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Stay informed about the changes in Arizona's liquor laws with the new omnibus bill SB 1937. Learn about the modifications and regulations affecting liquor licenses, permits for special events, and more effective from July 24, 2014.

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Welcome

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  1. Welcome

  2. DLLC update New liquor laws - omnibus bill (SB 1937) New liquor rules New online sampling event registration Today’s Discussion

  3. Education Prevention Enforcement

  4. Active Liquor Licenses TODAY: 11,906 5-YEARS AGO: 10,928

  5. License Series Growth 5-years AgoToday Restaurants 3,118 3,354 Wineries 36 87 Microbreweries 31 69 Special Events 1,362 2,500 (est)

  6. The Omnibus Bill Laws become effective July 24, 2014 Arizona S.B. 1397

  7. A.R.S. § 4-101 Definitions • “craft distiller” • Removed the word “domestic” from “farm winery” and “microbrewery” licenses

  8. A.R.S. § 4-112 Powers & Duties… • allows the Department of Liquor to continue to charge for fingerprint services

  9. A.R.S. § 4-201.01 Extending Time Limits • allows the extension of time limits for good cause

  10. A.R.S. § 4-203 Licenses: issuance, transfer, reversion • allows the “replacement” of a transferable license at a location that was previously licensed • allows a restaurant license to replace a hotel/motel license

  11. A.R.S. § 4-203.01 Interim permit: fee: rules • permits an interim permit to be issued during the replacement of a hotel/motel license with a restaurant license

  12. A.R.S. § 4-203.02 Special event license

  13. A.R.S. § 4-203.02 Special event license • requires local government approval when: • a special event is held at an unlicensed location or • at a location not fully within a licensed premises • does not require local government approval when a special event occurs fully within a licensed premise - illustration -

  14. A.R.S. § 4-203.02(B) & (C) Special Eventson licensed premiseson part of a licensed premises

  15. A.R.S. § 4-203.02 Special event license • limits unlicensed premises to 12 special events per calendar year and • allows an unlimited number of special events at locations controlled by the U.S., Arizona or a city, town or county and • requires special events applications to be submitted to DLLC at least 10 days before the scheduled event - illustration -

  16. A.R.S. § 4-203.02(D) Special event – unlicensed premises

  17. A.R.S. § 4-203.02 Special event license: rules • allows wine festival and craft distiller festival licenses to be stacked with special event licenses and • a wine festival location must be specifically diagramed • possession of liquor purchased at the wine or craft distiller fair/festival is permitted. (Despite A.R.S. § 4-244.13 & 19.) - illustration -

  18. A.R.S. § 4-203.02(D) Special event – unlicensed premises Special Event Premises Craft Distillery Festival Wine Festival Wine Festival

  19. A.R.S. § 4-203.02 Special event license • a special event licensees may purchase liquor from: • a licensed wholesaler or • an off-premise licensed retailer, and • permits applicant to receive spirituous liquor from wholesaler, farm winery, or micro-brewery, or producer as a donation • the requirement that the billing invoice be in the name of the off-sale retailer is no longer required

  20. A.R.S. § 4-203.02 Special event license

  21. A.R.S. § 4-203.03 Wine festival/fair license: fee • afarm winery, in- and out-of-state, may be issued 50 wine festival licenses per calendar year • are allowed up to 150 calendar days per year per winery • $15 per day

  22. A.R.S. § 4-203.04 Direct Shipment License • requires common carriers to keep records of liquor shipped to persons in the state • upon request, the shipper must provide the records to the Department of Liquor

  23. A.R.S. § 4-205.02 Restaurant license • continues a fee for site inspections

  24. Arizona Farm Wineries

  25. A.R.S. § 4-205.04(A) & (B) Farm winery license • changes annual reporting to a “calendar” year, for farm wineries • requires a farm winery that produces more than 40,000 gallons of wine per year to • apply for a producer license (series 1 or 2) and • surrender its farm winery license (series 13 or 2W)

  26. A.R.S. § 4-205.04(C) Farm winery license - defined • requires a farm winery: • to hold a winery permit issued by the TTB OR • produce and manufacturer wines from grapes grown on at least five producing acres of land owned or controlled by the applicant, AND • the land has been devoted to grow fruit for at least 3 consecutive calendar years

  27. A.R.S. § 4-205.04 Two Farm Winery Categories Determined by annual production: 200 – 40,000 less than 20,000 gallons Each production limit has different privileges

