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ARIZONA STATE SENATE
Fifty-Fifth Legislature, First Regular Session
spirituous liquor; delivery; off-sale permits
Purpose
Allows a bar to sell mixed cocktails for off-premises consumption and allows a restaurant liquor licensee to apply for a permit to sell mixed cocktails for off-premises consumption (to-go cocktails permit) according to prescribed requirements. Establishes a third-party facilitator license for the delivery of spirituous liquor to a consumer on behalf of a bar or restaurant.
Background
The Department of Liquor License and Control (DLLC) issues licenses to regulate the production, distribution and sale of alcoholic beverages through the State Liquor Board and the Office of the DLLC Director (Director). A bar license is a retailer’s license to sell spirituous liquors primarily by individual portions to be consumed on the premises and in the original container for consumption on or off the premises. The off-sale use, by total retail spirituous liquor sales, may not exceed 30 percent of the sales price of on-sale spirituous liquor the licensee sells at that location (A.R.S. §§ 4-206.01 and 4-209).
A restaurant license may be issued to a restaurant that is regularly open for the serving of food to guests for compensation, has suitable kitchen facilities connected with the restaurant for keeping, cooking and preparing foods required for ordinary meals, and derives at least 40 percent of its gross revenue from the sale of food. A restaurant licensee may sell spirituous liquor for only consumption on the licensed premises, unless the licensee applies and is issued a permit to sell beer in containers with a one-gallon maximum capacity according to outlined requirements (growler permit). Sales under the growler permit may not exceed 10 percent of total liquor sales (A.R.S. §§ 4-205.02 and 4-209).
A retail liquor licensee with off-sale privileges may take orders through the internet or by telephone, mail, fax, catalog or other means for the sale and delivery of spirituous liquor off of the licensed premises to a person in Arizona. The licensee may maintain a delivery service and may contract with an independent contractor or a common carrier for delivery of spirituous liquor. An employee of a licensee or other authorized person must verify the age of the person accepting the delivery through the display of an identification document and receive the person's signature. A licensee must label containers of spirituous liquor for delivery with the words, "contains alcohol, signature of person who is twenty-one years of age or older is required for delivery." The licensee is responsible for any violations of the requirements for the sale and delivery of spirituous liquor (A.R.S. § 4-203).
This is no anticipated fiscal impact to the state General Fund associated with this legislation.
Provisions
Authorization of To-Go Cocktails
1. Exempts a bar, from the prohibition on allowing spirituous liquor to be removed from the licensed premises except in the original, unbroken package, if the bar:
a) prepares a mixed cocktail and the licensee or licensee's employee fills the container on the licensed premises; and
b) the container meets prescribed requirements.
2. Allows a restaurant licensee or applicant to apply on a form prescribed and furnished by the Director for a permit to allow the sale of mixed cocktails for off-premises consumption if:
a) the restaurant prepares a mixed cocktail and the licensee or licensee's employee fills the container on the licensed premises;
b) the container meets prescribed requirements; and
c) the sale is accompanied by the sale of food for consumption on or off the licensed premises.
3. Requires a container for used for to-go cocktails to:
a) be a clean container composed of a material approved by a national sanitation organization;
b) be sealed;
c) have a maximum capacity of up to 32 ounces; and
d) display a government warning label and the restaurant's logo or name.
4. Exempts a restaurant with a to-go cocktails permit from the prohibition on allowing spirituous liquor to be removed from the licensed premises except in the original, unbroken package.
5. Allows the DLLC to issue a to-go cocktails permit only after the Director determines that the public convenience requires and that the best interest of the community will be substantially served by issuing the permit.
6. Requires all to-go cocktails permit applicants and their employees, managers and managing agents to complete alcohol training approved by the Director.
7. Requires an issued to-go cocktails permit to be noted on the license and in DLLC records.
Orders for Delivery
8. Allows a bar to take orders for the sale and delivery of mixed cocktails off the licensed premises.
9. Allows a restaurant to take orders for the sale and delivery off the licensed premises of:
a) mixed cocktails with the sale of food for consumption or off the licensed premises, if the restaurant holds a mixed cocktails permit; or
b) beer, if the restaurant holds a beer growler permit.
10. Allows the bar or restaurant licensee to maintain a delivery service and contract with one or more licensed third-party facilitators for spirituous liquor delivery if the liquor is:
a) loaded for delivery at the bar or restaurant premises; and
b) delivered in Arizona.
11. Deems a licensee, when a violation is attributable to a third-party facilitator, to not be responsible for a violation of Alcoholic Beverages statutes or related rules committed in connection with sale and delivery.
