FINAL BILL REPORT

2SHB 569

                                  C 452 L 87

BYHouse Committee on Ways & Means/Revenue (originally sponsored by Representatives Rayburn, Baugher, Hankins, Jesernig, Brooks, Day, Sayan, Moyer, Grant, Dellwo, Silver, K. Wilson, Doty, Lewis, P. King, Schmidt, Holm, Betrozoff, May, C. Smith and Haugen)

Establishing the Washington wine commission.

House Committe on Agriculture & Rural Development

Rereferred House Committee on Ways & Means

Senate Committee on Agriculture and Committee on Ways & Means

SYNOPSIS AS ENACTED

BACKGROUND:

Agricultural commodity commissions may be created directly by law or by referenda conducted under the 1955 or 1961 Agricultural Enabling Acts.  Wine-grape growing and wine production is an expanding industry in the state.  Currently a twenty and one-fourth cent per liter tax is levied by the state on wine sold to wholesalers and to the state Liquor Control Board.

SUMMARY:

The Washington Wine Commission is created.  The commission consists of eleven voting members.  Five members must be growers of vinifera grapes, five must be producers of wine from vinifera wine grapes and one member must be a wine wholesaler.  One commission member is a non-voting member who must be a wine producer in this state whose principal wine or wines are produced from fruit other than vinifera grapes.

Commission members are appointed by the director of the Department of Agriculture.  The director will seek to secure representation on the commission that reflects the composition of the industry throughout the state.

One of the commission positions will be designated as position one and be filled by a person who produces at least one million gallons of wine a year.  When the commission members vote on commission business after July 1, 1989, the vote must be weighted.  The vote of the person holding position one will be equal to one half of the total voting strength of the commission or to a percentage of the total vote equal to the percentage of all of the wine produced in the state that is produced by the person in position one, to the nearest 10 percent, whichever is less.  The rest of the votes must be divided equally among the remaining members.  If the person in position one produces less than 25 percent of Washington's wine, the vote of all members will be equal.

To provide temporary funding for the commission, in addition to the twenty and one-fourth cent per liter tax on wine, a one-fourth cent per liter tax is levied until July 1, 1993.  Revenues from the additional tax are to be disbursed each quarter to the Washington Wine Commission.  However, on July 1, 1987, an initial sum of $110,000 will be disbursed to the commission and this amount will be reduced from the quarterly distribution in four equal amounts.

To provide permanent funding for the commission, an assessment will be levied on wine producers and grape growers beginning July 1, 1989.  The assessment on wine producers will be two cents per gallon of packaged Washington wine sold in the state.  The assessment on wine grape growers will be at a rate that will raise an amount equal the revenues from the wine producer assessment.  During the 1988 legislative session, the legislature will determine the basis upon which growers will be assessed and the method of collecting the assessment.  If on July 1, 1989, there is not in effect an assessment on vinifera grape growers equivalent to the assessment on wine producers, the commission positions filled by the grape growers will cease to exist.  In such an event, the commission will be composed of six voting members and one non-voting member.  After July 1, 1993, the commission may change its assessments, subject to the approval of wine producers and grape growers.  Prior to July 1, 1996, a referendum of wine producers and grape growers must be conducted to determine whether the commission is to be continued as representing both wine producers and growers. If a majority of only one of those two groups favors the continuation, assessments will be levied only on the group favoring continuation.

The commission will create and conduct a comprehensive research, promotional and educational campaign.  It will ascertain the needs of producers, market conditions and other factors.  Among the major objectives of the commission are efforts to: establish Washington wine as a major factor in markets everywhere; promote state wineries as tourist attractions; and advance the knowledge and practice of producing and processing wine grapes in this state.  Other duties and authorities of the commission are assigned and the liability of individuals on the commission, as well as the employees and agents of the commission, is limited.

The commission may purchase or receive donations of wine from wineries and may use the wine for promotional purposes.  No license, permit or bond is required of the commission under the state's liquor control laws for its promotional activities.  Wine sold or donated to the commission which is used in the state is subject to the state wine tax.

VOTES ON FINAL PASSAGE:

      House 94   3

      Senate    43     5(Senate amended)

      House       (House refused to concur)

Free Conference Committee

      Senate    39     5

      House 97   0

EFFECTIVE:July 1, 1987

            July 1, 1989 (Section 10)