REFERENCE TITLE: craft producer; festival; fair; license State of Arizona House of Representatives Fifty-seventh Legislature First Regular Session 2025 HB 2905 Introduced by Representative Weninger AN ACT amending section 4-203.02, arizona revised statutes; repealing section 4-203.03, arizona revised statutes; amending title 4, chapter 2, article 1, arizona revised statutes, by adding a new section 4-203.03; amending section 4-205.08, arizona revised statutes; repealing sections 4-204.11 and 4-205.14, arizona revised statutes; amending section 4-207, arizona revised statutes; relating to liquor licensing. (TEXT OF BILL BEGINS ON NEXT PAGE)
REFERENCE TITLE: craft producer; festival; fair; license
State of Arizona House of Representatives Fifty-seventh Legislature First Regular Session 2025
HB 2905
Introduced by Representative Weninger
REFERENCE TITLE: craft producer; festival; fair; license
State of Arizona
House of Representatives
Fifty-seventh Legislature
First Regular Session
2025
HB 2905
Introduced by
Representative Weninger
AN ACT
amending section 4-203.02, arizona revised statutes; repealing section 4-203.03, arizona revised statutes; amending title 4, chapter 2, article 1, arizona revised statutes, by adding a new section 4-203.03; amending section 4-205.08, arizona revised statutes; repealing sections 4-204.11 and 4-205.14, arizona revised statutes; amending section 4-207, arizona revised statutes; relating to liquor licensing.
(TEXT OF BILL BEGINS ON NEXT PAGE)
Be it enacted by the Legislature of the State of Arizona: Section 1. Section 4-203.02, Arizona Revised Statutes, is amended to read: START_STATUTE4-203.02. Special event license; rules A. The director may issue on a temporary basis: 1. A daily on-sale special event license authorizing the sale of spirituous liquor for consumption on the premises where sold. The fee for the license is $25 per day. The director shall transfer the monies collected to the department of health services for the purposes prescribed in title 36, chapter 18, article 2. 2. A daily off-sale special event license authorizing a charitable auction for the sale of spirituous liquor for consumption off premises. B. Before the director may issue a temporary special event license, a special event that is to occur at an otherwise unlicensed location or by a licensee at a location that is not fully within the licensee's existing licensed premises must be approved by the board of supervisors of a county, or the board's designee, if the event is to be held in an unincorporated area, by the governing body of the city or town, or the governing body's designee, if the event is to be held in a city or town, or by the president of a university under the jurisdiction of the Arizona board of regents if the event is to be held on the university's property. A denial by the county, city or town must be forwarded to the director within sixty days after the submission of an application to the county, city or town, unless the applicant has requested more time for consideration of the application. C. The approval process prescribed in this section does not apply to physical locations that are fully within premises that are licensed pursuant to this title. D. A physical location, other than a physical location that is owned, operated, leased, managed or controlled by the United States, this state or a city, town or county of this state, that is not licensed pursuant to this title may not be issued more than a total of thirty days of special event licenses during the same calendar year. All applications for a special event license issued pursuant to this section must be submitted to the department at least ten days before the scheduled event. The director may waive the ten-day requirement for good cause shown. E. The director may issue the special event license only to a government entity or a political party or campaign committee supporting a candidate for public office or a ballot measure, or a nonprofit entity that is organized as a nonprofit entity in this state or pursuant to the laws of another state and that is a nonprofit entity under section 501(c) of the internal revenue code of the United States. The nonprofit entity shall demonstrate that it is in good standing in this state. An applicant for a special event license may contract with a special event contractor for assistance in selling and serving spirituous liquor at the special event. The special event contractor shall be listed on the application form. The director shall require a special event contractor to provide the controlling persons' identification and background information deemed necessary to identify the special event contractor and to demonstrate proof of the contractor's authority to conduct business in this state, including providing copies of any required state or local business licenses or permits. The department shall maintain a list of special event contractors that have been employed by special event licensees during the past year and that are not otherwise in penalty status pursuant to subsection I of this section. A licensee holding a currently active series 6, 7, 11 or 12 license may serve as the special event contractor for a special event license without any additional requirements. A new applicant for an initial special event license may be required by the department to demonstrate it is qualified, capable and reliable to conduct a special event. The department may require new special event contractors and new special event licensees to require persons who serve or sell spirituous liquor to patrons at the special event to complete an approved training course in accordance with section 4-112, subsection G, paragraph 2. A special event contractor is subject to examinations conducted pursuant to section 4-112, subsection G, paragraph 1. F. The director may issue a temporary special event license under subsection E of this section to an affiliate of a national, statewide or international parent nonprofit organization for a special event if all of the following requirements are met: 1. The affiliate holding the event provides a letter from the internal revenue service that the parent organization is a nonprofit entity under section 501(c)(4) of the internal revenue code of the United States with a group ruling. 2. The proceeds of the event are for a charitable or nonprofit purpose. 3. The affiliate provides a copy of a charter or letter from the parent nonprofit entity or organization that is organized under section 501(c) of the internal revenue code of the United States that recognizes the affiliate as a subordinate to the parent organization. 