SB1245 - 552R

Be it enacted by the Legislature of the State of Arizona:

Section 1. Section 4-101, Arizona Revised Statutes, is amended to read:

START_STATUTE4-101. Definitions

In this title, unless the context otherwise requires:

1. "Act of violence":

(a) Means an incident that consists of a riot, a fight, an altercation or tumultuous conduct and that meets at least one of the following criteria:

(i) In which Bodily injuries are sustained by any person and the injuries would be obvious to a reasonable person.

(ii) is of sufficient intensity as to require the intervention of a peace officer to restore normal order.

(iii) In which A weapon is brandished, displayed or used.

(iv) In which A licensee or an employee or contractor of the licensee fails to follow a clear and direct lawful order from a law enforcement officer or a fire marshal.

(b) Does not include the use of nonlethal devices by a peace officer.

2. "Aggrieved party" means a person who resides at, owns or leases property within a one-mile radius of premises proposed to be licensed and who filed a written request with the department to speak in favor of or opposition to the issuance of the license not later than sixty days after filing the application or fifteen days after action by the local governing body, whichever is sooner.

3. "alternative nicotine product" has the same meaning prescribed in section 13-3622.

3. 4. "Beer":

(a) Means any beverage obtained by the alcoholic fermentation, infusion or decoction of barley malt, hops, rice, bran or other grain, glucose, sugar or molasses, or any combination of them, and may include, as adjuncts in fermentation, honey, fruit, fruit juice, fruit concentrate, herbs, spices and other food materials.

(b) Includes beer aged in an empty wooden barrel previously used to contain wine or distilled spirits and as such is not considered a dilution or mixture of any other spirituous liquor.

4. 5. "Biometric identity verification device" means a device authorized by the department that instantly verifies the identity and age of a person by an electronic scan of a biometric of the person, through a fingerprint, iris image, facial image or other biometric characteristic, or any combination of these characteristics, that references the person's identity and age against any record described in section 4-241, subsection K, and that meets all of the following conditions:

(a) The authenticity of the record was previously verified by an electronic authentication process.

(b) The identity of and information about the record holder was previously verified through either:

(i) A secondary, electronic authentication process or set of processes using commercially available data, such as a public records query or a knowledge-based authentication quiz.

(ii) Using a state or federal government system of records for digital authentication.

(c) The authenticated record was securely linked to biometrics contemporaneously collected from the verified record holder and is stored in a centralized, highly secured, encrypted biometric database.

5. 6. "Board" means the state liquor board.

6. 7. "Bona fide guest" means:

(a) An individual who is personally familiar to the member, who is personally sponsored by the member and whose presence as a guest is in response to a specific and personal invitation.

(b) In the case of a club that meets the criteria prescribed in paragraph 8 9, subdivision (a) of this section, a current member of the armed services of the United States who presents proper military identification and any member of a recognized veterans' organization of the United States and of any country allied with the United States during current or past wars or through treaty arrangements.

7. 8. "Broken package" means any container of spirituous liquor on which the United States tax seal has been broken or removed or from which the cap, cork or seal placed on the container by the manufacturer has been removed.

8. 9. "Club" includes any of the following organizations where the sale of spirituous liquor for consumption on the premises is made only to members, spouses of members, families of members, bona fide guests of members and guests at other events authorized in this title:

(a) A post, chapter, camp or other local unit composed solely of veterans and its duly recognized auxiliary that has been chartered by the Congress of the United States for patriotic, fraternal or benevolent purposes and that has, as the owner, lessee or occupant, operated an establishment for that purpose in this state.

(b) A chapter, aerie, parlor, lodge or other local unit of an American national fraternal organization that has, as the owner, lessee or occupant, operated an establishment for fraternal purposes in this state. An American national fraternal organization as used in this subdivision shall actively operate in at least thirty-six states or have been in active continuous existence for at least twenty years.

(c) A hall or building association of a local unit mentioned in subdivisions (a) and (b) of this paragraph of which all of the capital stock is owned by the local unit or the members and that operates the clubroom facilities of the local unit.

(d) A golf club that has more than fifty bona fide members and that owns, maintains or operates a bona fide golf links together with a clubhouse.

(e) A social club that has more than one hundred bona fide members who are actual residents of the county in which it is located, that owns, maintains or operates club quarters, that is authorized and incorporated to operate as a nonprofit club under the laws of this state, and that has been continuously incorporated and operating for a period of at least one year. The club shall have had, during this one-year period, a bona fide membership with regular meetings conducted at least once each month, and the membership shall be and shall have been actively engaged in carrying out the objects of the club. The club's membership shall consist of bona fide dues-paying members paying dues of at least $6 per year, payable monthly, quarterly or annually, which have been recorded by the secretary of the club, and the members at the time of application for a club license shall be in good standing having for at least one full year paid dues. At least fifty-one percent of the members shall have signified their intention to secure a social club license by personally signing a petition, on a form prescribed by the board, which shall also include the correct mailing address of each signer. The petition shall not have been signed by a member at a date earlier than one hundred eighty days before the filing of the application. The club shall qualify for exemption from the payment of state income taxes under title 43. It is the intent of this subdivision that a license shall not be granted to a club that is, or has been, primarily formed or activated to obtain a license to sell liquor, but solely to a bona fide club, where the sale of liquor is incidental to the main purposes of the club.

(f) An airline club operated by or for airlines that are certificated by the United States government and that maintain or operate club quarters located at airports with international status.

9. 10. "Company" or "association", when used in reference to a corporation, includes successors or assigns.

10. 11. "Control" means the power to direct or cause the direction of the management and policies of an applicant or licensee, whether through the ownership of voting securities or a partnership interest, by agreement or otherwise. Control is presumed to exist if a person has the direct or indirect ownership of or power to vote ten percent or more of the outstanding voting securities of the applicant or licensee or to control in any manner the election of one or more of the directors of the applicant or licensee. In the case of a partnership, control is presumed to mean the general partner or a limited partner who holds ten percent or more of the voting rights of the partnership. For the purposes of determining the percentage of voting securities owned, controlled or held by a person, there shall be aggregated with the voting securities attributed to the person the voting securities of an officer, partner, employee or agent of the person or a spouse, parent or child of the person. Control is also presumed to exist if a creditor of the applicant or licensee holds a beneficial interest in ten percent or more of the liabilities of the licensee. The presumptions in this paragraph regarding control are rebuttable.

11. 12. "Controlling person" means a person directly or indirectly possessing control of an applicant or licensee.

12. 13. "Craft distiller" means a distiller in the United States or in a territory or possession of the United States that holds a license pursuant to section 4-205.10.

13. 14. "Department" means the department of liquor licenses and control.

14. 15. "Director" means the director of the department of liquor licenses and control.

15. 16. "Distilled spirits" includes alcohol, brandy, whiskey, rum, tequila, mescal, gin, absinthe, a compound or mixture of any of them or of any of them with any vegetable or other substance, alcohol bitters, bitters containing alcohol, fruits preserved in ardent spirits, and any alcoholic mixture or preparation, whether patented or otherwise, that may in sufficient quantities produce intoxication.

16. 17. "Employee" means any person who performs any service on licensed premises on a full-time, part-time or contract basis with consent of the licensee, whether or not the person is denominated an employee or independent contractor or otherwise. Employee does not include a person who is exclusively on the premises for musical or vocal performances, for repair or maintenance of the premises or for the delivery of goods to the licensee.

17. 18. "Farm winery" means a winery in the United States or in a territory or possession of the United States that holds a license pursuant to section 4-205.04.

18. 19. "Government license" means a license to serve and sell spirituous liquor on specified premises available only to a state agency, state board, state commission, county, city, town, community college or state university or the national guard or Arizona coliseum and exposition center on application by the governing body of the state agency, state board, state commission, county, city, town, community college or state university or the national guard or Arizona exposition and state fair board.

19. 20. "Legal drinking age" means twenty-one years of age or older.

20. 21. "License" means a license or an interim retail permit issued pursuant to this title.

21. 22. "Licensee" means a person who has been issued a license or an interim retail permit pursuant to this title or a special event licensee.

22. 23. "License fees" means fees collected for license issuance, license application, license renewal, interim permit issuance and license transfer between persons or locations.

23. 24. "Manager" means a natural person who meets the standards required of licensees and who has authority to organize, direct, carry on, control or otherwise operate a licensed business on a temporary or full-time basis.

24. 25. "Menu food item" means a food item from a regular menu, special menu or happy hour menu that is prepared by the licensee or the licensee's employee.

25. 26. "Microbrewery" means a brewery in the United States or in a territory or possession of the United States that meets the requirements of section 4-205.08.

26. 27. "Mixed cocktail":

(a) Means 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.

(b) Does not include a drink sold in an original manufacturer's packaging or any drink poured from an original manufacturer's package without the addition of all of the cocktail's other ingredients at the premises of the licensed bar, liquor store or restaurant.

27. 28. "Off-sale retailer" means any person that operates a bona fide regularly established retail liquor store selling that sells spirituous liquors, wines and beer and any established retail store that sells commodities other than spirituous liquors and that is engaged in the sale of spirituous liquors only in the original unbroken package, to be taken away from the premises of the retailer and to be consumed off the premises.

28. 29. "On-sale retailer" means any person operating an establishment where spirituous liquors are sold in the original container for consumption on or off the premises or in individual portions for consumption on the premises.

29. 30. "Permanent occupancy" means the maximum occupancy of the building or facility as set by the office of the state fire marshal for the jurisdiction in which the building or facility is located.

30. 31. "Person" includes a partnership, limited liability company, association, company or corporation, as well as a natural person.

31. 32. "Premises" or "licensed premises":

(a) Means the area from which the licensee is authorized to sell, dispense or serve spirituous liquors under the provision of the license. Premises or licensed premises

(b) Includes a patio that is not contiguous to the remainder of the premises or licensed premises if the patio is separated from the remainder of the premises or licensed premises by a public or private walkway or driveway not to exceed thirty feet, subject to rules the director may adopt to establish criteria for noncontiguous premises.

32. 33. "Registered alcohol delivery contractor":

(a) Means a person who delivers spirituous liquor to a consumer on behalf of a bar, beer and wine bar, liquor store, beer and wine store or restaurant.

(b) Does not include:

(i) A motor carrier as defined in section 28-5201.

(ii) An independent contractor, a subcontractor of an independent contractor, an employee of an independent contractor or an employee of a subcontractor as provided in section 4-203, subsection J.

33. 34. "Registered mail" includes certified mail.

34. 35. "Registered retail agent" means any person who is authorized pursuant to section 4-222 to purchase spirituous liquors for and on behalf of the person and other retail licensees.

35. 36. "Repeated acts of violence" means:

(a) For licensed premises with a permanent occupancy of two hundred or fewer persons, two or more acts of violence occurring within seven days or three or more acts of violence occurring within thirty days.

