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ARIZONA STATE SENATE
Fifty-Fifth 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
DLLC and Director of DLLC (Director) issue various license types, or series, to regulate the production, distribution and sale of alcoholic beverages (A.R.S. § 4-203). A licensee who holds a license in nonuse status for more than five months must pay a $100 surcharge for each subsequent month to be paid at the time the license is returned to active status. A license automatically reverts to the state after being held in continuous nonuse for more than 36 months. The Director may waive the surcharge and extend the time period for good cause if the licensee files a written request before the date of the automatic reversion (A.R.S. § 4-203).
Statute delineates
the permissible sale of spiritous liquor between licensees and to consumers. A
licensed craft distiller that annually produces 1,189 gallons or less of
distilled spirits may sell and deliver the produced distilled spirits to
on-sale and off-sale retailers (A.R.S.
§ 4-205.10). A distiller, vintner, brewer, rectifier, blender or other
spiritous liquor producer or wholesaler may provide samples to retail consumers
at on-sale premises establishments if the samples are limited to twelve ounces
of beer or cooler products, six ounces of wine or two ounces of distilled
spirits per person per brand (A.R.S.
§ 4-243).
On-sale spirituous liquor licensees with the same type of bar, beer and wine bar, restaurant or remote tasting room license may apply for a joint premises permit (A.R.S. § 4-207.02). The Director may issue a microbrewery license on the same parcel of land as a farm winery under outlined conditions if the licenses are held by different persons (A.R.S. § 4-205.09).
There is no anticipated fiscal impact to the state General Fund associated with this legislation.
Provisions
Liquor Distribution
1. Raises, from 1,189 gallons to 3,566 gallons, the annual distilled spirits production threshold under which a licensed craft distiller may make sales and deliveries of the produced distilled spirits to on-sale and off-sale retailers.
2. Increases, from 12 ounces to 16 ounces, the per person, per brand limit on beer or cooler product samples that a distiller, vintner, brewer, rectifier, blender or other liquor producer or wholesaler may provide to retail consumers at on-sale premises.
3. Specifies that a retailer may order, purchase or receive spirituous liquor from a craft distiller that is subject to the production limit for the sale and delivery to retailers.
Prohibited Acts
4. Allows a representative of a producer or wholesaler participating at a special event to consume small amounts of the producer's or wholesaler's product on the premises for the purpose of quality control.
5. Prohibits a licensed on-sale retailer from being charged with a violation of the limit on the amount of liquor in one drink when an employee serves an opened, original container of distilled spirits if:
a) a customer, without the retailer's knowledge, removes or tampers with the locking device on a bottle delivered to the customer for bottle service and the customer pours the customer's own drink from the bottle; and
b) when the licensee becomes aware of the removal or tampering, the licensee immediately installs a functioning locking device or removes the bottle and lock from bottle service.
6. Prohibits a licensee with joint premises privileges from allowing an underage person to remain in a joint premises area when the primary use is the sale, dispensing or consumption of spirituous liquor unless accompanied by a spouse, parent, grandparent or legal guardian of legal drinking age, rather than any adult.
License Administration
7. Grants a purchaser of a bar, beer and wine bar or liquor store license awarded through the annual liquor license lottery between January 1, 2017, and December 31, 2019, that has not been activated until December 31, 2022, to file a written request with the Director to sell or activate the license after the paying in full for the license.
8. Requires the Director to allow the purchaser to sell or submit an application to activate the license, after DLLC receives the full purchase price of the license and the purchaser's written request for relief.
9. Requires the Director to relieve a licensee or its legal representative from a prior license reversion for nonuse, unless the reverted license has been reissued, if the request for relief is filed in writing not later than two years after the reversion.
10. Grants a licensee whose retail license was reverted to the state between January 1, 2018, and December 31, 2020, due to being held in continuous nonuse for more than 36 months until December 31, 2022, to file with the Director a request for relief from the reversion if the Director has not reissued the license.
11. Directs the Director to reissue the retail license to the licensee on receipt of the licensee's request for relief.
12. Reverts, to the state, a reverted license that the Director reissued according to the extension to file a relief request if the reverted license is held in continuous nonuse for 36 months beginning the date the Director reissues the license, unless the Director grants a good cause extension.
13. Allows the Director to issue a microbrewery and farm winery license for location on the same parcel of land to the same bona fide educational institution for the purposes of postsecondary educational instruction.
Miscellaneous
14. Adds, to the exemptions from statutory regulations on Alcoholic Beverages:
a) wine produced for personal or family use that is not for sale; and
b) home winemakers' contests where wine is removed from the premises on which it was produced and exhibited at organized affairs, exhibitions or competitions.
15. Makes technical and conforming changes.
16. Becomes effective on the general effective date.
House Action
COM 1/19/21 DPA 10-0-0-0
3rd Read 2/9/21 55-4-0-0-1
Prepared by Senate Research
March 1, 2021
LB/MC/kja