Ariz. Admin. Code § R19-1-803 - Leasing an Off-sale Privilege regarding Spirituous Liquor other than Mixed Cocktails

A. Applicant responsibilities. To apply under A.R.S. § 4-203.07 to lease the privilege of a bar, beer and wine bar, or liquor store licensee to sell spirituous liquor other than mixed cocktails for consumption off the licensed premises, a restaurant licensee shall submit to the Department within one of the lease windows established by the Department:

1. An application form that is available from the Department at its office or on the Department's website;

2. A non-refundable application fee of $200; and

3. A privileges lease form that is available from the Department at its office or on the Department's website; and:

a. Is signed and dated by both the restaurant licensee and the bar, beer and wine bar, or liquor store licensee, both of which are located in the same county; and

b. Specifies the lease amount to which the parties agree, which may be the amount determined by the Department under A.R.S. § 4-203.07(C).

B. Director responsibilities. The Director shall:

1. Establish and make available on the Department's website:

a. At least four windows throughout a calendar year during which leases may be made;

b. Suggested lease amounts under the terms specified at A.R.S. § 4-203.07(C).

2. Within 30 days after receiving an application under subsection (A), approve or deny the application:

a. If the Director denies the application, the Director shall provide to the restaurant licensee the notice required under R19-1-209(H) and

b. If the Director approves the application, the Director shall transfer to the restaurant licensee the privilege of the bar, beer and wine bar, or liquor store licensee to sell spirituous liquor other than mixed cocktails for consumption off the licensed premises; and

3. Act as a third-party facilitator of the funds paid under subsection (C)(1) to ensure the lease payment is made to the bar, beer and wine bar, or liquor store licensee.

C. Restaurant licensee responsibilities. A restaurant licensee whose application is approved under subsection (B)(2) shall:

1. Pay in full to the Department the lease amount established under subsection (A)(3)(b) when the privileges lease agreement is made;

2. Comply with all Department statutes and rules including:

a. A.R.S. § 4-205.02(M) regarding the percentage of gross revenue derived from the sale of food, and

b. A.R.S. § 4-206.01(G) regarding the percentage of spirituous liquor sales derived under the privileges lease agreement; and

3. If desired, apply to the Department for renewal of the privileges lease agreement. To renew the privileges lease agreement, a restaurant licensee shall:

a. Submit to the Department a renewal application form that is available from the Department at its office or on the Department's website;

b. Submit to the Department an updated privileges lease form that is signed and dated by both the restaurant licensee and the bar, beer and wine bar, or liquor store licensee and specifies the lease amount to which the parties agree;

c. Pay a renewal fee that includes renewal of the restaurant license and is specified on the Department's website; and

d. Pay in full the lease amount established under subsection (C)(3)(b).

D. This Section is authorized by A.R.S. § 4-203.07.

Notes

Ariz. Admin. Code § R19-1-803

New Section made by final exempt rulemaking at 28 A.A.R. 3436, effective 10/28/2022.