(b) For licensed premises with a permanent occupancy of more than two hundred but not more than four hundred persons, four or more acts of violence within thirty days.

(c) For licensed premises with a permanent occupancy of more than four hundred but not more than six hundred fifty persons, five or more acts of violence within thirty days.

(d) For licensed premises with a permanent occupancy of more than six hundred fifty but not more than one thousand fifty persons, six or more acts of violence within thirty days.

(e) For licensed premises with a permanent occupancy of more than one thousand fifty persons, seven or more acts of violence within thirty days.

37. "retail tobacco vendor":

(a) Means a person, partnership, joint venture, society, club, trustee, true association, organization or corporation that owns, operates or manages any retail establishment physically located in this state that sells alternative nicotine products, shisha, tobacco products or vapor products, that is in the business of selling, distributing or conveying these products to the public or a user of any such product and that is not an otherwise lawful business located outside of this state.

(b) does not include either of the following:

(i) the nonmanagement employees of any tobacco retail establishment.

(ii) a wholesaler of any alternative nicotine product, shisha, tobacco product or vapor product with respect to selling, distributing or conveying these products in business-to-business transactions.

36. 38. "Sell" includes soliciting or receiving an order for, keeping or exposing for sale, directly or indirectly delivering for value, peddling, keeping with intent to sell and trafficking in.

39. "Shisha" has the same meaning prescribed in section 13-3622.

37. 40. "Spirituous liquor" includes alcohol, brandy, whiskey, rum, tequila, mescal, gin, wine, porter, ale, beer, any malt liquor or malt beverage, absinthe, a compound or mixture of any of them or of any of them with any vegetable or other substance, alcohol bitters, bitters containing alcohol, any liquid mixture or preparation, whether patented or otherwise, that produces intoxication, fruits preserved in ardent spirits, and beverages containing more than one-half of one percent of alcohol by volume.

38. 41. "Tamperproof sealed" means designed to prevent consumption without the removal of a tamperproof cap, seal, cork or closure that has a device, mechanism or adhesive that clearly shows whether a container has been opened.

42. "tobacco product" has the same meaning prescribed in section 13-3622.

43. "vapor product" has the same meaning prescribed in section 13-3622.

39. 44. "Vehicle" means any means of transportation by land, water or air, and includes everything made use of in any way for such transportation.

40. 45. "Vending machine" means a machine that dispenses merchandise through the means of coin, token, credit card or other nonpersonal means of accepting payment for merchandise received.

41. 46. "Veteran" means a person who has served in the United States air force, army, navy, marine corps or coast guard, as an active nurse in the services of the American red cross, in the army and navy nurse corps in time of war, or in any expedition of the armed forces of the United States, and who has received a discharge other than dishonorable.

42. 47. "Voting security" means any security presently entitling the owner or holder of the security to vote for the election of directors of an applicant or a licensee.

43. 48. "Wine" means the product obtained by the fermentation of grapes, other agricultural products containing natural or added sugar or cider or any such alcoholic beverage fortified with grape brandy and containing not more than twenty-four percent of alcohol by volume. END_STATUTEE

Sec. 2. Section 4-112, Arizona Revised Statutes, is amended to read:

START_STATUTE4-112. Powers and duties of board and director of department of liquor licenses and control; investigations; county and municipal regulation; definition

A. The board shall:

1. Grant and deny applications in accordance with the provisions of this title.

2. Adopt rules in order to carry out the provisions of this section.

3. Hear appeals and hold hearings as provided in this section.

B. Except as provided in subsection A of this section, the director shall administer the provisions of this title, including and shall do the following:

1. Adopting adopt rules:

(a) For carrying to carry out the provisions of this title.

(b) For the proper to properly conduct of the business to be carried on under each specific type of spirituous liquor license.

(c) To enable and assist state officials and political subdivisions to collect taxes levied or imposed in connection with spirituous liquors.

(d) For the issuance to issue and revocation of revoke certificates of registration of retail agents, including provisions governing the shipping, storage and delivery of spirituous liquors by registered retail agents, the keeping of records and the filing of reports by registered retail agents.

(e) To establish requirements for licensees under section 4-209, subsection B, paragraph 12.

2. Subject to title 41, chapter 4, article 4, employing employ necessary personnel and fixing fix their compensation pursuant to section 38-611.

3. Keeping keep an index record that is a public record open to public inspection and that contains the name and address of each licensee and the name and address of any person having an interest, either legal or equitable, in each license as shown by any written document that is placed on file in the office of the board.

4. Providing provide the board with supplies and personnel as directed by the board.

5. Responding respond in writing to any law enforcement agency that submits an investigative report to the department relating to a violation of this title, setting forth what action, if any, the department has taken or intends to take on the report and, if the report lacks sufficient information or is otherwise defective for use by the department, what the agency must do to remedy the report.

6. Taking take steps that are necessary to maintain effective liaison with the department of public safety and all local law enforcement agencies in the enforcement of enforcing this title, including the laws of this state against the consumption of spirituous liquor by persons under the legal drinking age or the use of alternative nicotine products, tobacco products or vapor products by persons under twenty-one years of age.

7. Providing provide training to law enforcement agencies in the proper investigation properly investigating and reporting of violations of this title.

8. enforce title 36, chapter 6, article 14.

C. The director shall establish within the department a separate investigations unit that has as its sole responsibility the investigation of investigating compliance with this title, including the investigation of investigating licensees alleged to have sold or distributed spirituous liquor in any form to persons under the legal drinking age or to have sold alternative nicotine products, tobacco products or vapor products to a person who is under twenty-one years of age. Investigations conducted by this unit may include covert undercover investigations.

D. All employees of the department of liquor licenses and control, except members of the state liquor board and the director of the department, shall be employed by the department in the manner prescribed by the department of administration.

E. The director may enter into a contract or agreement with any public agency for any joint or cooperative action as provided for by title 11, chapter 7, article 3.

F. The board or the director may take evidence, administer oaths or affirmations, issue subpoenas requiring attendance and testimony of witnesses, cause depositions to be taken and require by subpoena duces tecum the production of books, papers and other documents that are necessary for the enforcement of to enforce this title. Proceedings held during the course of a confidential investigation are exempt from title 38, chapter 3, article 3.1. If a person refuses to obey a subpoena or fails to answer questions as provided by this subsection, the board or the director may apply to the superior court in the manner provided in section 12-2212. The board or director may serve subpoenas by personal service or certified mail, return receipt requested.

G. The director may:

1. Examine books, records and papers of a licensee.

2. Require applicants, licensees, employees who serve, sell or furnish spirituous liquors to retail customers, managers and managing agents to take training courses approved by the director in spirituous liquor handling and spirituous liquor laws and rules. The director shall adopt rules that set standards for approving training courses. The director may suspend or revoke the previous approval of trainers who do not adhere to course administration requirements prescribed by the department or who do not meet course standards. If the director suspends or revokes the previous approval of a trainer pursuant to this paragraph, the trainer may appeal to the board pursuant to section 4-210.02 as if the suspension or revocation was a sanction against a licensee. After January 1, 2019, The rules for on-sale retailer basic training and on-sale retailer management training shall include security procedures for security personnel assigned to monitor admission of patrons, interaction with patrons, calls to law enforcement and strategies for use of force and for the use of de-escalation techniques. If the retailer uses a registered security guard, the retailer shall attempt to verify the validity and status of the security guard's registration certificate. The department's licensed investigators may participate and receive compensation as lecturers at approved training courses within this state's jurisdiction that are conducted by other entities but shall not participate in in-house training programs for licensees.

3. Delegate to employees of the department authority to exercise powers of the director in order to administer the department.

4. Regulate signs that advertise a spirituous liquor product at licensed retail premises.

5. Cause to be removed from the marketplace spirituous liquor, alternative nicotine products, tobacco products or vapor products that may be contaminated.

6. Regulate the age and conduct of erotic entertainers at licensed premises. The age limitation governing these erotic entertainers may be different from other employees of the licensee.

7. Issue and enforce cease and desist orders against any person or entity that sells beer, wine, or spirituous liquor, alternative nicotine products, tobacco products or vapor products without an appropriate license or permit.

8. Confiscate wines carrying a label including a reference to Arizona or any Arizona city, town or place unless at least seventy-five percent by volume of the grapes used in making the wine were grown in this state.

9. Accept and expend private grants of monies, gifts and devises for conducting educational programs for parents and students on the repercussions of underage alcohol consumption or the underage use of alternative nicotine products, tobacco products or vapor products. State general fund monies shall not be expended for the purposes of this paragraph. If the director does not receive sufficient monies from private sources to carry out the purposes of this paragraph, the director shall not provide the educational programs prescribed in this paragraph. Grant monies received pursuant to this paragraph are nonlapsing and do not revert to the state general fund at the close of the fiscal year.

10. Procure fingerprint scanning equipment and provide fingerprint services to license applicants and licensees. The department may charge a fee for providing these services.

11. Accept electronic signatures on all department and licensee forms and documents and applications. The director may adopt requirements that would require facsimile signatures to be followed by original signatures within a specified time period.

12. For use after January 1, 2019, Adopt a form that is required to be used by all on-sale retailers that hire or designate employees to serve as security personnel. All security personnel job applicants and employees for on-sale retailers shall complete the form, which shall be notarized, before assignment to a security role. The form shall require the applicant or other person to disclose whether in the previous five years the person has been a registered sex offender or pled guilty to, pled no contest to or been convicted of any offense that constitutes assault, homicide, domestic violence, sexual misconduct, misconduct involving a deadly weapon or a drug violation that constitutes the illegal sale, manufacturing, cultivation or transportation for sale of marijuana, a dangerous drug or a narcotic drug. A licensee may not hire or assign to a role as security personnel any person who fails to complete the form or if the whose form discloses one of the listed offenses within the previous five years. The licensee shall maintain on file affidavits of all security personnel hired or designated by the licensee. The form may not be required for a peace officer who is certified by the Arizona peace officer standards and training board or other security personnel who hold a current security guard registration certificate or armed security guard registration certificate issued pursuant to title 32, chapter 26.

H. A county or municipality may enact and enforce ordinances regulating the age and conduct of erotic entertainers at licensed premises in a manner at least as restrictive as rules adopted by the director.

I. For the purposes of this section, "security personnel":

1. Includes individuals whose primary assigned responsibilities include the security and safety of employees and patrons of an on-sale retailer premises. Security personnel

2. Does not include a person whose primary responsibilities include checking the identification cards of patrons to determine compliance with age requirements. END_STATUTE

Sec. 3. Section 4-205.02, Arizona Revised Statutes, is amended to read:

START_STATUTE4-205.02. Restaurant license; issuance; regulatory provisions; expiration; off-sale leases and permits; fee; definitions

A. The director may issue a restaurant license to any restaurant in this state that is regularly open for serving food to guests for compensation and that has suitable kitchen facilities connected with the restaurant for keeping, cooking and preparing foods required for ordinary meals.

