd Read 22-8-0-0Final Vote: 50-9-1-0 |
HB 2773: spirituous liquor; delivery; off-sale permits
Sponsor: Representative Weninger, LD 17
Transmitted to the Governor
Overview
Provides requirements for certain licensees to lease the off-sale privileges and mixed cocktail privilege associated with the license to a restaurant licensee. Allows, beginning January 1, 2026, a restaurant licensee it apply for a permit for mixed cocktail privileges.
History
The Department of Liquor Licenses and Control (Department), which consists of the State Liquor Board and the Office of the Director (Director) of the Department regulates the manufacture, distribution and sale of liquor in this state through the issuance of 21 license types or series.
Under current law, it is unlawful for a licensee or employee to knowingly allow spirituous liquor to be removed from the licensed premises, except in the original unbroken package unless:
1) It is a bottle of wine that has been partially consumed in conjunction with a purchased meal and is properly sealed;
2) There is a noncontiguous portion of the licensed premises that is separated by a public or private walkway or driveway and the liquor is taken from one portion of the premises directly to the other; or
3) The licensee has an appropriate permit that dispenses beer only in a clean container and that is not for consumption on the premises if:
a) The licensee fills the container at the tap at the time of sale; and
b) The container is sealed and displays a government warning label.(A.R.S. § 4-244).
Spirituous liquor means alcohol, brandy, whiskey, rum, tequila, mescal, gin, wine, porter, ale, beer, any malt liquor or malt beverage, absinthe, a compound or mixture of any of them or of any of them with any vegetable or other substance, alcohol bitters, bitters containing alcohol, any liquid mixture or preparation, whether patented or otherwise, which produces intoxication, fruits preserved in ardent spirits and beverages containing more than one-half of one percent of alcohol by volume (A.R.S. § 4-101).
Provisions
Spirituous Liquor Delivery (Sec. 2)
1. Specifies the current statutory authorization for a retail licensee with off-sale privileges for the sale and delivery of spirituous liquor off the licensed premises by an independent contractor does not apply to a bar, beer and wine bar or restaurant licensee.
2. Permits bar, beer and wine bar, liquor store, beer and wine store and restaurant licensees to take orders for the sale and delivery of spirituous liquor off the licensed premises by a registered alcohol delivery contractor.
a) Outlines the type of spirituous liquor permissible for delivery by license type.
3. Specifies the transaction is not considered a sale until delivery is made.
4. Requires the licensee to inform the purchaser of state liquor laws relating to minimum age and identification requirements.
5. Allows the licensee to maintain a delivery service and contract with one or more registered alcohol delivery contractor for delivery of spirituous liquor provided the liquor is:
a) packaged and tamper proof sealed;
b) loaded at the premises; and
c) delivered within the state on the same business day.
i. Provides a definition for business day.
6. Allows a liquor store or beer and wine store licensee to contract with an independent contractor for delivery of spirituous liquors as authorized by current statute
7. Requires delivered spirituous liquor containers to be tamper proof sealed with a required label.
8. Asserts the licensee is responsible for any violation of laws or rules regarding the sale or delivery of spiritous liquor.
9. Provides requirements for delivery and payment collection, including operation limitations.
10. Specifies any violation based on an act or omission of a licensee’s employee or a registered alcohol delivery contractor will be mitigated in accordance with statute.
11. Specifies statutory prohibitions relating to selling or giving alcohol to underaged persons applies only at the time of delivery.
12. Deems an alcohol delivery contractor, subtractor or employee of such contractor to be acting on behalf of the licensee when making a spirituous liquor delivery.
Lease Mixed Cocktails Privilege (Sec. 3)
13. Requires, through December 31, 2025, bar and liquor store licensees (lessor) to lease the privilege of selling mixed cocktails for consumption off the premises to restaurant licensees (lessee).
a) Specifies the lease and renewal periods.
b) Provides requirements for establishing the amount of the lease by the Department.
14. Provides conditions for the lease, which include:
a) application fees;
b) random selection process of lessor and lessee;
c) establishing a process to facilitate and approve the lease conveyance and governance;
d) lease payment requirements; and
e) lease violations and restrictions.
15. Stipulates the Director to return the lessor to a random selection process if the lessee does not renew a lease.
16. Requires the Director to transfer the lease to another lessor at the end of the lease term if the original lessor has its license suspended or revoked.