  28. A.R.S. § 4-205.04 200 – 40,000 gallons per year • May: • make sales & deliveries to wholesalers • serve wine produced on the premises for sampling • sell to consumers physically present • may sell another farm winery’s product not to exceed 20% of total sales

  29. A.R.S. § 4-205.04 less than 20,000 gallons per year • May also: • make sales & deliveries to retailers (self distribute) • purchase & accept deliveries from retailers • deliver and accept orders by phone, mail, fax, catalogue or Internet (not to licensed retailers)

  30. A.R.S. § 4-205.04(C) Farm winery license200 – 40,000 gallon privileges • farm winery may purchase and sell wine for consumption on and off the premises if • the consumer is physically present • the sale of wine produced by other wineries does not exceed 20% of total sales

  31. A.R.S. § 4-205.04(C) Farm winery license - stacking • a farm winery may • no longer stack beer and wine bar (series 7) or beer and wine store (series 10) licenses • stack with a restaurant (series 12) license

  32. Alternating Proprietorship

  33. Alternating Proprietorships Tenants may share the cost of purchasing or renting equipment at a licensed farm winery. Each tenant has a farm winery (series 13 or 2W) license and sells the finished wine product at their license location.

  34. A.R.S. § 4-205.04(D) Farm winery licenseAlternating Proprietorship • permits “alternating proprietorships” if approved by TTB and • defines “alternating proprietorships”

  35. Custom Crush

  36. Farm winery license Custom Crush

  37. A.R.S. § 4-205.04(E) Farm winery licenseCustom Crush • Permits “custom crush” arrangements if • approved by TTB • requires a farm winery license • requires annual production reporting to the Department of Liquor (custom crush only)

  38. Remote Tasting Rooms

  39. A.R.S. § 4-205.04(F) Farm winery licenseRemote Tasting Room • allows farm wineries to operate up to two remote tasting and retail premises if:

  40. A.R.S. § 4-205.04(F) Farm winery licenseRemote Tasting Room • wine is produced or manufactured by the winery or other farm wineries • may sell to customers physically present • but no more than 20% of the total sales by volume for wine not produced or manufactured by the farm winery • this is a retail location, no in-bond wine • must follow the 300 foot law

  41. A.R.S. § 4-205.04(F) Farm winery licenseRemote Tasting Room • The farm winery is: • obtains local governing body approval first • responsible for the premises • does not sublease the premises • has a qualified agent who is a natural person • meets licensing qualifications A.R.S. § 4-203(A)

  42. A.R.S. § 4-205.04(G) Farm winery licenseWith Craft Distiller License • permits a farm winery to hold a craft distiller license • the craft distiller may only produce 1,000 gallons in a calendar year from fruit processed at the winery • the farm winery may provide sampling and sales of distilled spirits on the same premises as the wine sampling and retail sales (on-sale and off-sale)

  43. A.R.S. § 4-205.04(L)Farm winery license- fees • permits a fee for • alternating proprietorships • custom crush arrangements • remote tasting rooms

  44. A.R.S. § 4-205.05Dispose of liquor - auction • permits disposal of seized liquor by public auction • authorizes a qualified person to recycle liquor

  45. A.R.S. § 4-205.08Microbrewery license • permits self-distribution of beer up to 93,000 gallons annually (This means 93,000 gallons per year per microbrewery, not per retailer.)

  46. Craft Distillery License Series 18 License

  47. A.R.S. § 4-205.10Craft Distiller license • permits issuance of a craft distiller’s license which • may not be transferred • may not hold a producer’s license • limits production to 20,000 gallons of distilled spirituous per calendar year

  48. A.R.S. § 4-205.10Craft Distiller license • requires • annual reporting • when production exceeds 20,000 gallons, the licensee must apply for a producer’s license and surrender the craft distiller’s license

  49. A.R.S. § 4-205.10(C)(1) - (3)Craft Distiller license – sales & delivery • sales and deliveries are subject to the following: • to wholesalers • consumption on premise and may charge for samples • off premise sales to consumers physically present

  50. A.R.S. § 4-205.10(C)(4) Craft Distiller license – sales & delivery • sales and deliveries are subject to the following: • sale of product from other craft distillers may not exceed 20% of the total sales • make deliveries of distilled spirits to retail licensed premises not to exceed 1,189 gallons

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