B. The director shall issue the license in the name of the restaurant on application for the license by the owner or lessee of the restaurant, if the applicant is otherwise qualified to hold a spirituous liquor license. The holder of such a license is subject to the penalties prescribed for any violation of the law relating to alcoholic beverages.

C. The holder of a restaurant license may sell and serve spirituous liquors solely for consumption on the licensed premises. For the purpose of this subsection, "licensed premises" may include rooms, areas or locations in which the restaurant normally sells or serves spirituous liquors pursuant to regular operating procedures and practices and that are contiguous to the restaurant or a noncontiguous patio pursuant to section 4-101, paragraph 31 32. For the purposes of this subsection, a restaurant licensee must submit proof of tenancy or permission from the landowner or lessor for all property to be included in the licensed premises.

D. In addition to other grounds prescribed in this title on which a license may be revoked, the director may require the holder of a restaurant license issued pursuant to this section to surrender the license in any case in which the licensee ceases to operate as a restaurant, as prescribed in subsection A of this section. The surrender of a license pursuant to this subsection does not prevent the director from revoking the license for other grounds prescribed in this title or for making deliberate material misrepresentations to the department regarding the licensee's equipment, service or entertainment items or seating capacity in applying for the restaurant license.

E. Neither the director nor the board may initially issue a restaurant license if either finds that there is sufficient evidence that the operation will not satisfy the criteria adopted by the director for issuing a restaurant license described in section 4-209, subsection B, paragraph 12. The director shall issue a restaurant license only if the applicant has submitted a plan for the operation of operating the restaurant. The plan shall be completed on forms provided by the department and shall include listings of all restaurant equipment and service items, the restaurant seating capacity and other information requested by the department to substantiate that the restaurant will operate in compliance with this section.

F. The holder of the license described in section 4-209, subsection B, paragraph 12 who intends to alter the seating capacity or dimensions of a restaurant facility shall notify the department in advance on forms provided by the department.

G. The director may charge a fee for site inspections conducted before the issuance of a restaurant license.

H. A restaurant applicant or licensee may apply for a permit allowing for the sale of beer for consumption off the licensed premises pursuant to section 4-244, paragraph 32, subdivision (c) on a form prescribed and furnished by the director. The department shall not issue a permit to a restaurant applicant or licensee that does not meet the requirements in section 4-207, subsection A. Section 4-207, subsection B does not apply to this subsection. The permit shall be issued only after the director has determined that the public convenience requires and that the best interest of the community will be substantially served by the issuance of the permit, considering the same criteria adopted by the director for issuing a restaurant license described in section 4-209, subsection B, paragraph 12. The amount of beer sold under the permit shall not exceed ten percent of gross revenue of spirituous liquor sold by the establishment. After the permit has been issued, the permit shall be noted on the license itself and in the records of the department. The director may charge a fee for processing the application for the permit and a renewal fee.

I. Notwithstanding any rule adopted by the department, business establishments that relied on a form issued by the department that provides for a small restaurant exemption for fifty or fewer seats before January 31, 2019 are allowed to continue to maintain the capacity of fifty or fewer seats for the duration of the business. The rights of a business establishment subject to this section are not transferable.

J. Notwithstanding section 4-203, subsection E, section 4-207 and section 4-210, subsection A, paragraph 6, through December 31, 2025, a restaurant applicant or licensee may apply to the department for a lease for the privilege of selling mixed cocktails for consumption off the licensed premises pursuant to section 4-203.06 and section 4-244, paragraph 32, subdivision (d).

K. Notwithstanding section 4-207, beginning January 1, 2026, a restaurant applicant or licensee may apply for a permit to allow the sale of mixed cocktails for consumption off the licensed premises pursuant to section 4-203.07 and section 4-244, paragraph 32, subdivision (d), on a form prescribed and furnished by the director. The sale of mixed cocktails for consumption off the licensed premises must be accompanied by the sale of menu food items for consumption on or off the licensed premises. The department shall issue the permit only after the director has determined that the public convenience requires and that the best interest of the community will be substantially served by issuing the permit. All permit holders and their employees, managers and agents must complete alcohol training pursuant to section 4-112, subsection G, paragraph 2. After the department issues the permit, the permit shall be noted on the license itself and in the records of the department. The director may establish and charge a fee for processing the permit application and a renewal fee.

L. A restaurant licensee shall cease selling spirituous liquor, including mixed cocktails, for off-premises consumption when the licensee ceases regular kitchen service for food.

M. For the purposes of this section:

1. "Gross revenue":

(a) Means the revenue derived from all sales of food and spirituous liquor on the licensed premises, regardless of whether the sales of spirituous liquor are made under a restaurant license issued pursuant to this section or under any other license that has been issued for the premises pursuant to this article.

(b) Includes revenue derived from spirituous liquor sold for off-sale consumption.

2. "Restaurant" means an establishment that derives at least forty percent of its gross revenue from the sale of food, including sales of food for consumption off the licensed premises if the amount of these sales included in the calculation of gross revenue from the sale of food does not exceed fifteen percent of all gross revenue of the restaurant. END_STATUTE

Sec. 4. Section 4-244, Arizona Revised Statutes, is amended to read:

START_STATUTE4-244. Unlawful acts; definition

It is unlawful:

1. For a person to buy for resale, sell or deal in spirituous liquors in this state without first having procured a license duly issued by the board, except that the director may issue a temporary permit of any series pursuant to section 4-205.05 to a trustee in bankruptcy to acquire and dispose of the spirituous liquor of a debtor.

2. For a person to sell or deal in alcohol for beverage purposes without first complying with this title.

3. For a distiller, vintner, brewer or wholesaler knowingly to sell, dispose of or give spirituous liquor to any person other than a licensee except in sampling wares as may be necessary in the ordinary course of business, except in donating spirituous liquor to a nonprofit organization that has obtained a special event license for the purpose of charitable fundraising activities or except in donating spirituous liquor with a cost to the distiller, brewer or wholesaler of up to $500 in a calendar year to an organization that is exempt from federal income taxes under section 501(c) (3), (4), (6) or (7) of the internal revenue code and not licensed under this title.

4. For a distiller, vintner or brewer to require a wholesaler to offer or grant a discount to a retailer, unless the discount has also been offered and granted to the wholesaler by the distiller, vintner or brewer.

5. For a distiller, vintner or brewer to use a vehicle for trucking or transportation of transporting spirituous liquors unless there is affixed to both sides of the vehicle a sign showing the name and address of the licensee and the type and number of the person's license in letters not less than three and one-half inches in height.

6. For a person to take or solicit orders for spirituous liquors unless the person is a salesman or solicitor of a licensed wholesaler, a salesman or solicitor of a distiller, brewer, vintner, importer or broker or a registered retail agent.

7. For any retail licensee to purchase spirituous liquors from any person other than a solicitor or salesman of a wholesaler licensed in this state.

8. For a retailer to acquire an interest in property owned, occupied or used by a wholesaler in the wholesaler's business, or in a license with respect to the premises of the wholesaler.

9. Except as provided in paragraphs 10 and 11 of this section, for a licensee or other person to sell, furnish, dispose of or give, or cause to be sold, furnished, disposed of or given, to a person under the legal drinking age or for a person under the legal drinking age to buy, receive, have in the person's possession or consume spirituous liquor. This paragraph does not prohibit the employment by an off-sale retailer of persons who are at least sixteen years of age to check out, if supervised by a person on the premises who is at least eighteen years of age, package or carry merchandise, including spirituous liquor, in unbroken packages, for the convenience of the customer of the employer, if the employer sells primarily merchandise other than spirituous liquor.

10. For a licensee to employ a person under eighteen years of age to manufacture, sell or dispose of spirituous liquors. This paragraph does not prohibit the employment by an off-sale retailer of persons who are at least sixteen years of age to check out, if supervised by a person on the premises who is at least eighteen years of age, package or carry merchandise, including spirituous liquor, in unbroken packages, for the convenience of the customer of the employer, if the employer sells primarily merchandise other than spirituous liquor.

11. For an on-sale retailer to employ a person under eighteen years of age in any capacity connected with the handling of spirituous liquors. This paragraph does not prohibit the employment by an on-sale retailer of a person under eighteen years of age who cleans up the tables on the premises for reuse, removes dirty dishes, keeps a ready supply of needed items and helps clean up the premises.

12. For a licensee, when engaged in waiting on or serving customers, to consume spirituous liquor or for a licensee or on-duty employee to be on or about the licensed premises while in an intoxicated or disorderly condition.

13. For an employee of a retail licensee, during that employee's working hours or in connection with such employment, to give to or purchase for any other person, accept a gift of, purchase for the employee or consume spirituous liquor, except that:

(a) An employee of a licensee, during that employee's working hours or in connection with the employment, while the employee is not engaged in waiting on or serving customers, may give spirituous liquor to or purchase spirituous liquor for any other person.

(b) An employee of an on-sale retail licensee, during that employee's working hours or in connection with the employment, while the employee is not engaged in waiting on or serving customers, may taste samples of beer or wine of not more than four ounces per day or distilled spirits of not more than two ounces per day provided by an employee of a wholesaler or distributor who is present at the time of the sampling.

(c) An employee of an on-sale retail licensee, under the supervision of a manager as part of the employee's training and education, while not engaged in waiting on or serving customers may taste samples of distilled spirits of not more than two ounces per educational session or beer or wine of not more than four ounces per educational session, and provided that a if the licensee does not have more than two educational sessions in any thirty-day period.

(d) An unpaid volunteer who is a bona fide member of a club and who is not engaged in waiting on or serving spirituous liquor to customers may purchase for himself and consume spirituous liquor while participating in a scheduled event at the club. An unpaid participant in a food competition may purchase for himself and consume spirituous liquor while participating in the food competition.

(e) An unpaid volunteer of a special event licensee under section 4-203.02 may purchase and consume spirituous liquor while not engaged in waiting on or serving spirituous liquor to customers at the special event. This subdivision does not apply to an unpaid volunteer whose responsibilities include verification of a person's legal drinking age, security or the operation of any vehicle or heavy machinery.

(f) A representative of a producer or wholesaler participating at a special event under section 4-203.02 may consume small amounts of the products of the producer or wholesaler on the premises of the special event for the purpose of quality control.

14. For a licensee or other person to serve, sell or furnish spirituous liquor to a disorderly or obviously intoxicated person, or for a licensee or employee of the licensee to allow a disorderly or obviously intoxicated person to come into or remain on or about the premises, except that a licensee or an employee of the licensee may allow an obviously intoxicated person to remain on the premises for not more than thirty minutes after the state of obvious intoxication is known or should be known to the licensee for a nonintoxicated person to transport the obviously intoxicated person from the premises. For the purposes of this section, "obviously intoxicated" means inebriated to the extent that a person's physical faculties are substantially impaired and the impairment is shown by significantly uncoordinated physical action or significant physical dysfunction that would have been obvious to a reasonable person.

