Assigned to COM FOR COMMITTEE
ARIZONA STATE SENATE
Fifty-Sixth Legislature, First Regular Session
FACT SHEET FOR H.B. 2223
liquor; licensing; processes; procedures
Purpose
Allows the Department of Liquor Licenses and Control (DLLC) to issue microbrewery
festival licenses and microbrewery fair licenses. Makes various changes related to liquor
regulatory statutes.
Background
DLLC, which consists of the State Liquor Board and the Office of the Director of DLLC,
regulates the manufacture, distribution and sale of liquor in Arizona through the issuance of a
series of licenses and investigating licensee compliance with liquor laws. A separate license is
required for each specific type of business and is issued only after a satisfactory showing of the
capability, qualifications and reliability of the applicant and that the public convenience requires
and that the best interest of the community will be substantially served by the issuance (A.R.S.
§§ 4-111 and 4-203).
DLLC may issue a microbrewery license to any microbrewery that meets the statutory
requirements. A microbrewery must produce or manufacture at least 5,000 gallons and fewer than
6,200,000 gallons of beer in a calendar year to maintain a microbrewery license. A microbrewery
may: 1) sell beer produced or manufactured on the premises for consumption on or off the
premises; 2) make sales and deliveries of beer that the microbrewery produces or manufactures to
persons licensed to sell beer in Arizona through wholesales licensed in Arizona or to persons
licensed to sell beer in another state, if lawful; and 3) sell beer produced or manufactured by other
microbreweries for consumption only on the licensee's premises (A.R.S. § 4-205.08).
If the collection of fees for microbrewery festival or fair licenses changes DLLC revenue,
there may be a fiscal impact to the state General Fund.
Provisions
Microbrewery Festival and Fair Licenses
1. Allows DLLC to issue a microbrewery festival license on a temporary basis that authorizes
the:
a) sampling of the microbrewery products on the microbrewery festival premises;
b) sale of products for consumption on the microbrewery festival premises; and
c) sale of products in the original container for consumption off the microbrewery festival
premises. FACT SHEET
H.B. 2223
Page 2
2. Requires, before DLLC issues a microbrewery festival license, a microbrewery festival that is
to occur at an otherwise unlicensed location or at a location that is not fully within the licensee's
existing licensed premises, to be approved by the:
a) county board of supervisors, or the board's designee, if the event is to be held in an
unincorporated area; or
b) city's or town's governing body, or the governing body's designee, if the event is to be held
in a city or town.
3. Requires a city's, town's or county's denial of a microbrewery festival license to be forwarded
to DLLC within 60 days after the application is submitted to the city, town or county unless
the applicant requests more time for consideration of the application.
4. Specifies that a microbrewery festival license for an event that is to be held at a physical
location that is fully located within a licensed premises does not require approval from the
city's, town's or county's governing body.
5. States that any microbrewery may apply for a microbrewery festival license.
6. Allows, for the purpose of quality control, a licensed microbrewery's representative to consume
small amounts of the licensed microbrewery's products on the festival premises.
7. Allows DLLC to issue one or more microbrewery festival licenses for each licensed
microbrewery, for a total of up to 150 calendar days for each microbrewery.
8. Allows DLLC to issue a microbrewery fair license, with the permission of the state or county
fair organizers.
9. Specifies that, at any sanctioned state or county fair, a microbrewery may allow the:
a) sampling of microbrewery products on the fair premises;
b) sale of the products for consumption on the fair premises; and
c) sale of the products in original containers for consumption off the fair premises.
10. Allows DLLC to establish a fee for each day:
a) of each event for a microbrewery festival license; and
b) for each event for a microbrewery fair license.
11. Exempts microbrewery festival licenses and microbrewery fair licenses from the statutory
application procedures for a license to manufacture, sell or deal in spirituous liquors in a city,
town or county.
12. Exempts microbrewery festival licenses and microbrewery fair licenses from the prohibition
on licensing premises that are within 300 feet of a public or private school building, or a fenced
recreational area adjacent to the public or private school building, with kindergarten programs
or any of the grades 1 through 12. FACT SHEET
H.B. 2223
Page 3
Delivery of Spirituous Liquor by an Off-Sale Licensee
13. Requires a licensee that has off-sale privileges and delivers spirituous liquor to:
a) complete a written record of each delivery at the time of delivery that includes all the
following:
i. the name of the licensee making the delivery;
ii. the complete address of the licensee making the delivery;
iii. the licensee's license number;
iv. the date and time of the delivery;
v. the address where the delivery was made; and
vi. the type and brand of all spirituous liquor delivered; and
b) obtain, from the individual who accepts the delivery, the individual's name, date of birth
and signature.
14. Specifies that a licensee making the delivery may use an electronic signature system to comply
with the outlined requirements.
Craft Producer Sampling
15. Allows, for the purpose of sampling the craft producer's products, a licensed craft producer's
representative to consume small amounts and serve the licensed craft producer's products on
the premises of an off-sale retailer or a retailer with off-sale privileges.
16. Holds the licensee of the craft producer liable for any violations of alcoholic beverage laws
committed in connection with sampling.
17. Requires DLLC to regulate the manner of conducting craft producer samplings to prevent
abusive practices.
18. Requires the licensed retailer to make sales of craft producer products from the licensed retail
premises.
19. Defines craft producer as a licensed farm winery, a licensed microbrewery or a licensed craft
distiller.
Miscellaneous
20. Allows, for an on-sale licensee extension of premises application, DLLC to act on the
application before the expiration of the 60-day period, if the local governing body or the local
governing body's designee:
a) completes the review; and
b) provides an advisory recommendation to DLLC before the conclusion of the 60-day period.
21. Adds, as an acceptable form of identification to determine whether a person is of legal drinking
age, a valid unexpired consular identification card that is issued:
a) by a foreign government; and
b) using biometric identity verification techniques. FACT SHEET
H.B. 2223
Page 4
22. Defines biometric identity verification techniques to include fingerprint identification and
retina scans.
23. Increases, from $500 to $700, the cap on the total market value of promotional items that a
wholesaler may furnish without cost to an on-sale retailer in any calendar year.
24. Excludes, from the definition of promotional items, refrigerators.
25. Requires, beginning January 1, 2024, a farm winery, manufacturer, microbrewery, craft
distiller or direct shipment licensee to pay the luxury privilege tax to the Arizona Department
of Revenue annually, rather than monthly, by the 20th day of the first month of the year
succeeding the year in which the tax accrues.
26. Makes technical and conforming changes.
27. Becomes effective on the general effective date.
House Action
COM 2/14/23 DPA 9-0-0-1
3
rd
Read 2/22/23 60-0-0
Prepared by Senate Research
March 6, 2023
JT/FB/sr