WSR 08-21-121

PROPOSED RULES

LIQUOR CONTROL BOARD


[ Filed October 17, 2008, 1:31 p.m. ]

Original Notice.

Preproposal statement of inquiry was filed as WSR 08-15-070.

Title of Rule and Other Identifying Information: WAC 314-05-020 What is a special occasion license? and 314-05-030 Guidelines for special occasion license events.

Hearing Location(s): Liquor Control Board, Board Room, 3000 Pacific Avenue S.E., Olympia, WA, on December 3, 2008, at 10:00 a.m.

Date of Intended Adoption: December 17, 2008.

Submit Written Comments to: Karen McCall, P.O. Box 43080, Olympia, WA 98504-3080, e-mail rules@liq.wa.gov, fax (360) 704-4921, by December 10, 2008.

Assistance for Persons with Disabilities: Contact Karen McCall by December 10, 2008, (360) 664-1631.

Purpose of the Proposal and Its Anticipated Effects, Including Any Changes in Existing Rules: The purpose of this rule making is to implement legislation that passed in the 2006, 2007, and 2008 legislative sessions (SHB 3128, E2SSB 5859, and SSB 6770) to RCW 66.28.010, 66.28.040, and 66.24.375. The legislation allows a local wine industry 501 (c)(6) nonprofit, to hold a special occasion license, even if its board members are also members of a licensed domestic winery or a wine certificate of approval holder, and also allows a domestic winery, domestic brewery, or an out-of-state certificate of approval holder to furnish wine and beer without charge to a 501 (c)(6) nonprofit.

Reasons Supporting Proposal: The rules are amended to reflect statute changes during the legislative sessions.

Statutory Authority for Adoption: RCW 66.08.030.

Statute Being Implemented: RCW 66.28.010, 66.28.040, 66.24.375.

Rule is not necessitated by federal law, federal or state court decision.

Name of Proponent: Washington state liquor control board, governmental.

Name of Agency Personnel Responsible for Drafting: Karen Rogers, 3000 Pacific Avenue S.E., Olympia, WA, (360) 664-1622; Implementation: Alan Rathbun, 3000 Pacific Avenue S.E., Olympia, WA, (360) 664-1615; and Enforcement: Pat Parmer, 3000 Pacific Avenue S.E., Olympia, WA, (360) 664-1726.

No small business economic impact statement has been prepared under chapter 19.85 RCW. This proposal imposes only minor impact on businesses in the industry.

A cost-benefit analysis is not required under RCW 34.05.328.

October 15, 2008

Lorraine Lee

Chairman

OTS-1946.2


AMENDATORY SECTION(Amending WSR 04-22-078, filed 11/2/04, effective 12/3/04)

WAC 314-05-020   What is a special occasion license?   (1) Per RCW 66.24.380, a special occasion license allows a nonprofit organization to sell, at a specified date, time, and place:

(a) Spirits, beer, and wine by the individual serving for on-premises consumption; and

(b) Beer and wine in original, unopened containers for off-premises consumption.

(2) Special occasion licensees are limited to twelve days per calendar year (see RCW 66.24.380(1) for an exception for agricultural fairs).

(3) The fee for this license is $60 per day, per event. Multiple alcohol service locations at an event are an additional sixty dollars per location.

(4) ((Guidelines for nonprofit organizations:

(a))) Per RCW 66.24.375, all proceeds from the sale of alcohol at a special occasion event must go directly back into the nonprofit organization, except for reasonable operating costs for actual services performed at compensation levels comparable to like services within the state.

(((b) Per RCW 66.28.010, officers, directors, and/or stockholders of the organization may not have an interest in a manufacturer, importer, or distributor of alcohol.)) (5) A charitable nonprofit organization or a local winery industry association may qualify for a special occasion license even if its board members are also officers, directors, owners, or employees of either a licensed domestic winery or a winery certificate of approval holder. The charitable nonprofit organization must be registered under section 501 (c)(3) of the Internal Revenue Code, and the local wine industry association must be registered under section 501 (c)(6) of the Internal Revenue Code.

[Statutory Authority: RCW 66.08.030, 66.24.375, 66.24.380, 66.28.010. 04-22-078, 314-05-020, filed 11/2/04, effective 12/3/04.]


AMENDATORY SECTION(Amending WSR 07-02-076, filed 12/29/06, effective 1/29/07)

WAC 314-05-030   Guidelines for special occasion license events.   (1) The special occasion license must be posted at the event.

(2) Special occasion licensees may get alcohol for the event only from the following sources:

(a) Spirits must be purchased from a Washington state-run or contract liquor store;

(b) Beer and wine must be purchased at retail from a licensed retailer, from a beer or wine distributor, from a domestic brewery, microbrewery, or winery, acting as a distributor of its own product, or from a certificate of approval holder with a direct shipping to Washington retailer endorsement; and

(c) Per RCW 66.28.040, in state breweries and wineries and out-of-state breweries and wineries holding a certificate of approval license may donate beer and wine to special occasion licensees that are nonprofit 501 (c)(3) charitable organizations or nonprofit 501 (c)(6) organizations.

(3) Special occasion licensees may not advertise or sell alcohol below cost. If donated product is sold by the special occasion licensee, it may not be advertised or sold below the manufacturers' cost.

(4) Per RCW 66.28.010, alcohol manufacturers, importers and distributors may provide advertising, pouring, or dispensing of beer or wine at a beer or wine tasting exhibition or judging event, but may not provide money, goods, or services to special occasion licensees.

(5) Per RCW ((66.28.380)) 66.24.380, the sale, service, and consumption of alcohol must be confined to a designated location(s).

(6) If a special occasion license function is held at an establishment that has a liquor license:

(a) The special occasion function must be held in an area of the premises separate from areas open to the general public during the time the special occasion function is occurring, and the licensed premises' liquor cannot be sold or served in the same area(s) as the special occasion license function.

(b) The liquor licensee cannot charge for the liquor purchased by the special occasion licensee for service at the special occasion event, but can charge for room usage, services, etc. The liquor licensee must sign the special occasion application giving permission for the special occasion licensee to bring their alcohol onto the liquor licensed premises.

(c) The special occasion ((licensees)) license will not be issued for use at premises whose liquor license will be suspended on the date(s) of the scheduled event.

[Statutory Authority: RCW 66.08.030, 66.20.360 through [66.20].380, 66.20.390, 66.24.170, 66.24.206, 66.24.210, 66.24.240, 66.24.244, 66.24.270, 66.24.290, 66.28.170, 66.28.180, and 42.56.270. 07-02-076, 314-05-030, filed 12/29/06, effective 1/29/07. Statutory Authority: RCW 66.08.030, 66.24.375, 66.24.380, 66.28.010. 04-22-078, 314-05-030, filed 11/2/04, effective 12/3/04.]

Washington State Code Reviser's Office