15. For an on-sale or off-sale retailer or an employee of such retailer or an alcohol delivery contractor to sell, dispose of, deliver or give spirituous liquor to a person between the hours of 2:00 a.m. and 6:00 a.m., except that a retailer with off-sale privileges may receive and process orders, accept payment or package, load or otherwise prepare spirituous liquor for delivery at any time, if the actual deliveries to customers are made between the hours of 6:00 a.m. and 2:00 a.m., at which time section 4-241, subsections A and K apply.

16. For a licensee or employee to knowingly allow any person on or about the licensed premises to give or furnish any spirituous liquor to any person under twenty-one years of age or knowingly allow any person under twenty-one years of age to have in the person's possession spirituous liquor on the licensed premises.

17. For an on-sale retailer or an employee of such a retailer to allow a person to consume or possess spirituous liquors on the premises between the hours of 2:30 a.m. and 6:00 a.m.

18. For an on-sale retailer to allow an employee or for an employee to solicit or encourage others, directly or indirectly, to buy the employee drinks or anything of value in the licensed premises during the employee's working hours. An on-sale retailer shall not serve employees or allow a patron of the establishment to give spirituous liquor to, purchase liquor for or drink liquor with any employee during the employee's working hours.

19. For an off-sale retailer or employee to sell spirituous liquor except in the original unbroken container, to allow spirituous liquor to be consumed on the premises or to knowingly allow spirituous liquor to be consumed on adjacent property under the licensee's exclusive control.

20. For a person to consume spirituous liquor in a public place, thoroughfare or gathering. The license of a licensee allowing a violation of this paragraph on the premises shall be subject to revocation. This paragraph does not apply to the sale of spirituous liquors on the premises of and by an on-sale retailer. This paragraph also does not apply to a person consuming beer or wine from a broken package in a public recreation area or on private property with permission of the owner or lessor or on the walkways surrounding such private property or to a person consuming beer or wine from a broken package in a public recreation area as part of a special event or festival that is conducted under a license secured pursuant to section 4-203.02 or 4-203.03.

21. For a person to have possession of possess or to transport spirituous liquor that is manufactured in a distillery, winery, brewery or rectifying plant contrary to the laws of the United States and this state. Any property used in transporting such spirituous liquor shall be forfeited to the state and shall be seized and disposed of as provided in section 4-221.

22. For an on-sale retailer or employee to allow a person under the legal drinking age to remain in an area on the licensed premises during those hours in which its primary use is the sale, dispensing or consumption of alcoholic beverages after the licensee, or the licensee's employees, know or should have known that the person is under the legal drinking age. An on-sale retailer may designate an area of the licensed premises as an area in which spirituous liquor will not be sold or consumed for the purpose of allowing underage persons on the premises if the designated area is separated by a physical barrier and at no time will underage persons have access to the area in which spirituous liquor is sold or consumed. A licensee or an employee of a licensee may require a person who intends to enter a licensed premises or a portion of a licensed premises where persons under the legal drinking age are prohibited under this section to exhibit an instrument of identification that is acceptable under section 4-241 as a condition of entry or may use a biometric identity verification device to determine the person's age as a condition of entry. The director, or a municipality, may adopt rules to regulate the presence of underage persons on licensed premises provided the rules adopted by a municipality are more stringent than those adopted by the director. The rules adopted by the municipality shall be adopted by local ordinance and shall not interfere with the licensee's ability to comply with this paragraph. This paragraph does not apply:

(a) If the person under the legal drinking age is accompanied by a spouse, parent, grandparent or legal guardian of legal drinking age or is an on-duty employee of the licensee.

(b) If the owner, lessee or occupant of the premises is a club as defined in section 4-101, paragraph 8 9, subdivision (a) and the person under the legal drinking age is any of the following:

(i) An active duty military service member.

(ii) A veteran.

(iii) A member of the United States army national guard or the United States air national guard.

(iv) A member of the United States military reserve forces.

23. For an on-sale retailer or employee to conduct drinking contests, to sell or deliver to a person an unlimited number of spirituous liquor beverages during any set period of time for a fixed price, to deliver more than fifty ounces of beer, one liter of wine or four ounces of distilled spirits in any spirituous liquor drink to one person at one time for that person's consumption or to advertise any practice prohibited by this paragraph. The provisions of This paragraph do does not prohibit an on-sale retailer or employee from selling and delivering an opened, original container of distilled spirits if:

(a) Service or pouring of the spirituous liquor is provided by an employee of the on-sale retailer. A licensee shall not be charged for a violation of this subdivision paragraph if a customer, without the knowledge of the retailer, removes or tampers with the a locking device on a bottle delivered to the customer for bottle service and the customer pours the customer's own drink from the bottle, if when the licensee becomes aware of the removal or tampering of the locking device the licensee immediately installs a functioning locking device on the bottle or removes the bottle and lock from bottle service.

(b) The employee of the on-sale retailer monitors consumption to ensure compliance with this paragraph. Locking devices may be used, but are not required.

24. For a licensee or employee to knowingly allow the unlawful possession, use, sale or offer for sale of narcotics, dangerous drugs or marijuana on the premises. For the purposes of this paragraph, "dangerous drug" has the same meaning prescribed in section 13-3401.

25. For a licensee or employee to knowingly allow prostitution or the solicitation of prostitution on the premises.

26. For a licensee or employee to knowingly allow unlawful gambling on the premises.

27. For a licensee or employee to knowingly allow trafficking or attempted trafficking in stolen property on the premises.

28. For a licensee or employee to fail or refuse to make the premises or records available for inspection and examination as provided in this title or to comply with a lawful subpoena issued under this title.

29. For any person other than a peace officer while on duty or off duty or a member of a sheriff's volunteer posse while on duty who has received firearms training that is approved by the Arizona peace officer standards and training board, a retired peace officer as defined in section 38-1113 or an honorably retired law enforcement officer who has been issued a certificate of firearms proficiency pursuant to section 13-3112, subsection T, the licensee or an employee of the licensee acting with the permission of the licensee to be in possession of a firearm while on the licensed premises of an on-sale retailer. This paragraph does not include a situation in which a person is on licensed premises for a limited time in order to seek emergency aid and such the person does not buy, receive, consume or possess spirituous liquor. This paragraph does not apply to:

(a) Hotel or motel guest room accommodations.

(b) The exhibition exhibiting or display of displaying a firearm in conjunction with a meeting, show, class or similar event.

(c) A person with a permit issued pursuant to section 13-3112 who carries a concealed handgun on the licensed premises of any on-sale retailer that has not posted a notice pursuant to section 4-229.

30. For a licensee or employee to knowingly allow a person in possession of a firearm other than a peace officer while on duty or off duty or a member of a sheriff's volunteer posse while on duty who has received firearms training that is approved by the Arizona peace officer standards and training board, a retired peace officer as defined in section 38-1113 or an honorably retired law enforcement officer who has been issued a certificate of firearms proficiency pursuant to section 13-3112, subsection T, the licensee or an employee of the licensee acting with the permission of the licensee to remain on the licensed premises or to serve, sell or furnish spirituous liquor to a person in possession of a firearm while on the licensed premises of an on-sale retailer. It is a defense to action under this paragraph if the licensee or employee requested assistance of a peace officer to remove such a person. This paragraph does not apply to:

(a) Hotel or motel guest room accommodations.

(b) The exhibition Exhibiting or display of displaying a firearm in conjunction with a meeting, show, class or similar event.

(c) A person with a permit issued pursuant to section 13-3112 who carries a concealed handgun on the licensed premises of any on-sale retailer that has not posted a notice pursuant to section 4-229.

31. For any person in possession of a firearm while on the licensed premises of an on-sale retailer to consume spirituous liquor. This paragraph does not prohibit the consumption of small amounts of spirituous liquor by an undercover peace officer on assignment to investigate the licensed establishment.

32. For a licensee or employee to knowingly allow spirituous liquor to be removed from the licensed premises, except in the original unbroken package. This paragraph does not apply to any of the following:

(a) A person who removes a bottle of wine that has been partially consumed in conjunction with a purchased meal from licensed premises if a cork is inserted flush with the top of the bottle or the bottle is otherwise securely closed.

(b) A person who is in licensed premises that have noncontiguous portions that are separated by a public or private walkway or driveway and who takes spirituous liquor from one portion of the licensed premises across the public or private walkway or driveway directly to the other portion of the licensed premises.

(c) A licensee of a bar, beer and wine bar, liquor store, beer and wine store, microbrewery or restaurant that has a permit pursuant to section 4-205.02, subsection H and that dispenses beer only in a clean container composed of a material approved by a national sanitation organization with a maximum capacity that does not exceed one gallon and not for consumption on the premises if:

(i) The licensee or the licensee's employee fills the container at the tap at the time of sale.

(ii) The container is sealed and displays a government warning label.

(d) A bar or liquor store licensee that prepares a mixed cocktail or a restaurant licensee that leases the privilege to sell mixed cocktails for consumption off the licensed premises pursuant to section 4-203.06 or holds a permit pursuant to section 4-203.07 and section 4-205.02, subsection K and that prepares a mixed cocktail and transfers it to a clean container composed of a material approved by a national sanitation organization with a maximum capacity that does not exceed thirty-two ounces and not for consumption on the premises if all of the following apply:

(i) The licensee or licensee's employee fills the container with the mixed cocktail on the licensed premises of the bar, liquor store or restaurant.

(ii) The container is tamperproof sealed by the licensee or the licensee's employee and displays a government warning label.

(iii) The container clearly displays the bar's, liquor store's or restaurant's logo or name.

(iv) For a restaurant licensee licensed pursuant to section 4-205.02, the sale of mixed cocktails for consumption off the licensed premises is accompanied by the sale of menu food items for consumption on or off the licensed premises.

33. For a person who is obviously intoxicated to buy or attempt to buy spirituous liquor from a licensee or employee of a licensee or to consume spirituous liquor on licensed premises.

34. For a person who is under twenty-one years of age to drive or be in physical control of a motor vehicle while there is any spirituous liquor in the person's body.

35. For a person who is under twenty-one years of age to operate or be in physical control of a motorized watercraft that is underway while there is any spirituous liquor in the person's body. For the purposes of this paragraph, "underway" has the same meaning prescribed in section 5-301.

36. For a licensee, manager, employee or controlling person to purposely induce a voter, by means of alcohol, to vote or abstain from voting for or against a particular candidate or issue on an election day.

37. For a licensee to fail to report an occurrence of an act of violence to either the department or a law enforcement agency.