4. The affiliate and its members have not previously violated this title, local requirements for special events or any fire code. G. The director may issue a special event license concurrently with wine festival licenses, craft distillery festival licenses and microbrewery festival licenses a craft producer festival license. Notwithstanding section 4-244, paragraphs 13 and 19, all licenses shall allow the presence of purchased spirituous liquor in the possession of the purchaser. H. For the purposes of this section, a special event licensee or an employee of a special event licensee and a special event contractor or an employee of a special event contractor that has been retained for an approved special event may order or purchase spirituous liquor from the holder of a license authorized to sell off-sale or a licensed wholesaler. If a nonprofit entity has obtained a special event license for the purpose of charitable fundraising activities, the nonprofit entity or special event contractor may receive the spirituous liquor from a wholesaler, farm winery, microbrewery or producer as a donation, except that a licensee licensed pursuant to subsection A, paragraph 2 of this section may receive spirituous liquor from a donor when the donor receives no remuneration or payment of any kind, directly or indirectly, other than any tax benefits that might result. Spirituous liquor may be dispensed and served at the special event only by the following persons: 1. The special event licensee or an employee of the special event licensee, unless the special event is at the premises of a licensed retailer and the licensed retailer has agreed to dispense and serve the spirituous liquor. 2. The special event contractor or an employee of the special event contractor, unless the special event is at the premises of a licensed retailer and the licensed retailer has agreed to dispense and serve the spirituous liquor. 3. The producer or producers who furnished the spirituous liquor. 4. The wholesaler or wholesalers who furnished the spirituous liquor. I. In addition to all other actions that may be taken by the director for a violation of this title or the rules adopted pursuant to this title by the special event licensee or special event contractor, the department may limit the right of the licensee to obtain a special event license for a period of up to one year or may limit the right of the special event contractor to support any licensed special event for a period of up to one year. Any penalty issued pursuant to this subsection may be appealed to the board pursuant to section 4-210.02 as if the order was a sanction against a licensee. An organization that is issued a license pursuant to subsection A, paragraph 2 of this section shall receive at least seventy-five percent of the gross receipts of the auction. Up to twenty-five percent of the gross receipts of a special event auction conducted pursuant to subsection A, paragraph 2 of this section may be used to pay reasonable and necessary expenses incurred in connection with the auction. All expenses shall be supported by written contracts, invoices or receipts, which shall be made available to the director on request. An organization that is issued a license pursuant to subsection A, paragraph 2 of this section shall not sell at auction more than twenty twelve-bottle cases of spirituous liquor annually under a special event license. J. The director may adopt those rules the director determines are necessary to implement and administer this section, including a limit on the number of times during a calendar year a qualified organization may apply for and be issued a license under this section. The qualified organization issued a license pursuant to subsection A, paragraph 1 of this section must receive at least twenty-five percent of the gross revenues of all spirituous liquor sold at the special events, which shall be supported by a contract between the parties to be supplied at the time of application. K. At an event conducted under a license issued pursuant to subsection A of this section, the licensee may conduct a wine pull or distilled spirits pull of up to twenty twelve-bottle cases of wine and up to ten twelve-bottle cases of distilled spirits per day of a licensed special event not to exceed five days per year. The special event licensee shall be responsible for compliance with the case limits in this section. An organization that is issued a license pursuant to subsection A, paragraph 2 of this section shall not sell more than twenty cases of spirituous liquor annually under a special event license. For the purposes of this subsection, "wine pull" or "distilled spirits pull" means an activity where, for a set price, one or more attendees at a special event pay for the opportunity to select at the event one or more bottles of wine or distilled spirits where the variety and vintage are undisclosed. L. Section 4-201 does not apply to the licenses provided for under this section. M. A licensed producer or wholesaler may donate spirituous liquor directly to a nonprofit entity that is issued a license pursuant to subsection A of this section. The licensed producer or wholesaler, in such instances, shall issue a net-zero cost billing invoice in the name of the special event licensee. All licensees making or receiving spirituous liquor donations remain subject to the applicable limits and requirements stated in this title and in the rules adopted by the department. A licensed producer or wholesaler may also make a monetary donation to a nonprofit entity that is issued a license pursuant to subsection A of this section to help sponsor a special event and the licensed producer or wholesaler may issue a check payable to either the special event licensee or to the approved special event contractor that is contracted to conduct the special event if the special event contractor does not hold a currently active bar license, beer and wine bar license, hotel-motel license or restaurant license. N. A licensed wholesaler may temporarily leave a delivery vehicle and other items of equipment necessary for the sale or service of spirituous liquor on the premises of a licensed special event for the duration of the event and up to one business day before and after the event. O. The holder of a license authorized to sell off-sale or a licensed wholesaler may leave purchased spirituous liquor products at a special event if the products are properly described on a preliminary billing invoice that is issued in the name of the special event licensee. The holder of a license authorized to sell off-sale or the licensed wholesaler has up to five business days after the special event ends to make any necessary billing adjustments and issue a final billing invoice to the special event licensee. Within one business day after the conclusion of the special event, the special event licensee or a special event contractor shall return unbroken packages of spirituous liquor to the appropriate off-sale licensee or wholesaler subject to the applicable rules of the United States alcohol and tobacco tax and trade bureau and the policy of the applicable off-sale licensee or wholesaler. P. The director may adopt rules deemed necessary to implement and administer this section for special event contractors. END_STATUTE Sec. 2. Repeal Section 4-203.03, Arizona Revised Statutes, is repealed. Sec. 3. Title 4, chapter 2, article 1, Arizona Revised Statutes, is amended by adding a new section 4-203.03, to read: START_STATUTE4-203.03. Craft producer festival license; craft producer fair license; fee A. THE DIRECTOR MAY ISSUE ON A TEMPORARY BASIS A CRAFT PRODUCER FESTIVAL LICENSE THAT AUTHORIZES: 1. THE SAMPLING OF THE CRAFT PRODUCER PRODUCTS ON THE CRAFT PRODUCER FESTIVAL PREMISES. 2. THE SALE OF THE CRAFT PRODUCER PRODUCTS FOR CONSUMPTION ON THE CRAFT PRODUCER FESTIVAL PREMISES. 