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Welcome. DLLC update New liquor laws - omnibus bill (SB 1937) New liquor rules New online sampling event registration. Today’s Discussion. Education Prevention Enforcement. Active Liquor Licenses. TODAY: 11,906 5-YEARS AGO: 10,928. License Series Growth. 5-years Ago Today
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DLLC update New liquor laws - omnibus bill (SB 1937) New liquor rules New online sampling event registration Today’s Discussion
Active Liquor Licenses TODAY: 11,906 5-YEARS AGO: 10,928
License Series Growth 5-years AgoToday Restaurants 3,118 3,354 Wineries 36 87 Microbreweries 31 69 Special Events 1,362 2,500 (est)
The Omnibus Bill Laws become effective July 24, 2014 Arizona S.B. 1397
A.R.S. § 4-101 Definitions • “craft distiller” • Removed the word “domestic” from “farm winery” and “microbrewery” licenses
A.R.S. § 4-112 Powers & Duties… • allows the Department of Liquor to continue to charge for fingerprint services
A.R.S. § 4-201.01 Extending Time Limits • allows the extension of time limits for good cause
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
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
A.R.S. § 4-203.02 Special event license
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 -
A.R.S. § 4-203.02(B) & (C) Special Eventson licensed premiseson part of a licensed premises
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 -
A.R.S. § 4-203.02(D) Special event – unlicensed premises
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 -
A.R.S. § 4-203.02(D) Special event – unlicensed premises Special Event Premises Craft Distillery Festival Wine Festival Wine Festival
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
A.R.S. § 4-203.02 Special event license
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
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
A.R.S. § 4-205.02 Restaurant license • continues a fee for site inspections
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)
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
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
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
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)
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
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
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.
A.R.S. § 4-205.04(D) Farm winery licenseAlternating Proprietorship • permits “alternating proprietorships” if approved by TTB and • Defines “alternating proprietorships”
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)
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:
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
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)
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 for on and off premise consumption on the same premises as the wine sampling and retail sales (on-sale and off-sale)
A.R.S. § 4-205.04(L)Farm winery license- fees • permits a fee for • alternating proprietorships • custom crush arrangements • remote tasting rooms
A.R.S. § 4-205.05Dispose of liquor - auction • permits disposal of seized liquor by public auction • authorizes a qualified person to recycle liquor
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.)
Craft Distillery License Series 18 License
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
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
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 consumption to consumers physically present
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