12. Requires the bar or restaurant licensee to inform the purchaser at the time the order is placed that:
a) state law requires a spirituous liquor purchaser to be at least 21 years old; and
b) the person accepting delivery must comply with statutory age identification requirements.
13. Directs the restaurant, bar or third-party facilitator to collect from the purchaser payment for the full price of the liquor before the product leaves the licensed premises.
14. Applies the spirituous liquor labeling requirement to containers of mixed cocktails for delivery.
15. Directs the Director to adopt rules setting operational limits for spirituous liquor delivery for bars and restaurants.
16. Prescribes the following methods for a bar or restaurant licensee to take orders for the sale and delivery of spirituous liquor:
a) telephone, mail, fax or catalog;
b) through the internet or a third-party facilitator; or
c) any other means.
17. Requires delivery to be made by a person who is at least 21 years old and is:
a) a licensee's employee; or
b) an authorized third-party facilitator employee or independent contractor.
18. Specifies that delivery must made to a customer who:
a) is at least 21 years old; and
b) displays an identification at the time of delivery that meets statutory requirements.
19. Specifies that placing a spirituous liquor order from a bar or restaurant and paying for the order is not a sale until delivery has been made.
Third-Party Facilitator License
20. Authorizes the Director to issue a one-year, nontransferable third-party facilitator license to any person in Arizona for the purpose of facilitating spirituous liquor delivery.
21. Allows a facilitator licensee to:
a) deliver spirituous liquor to a consumer on behalf of a bar or restaurant in Arizona if the facilitator complies with statutory Alcoholic Beverages Regulations and Prohibitions; and
b) take spirituous liquor orders, including collecting payment on behalf of another licensee, if 100 percent of monies for the liquor are transferred to the other licensee.
22. Directs the Director to adopt rules setting age verification and record standards for licensed facilitator delivery of spirituous liquor.
23. Requires all facilitator license applicants, licensees and managers to complete alcohol training approved by the Director.
24. Prohibits the Director, if a bar or a restaurant contracts with a licensed facilitator from treating a violation by a third-party facilitator as a violation by the bar or restaurant.
25. Prohibits the Director from issuing a third-party facilitator license to a person who:
a) within one year preceding application, has had a third-party facilitator license or other license to deal in spirituous liquor revoked in Arizona or any other state; or
b) within five years immediately preceding application, has been convicted of a felony in Arizona or any other state or convicted of an offense in another state that would be a felony if convicted in Arizona.
26. Allows the Director, after notice and a hearing, to suspend, revoke or refuse to renew a third-party facilitator license for:
a) good cause; or
b) any violation of statutes governing Alcoholic Beverages or related rules.
27. Allows the Director to refuse to issue a third-party facilitator license for good cause.
28. Directs a facilitator to provide information, including a description and license plate number of the vehicle used to facilitate a delivery request, on request by the DLLC or law enforcement as part of an investigation of a violation of the facilitator license requirements.
Application Administration and Fees
29. Allows the Director to establish and charge:
a) a to-go cocktails permit application processing fee and a renewal fee;
b) a fee for a to-go cocktails application;
c) an annual fee for a to-go cocktails permit;
d) an initial facilitator license and renewal fee to be used for administrative costs associated with the license;
e) a facilitator license renewal fee to be used for administrative costs associated with the license, auditing and enforcement; and
f) annual renewal fee for a facilitator license.
30. Directs the DLLC to use all monies received from a to-go cocktails permit and a facilitator license, including the annual renewal fees, for administrative costs associated with the permit or license and enforcement of license fee requirements.
31. Requires a person to apply for a facilitator license on a form prescribed and provided by the Director and requires the application to include:
a) the address of the premises where the applicant's principal place of business is located;
b) the name, address and telephone number of an officer of the applicant or individual who is authorized to represent the applicant before the Director; and
c) a complete and full disclosure of criminal convictions by the applicant and any officer, director or controlling person in any state or foreign jurisdiction within the immediately preceding five years.
32. Allows a facilitator licensee to apply for license renewal before the current license expires.
Miscellaneous
33. Defines third-party facilitator as a person or company who delivers spirituous liquor to a consumer on behalf of a bar or restaurant and does not include a motor carrier.
34. Defines mixed cocktail as any drink containing one or more spirituous liquors that:
a) when combined with at least one other ingredient, except water, contains more than 0.5 percent alcohol by volume; and
b) are combined at the licensed premises.
35. Makes technical and conforming changes.
36. Becomes effective on the general effective date.
House Action
COM 2/9/21 DPA 7-3-0-0
3rd Read 3/3/21 34-26-0
Prepared by Senate Research
March 23, 2021
LB/kja