3. THE SALE OF THE CRAFT PRODUCER PRODUCTS IN THE ORIGINAL CONTAINER FOR CONSUMPTION OFF THE CRAFT PRODUCER FESTIVAL PREMISES. B. BEFORE THE DIRECTOR MAY ISSUE A CRAFT PRODUCER FESTIVAL LICENSE, A CRAFT PRODUCER 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 MUST BE APPROVED BY THE BOARD OF SUPERVISORS, OR THE BOARD'S DESIGNEE, IF THE EVENT IS TO BE HELD IN AN UNINCORPORATED AREA OR BY THE GOVERNING BODY OF THE CITY OR TOWN, OR THE GOVERNING BODY'S DESIGNEE, IF THE EVENT IS TO BE HELD IN A CITY OR TOWN. A DENIAL BY THE COUNTY, CITY OR TOWN MUST BE FORWARDED TO THE DIRECTOR WITHIN SIXTY DAYS AFTER THE SUBMISSION OF AN APPLICATION TO THE COUNTY, CITY OR TOWN UNLESS THE APPLICANT HAS REQUESTED MORE TIME FOR CONSIDERATION OF THE APPLICATION. c. THE APPROVAL PROCESS PRESCRIBED IN THIS SECTION DOES NOT APPLY TO PHYSICAL LOCATIONS THAT ARE FULLY LOCATED WITHIN A premises licensed pursuant to this title. D. THE DIRECTOR MAY ISSUE ONE OR MORE CRAFT PRODUCER FESTIVAL LICENSES FOR EACH LICENSED CRAFT PRODUCER, FOR A TOTAL OF UP TO ONE HUNDRED FIFTY CALENDAR DAYS FOR EACH CRAFT PRODUCER. THE DIRECTOR MAY ESTABLISH A FEE FOR EACH DAY OF EACH EVENT FOR A CRAFT PRODUCER FESTIVAL LICENSE. E. A REPRESENTATIVE OF THE LICENSED CRAFT PRODUCER MAY CONSUME SMALL AMOUNTS OF THE PRODUCTS OF THE LICENSED CRAFT PRODUCER ON THE FESTIVAL PREMISES FOR THE PURPOSE OF QUALITY CONTROL. F. THE DIRECTOR MAY ISSUE A CRAFT PRODUCER FAIR LICENSE WITH THE PERMISSION OF STATE FAIR ORGANIZERS OR COUNTY FAIR ORGANIZERS. ANY CRAFT PRODUCER MAY ALLOW THE SAMPLING OF CRAFT PRODUCER PRODUCTS ON THE FAIR PREMISES, THE SALE OF THE PRODUCTS FOR CONSUMPTION ON THE FAIR PREMISES AND THE SALE OF THE PRODUCTS IN ORIGINAL CONTAINERS FOR CONSUMPTION OFF THE FAIR PREMISES AT ANY SANCTIONED STATE FAIR OR COUNTY FAIR. THE DIRECTOR MAY ESTABLISH A FEE FOR EACH DAY FOR EACH EVENT FOR A CRAFT PRODUCER FAIR LICENSE. G. SECTION 4-201 DOES NOT APPLY TO THE LICENSES PROVIDED UNDER THIS SECTION. END_STATUTE Sec. 4. Section 4-205.08, Arizona Revised Statutes, is amended to read: START_STATUTE4-205.08. Microbrewery license; issuance; regulatory provisions; retail site A. The director may issue a microbrewery license to any microbrewery. Each location that engages in producing, manufacturing and bottling these products must obtain a separate microbrewery license. The licensee may not transfer the microbrewery license from person to person or from location to location. B. An applicant for a microbrewery license, at the time of filing the application for the license, shall accompany the application with the license fee. Persons holding a microbrewery license shall report annually at the end of each calendar year, at the time and in the manner as the director prescribes, the amount of beer produced or manufactured by them during the calendar year and the amount delivered pursuant to subsection D, paragraph 4, subdivision (b) of this section. If the total amount of beer that is produced or manufactured during the calendar year exceeds the amount permitted annually by the license, the licensee shall apply for and receive a producer's license only on surrender of the microbrewery license or licenses and shall have no continuing rights as a microbrewery under this section. On the surrender of the microbrewery license or licenses, the licensee shall transfer, surrender or otherwise relinquish control of all of its retail licenses located remotely from a microbrewery. C. Notwithstanding any other law, a licensed 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 under this title through wholesalers licensed under this title or as provided in subsection D, paragraph 4, subdivision (a) or (b) of this section. 3. Make sales and deliveries of beer that the microbrewery produces or manufactures to persons licensed to sell beer in another state if lawful under the laws of that state. 4. Serve beer produced or manufactured on the premises for the purpose of sampling the beer. 5. Sell beer produced or manufactured by other microbreweries for consumption only on the premises of the licensee, except that the sales percentage of beer from other microbreweries may not exceed twenty percent of the licensee's annual sales of beer by volume at the premises. If the other microbrewery has established a distribution relationship with one or more wholesalers who are licensed under this title, the beer shall be purchased through those wholesalers. 6. Maintain at no charge a tapping equipment system of a licensed retailer when the microbrewery sells beer as provided in subsection D, paragraphs 3 and 4 of this section, including cleaning the tapping equipment system and replacing bonnet washers, friction rings, valve stems, hardware, unions, clamps, air tees, screws, tapping devices, tower heads and single air and beer lines. D. A licensed microbrewery is subject to all of the following requirements: 1. The microbrewery shall produce or manufacture not less than five one thousand gallons of beer in each calendar year following the first year of operation. 2. The microbrewery shall not produce or manufacture more than six million two hundred thousand gallons of beer in a calendar year. 3. If retail operations are conducted in conjunction with the microbrewery, the microbrewery may sell other spirituous liquor products if the microbrewery holds an on-sale retail license for a bar, beer and wine bar or restaurant. The microbrewery may be issued up to a combined total of seven retail licenses in this state, whether the premises are located on or adjacent to a microbrewery or remotely from a microbrewery. The limit on the number of retail licenses applies on an aggregated basis to all microbreweries that are under common control of any person with control of the microbrewery. 4. The microbrewery may make sales and deliveries of beer that it has produced or manufactured to both: (a) Retail licensees that meet the requirements prescribed in paragraph 3 of this subsection in any amount. (b) Any other retail licensee in a cumulative amount not to exceed ninety-three thousand gallons in total for all licensed retailers in any calendar year. E. A microbrewery that produces or manufactures more than one million two hundred forty thousand gallons of beer in a calendar year maintains all of the rights associated with a microbrewery license, except that the microbrewery shall not: 1. Apply for or receive a retail license pursuant to subsection D, paragraph 3 of this section for premises that are located remotely from the microbrewery. 2. Make sales or deliveries of beer that the microbrewery has produced or manufactured to any retail licensee as provided in subsection D, paragraph 4 of this section, except for the microbrewery's retail licensees on or adjacent to the microbrewery. F. The gallonage amounts prescribed in subsection D, paragraph 2 and subsection E of this section apply to the aggregate manufacture or production of all microbreweries that are under common control of any person with control of the microbrewery. G. A microbrewery that is otherwise engaged as a distiller, vintner, brewer, rectifier, blender or other producer of spirituous liquor in any jurisdiction is prohibited from holding any retail license that is located remotely from a microbrewery. This subsection does not prohibit a person with control of more than one microbrewery from conducting retail operations remotely from a microbrewery pursuant to subsection D, paragraph 3 of this section. H. A microbrewery that sells or delivers beer pursuant to this section shall: 1. Pay to the department of revenue all luxury taxes imposed pursuant to title 42, chapter 3 and all transaction privilege or use taxes imposed pursuant to title 42, chapter 5. 