38. For a licensee to use a vending machine for the purpose of dispensing spirituous liquor.

39. For a licensee to offer for sale a wine carrying a label including a reference to Arizona or any Arizona city, town or geographic location unless at least seventy-five percent by volume of the grapes used in making the wine were grown in Arizona.

40. For a retailer to knowingly allow a customer to bring spirituous liquor onto the licensed premises, except that an on-sale retailer may allow a wine and food club to bring wine onto the premises for consumption by the club's members and guests of the club's members in conjunction with meals purchased at a meeting of the club that is conducted on the premises and that at least seven members attend. An on-sale retailer that allows wine and food clubs to bring wine onto its premises under this paragraph shall comply with all applicable provisions of this title and any rules adopted pursuant to this title to the same extent as if the on-sale retailer had sold the wine to the members of the club and their guests. For the purposes of this paragraph, "wine and food club" means an association that has more than twenty bona fide members paying at least $6 per year in dues and that has been in existence for at least one year.

41. For a person who is under twenty-one years of age to have in the person's body any spirituous liquor. In a prosecution for a violation of this paragraph:

(a) Pursuant to section 4-249, it is a defense that the spirituous liquor was consumed in connection with the bona fide practice of a religious belief or as an integral part of a religious exercise and in a manner not dangerous to public health or safety.

(b) Pursuant to section 4-226, it is a defense that the spirituous liquor was consumed for a bona fide medicinal purpose and in a manner not dangerous to public health or safety.

42. For an employee of a licensee to accept any gratuity, compensation, remuneration or consideration of any kind to either:

(a) Allow a person who is under twenty-one years of age to enter any portion of the premises where that person is prohibited from entering pursuant to paragraph 22 of this section.

(b) Sell, furnish, dispose of or give spirituous liquor to a person who is under twenty-one years of age.

43. For a person to purchase, offer for sale or use any device, machine or process that mixes spirituous liquor with pure oxygen or another gas to produce a vaporized product for the purpose of consumption by inhalation or to allow patrons to use any item for the consumption of vaporized spirituous liquor.

44. For a retail licensee or an employee of a retail licensee to sell spirituous liquor to a person if the retail licensee or employee knows the person intends to resell the spirituous liquor.

45. Except as authorized by paragraph 32, subdivision (c) of this section, for a person to reuse a bottle or other container authorized for use by the laws of the United States or any agency of the United States for the packaging of distilled spirits or for a person to increase the original contents or a portion of the original contents remaining in a liquor bottle or other authorized container by adding any substance.

46. For a direct shipment licensee, a farm winery licensee or an employee of those licensees to sell, dispose of, deliver or give spirituous liquor to an individual purchaser between the hours of 2:00 a.m. and 6:00 a.m., except that a direct shipment licensee or a farm winery licensee may receive and process orders, accept payment, or package, load or otherwise prepare wine for delivery at any time without complying with section 4-241, subsections A and K, if the actual deliveries to individual purchasers are made between the hours of 6:00 a.m. and 2:00 a.m. and in accordance with section 4-203.04 for direct shipment licensees and section 4-205.04 for farm winery licensees. END_STATUTE

Sec. 5. Title 4, Arizona Revised Statutes, is amended by adding chapter 4, to read:

CHAPTER 4

ALTERNATIVE NICOTINE, TOBACCO AND VAPOR PRODUCTS

ARTICLE 1. LICENSING AND SALE OF ALTERNATIVE

NICOTINE, TOBACCO AND VAPOR PRODUCTS

START_STATUTE4-401. Tobacco retail sales; licenses; requirements; fees; training; civil penalties

A. Beginning January 1, 2024, a retail tobacco vendor may not distribute alternative nicotine products, tobacco products or vapor products in this state without a valid tobacco retail sales license. A retail tobacco vendor that distributes alternative nicotine products, tobacco products or vapor products in this state shall secure for each location, and display at all times, a tobacco retail sales license issued by the department before engaging or continuing to engage in such a business.

B. The department shall establish and collect fees for the purpose of an initial tobacco retail sales license and the renewal of that license. The department shall deposit, pursuant to sections 35-146 and 35-147, the fees collected pursuant to this section in the tobacco retail sales licensing fund established by section 4-404.

C. A tobacco retail sales license is valid for one year, unless the license is suspended or revoked by the department or the department's designee. A tobacco retail sales license may not be renewed if the retail tobacco vendor has any outstanding penalties pursuant to this article. The department may receive and review tobacco retail sales license applications electronically.

D. A tobacco retail sales license may not be issued to or renewed for a retail tobacco vendor licensee until the retail tobacco vendor signs a form stating that the retail tobacco vendor has read this article and has provided training to all employees on the sale of alternative nicotine products, tobacco products and vapor products. The training shall include the following information:

1. That it is illegal to sell an alternative nicotine product, tobacco product or vapor product to a person who is under twenty-one years of age.

2. The types of identification that are legally acceptable for the proof of age.

E. The tobacco retail sales license is nontransferable. If a retail tobacco vendor ceases to be a retailer at the licensed retail location by reason of discontinuation, sale or transfer of the retail tobacco vendor's business, the retail tobacco vendor shall notify the department in writing at the time the discontinuance, sale or transfer takes effect.

F. Any business found to be selling alternative nicotine products, tobacco products or vapor products without a license is subject to a civil penalty of at least $500 but not more than $1,000 for a first or second violation within a thirty-six-month period. The department shall issue to A business that receives a second violation within a thirty-six-month period a cease and desist order prohibiting the business from selling alternative nicotine products, tobacco products and vapor products and notifying the business owner that the business is ineligible to receive a tobacco retail sales license for a period of three years after the date of the second violation. END_STATUTE

4-402. Selling, furnishing, giving or providing alternative nicotine, tobacco or vapor products; prohibitions; fraudulent identification; penalties; violations; classification

A. IT IS UNLAWFUL FOR A RETAIL TOBACCO VENDOR OR A RETAIL TOBACCO VENDOR'S REPRESENTATIVE, AGENT OR EMPLOYEE TO SELL, FURNISH, GIVE OR PROVIDE An alternative nicotine product, TOBACCO product OR VAPOR PRODUCT TO A PERSON WHO IS UNDER TWENTY-ONE years of age.

B. BEFORE DISTRIBUTING ANY ALTERNATIVE NICOTINE product, TOBACCO product OR VAPOR PRODUCT, THE RETAIL TOBACCO VENDOR OR THE RETAIL TOBACCO VENDOR'S REPRESENTATIVE, AGENT OR EMPLOYEE SHALL VERIFY THAT THE PURCHASER IS AT LEAST twenty-one years of age. EACH RETAIL TOBACCO VENDOR OR RETAIL TOBACCO VENDOR'S REPRESENTATIVE, AGENT OR EMPLOYEE SHALL EXAMINE THE PURCHASER'S GOVERNMENT-ISSUED PHOTO IDENTIFICATION. THIS VERIFICATION IS NOT REQUIRED FOR A PERSON WHO IS THIRTY YEARS OF AGE OR OLDER. THE FACT THAT A PURCHASER APPEARS TO BE THIRTY YEARS OF AGE OR OLDER DOES NOT CONSTITUTE A DEFENSE TO A VIOLATION OF THIS SECTION.

C. IF A RETAIL TOBACCO VENDOR OR THE RETAIL TOBACCO VENDOR'S REPRESENTATIVE, AGENT OR EMPLOYEE FAILS A COMPLIANCE CHECK OR A FOLLOW-UP COMPLIANCE CHECK pursuant to subsection E of this section OR IS CONVICTED OF VIOLATING SECTION 13-3622 BASED ON A CITATION ISSUED BY THE ATTORNEY GENERAL, the retail tobacco vendor is SUBJECT TO THE FOLLOWING PENALTIES:

1. FOR A FIRST VIOLATION, THE RETAIL TOBACCO VENDOR AND THE RETAIL TOBACCO VENDOR'S REPRESENTATIVE, AGENT OR EMPLOYEE CITED IN THE VIOLATION MUST ATTEND AN EDUCATION CLASS IF AVAILABLE. IF an EDUCATION CLASS IS not AVAILABLE, THE RETAIL TOBACCO VENDOR IS SUBJECT TO A civil penalty of NOT more than $500.

2. FOR A SECOND VIOLATION WITHIN A THIRTY-SIX-MONTH PERIOD, A CIVIL PENALTY OF AT LEAST $750 BUT NOT MORE THAN $1,000. the director may prohibit THE RETAIL TOBACCO VENDOR FROM DISTRIBUTING alternative nicotine products, TOBACCO products OR VAPOR PRODUCTS FOR up to FOURTEEN DAYS.

3. FOR A THIRD VIOLATION WITHIN A THIRTY-SIX-MONTH PERIOD, A CIVIL PENALTY OF AT LEAST $1,000 BUT NOT MORE THAN $1,500. The director shall prohibit THE RETAIL TOBACCO VENDOR from DISTRIBUTING ALTERNATIVE NICOTINE products, TOBACCO products OR VAPOR PRODUCTS for a minimum of fifteen but not more than THIRTY DAYS, at the discretion of the director.

4. FOR A FOURTH OR ANY SUBSEQUENT VIOLATION WITHIN A THIRTY-SIX-MONTH PERIOD, A CIVIL PENALTY OF AT LEAST $1,500 BUT NOT MORE THAN $3,000. THE director shall prohibit the RETAIL TOBACCO VENDOR FROM DISTRIBUTING ALTERNATIVE NICOTINE products, TOBACCO products OR VAPOR PRODUCTS FOR A PERIOD OF AT LEAST one YEAR.

d. IN ADDITION TO THE PENALTIES IMPOSED FOR A VIOLATION OF THIS SECTION or SECTION 13-3622 OR 36-798.02, A PERSON FOUND TO HAVE VIOLATED THIS SECTION or section 13-3622 OR 36-798.02 WHILE ACTING AS A NONMANAGEMENT AGENT OR EMPLOYEE OF A RETAIL TOBACCO VENDOR IS SUBJECT TO NONCRIMINAL, NONMONETARY PENALTIES, INCLUDING EDUCATION CLASSEs OR COMMUNITY SERVICE.

e. A RETAIL TOBACCO VENDOR IS SUBJECT TO AT LEAST one UNANNOUNCED COMPLIANCE CHECK ANNUALLY. THE DEPARTMENT OR ITS AUTHORIZED DESIGNEE SHALL CONDUCT COMPLIANCE CHECKS BY ENGAGING PERSONs WHO ARE AT LEAST EIGHTEEN but UNDER twenty-one years of age. UNANNOUNCED FOLLOW-UP COMPLIANCE CHECKS OF ALL NONCOMPLIANT RETAIL TOBACCO VENDORS ARE REQUIRED WITHIN THREE MONTHS AFTER ANY VIOLATION OF THIS ARTICLE. THE DEPARTMENT shall publish THE RESULTS OF ALL COMPLIANCE CHECKS AT LEAST ANNUALLY AND shall make the results AVAILABLE TO THE PUBLIC ON REQUEST.

