HB 2199
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ARIZONA HOUSE OF REPRESENTATIVES
Fifty-sixth Legislature
Second Regular Session
House: COM DPA 10-0-0-0
HB 2199: restaurants; small alcohol ratio exemption
Sponsor: Representative Gress, LD 4
Caucus & COW
Overview
Provides an exemption to certain restaurants from the statutory off-sale limit relating to
mixed cocktails.
History
A restaurant license may be issued to any restaurant that is regularly open for serving food
to guests for compensation, has suitable kitchen facilities connected with the restaurant for
keeping, cooking and preparing foods require for ordinary meals and derives at least 40% of
its gross revenues from the sale of food. A restaurant licensee may sell and serve spirituous
liquors solely for consumption on the licensed premises. A restaurant licensee may apply for
certain permits allowing for the sale of alcohol for consumption off the licensed premises
(A.R.S. § 4-205.02).
Laws 2021, Chapter 375, permitted a restaurant licensee to lease a bar or liquor stores
licensee's privilege to sell mixed cocktails for consumption off the licensed premises. The sale
of mixed cocktails for consumption off the licensed premises must be accompanied by the sale
of food and the total sales price for off-sale use cannot exceed 30% of the total sales price of
on-sale spirituous liquor by the licensee at that location.
A mixed cocktail is any drink combined at the premises of an authorized licensee that
contains a spirituous liquor and that is combined with at least one other ingredient, which
may include additional spirituous liquors, fruit juice, vegetable juice, mixers, cream, flavored
syrup or other ingredients except water, and that when combined contains more than one-
half of one percent of alcohol by volume (A.R.S. § 4-101).
Provisions
1. Exempts restaurants that derive at least 90% of their gross revenue from the sale of food,
including sales of food for consumption off the license premises, from the statutory
percentage cap of total liquor sales for mixed cocktail off-sale use. (Sec. 1)
2. Defines gross revenue. (Sec. 1)
Amendments
Committee on Commerce
1. Subjects the issuance of a special event license, based on the location of the event, to the
approval of:
a) a county board of supervisors;
b) the governing body of a municipality; or
c) the president of a university under the Arizona Board of Regents.
☐ Prop 105 (45 votes) ☐ Prop 108 (40 votes) ☐ Emergency (40 votes) ☐ Fiscal Note HB 2199
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2. Allows a special event license to be issued concurrently with a microbrewery festival
license.
3. Removes the ability of the Director to approve the location of a wine festival license within
an excluded area of a special event license.
4. Clarifies the exemption from the statutory percentage cap of liquor sales for mixed
cocktail off-sale use applies to restaurants who meet specified qualifications.
5. Includes a requirement for DLLC to provide, through December 31, 20 25, for an
addendum to leases relating to the privilege of selling mixed cocktails for consumption off
the licensed premises for restaurants that derive at least 90% of gross revenues from the
sale of food and that have off-sale liquor sales that exceed 30% of total liquor sales in
either 2023 or 2024.
6. Outlines the conditions applicable to the lease addendum.
7. Applies the exemption from the off-sale liquor sales percentage cap retroactive to January
1, 2024.
8. Adds that the Director may issue a new license of the same series in the same county for
licenses that have been surrendered.
9. Permits an applicant for a liquor store license and a bar license to consolidate the
application and apply for both licenses at the same time.
10. Requires a liquor store license and a bar license on the same premises to be owned by and
issued to the same licensee.
11. Removes the exception relating to unlawful coercion or bribery statutes allowing
producers and wholesales who designate an area separate from the off-sale retailer's
premises to provide samples to retail consumers.
12. Removes the definition of gross revenue.