2. File all returns or reports required by law. I. A delivery of beer by a microbrewery to a purchaser in this state is a transaction deemed to have occurred in this state. J. The director shall adopt rules to administer this section. END_STATUTE Sec. 5. Repeal Sections 4-205.11 and 4-205.14, Arizona Revised Statutes, are repealed. Sec. 6. Section 4-207, Arizona Revised Statutes, is amended to read: START_STATUTE4-207. Restrictions on licensing premises near school buildings; definition A. A retailer's license shall not be issued for any premises that are, at the time the license application is received by the director, within three hundred horizontal feet of a public or private school building with kindergarten programs or any of grades one through twelve or within three hundred horizontal feet of a fenced recreational area adjacent to such school building. This section does not prohibit the renewal of a valid license issued pursuant to this title if, on the date that the original application for the license is filed, the premises were not within three hundred horizontal feet of a public or private school building with kindergarten programs or any of grades one through twelve or within three hundred horizontal feet of a fenced recreational area adjacent to such school building. B. Subsection A of this section does not apply to a: 1. Restaurant issued a license pursuant to section 4-205.02, subject to the limitations in section 4-205.02, subsection H for a permit allowing for the sale of beer for consumption off of the licensed premises pursuant to section 4-244, paragraph 32, subdivision (c). 2. Special event license issued pursuant to section 4-203.02. 3. Hotel-motel issued a license pursuant to section 4-205.01. 4. Government license issued pursuant to section 4-205.03. 5. Playing area of a golf course issued a license pursuant to this article. 6. Beer and wine license at a nonprofit performing arts theatre with a permanent seating capacity of at least two hundred fifty persons. 7. Craft distillery festival license issued pursuant to section 4-205.11. 8. Farm winery festival license issued pursuant to section 4-203.03. 9. Microbrewery festival license or microbrewery fair license issued pursuant to section 4-205.14. 7. Craft producer festival license or Craft producer fair license issued pursuant to section 4-203.03. C. Notwithstanding subsection A of this section: 1. A transferable spirituous liquor license that is validly issued and that is, on the date an application for a transfer is filed, within three hundred horizontal feet of a public or private school building with kindergarten programs or any of grades one through twelve or within three hundred horizontal feet of a fenced recreational area adjacent to such school building may be transferred person to person pursuant to sections 4-201, 4-202 and 4-203 and remains in full force until the license is terminated in any manner, unless renewed pursuant to section 4-209, subsection A. 2. A person may be issued a spirituous liquor license pursuant to sections 4-201, 4-202 and 4-203 of the same class for premises that, on the date the application is filed, have a valid transferable or nontransferable license of the same series if the premises are, on the date an application for the license is filed, within three hundred horizontal feet of a public or private school building with kindergarten programs or any of grades one through twelve or within three hundred horizontal feet of a fenced recreational area adjacent to such school building and the license remains in full force until the license is terminated in any manner, unless renewed pursuant to section 4-209, subsection A. 3. A person may be issued a liquor store license pursuant to sections 4-201, 4-202, 4-203 and 4-206.01 for premises that have a beer and wine store license validly issued if the premises, on the date an application for such license is filed, are within three hundred horizontal feet of a public or private school building with kindergarten programs or any of grades one through twelve or within three hundred horizontal feet of a fenced recreational area adjacent to such school building and the license remains in full force until the license is terminated in any manner, unless renewed pursuant to section 4-209, subsection A. 4. The governing body of a city or town, on a case-by-case basis, may approve an exemption from the distance restrictions prescribed in this section for a public or private school that is located in an area that is designated an entertainment district by the governing body of that city or town. A city or town with a population of at least five hundred thousand persons may designate not more than three entertainment districts within the boundaries of the city or town pursuant to this paragraph. A city or town with a population of at least two hundred thousand persons but less than five hundred thousand persons may designate not more than two entertainment districts within the boundaries of the city or town pursuant to this paragraph. A city or town with a population of less than two hundred thousand persons may designate not more than one entertainment district within the boundaries of the city or town pursuant to this paragraph. 5. A person may be issued a beer and wine store license pursuant to sections 4-201, 4-202, 4-203 and 4-206.01 for premises that have a liquor store license validly issued if the premises, on the date of an application for which the license is filed, are within three hundred horizontal feet of a public or private school building with kindergarten programs or any of grades one through twelve or within three hundred horizontal feet of a fenced recreation area adjacent to such school building and the license remains in full force until the license is terminated in any manner, unless renewed pursuant to section 4-209, subsection A. D. For the purposes of this section, "entertainment district" means a specific contiguous area that is designated an entertainment district by a resolution adopted by the governing body of a city or town, that consists of not more than one square mile, that is not less than one-eighth of a mile in width and that contains a significant number of entertainment, artistic and cultural venues, including music halls, concert facilities, theaters, arenas, stadiums, museums, studios, galleries, restaurants, bars and other related facilities. END_STATUTE
Be it enacted by the Legislature of the State of Arizona:
Section 1. Section 4-203.02, Arizona Revised Statutes, is amended to read:
START_STATUTE4-203.02. Special event license; rules
A. The director may issue on a temporary basis:
1. A daily on-sale special event license authorizing the sale of spirituous liquor for consumption on the premises where sold. The fee for the license is $25 per day. The director shall transfer the monies collected to the department of health services for the purposes prescribed in title 36, chapter 18, article 2.