F. A PERSON WHO IS UNDER twenty-one years of age AND WHO MISREPRESENTS THE PERSON'S AGE TO ANY OTHER PERSON BY MEANS OF A WRITTEN INSTRUMENT OF IDENTIFICATION WITH THE INTENT TO INDUCE THE OTHER PERSON TO SELL, GIVE OR FURNISH AN ALTERNATIVE NICOTINE product, TOBACCO product OR VAPOR PRODUCT TO THE UNDERAGE PERSON IS GUILTY OF A PETTY OFFENSE.

G. A PERSON WHO IS UNDER twenty-one years of age AND WHO SOLICITS ANOTHER PERSON TO PURCHASE, SELL, GIVE OR FURNISH AN ALTERNATIVE NICOTINE product, TOBACCO product OR VAPOR PRODUCT TO THE UNDERAGE PERSON IS GUILTY OF A PETTY OFFENSE.

H. A PERSON WHO IS UNDER twenty-one years of age AND WHO USES A FRAUDULENT OR FALSE WRITTEN INSTRUMENT OF IDENTIFICATION OR VALID LICENSE OR IDENTIFICATION OF ANOTHER PERSON TO PURCHASE OR ATTEMPT TO PURCHASE AN ALTERNATIVE NICOTINE product, TOBACCO product OR VAPOR PRODUCT IS GUILTY OF A PETTY OFFENSE.

I. A PERSON WHO KNOWINGLY INFLUENCES THE PURCHASE of an alternative nicotine product, tobacco product OR VAPOR PRODUCT TO A PERSON UNDER twenty-one years of age BY MISREPRESENTING THE person's AGE OR WHO ORDERS, REQUESTS, RECEIVES OR PROCURES AN ALTERNATIVE NICOTINE product, TOBACCO product OR VAPOR PRODUCT FROM ANY LICENSEE, LICENSEE'S EMPLOYEE OR OTHER PERSON WITH THE INTENT to SELL OR GIVe IT TO A PERSON UNDER twenty-one years of age IS GUILTY OF A PETTY OFFENSE.

START_STATUTE4-403. Rulemaking; delegation of authority to counties; collaboration; reporting requirements

A. The department shall adopt rules pursuant to title 41, chapter 6 to carry out this article.

B. The department may delegate the enforcement and compliance inspections required under this article to any county that accepts this delegation.

C. The department may collaborate with and use the findings of other entities, including the attorney general's office and law enforcement agencies, to carry out the obligations of this article and to ensure that the complaints received by other entities are forwarded to the department for timely investigation and action.

D. any law enforcement agency or other local entity that conducts compliance checks to assess a retail tobacco vendor's compliance with the minimum legal sales age for ALTERNATIVE NICOTINE products, tobacco products and vapor products shall report the compliance check results to the department. Any violation found in the course of a compliance check is a violation of the retail tobacco vendor's tobacco retail sales license. END_STATUTE

START_STATUTE4-404. Tobacco retail sales licensing fund

The tobacco retail sales licensing fund is established consisting of licensing fees collected pursuant to this article. the department shall administer the fund. The department shall deposit, pursuant to sections 35-146 and 35-147, ninety percent of all licensing fees collected under this article in the tobacco retail sales licensing fund and the remaining ten percent in the state general fund. Monies in the fund are subject to legislative appropriation and shall be used to administer and enforce this article. Monies in the fund may be used only for the purposes prescribed by this section.END_STATUTE

Sec. 6. Section 13-3622, Arizona Revised Statutes, is amended to read:

START_STATUTE13-3622. Alternative nicotine, tobacco and vapor products; persons under twenty-one years of age; classification; exceptions; definitions

A. A person who knowingly sells, gives or furnishes an alternative nicotine product, a tobacco product, a vapor product or any instrument or paraphernalia that is solely designed for the smoking or ingestion of ingesting tobacco or shisha, including a hookah or waterpipe, to a minor person who is under twenty-one years of age is guilty of a petty offense.

B. A minor person who is under twenty-one years of age who buys, or has in his the person's possession or knowingly accepts or receives from any person, an alternative nicotine product, a tobacco product, a vapor product or any instrument or paraphernalia that is solely designed for the smoking or ingestion of ingesting tobacco or shisha, including a hookah or waterpipe, is guilty of a petty offense, and if the offense involves any instrument or paraphernalia that is solely designed for the smoking or ingestion of ingesting tobacco or shisha, shall pay a fine of not less than one hundred dollars at least $100 or perform not less than at least thirty hours of community restitution.

C. A minor person who is under twenty-one years of age who misrepresents the minor's person's age to any other person by means of a written instrument of identification with the intent to induce the other person to sell, give or furnish an alternative nicotine product, a tobacco product, a vapor product or any instrument or paraphernalia that is solely designed for the smoking or ingestion of ingesting tobacco or shisha, including a hookah or waterpipe, in violation of subsection A or B of this section is guilty of a petty offense and, notwithstanding section 13-802, shall pay a fine of not more than five hundred dollars $500.

D. This section does not apply to any of the following:

1. Cigars, cigarettes or cigarette papers, smoking or chewing Tobacco products or any instrument or paraphernalia that is solely designed for the smoking or ingestion of ingesting tobacco or shisha, including a hookah or waterpipe, if it is used or intended to be used in connection with a bona fide practice of a religious belief and as an integral part of a religious or ceremonial exercise.

2. Any instrument or paraphernalia that is solely designed for the smoking or ingestion of ingesting tobacco or shisha, including a hookah or waterpipe, that is given to or possessed by a minor person who is under twenty-one years of age if the instrument or paraphernalia was a gift or souvenir and is not used or intended to be used by the minor person to smoke or ingest tobacco or shisha.

E. For the purposes of this section:

1. "alternative nicotine product":

(a) means any noncombustible product that contains nicotine and that is intended for human consumption, whether chewed, absorbed, dissolved, ingested or consumed by any other means.

(b) does not include any e-LIQUID, vapor product, tobacco product or shisha or any product regulated as a DRUG or device by the united states food and drug administration under subchapter v of the federal food, drug, and cosmetic act.

1. 2. "Shisha" includes any mixture of tobacco leaf and honey, molasses or dried fruit or any other sweetener.

2. 3. "Tobacco product" means any of the following:

(a) Cigars.

(b) Cigarettes.

(d) Smoking tobacco of any kind.

(e) Chewing tobacco of any kind.

3. 4. "Vapor product":

(a) Means a noncombustible tobacco-derived product containing nicotine that employs a mechanical heating element, battery or circuit, regardless of shape or size, that can be used to heat a liquid nicotine solution contained in cartridges. Vapor product

(b) Does not include any product that is regulated by the United States food and drug administration under chapter V of the federal food, drug, and cosmetic act. END_STATUTE

Sec. 7. Subject to the requirements of article IV, part 1, section 1, Constitution of Arizona, section 36-601.01, Arizona Revised Statutes, is amended to read:

START_STATUTE36-601.01. Smoke-free Arizona act

A. Definitions. The following words and phrases, whenever used in this section, shall be construed as defined in this section:

1. "Employee" means any person who performs any service on a full-time, part-time or contracted basis whether or not the person is denominated an employee, or independent contractor or otherwise and whether or not the person is compensated or is a volunteer.

2. "Employer" means a person, a business, a partnership, an association, the this state of Arizona and its political subdivisions, corporations a corporation, including a municipal corporations corporation, a trust, or non-profit a nonprofit entity that employs the services of one or more individual persons.

3. "Enclosed area":

(a) Means all space between a floor and ceiling that is enclosed on all sides by permanent or temporary walls or windows, (exclusive of doorways) , which that extend from the floor to the ceiling. Enclosed area

(b) Includes a reasonable distance from any entrances, windows and ventilation systems so that persons entering or leaving the building or facility shall not be are not subjected to breathing tobacco smoke and so that tobacco smoke does not enter the building or facility through entrances, windows, ventilation systems or any other means.

4. "Health care facility" means any enclosed area utilized used by any health care institution licensed according pursuant to title 36, chapter 4, chapter 6, article 7, of this chapter or chapter 4 or 17 of this title, or any health care professional licensed according pursuant to title 32, chapters chapter 7, 8, 11, 13, 14, 15, 15.1, 16, 17, 18, 19, 19.1, 21, 25, 28, 29, 33, 34, 35, 39, 41, or 42.

5. "Person" means an individual, partnership, corporation, limited liability company, entity, association, governmental subdivision or unit of a governmental subdivision, or a public or private organization of any character.

6. "Physically separated" means all space between a floor and ceiling which that is enclosed on all sides by solid walls or windows, (exclusive of a door or passageway) , and that is independently ventilated from smoke-free areas, so that air within permitted allowed smoking areas does not drift or get vented into smoke-free areas.

7. "Places of employment":

(a) Means an enclosed area under the control of a public or private employer that employees normally frequent during the course of employment, including office buildings, work areas, auditoriums, employee lounges, restrooms, conference rooms, meeting rooms, classrooms, cafeterias, hallways, stairs, elevators, health care facilities, private offices and vehicles owned and operated by the employer during working hours when the vehicle is occupied by more than one person.

(b) does not include A private residence is not a "place of employment" unless it is used as a child care, adult day care, or health care facility.

9. 8. "Public place":

(a) Means any enclosed area to which the public is invited or in which the public is permitted allowed, including airports, banks, bars, common areas of apartment buildings, condominiums or other multifamily housing facilities, educational facilities, entertainment facilities or venues, health care facilities, hotel and motel common areas, laundromats, public transportation facilities, reception areas, restaurants, retail food production and marketing establishments, retail service establishments, retail stores, shopping malls, sports facilities, theaters, and waiting rooms.

(b) does not include A private residence is not a "public place" unless it is used as a child care, adult day care, or health care facility.

10. 9. "Retail tobacco store" means a retail store that derives the majority of its sales from tobacco products and accessories.

11. 10. "Smoking" means inhaling, exhaling, burning, or carrying or possessing any lighted tobacco product, including cigars, cigarettes, pipe tobacco and any other lighted tobacco product.

12. 11. "Sports facilities" means enclosed areas of sports pavilions, stadiums, gymnasiums, health spas, boxing arenas, swimming pools, roller and ice rinks, billiard halls, bowling alleys, and other similar places where members of the general public assemble to engage in physical exercise, participate in athletic competition, or witness sporting events.

12. "tobacco product" has the same meaning prescribed in section 13-3622.

13. "Vapor product" has the same meaning prescribed in section 13-3622.

8. 14. "Veteran and fraternal clubs club" means a club as defined in A.R.S. (7)(a)(b) or (c) section 4-101, paragraph 9, subdivision (a), (b) or (c).