17. Repeals the leasing of mixed cocktails privilege on January 1, 2026. (Sec. 4)
18. Requires the Director, beginning January 1, 2026, to make mixed cocktail permits available for a restaurant licensee to purchase from the Department equal in number to the total number of bar and liquor store licenses.
a) Allows the Director to set the application and annual renewal fees.
Lease Off-Sale Privilege (Sec. 3)
19. Permits a bar, beer and wine bar and liquor store licensee (lessor) to lease the off-sale privileges associated with the license to a restaurant licensee (lessee).
a) Specifies the privilege does not include mixed cocktail privilege.
b) Specifies the lease is for a period of one year and may be renewed.
c) Allows licenses that are held in non-use status to be leased.
20. Provides conditions for the lease, which include:
a) establishing lease windows, by the Department, in which a lease may be agreed upon by the lessor and lessee;
b) application fees;
c) establishing a process to facilitate and approve the lease conveyance and governance;
d) lease payment requirements; and
e) lease violations and restrictions.
21. Instructs the Director to publish lease amounts and provides requirements for establishing the amount of the lease.
a) Specifies the lease amount applies unless the lessor and lessee agree to a different amount.
Restaurant License (Sec. 5)
22. Permits a licensee, through December 31, 2025, to apply for a lease for the privilege of selling mixed cocktails for consumption off the licensed premises.
23. Permits a licensee, beginning January 1, 2026, to apply for a permit to sell mixed cocktails for consumption off the licensed premises.
24. Requires the sale of mixed cocktails to be accompanied by the sale of menu food items.
25. Directs the Director to issue a permit after a determination that the public convenience requires, and the best interest of the community will be substantially served.
26. Requires permit holders and employees to complete alcohol training in accordance with statute.
27. Allows the Department to establish an application and renewal fee for a permit.
28. Requires the licensee to stop selling spirituous liquor for consumption off the premises when the licensee stops regular kitchen service for food.
29. Modifies gross revenue to include revenue derived from spirituous liquor sold for off-sale consumption.
Registration Alcohol Delivery Contractor (Sec. 6)
30. Permits the Director to register a person as an alcohol delivery contractor for delivering spirituous liquor from specified licensees to an Arizona consumer.
31. Requires the person to apply to the Department and provide certain information as required by the Director.
32. Permits the Director to establish a registration and renewal fee to cover administrative and enforcement costs.
33. Instructs the Department to maintain a list of registered alcohol delivery contractors.
34. Allows the Director to require completion of approved training course regarding spirituous liquor handling, laws and rules.
35. Specifies the Director may refuse to register a person for good cause.
36. Authorizes registered alcohol delivery contractors who comply with Alcoholic Beverage statutes to deliver spirituous liquor on behalf of a bar, beer and wine bar, liquor store, beer and wine store or restaurant.
37. Allows registered alcohol delivery contractors to contractor with an independent contractor for delivery of spirituous liquor.
38. Permits the Department, in addition to all other actions that may be taken for violations of statute or rules, to limit the right of registered alcohol delivery contractors to deliver liquor for a period of up to one year.
a) Allows the limitation penalty to be appealed to the Liquor Board.
Miscellaneous
39. Requires monies received from application fees for mixed cocktail permits, off-sale privilege leases or alcohol delivery contractor registrations be used for administration and enforcement costs of the Department. (Sec. 8)
40. Extends statute relating to revocation, suspension and refusing to renew a license to a registrant, lessee or permittee. (Sec. 9)
41. Authorizes the Department to impose civil penalties for violations of a registered alcohol delivery contractor. (Sec. 10)
42. 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. (Sec. 11, 15)
43. Includes, as an unlawful act, the sell, delivery or giving of spirituous liquor by an alcohol delivery contractor to a person between the hours of 2:00 a.m. and 6:00 a.m. (Sec. 12)
44. Provides, to a bar, liquor store or restaurant licensee regarding mixed cocktails, an exemption from the prohibition on removing spirituous liquor from the license premises provided specified requirements are met. (Sec. 12)
45. Defines menu food item, mixed cocktail, registered alcohol delivery contractor, and tamper proof sealed. (Sec. 1)
46. Contains a severability clause. (Sec. 13)
47. Includes a delayed effective date of October 1, 2021 for specified sections of the act. (Sec. 15)
48. Makes technical and conforming changes. (Sec. 5, 7, 8, 11, 12)
49.
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52. HB 2773
53. Initials PRB Page 0 Transmitted
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