2. A daily off-sale special event license authorizing a charitable auction for the sale of spirituous liquor for consumption off premises.
B. Before the director may issue a temporary special event license, a special event that is to occur at an otherwise unlicensed location or by a licensee at a location that is not fully within the licensee's existing licensed premises must be approved by the board of supervisors of a county, or the board's designee, if the event is to be held in an unincorporated area, by the governing body of the city or town, or the governing body's designee, if the event is to be held in a city or town, or by the president of a university under the jurisdiction of the Arizona board of regents if the event is to be held on the university's property. A denial by the county, city or town must be forwarded to the director within sixty days after the submission of an application to the county, city or town, unless the applicant has requested more time for consideration of the application.
C. The approval process prescribed in this section does not apply to physical locations that are fully within premises that are licensed pursuant to this title.
D. A physical location, other than a physical location that is owned, operated, leased, managed or controlled by the United States, this state or a city, town or county of this state, that is not licensed pursuant to this title may not be issued more than a total of thirty days of special event licenses during the same calendar year. All applications for a special event license issued pursuant to this section must be submitted to the department at least ten days before the scheduled event. The director may waive the ten-day requirement for good cause shown.
E. The director may issue the special event license only to a government entity or a political party or campaign committee supporting a candidate for public office or a ballot measure, or a nonprofit entity that is organized as a nonprofit entity in this state or pursuant to the laws of another state and that is a nonprofit entity under section 501(c) of the internal revenue code of the United States. The nonprofit entity shall demonstrate that it is in good standing in this state. An applicant for a special event license may contract with a special event contractor for assistance in selling and serving spirituous liquor at the special event. The special event contractor shall be listed on the application form. The director shall require a special event contractor to provide the controlling persons' identification and background information deemed necessary to identify the special event contractor and to demonstrate proof of the contractor's authority to conduct business in this state, including providing copies of any required state or local business licenses or permits. The department shall maintain a list of special event contractors that have been employed by special event licensees during the past year and that are not otherwise in penalty status pursuant to subsection I of this section. A licensee holding a currently active series 6, 7, 11 or 12 license may serve as the special event contractor for a special event license without any additional requirements. A new applicant for an initial special event license may be required by the department to demonstrate it is qualified, capable and reliable to conduct a special event. The department may require new special event contractors and new special event licensees to require persons who serve or sell spirituous liquor to patrons at the special event to complete an approved training course in accordance with section 4-112, subsection G, paragraph 2. A special event contractor is subject to examinations conducted pursuant to section 4-112, subsection G, paragraph 1.
F. The director may issue a temporary special event license under subsection E of this section to an affiliate of a national, statewide or international parent nonprofit organization for a special event if all of the following requirements are met:
1. The affiliate holding the event provides a letter from the internal revenue service that the parent organization is a nonprofit entity under section 501(c)(4) of the internal revenue code of the United States with a group ruling.
2. The proceeds of the event are for a charitable or nonprofit purpose.
3. The affiliate provides a copy of a charter or letter from the parent nonprofit entity or organization that is organized under section 501(c) of the internal revenue code of the United States that recognizes the affiliate as a subordinate to the parent organization.
4. The affiliate and its members have not previously violated this title, local requirements for special events or any fire code.
G. The director may issue a special event license concurrently with wine festival licenses, craft distillery festival licenses and microbrewery festival licenses a craft producer festival license. Notwithstanding section 4-244, paragraphs 13 and 19, all licenses shall allow the presence of purchased spirituous liquor in the possession of the purchaser.
H. For the purposes of this section, a special event licensee or an employee of a special event licensee and a special event contractor or an employee of a special event contractor that has been retained for an approved special event may order or purchase spirituous liquor from the holder of a license authorized to sell off-sale or a licensed wholesaler. If a nonprofit entity has obtained a special event license for the purpose of charitable fundraising activities, the nonprofit entity or special event contractor may receive the spirituous liquor from a wholesaler, farm winery, microbrewery or producer as a donation, except that a licensee licensed pursuant to subsection A, paragraph 2 of this section may receive spirituous liquor from a donor when the donor receives no remuneration or payment of any kind, directly or indirectly, other than any tax benefits that might result. Spirituous liquor may be dispensed and served at the special event only by the following persons:
1. The special event licensee or an employee of the special event licensee, unless the special event is at the premises of a licensed retailer and the licensed retailer has agreed to dispense and serve the spirituous liquor.
2. The special event contractor or an employee of the special event contractor, unless the special event is at the premises of a licensed retailer and the licensed retailer has agreed to dispense and serve the spirituous liquor.