B. Smoking is and using vapor products are prohibited in all public places and places of employment within the this state of Arizona, except the following:

1. Private residences, except when used as a licensed child care, adult day care, or health care facility.

2. Hotel and motel rooms that are rented to guests and are designated as smoking rooms; provided, however, that if not more than fifty percent of rooms rented to guests in a hotel or motel are so designated.

3. Retail tobacco stores that are physically separated so that smoke from retail tobacco stores does not infiltrate into areas where smoking is and using vapor products are prohibited under the provisions of this section.

4. Veterans Veteran and fraternal clubs when they are not open to the general public.

5. Smoking when associated with a religious ceremony practiced pursuant to the American Indian religious freedom act of 1978.

6. Outdoor patios so long as tobacco smoke does not enter areas where smoking is and using vapor products are prohibited through entrances, windows, ventilation systems, or other means.

7. A theatrical performance upon on a stage or in the course of a film or television production if the smoking or using vapor products is part of the performance or production.

C. The prohibition on smoking and using vapor products in places of employment shall be communicated to all existing employees by the effective date of this section and to all prospective employees upon on their application for employment.

D. Notwithstanding any other provision of this section, an owner, operator, manager, or other person or entity in control of an establishment, facility, or outdoor area may declare that entire establishment, facility, or outdoor area as a nonsmoking place.

E. Posting of signs and ashtray removal.

1. "No smoking" signs or the international "no smoking" symbol, (consisting of a pictorial representation of a burning cigarette enclosed in a red circle with a red bar across it) , shall be clearly and conspicuously posted by the owner, operator, manager, or other person in control of that place identifying where smoking is and using vapor products are prohibited by this section and where complaints regarding violations may be registered.

2. Every public place and place of employment where smoking is and using vapor products are prohibited by this section shall have posted at every entrance a conspicuous sign clearly stating that smoking is and using vapor products are prohibited.

3. All ashtrays shall be removed from any area where smoking is and using vapor products are prohibited by this section by the owner, operator, manager, or other person having control of the area.

F. No an employer may not discharge or retaliate against an employee because that employee exercises any rights afforded by this section or reports or attempts to prosecute a violation of this section.

G. The law this section shall be implemented and enforced by the department of health services as follows:

1. The department shall design and implement a program, including the establishment of establishing an internet website, to educate the public regarding the provisions of this law section.

2. The department shall inform persons who own, manage, operate or otherwise control a public place or place of employment of the requirements of this law section and how to comply with its provisions including making information available and providing a toll-free telephone number and e-mail email address to be used exclusively for this purpose.

3. Any member of the public may report a violation of this law section to the department. The department shall accept oral and written reports of violation and establish an e-mail address(es) email address or addresses and toll-free telephone number(s) number or numbers to be used exclusively for the purpose of reporting violations. A person shall not be required to disclose the person's identity when reporting a violation.

4. If the department has reason to believe a violation of this law section exists, the department may enter upon on and into any public place or place of employment for purposes of determining to determine compliance with this law section. However, the department may inspect public places where food or alcohol is served at any time to determine compliance with this law section.

5. If the department determines that a violation of this law section exists at a public place or place of employment, the department shall issue a notice of violation to the person who owns, manages, operates or otherwise controls the public place or place of employment. The notice shall include the nature of each violation, date and time each violation occurred, and the name of the department contact person.

6. The department shall impose a civil penalty on the person in an amount of not less than at least $100, but not more than $500 for each violation. In considering whether to impose a fine and the amount of the fine, the department may consider whether the person has been cited previously and what efforts the person has taken to prevent or cure the violation, including reporting the violation or taking action under subsection J I of this section. Each day that a violation occurs constitutes a separate violation. The director may issue a notice that includes the proposed amount of the civil penalty assessment. A person may appeal the assessment of a civil penalty by requesting a hearing. If a person requests a hearing to appeal an assessment, the director shall not take further action to enforce and collect the assessment until the hearing process is complete. The director shall impose a civil penalty only for those days on which the violation has been documented by the department.

7. If a civil penalty imposed by this section is not paid, the attorney general or a county attorney shall file an action to collect the civil penalty in a justice court or the superior court in the county in which the violation occurred.

8. The department may apply for injunctive relief to enforce these provisions in the superior court in the county in which the violation occurred. The court may impose appropriate injunctive relief and impose a penalty of not less than at least $100 but not more than $500 for each violation. Each day that a violation occurs constitutes a separate violation. If the superior court finds the violations are willful wilful or evidence of a pattern of noncompliance, the court may impose a fine up to $5000 $5,000 per violation.

9. The department may contract with a third party to determine compliance with this law section.

10. The department may delegate to a state agency or political subdivision of this state any functions, powers or duties under this law section.

11. The director of the department may promulgate adopt rules for the implementation to implement and enforcement of enforce this law section. The department is exempt from the rulemaking procedures in A.R.S. § title 41, chapter 6 except the department shall publish draft rules and thereafter take public input including hold at least two public hearings prior to implementing the rules. This exemption expires May 1, 2007.

H. Beginning On June 1, 2008 and every other June 1 thereafter, each year, the director of the Arizona department of health services shall issue a report analyzing its activities to enforce this law section, including the activities of all of the state agencies or political subdivisions to whom the department has delegated responsibility under this law section.

I. An owner, manager, operator or employee of a place regulated by this law section shall inform any person who is smoking or using vapor products in violation of this law section that smoking is and using vapor products are illegal and request that the illegal smoking or use of vapor products stop immediately.

J. This law section does not create any new private right of action nor does it or extinguish any existing common law causes of action.

K. A person who smokes or uses vapor products where smoking is and using vapor products are prohibited is guilty of a petty offense with a fine of not less than fifty dollars at least $50 and not more than three hundred dollars $300.

L. Smoke-free Arizona fund

1. The smoke-free Arizona fund is established consisting of all revenues deposited in the fund pursuant to §42-3251.02 section 42-3251.02 and interest earned on those monies. The Arizona department of health services shall administer the fund. On notice from the department, the state treasurer shall invest and divest monies in the fund as provided by §35-313 section 35-313, and monies earned from investment shall be credited to the fund.

2. All money monies in the smoke-free Arizona fund shall be used to enforce the provisions of this section, provided however except that if there is money any monies remaining after the department has met its enforcement obligations, that remaining money shall be deposited in the tobacco products tax fund and used for education programs to reduce and eliminate tobacco use and for no other purpose.

3. Monies in this fund are continuously appropriated, are not subject to further approval, do not revert to the state general fund and are exempt from the provisions of §36-190 section 35-190 relating to the lapsing of appropriations.

M. This section does not prevent a political subdivision of the this state from adopting ordinances or regulations that are more restrictive than this section. nor does This section does not repeal any existing ordinance or regulation that is more restrictive than this section.

N. Tribal sovereignty — this section has no application on Indian reservations as defined in ARS 42-3301(2) section 42-3301. END_STATUTE

Sec. 8. Heading change

The article heading of title 36, chapter 6, article 14, Arizona Revised Statutes, is changed from "TOBACCO SALES" to "SALES OF ALTERNATIVE NICOTINE PRODUCTS, TOBACCO PRODUCTS AND VAPOR PRODUCTS".

Sec. 9. Section 36-798, Arizona Revised Statutes, is amended to read:

START_STATUTE36-798. Definitions

In this article, unless the context otherwise requires:

1. "Alternative nicotine product" has the same meaning prescribed in section 13-3622.

1. 2. "Bar" means that portion of any premises licensed under section 4-209, subsection B, paragraph 6, 7, 11, 12 or 14 that is primarily used for the selling, consumption consuming or serving of alcoholic beverages and that is not primarily used for the consumption of consuming food on the premises.

2. 3. "Beedies" or "bidis" means a product containing tobacco that is wrapped in temburni leaf (diospyros melanoxylon) or tendu leaf (diospyros exculpra), or any other product that is offered to, or purchased by, consumers as beedies or bidis.

3. 4. "Cigar" means a roll of tobacco or any lawful substitute for tobacco that is wrapped in tobacco.

4. 5. "Cigarette" means a roll of tobacco or any lawful substitute for tobacco that is wrapped in paper or in any substance other than tobacco.

5. "Minor" means a person who is under eighteen years of age.

6. "Retail tobacco vendor":

(a) Means a person, who possesses tobacco or tobacco products for the purpose of selling them for consumption and not for resale partnership, joint venture, society, club, trustee, true association, organization or corporation that owns, operates or manages any retail establishment physically located in this state that sells alternative nicotine products, shisha, tobacco products or vapor products, that is in the business of selling, distributing or conveying these products to the public or a user of any such product and that is not an otherwise lawful business located outside of this state.

(b) does not include either of the following:

(i) the nonmanagement employees of any tobacco retail establishment.

(ii) a wholesaler of any alternative nicotine product, shisha, tobacco product or vapor product with respect to selling, distributing or conveying these products in business-to-business transactions.

7. "Shisha" has the same meaning prescribed in section 13-3622.

7. 8. "Smokeless tobacco" includes shredded tobacco, snuff, cavendish and plug, twist and other tobacco products that are intended for oral use but not for smoking.

8. 9. "Smoking tobacco" includes any tobacco or tobacco product, other than cigarettes and cigars, that is intended to be smoked.

9. 10. "Tobacco products" includes cigarettes, cigarette papers, cigars, smokeless tobacco and smoking tobacco.

11. "Vapor product" has the same meaning prescribed in section 13-3622.

10. 12. "Vending machine" means any mechanical, electrical or electronic device that, on insertion of money, tokens or any other form of payment, automatically dispenses tobacco products. END_STATUTE

Sec. 10. Section 36-798.01, Arizona Revised Statutes, is amended to read:

START_STATUTE36-798.01. Selling or giving beedies or bidis; violation; classification

A. It is unlawful for a retail tobacco vendor to sell, furnish, give or provide beedies or bidis to a minor a person who is under twenty-one years of age in this state.

B. Any person who violates this section is guilty of a class 3 misdemeanor. END_STATUTE

Sec. 11. Section 36-798.02, Arizona Revised Statutes, is amended to read:

START_STATUTE36-798.02. Vending machine sales of tobacco, alternative nicotine and vapor products; exceptions; signage; violation; classification

A. except as provided in subsection b of this section, a person shall not sell or distribute tobacco products, through a vending machine unless the vending machine is located in alternative nicotine products or vapor products either:

1. at a retail establishment in this state by any means other than vendor-assisted sales in which the customer has no direct access to the product except through the assistance of the seller.

2. from self-service displays or vending machines.

b. subsection a of this section does not apply to:

1. retail establishments if persons who are under twenty-one years of age are not allowed in the ESTABLISHMENT and the prohibition is posted clearly on all entrances.

1. 2. A bar bars.