3. The producer or producers who furnished the spirituous liquor.
4. The wholesaler or wholesalers who furnished the spirituous liquor.
I. In addition to all other actions that may be taken by the director for a violation of this title or the rules adopted pursuant to this title by the special event licensee or special event contractor, the department may limit the right of the licensee to obtain a special event license for a period of up to one year or may limit the right of the special event contractor to support any licensed special event for a period of up to one year. Any penalty issued pursuant to this subsection may be appealed to the board pursuant to section 4-210.02 as if the order was a sanction against a licensee. An organization that is issued a license pursuant to subsection A, paragraph 2 of this section shall receive at least seventy-five percent of the gross receipts of the auction. Up to twenty-five percent of the gross receipts of a special event auction conducted pursuant to subsection A, paragraph 2 of this section may be used to pay reasonable and necessary expenses incurred in connection with the auction. All expenses shall be supported by written contracts, invoices or receipts, which shall be made available to the director on request. An organization that is issued a license pursuant to subsection A, paragraph 2 of this section shall not sell at auction more than twenty twelve-bottle cases of spirituous liquor annually under a special event license.
J. The director may adopt those rules the director determines are necessary to implement and administer this section, including a limit on the number of times during a calendar year a qualified organization may apply for and be issued a license under this section. The qualified organization issued a license pursuant to subsection A, paragraph 1 of this section must receive at least twenty-five percent of the gross revenues of all spirituous liquor sold at the special events, which shall be supported by a contract between the parties to be supplied at the time of application.
K. At an event conducted under a license issued pursuant to subsection A of this section, the licensee may conduct a wine pull or distilled spirits pull of up to twenty twelve-bottle cases of wine and up to ten twelve-bottle cases of distilled spirits per day of a licensed special event not to exceed five days per year. The special event licensee shall be responsible for compliance with the case limits in this section. An organization that is issued a license pursuant to subsection A, paragraph 2 of this section shall not sell more than twenty cases of spirituous liquor annually under a special event license. For the purposes of this subsection, "wine pull" or "distilled spirits pull" means an activity where, for a set price, one or more attendees at a special event pay for the opportunity to select at the event one or more bottles of wine or distilled spirits where the variety and vintage are undisclosed.
L. Section 4-201 does not apply to the licenses provided for under this section.
M. A licensed producer or wholesaler may donate spirituous liquor directly to a nonprofit entity that is issued a license pursuant to subsection A of this section. The licensed producer or wholesaler, in such instances, shall issue a net-zero cost billing invoice in the name of the special event licensee. All licensees making or receiving spirituous liquor donations remain subject to the applicable limits and requirements stated in this title and in the rules adopted by the department. A licensed producer or wholesaler may also make a monetary donation to a nonprofit entity that is issued a license pursuant to subsection A of this section to help sponsor a special event and the licensed producer or wholesaler may issue a check payable to either the special event licensee or to the approved special event contractor that is contracted to conduct the special event if the special event contractor does not hold a currently active bar license, beer and wine bar license, hotel-motel license or restaurant license.
N. A licensed wholesaler may temporarily leave a delivery vehicle and other items of equipment necessary for the sale or service of spirituous liquor on the premises of a licensed special event for the duration of the event and up to one business day before and after the event.
O. The holder of a license authorized to sell off-sale or a licensed wholesaler may leave purchased spirituous liquor products at a special event if the products are properly described on a preliminary billing invoice that is issued in the name of the special event licensee. The holder of a license authorized to sell off-sale or the licensed wholesaler has up to five business days after the special event ends to make any necessary billing adjustments and issue a final billing invoice to the special event licensee. Within one business day after the conclusion of the special event, the special event licensee or a special event contractor shall return unbroken packages of spirituous liquor to the appropriate off-sale licensee or wholesaler subject to the applicable rules of the United States alcohol and tobacco tax and trade bureau and the policy of the applicable off-sale licensee or wholesaler.
P. The director may adopt rules deemed necessary to implement and administer this section for special event contractors. END_STATUTE
Sec. 2. Repeal
Section 4-203.03, Arizona Revised Statutes, is repealed.
Sec. 3. Title 4, chapter 2, article 1, Arizona Revised Statutes, is amended by adding a new section 4-203.03, to read:
START_STATUTE4-203.03. Craft producer festival license; craft producer fair license; fee
A. THE DIRECTOR MAY ISSUE ON A TEMPORARY BASIS A CRAFT PRODUCER FESTIVAL LICENSE THAT AUTHORIZES:
1. THE SAMPLING OF THE CRAFT PRODUCER PRODUCTS ON THE CRAFT PRODUCER FESTIVAL PREMISES.
2. THE SALE OF THE CRAFT PRODUCER PRODUCTS FOR CONSUMPTION ON THE CRAFT PRODUCER FESTIVAL PREMISES.
3. THE SALE OF THE CRAFT PRODUCER PRODUCTS IN THE ORIGINAL CONTAINER FOR CONSUMPTION OFF THE CRAFT PRODUCER FESTIVAL PREMISES.
B. BEFORE THE DIRECTOR MAY ISSUE A CRAFT PRODUCER FESTIVAL LICENSE, A CRAFT PRODUCER 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 MUST BE APPROVED BY THE BOARD OF SUPERVISORS, OR THE BOARD'S DESIGNEE, IF THE EVENT IS TO BE HELD IN AN UNINCORPORATED AREA OR BY THE GOVERNING BODY OF THE CITY OR TOWN, OR THE GOVERNING BODY'S DESIGNEE, IF THE EVENT IS TO BE HELD IN A CITY OR TOWN. A DENIAL BY THE COUNTY, CITY OR TOWN MUST BE FORWARDED TO THE DIRECTOR WITHIN SIXTY DAYS AFTER THE SUBMISSION OF AN APPLICATION TO THE COUNTY, CITY OR TOWN UNLESS THE APPLICANT HAS REQUESTED MORE TIME FOR CONSIDERATION OF THE APPLICATION.
c. THE APPROVAL PROCESS PRESCRIBED IN THIS SECTION DOES NOT APPLY TO PHYSICAL LOCATIONS THAT ARE FULLY LOCATED WITHIN A premises licensed pursuant to this title.