2. 3. An Employee lounge area areas that is are not open to the public and if the business in which the lounge area is located does not employ minors persons who are under twenty-one years of age.

B. c. A sign measuring at least eighty square inches shall be obviously affixed to the front of each vending machine. The sign shall state in block letters, that it is illegal for a minor person who is under twenty-one years of age to purchase cigarettes, or tobacco products, alternative nicotine products or vapor products and, upon on conviction, a fine of up to three hundred dollars $300 may be imposed.

C. d. Notwithstanding section 36-798.07, this article does not invalidate an ordinance of or prohibit the adoption of an ordinance by a county, city or town to further restrict the location of vending machines or specify different wording for the vending machines machine signs as required by subsection B c of this section.

D. e. A person who violates this section is guilty of a petty offense. END_STATUTE

Sec. 12. Section 36-798.03, Arizona Revised Statutes, is amended to read:

START_STATUTE36-798.03. Tobacco, alternative nicotine and vapor products; prohibition at schools and school-related areas; exception; violation; classification

A. Using and possessing tobacco products, alternative nicotine products and vapor products are prohibited on school grounds, inside school buildings, in school parking lots or playing fields, in school buses or vehicles or at off-campus school sponsored events. For the purposes of this subsection, "school" means any public, charter or private school where children attend classes in kindergarten programs or any of grades one through twelve.

B. Subsection A of this section does not apply to an adult a person who is twenty-one years of age or older and who employs tobacco products, alternative nicotine products or vapor products, or any combination of these, as a necessary component of a school sanctioned school-sanctioned tobacco products, alternative nicotine products or vapor products prevention or cessation program established pursuant to section 15-712.

c. a school district governing board, a charter school governing body or a private school may adopt policies prohibiting, restricting and regulating tobacco products, alternative nicotine products and vapor products at school-sanctioned activities as determined by the governing board, governing body or private school.

C. d. A person who violates this section is guilty of a petty offense. END_STATUTE

Sec. 13. Section 36-798.05, Arizona Revised Statutes, is amended to read:

START_STATUTE36-798.05. Unsolicited delivery of tobacco products, alternative nicotine products and vapor products; violation; classification; civil penalties; definitions

A. It is unlawful for a person to deliver or cause to be delivered to any residence in this state any tobacco products, alternative nicotine products or vapor products unsolicited by at least one adult person who is twenty-one years of age or older and who resides at that address.

B. A person who knowingly violates subsection A of this section is guilty of a class 2 misdemeanor.

C. A person who violates subsection A of this section is subject to a civil penalty in an amount of not to exceed five thousand dollars $5,000 for each violation. Each delivery of a tobacco product, shall constitute alternative nicotine product or vapor product constitutes a separate violation.

D. The attorney general may bring an action to recover civil penalties and, as determined by the court, taxable costs, such other fees and expenses reasonably incurred and reasonable attorney fees, in the name of the state for a violation of this section. All civil penalties recovered shall be deposited, pursuant to sections 35-146 and 35-147, in the state general fund and all other monies recovered shall be deposited, pursuant to sections 35-146 and 35-147, in the antitrust enforcement revolving fund established by section 41-191.02.

E. In For the purposes of this section, unless the context otherwise requires:

1. "Knowingly" has the same meaning prescribed in section 13-105.

2. "Person" means an individual, partnership, firm, association, corporation, limited liability company, limited liability partnership, joint venture, or other entity, other than an individual or entity engaged in the delivery of items for hire. END_STATUTE

Sec. 14. Title 36, chapter 6, article 14, Arizona Revised Statutes, is amended by adding section 36-798.07, to read:

START_STATUTE36-798.07. Single state standard; preemption; exceptions

A. Except as otherwise provided in this section, THE REGULATION OF THE SALE AND MARKETING OF ALTERNATIVE NICOTINE PRODUCTS, tobacco products and vapor products IS A MATTER OF STATEWIDE CONCERN AND IS NOT SUBJECT TO FURTHER REGULATION BY A CITY, TOWN OR COUNTY IN THIS STATE. SUBJECT TO THE AUTHORITY PROVIDED TO CITIES, TOWNS AND COUNTIES PURSUANT TO SUBSECTIONS B, C, D, E AND F OF THIS SECTION, THIS ARTICLE PREEMPTS ANY RULE, REGULATION, CODE OR ORDINANCE THAT IS ADOPTED OR MODIFIED BY ANY CITY, TOWN OR COUNTY IN THIS STATE AFTER JANUARY 1, 2022 regarding THE SALE OR MARKETING OF alternative nicotine products, tobacco products or vapor products and THAT IS IN CONFLICT WITH OR MORE RESTRICTIVE THAN A STATE LAW OR RULE. A CITY, TOWN OR COUNTY MAY NOT LIMIT ANY RIGHT GRANTED BY THIS ARTICLE OR RULES ADOPTED PURSUANT TO THIS ARTICLE OR PURSUANT TO TITLE 4, CHAPTER 4, EXCEPT AS OTHERWISE PROVIDED IN THIS SECTION.

B. A CITY, TOWN OR COUNTY MAY ADOPT AND ENFORCE LAWFUL ZONING REQUIREMENTS THAT LIMIT THE LOCATION OF RETAIL TOBACCO VENDORS. zoning requirements adopted pursuant to THIS SUBSECTION may NOT PROHIBIT THE CONTINUATION OF A RETAIL TOBACCO VENDOR IF, ON THE effective DATE OF THIS section OR ON THE DATE A DISTANCE PROVISION IS ADOPTED BY THE CITY, TOWN OR COUNTY, THE BUSINESS WAS ALREADY OPERATING AS A RETAIL TOBACCO VENDOR AND HAS CONTINUED TO OPERATE SINCE THAT DATE.

C. A CITY, TOWN OR COUNTY MAY ADOPT ANY RULE, REGULATION, CODE OR ORDINANCE THAT REGULATES THE SALE OF ALTERNATIVE NICOTINE PRODUCTS, tobacco products or vapor products WITHIN three hundred FEET OF A PUBLIC, PRIVATE OR CHARTER SCHOOL PROVIDING PRIMARY OR SECONDARY EDUCATION OR FROM A FENCED PLAYGROUND ADJACENT TO A SCHOOL.

D. IN ADDITION TO THE PROVISIONS OF SUBSECTION C of this section, A CITY, TOWN OR COUNTY MAY ADOPT ANY RULE, REGULATION, CODE OR ORDINANCE THAT REGULATES THE SALE OF ALTERNATIVE NICOTINE PRODUCTS, TOBACCO PRODUCTS and VAPOR PRODUCTS AT A RETAIL TOBACCO VENDOR WITHIN one thousand FEET OF A PUBLIC, PRIVATE OR CHARTER SCHOOL PROVIDING PRIMARY OR SECONDARY EDUCATION OR FROM A FENCED PLAYGROUND ADJACENT TO A SCHOOL. RETAIL TOBACCO VENDORS THAT ARE LOCATED BETWEEN THREE HUNDRED ONE FEET AND ONE THOUSAND FEET FROM A PUBLIC, PRIVATE OR CHARTER SCHOOL PROVIDING PRIMARY OR SECONDARY EDUCATION OR FROM A FENCED PLAYGROUND ADJACENT TO A SCHOOL ARE EXEMPT FROM THE CITY, TOWN OR COUNTY RULES, REGULATIONS, CODES OR ORDINANCES REGULATING THE SALE OF ALTERNATIVE NICOTINE PRODUCTS, TOBACCO PRODUCTS OR VAPOR PRODUCTS IF, ON THE DATE THE RULE, REGULATION, CODE OR ORDINANCE is ADOPTED BY THE CITY, TOWN OR COUNTY, OR THE DATE WHEN THE PUBLIC, PRIVATE OR CHARTER SCHOOL PROVIDING PRIMARY OR SECONDARY EDUCATION OR A FENCED PLAYGROUND ADJACENT TO A SCHOOL iS ESTABLISHED, THE BUSINESS WAS ALREADY OPERATING AS A RETAIL TOBACCO VENDOR. IF A RETAIL TOBACCO VENDOR CONTINUES operating AFTER THE DATE THE RULE, REGULATION, CODE OR ORDINANCE WAS ADOPTED AND IS CONVICTED OF A FOURTH VIOLATION WITHIN thirty-six MONTHS PURSUANT TO SECTION 4-402, SUBSECTION c, PARAGRAPH 4, THE CITY, TOWN OR COUNTY MAY PROSPECTIVELY ENFORCE ANY RULE, REGULATION, CODE OR ORDINANCE REGULATING THE SALE OF ALTERNATIVE NICOTINE PRODUCTS, TOBACCO PRODUCTS OR VAPOR PRODUCTS as to that retail tobacco vendor. IF THE RETAIL TOBACCO VENDOR SELLS THE BUSINESS TO ANOTHER RETAIL TOBACCO VENDOR, THE VIOLATIONS THAT OCCURRED AT THE LOCATION BY THE PREVIOUS OWNER WITHIN THE thirty-six MONTHS IMMEDIATELY before THE SALE ARE ATTRIBUTABLE TO THE NEW OWNERSHIP.

E. A CITY, TOWN OR COUNTY MAY ADOPT ANY RULE, REGULATION, CODE OR ORDINANCE THAT REGULATES THE outdoor ADVERTISING of ALTERNATIVE NICOTINE PRODUCTS, tobacco products and vapor products, EXCEPT for ADVERTISING ON THE PREMISES OF A RETAIL TOBACCO VENDOR.

F. THIS SECTION DOES NOT PROHIBIT A CITY, TOWN, COUNTY, SCHOOL DISTRICT, CHARTER SCHOOL, COMMUNITY COLLEGE DISTRICT OR STADIUM DISTRICT OR THE ARIZONA BOARD OF REGENTS FROM REGULATING THE SALE, MARKETING OR USE OF ALTERNATIVE NICOTINE PRODUCTS, tobacco products and vapor products ON PROPERTY THAT IS OWNED, LEASED OR OPERATED IN THIS STATE BY THE CITY, TOWN, COUNTY, SCHOOL DISTRICT, CHARTER SCHOOL, COMMUNITY COLLEGE DISTRICT, STADIUM DISTRICT OR ARIZONA BOARD OF REGENTS. END_STATUTE

Sec. 15. Effective date

This act is effective from and after December 31, 2022.

Sec. 16. Severability

If a provision of this act or its application to any person or circumstance is held invalid, this invalidity does not affect other provisions of applications of the act that can be given effect without the invalid provision or application, and to this end the provisions of this act are severable.

Sec. 17. Requirements for enactment; three-fourths vote

Pursuant to article IV, part 1, section 1, Constitution of Arizona, section 36-601.01, Arizona Revised Statutes, as amended by this act, is effective only on the affirmative vote of at least three-fourths of the members of each house of the legislature.