D. THE DIRECTOR MAY ISSUE ONE OR MORE CRAFT PRODUCER FESTIVAL LICENSES FOR EACH LICENSED CRAFT PRODUCER, FOR A TOTAL OF UP TO ONE HUNDRED FIFTY CALENDAR DAYS FOR EACH CRAFT PRODUCER. THE DIRECTOR MAY ESTABLISH A FEE FOR EACH DAY OF EACH EVENT FOR A CRAFT PRODUCER FESTIVAL LICENSE.
E. A REPRESENTATIVE OF THE LICENSED CRAFT PRODUCER MAY CONSUME SMALL AMOUNTS OF THE PRODUCTS OF THE LICENSED CRAFT PRODUCER ON THE FESTIVAL PREMISES FOR THE PURPOSE OF QUALITY CONTROL.
F. THE DIRECTOR MAY ISSUE A CRAFT PRODUCER FAIR LICENSE WITH THE PERMISSION OF STATE FAIR ORGANIZERS OR COUNTY FAIR ORGANIZERS. ANY CRAFT PRODUCER MAY ALLOW THE SAMPLING OF CRAFT PRODUCER PRODUCTS ON THE FAIR PREMISES, THE SALE OF THE PRODUCTS FOR CONSUMPTION ON THE FAIR PREMISES AND THE SALE OF THE PRODUCTS IN ORIGINAL CONTAINERS FOR CONSUMPTION OFF THE FAIR PREMISES AT ANY SANCTIONED STATE FAIR OR COUNTY FAIR. THE DIRECTOR MAY ESTABLISH A FEE FOR EACH DAY FOR EACH EVENT FOR A CRAFT PRODUCER FAIR LICENSE.
G. SECTION 4-201 DOES NOT APPLY TO THE LICENSES PROVIDED UNDER THIS SECTION. END_STATUTE
Sec. 4. Section 4-205.08, Arizona Revised Statutes, is amended to read:
START_STATUTE4-205.08. Microbrewery license; issuance; regulatory provisions; retail site
A. The director may issue a microbrewery license to any microbrewery. Each location that engages in producing, manufacturing and bottling these products must obtain a separate microbrewery license. The licensee may not transfer the microbrewery license from person to person or from location to location.
B. An applicant for a microbrewery license, at the time of filing the application for the license, shall accompany the application with the license fee. Persons holding a microbrewery license shall report annually at the end of each calendar year, at the time and in the manner as the director prescribes, the amount of beer produced or manufactured by them during the calendar year and the amount delivered pursuant to subsection D, paragraph 4, subdivision (b) of this section. If the total amount of beer that is produced or manufactured during the calendar year exceeds the amount permitted annually by the license, the licensee shall apply for and receive a producer's license only on surrender of the microbrewery license or licenses and shall have no continuing rights as a microbrewery under this section. On the surrender of the microbrewery license or licenses, the licensee shall transfer, surrender or otherwise relinquish control of all of its retail licenses located remotely from a microbrewery.
C. Notwithstanding any other law, a licensed 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 under this title through wholesalers licensed under this title or as provided in subsection D, paragraph 4, subdivision (a) or (b) of this section.
3. Make sales and deliveries of beer that the microbrewery produces or manufactures to persons licensed to sell beer in another state if lawful under the laws of that state.
4. Serve beer produced or manufactured on the premises for the purpose of sampling the beer.
5. Sell beer produced or manufactured by other microbreweries for consumption only on the premises of the licensee, except that the sales percentage of beer from other microbreweries may not exceed twenty percent of the licensee's annual sales of beer by volume at the premises. If the other microbrewery has established a distribution relationship with one or more wholesalers who are licensed under this title, the beer shall be purchased through those wholesalers.
6. Maintain at no charge a tapping equipment system of a licensed retailer when the microbrewery sells beer as provided in subsection D, paragraphs 3 and 4 of this section, including cleaning the tapping equipment system and replacing bonnet washers, friction rings, valve stems, hardware, unions, clamps, air tees, screws, tapping devices, tower heads and single air and beer lines.
D. A licensed microbrewery is subject to all of the following requirements:
1. The microbrewery shall produce or manufacture not less than five one thousand gallons of beer in each calendar year following the first year of operation.
2. The microbrewery shall not produce or manufacture more than six million two hundred thousand gallons of beer in a calendar year.
3. If retail operations are conducted in conjunction with the microbrewery, the microbrewery may sell other spirituous liquor products if the microbrewery holds an on-sale retail license for a bar, beer and wine bar or restaurant. The microbrewery may be issued up to a combined total of seven retail licenses in this state, whether the premises are located on or adjacent to a microbrewery or remotely from a microbrewery. The limit on the number of retail licenses applies on an aggregated basis to all microbreweries that are under common control of any person with control of the microbrewery.
4. The microbrewery may make sales and deliveries of beer that it has produced or manufactured to both:
(a) Retail licensees that meet the requirements prescribed in paragraph 3 of this subsection in any amount.
(b) Any other retail licensee in a cumulative amount not to exceed ninety-three thousand gallons in total for all licensed retailers in any calendar year.
E. A microbrewery that produces or manufactures more than one million two hundred forty thousand gallons of beer in a calendar year maintains all of the rights associated with a microbrewery license, except that the microbrewery shall not:
1. Apply for or receive a retail license pursuant to subsection D, paragraph 3 of this section for premises that are located remotely from the microbrewery.
2. Make sales or deliveries of beer that the microbrewery has produced or manufactured to any retail licensee as provided in subsection D, paragraph 4 of this section, except for the microbrewery's retail licensees on or adjacent to the microbrewery.
F. The gallonage amounts prescribed in subsection D, paragraph 2 and subsection E of this section apply to the aggregate manufacture or production of all microbreweries that are under common control of any person with control of the microbrewery.
G. A microbrewery that is otherwise engaged as a distiller, vintner, brewer, rectifier, blender or other producer of spirituous liquor in any jurisdiction is prohibited from holding any retail license that is located remotely from a microbrewery. This subsection does not prohibit a person with control of more than one microbrewery from conducting retail operations remotely from a microbrewery pursuant to subsection D, paragraph 3 of this section.
H. A microbrewery that sells or delivers beer pursuant to this section shall:
1. Pay to the department of revenue all luxury taxes imposed pursuant to title 42, chapter 3 and all transaction privilege or use taxes imposed pursuant to title 42, chapter 5.
2. File all returns or reports required by law.
I. A delivery of beer by a microbrewery to a purchaser in this state is a transaction deemed to have occurred in this state.
J. The director shall adopt rules to administer this section. END_STATUTE
Sec. 5. Repeal
Sections 4-205.11 and 4-205.14, Arizona Revised Statutes, are repealed.
Sec. 6. Section 4-207, Arizona Revised Statutes, is amended to read:
START_STATUTE4-207. Restrictions on licensing premises near school buildings; definition
A. A retailer's license shall not be issued for any premises that are, at the time the license application is received by the director, within three hundred horizontal feet of a public or private school building with kindergarten programs or any of grades one through twelve or within three hundred horizontal feet of a fenced recreational area adjacent to such school building. This section does not prohibit the renewal of a valid license issued pursuant to this title if, on the date that the original application for the license is filed, the premises were not within three hundred horizontal feet of a public or private school building with kindergarten programs or any of grades one through twelve or within three hundred horizontal feet of a fenced recreational area adjacent to such school building.
B. Subsection A of this section does not apply to a:
1. Restaurant issued a license pursuant to section 4-205.02, subject to the limitations in section 4-205.02, subsection H for a permit allowing for the sale of beer for consumption off of the licensed premises pursuant to section 4-244, paragraph 32, subdivision (c).
2. Special event license issued pursuant to section 4-203.02.
3. Hotel-motel issued a license pursuant to section 4-205.01.
4. Government license issued pursuant to section 4-205.03.
5. Playing area of a golf course issued a license pursuant to this article.
6. Beer and wine license at a nonprofit performing arts theatre with a permanent seating capacity of at least two hundred fifty persons.
7. Craft distillery festival license issued pursuant to section 4-205.11.
8. Farm winery festival license issued pursuant to section 4-203.03.
9. Microbrewery festival license or microbrewery fair license issued pursuant to section 4-205.14.
7. Craft producer festival license or Craft producer fair license issued pursuant to section 4-203.03.
C. Notwithstanding subsection A of this section:
1. A transferable spirituous liquor license that is validly issued and that is, on the date an application for a transfer is filed, within three hundred horizontal feet of a public or private school building with kindergarten programs or any of grades one through twelve or within three hundred horizontal feet of a fenced recreational area adjacent to such school building may be transferred person to person pursuant to sections 4-201, 4-202 and 4-203 and remains in full force until the license is terminated in any manner, unless renewed pursuant to section 4-209, subsection A.
2. A person may be issued a spirituous liquor license pursuant to sections 4-201, 4-202 and 4-203 of the same class for premises that, on the date the application is filed, have a valid transferable or nontransferable license of the same series if the premises are, on the date an application for the license is filed, within three hundred horizontal feet of a public or private school building with kindergarten programs or any of grades one through twelve or within three hundred horizontal feet of a fenced recreational area adjacent to such school building and the license remains in full force until the license is terminated in any manner, unless renewed pursuant to section 4-209, subsection A.
3. A person may be issued a liquor store license pursuant to sections 4-201, 4-202, 4-203 and 4-206.01 for premises that have a beer and wine store license validly issued if the premises, on the date an application for such license is filed, are within three hundred horizontal feet of a public or private school building with kindergarten programs or any of grades one through twelve or within three hundred horizontal feet of a fenced recreational area adjacent to such school building and the license remains in full force until the license is terminated in any manner, unless renewed pursuant to section 4-209, subsection A.
4. The governing body of a city or town, on a case-by-case basis, may approve an exemption from the distance restrictions prescribed in this section for a public or private school that is located in an area that is designated an entertainment district by the governing body of that city or town. A city or town with a population of at least five hundred thousand persons may designate not more than three entertainment districts within the boundaries of the city or town pursuant to this paragraph. A city or town with a population of at least two hundred thousand persons but less than five hundred thousand persons may designate not more than two entertainment districts within the boundaries of the city or town pursuant to this paragraph. A city or town with a population of less than two hundred thousand persons may designate not more than one entertainment district within the boundaries of the city or town pursuant to this paragraph.
5. A person may be issued a beer and wine store license pursuant to sections 4-201, 4-202, 4-203 and 4-206.01 for premises that have a liquor store license validly issued if the premises, on the date of an application for which the license is filed, are within three hundred horizontal feet of a public or private school building with kindergarten programs or any of grades one through twelve or within three hundred horizontal feet of a fenced recreation area adjacent to such school building and the license remains in full force until the license is terminated in any manner, unless renewed pursuant to section 4-209, subsection A.
D. For the purposes of this section, "entertainment district" means a specific contiguous area that is designated an entertainment district by a resolution adopted by the governing body of a city or town, that consists of not more than one square mile, that is not less than one-eighth of a mile in width and that contains a significant number of entertainment, artistic and cultural venues, including music halls, concert facilities, theaters, arenas, stadiums, museums, studios, galleries, restaurants, bars and other related facilities. END_STATUTE