Original Notice.

     Preproposal statement of inquiry was filed as WSR 04-08-105.

     Title of Rule and Other Identifying Information: New WAC in chapters 314-20 and 314-24 WAC to define an authorized representative, per SSB 6655 passed during the 2004 legislative session.

     New WAC in chapters 314-20 and 314-24 WAC, to set the fee for a certificate of approval license, per SSB 6655 passed during the 2004 legislative session.

     Revise the following existing WAC to reference the new privilege authorized by SSB 6655 passed during the 2004 legislative session: WAC 314-24-040 Wine labels -- Certificate of label approval required -- Labels to be submitted, 314-24-220 Licensing and operation of bonded wine warehouses, 314-20-020 Beer labels -- Certificate of label approval required -- Labels to be submitted, 314-20-030 Packages -- Classification, 314-20-140 Beer importers -- Certain duties, and 314-20-170 Holders of certificates of approval.

     Hearing Location(s): Liquor Control Board, Board Room, 3000 Pacific Avenue S.E., Olympia, WA, on September 1, 2004, at 10:00 a.m.

     Date of Intended Adoption: September 14, 2004.

     Submit Written Comments to: Teresa Berntsen, Rules Coordinator, P.O. Box 43080, Olympia, WA 98504-3080, e-mail rules@liq.wa.gov, fax (360)704-4921, by September 6, 2004.

     Assistance for Persons with Disabilities: Contact Teresa Berntsen by August 3, 2004, TTY (800) 855-2880 or (360) 664-1648.

     Purpose of the Proposal and Its Anticipated Effects, Including Any Changes in Existing Rules: The purpose of this rule making is to implement SSB 6655 passed during the 2004 legislative session, which will take effect January 1, 2005. Currently only out-of-state manufacturers can ship beer and wine into Washington for resale. SSB 6655 allows an authorized representative to ship in beer and wine (an authorized representative is someone who has an agreement with one or more out-of-state breweries or wineries to sell their beer or wine in Washington). Currently companies or persons who ship foreign-produced beer or wine into Washington state are not required to license and register with the Liquor Control Board. SSB 6655 requires such persons or companies to get a certificate of approval, just like suppliers of United States product.

     SSB 6655 allows the Liquor Control Board to set the certificate fee at a level that will allow the agency to cover the costs of administering this program. New rules need to be made and existing rules need to be revised.

     Statutory Authority for Adoption: RCW 66.08.030, chapter 160, Laws of 2004.

     Statute Being Implemented: Chapter 160, Laws of 2004.

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

     Name of Proponent: [Liquor Control Board], governmental.

     Name of Agency Personnel Responsible for Drafting: Teresa Berntsen, 3000 Pacific Avenue S.E., Olympia, WA, (360) 664-1648; Implementation and Enforcement: Lorraine Lee, 3000 Pacific Avenue S.E., Olympia, WA, (360) 664-1600.

     No small business economic impact statement has been prepared under chapter 19.85 RCW. No economic impact to small businesses.

     A cost-benefit analysis is not required under RCW 34.05.328. The Washington State Liquor Control Board is not a listed agency in RCW 34.05.328.

July 21, 2004

Merritt D. Long

Chairman

     (d) Is appointed by the brewery referenced in (c) of this subsection as its exclusive authorized representative for marketing and selling its products within the United States, in accordance with a written agreement between the authorized representative and the brewery. The board may waive the requirement for the written agreement of exclusivity in situations consistent with the normal marketing practices of certain products.

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     Reviser's note: The unnecessary underscoring in the above section occurred in the copy filed by the agency and appears in the Register pursuant to the requirements of RCW 34.08.040.
AMENDATORY SECTION(Amending WSR 04-06-007, filed 2/20/04, effective 3/22/04)

WAC 314-20-020   Beer labels -- Certificate of label approval required -- Labels to be submitted.   (1) Every bottle or can containing beer intended for sale in the state of Washington shall bear a label in compliance with RCW 66.28.120. No beer shall be imported or sold within the state of Washington until the licensed brewery, or certificate of approval holder, shall have obtained from the board a certificate of label approval for such beer.

     (2) A request for certificate of label approval must be submitted on a form prescribed by the board which is one copy of the federal certificate of label approval for such beer, issued by the Bureau of Alcohol, Tobacco, and Firearms, U.S. Treasury Department.

     (3) Any change in label or product which requires reissuance of federal certificate of label approval, must also be submitted to the board, in accordance with the foregoing provisions of this regulation.

     (4) No label shall be used that is misleading.

     (5) Every producer, importer, ((or)) distributor of beer, or beer certificate of approval holder shall, upon request of the board or its authorized representative, furnish without cost to the board, samples of any brand of beer upon its premises for the purpose of analysis in order to determine whether the beer conforms to commercial standards.

     (6) No label will be approved which is designed to be especially appealing to children or other persons under legal age to consume. Persons who appear to be under legal age to consume may be depicted on a label when, in the discretion of the board, the depiction is dignified and does not promote illegal consumption of liquor.

     (7) For strong beer, the label must contain the beer's alcohol content, stated in terms of percentage of alcohol by volume. Per RCW 66.04.010, strong beer means any malt beverage that contains more than eight percent of alcohol by weight, which is approximately ten percent of alcohol by volume.

[Statutory Authority: RCW 66.08.030, 66.04.010, 66.28.120. 04-06-007, § 314-20-020, filed 2/20/04, effective 3/22/04. Statutory Authority: RCW 66.08.030, 15.88.030, 19.126.020, 66.04.010, 66.08.180, 66.16.100, 66.20.010, 66.20.300, 66.20.310, 66.24.150, 66.24.170, 66.24.185, 66.24.200, 66.24.206, 66.24.210, 66.24.230, 66.24.240, 66.24.244, 66.24.250, 66.24.375, 66.24.380, 66.24.395, 66.24.400, 66.24.420, 66.24.425, 66.24.440, 66.24.450, 66.24.455, 66.24.495, 66.24.540, 66.28.010, 66.28.040, 66.28.050, 66.28.170, 66.28.180, 66.28.190, 66.28.200, 66.28.310, 66.44.190, 66.44.310, 66.98.060 and 82.08.150. 98-18-097, § 314-20-020, filed 9/2/98, effective 10/3/98. Statutory Authority: RCW 66.08.030. 92-03-109, § 314-20-020, filed 1/21/92, effective 2/21/92. Statutory Authority: RCW 66.08.030 and 66.28.160. 91-08-022, § 314-20-020, filed 3/27/91, effective 4/27/91. Statutory Authority: RCW 66.08.030. 90-18-008, § 314-20-020, filed 8/24/90, effective 1/1/92; 89-02-015 (Order 275, Resolution No. 284), § 314-20-020, filed 12/28/88. Statutory Authority: RCW 66.08.030 and 66.28.120. 88-14-131 (Order 255, Resolution No. 264), § 314-20-020, filed 7/6/88. Statutory Authority: RCW 66.28.120 and 66.28.110. 87-21-036 (Order 230, Resolution No. 239), § 314-20-020, filed 10/13/87. Statutory Authority: RCW 66.28.120. 87-08-015 (Order 215, Resolution No. 224), § 314-20-020, filed 3/24/87; Order 42, § 314-20-020, filed 11/6/75; Order 19, § 314-20-020, filed 8/10/72; Rule 38, filed 6/13/63.]

     (2) Net contents -- Packaged beer. Net contents shall be stated in a clearly legible manner on the label in fluid ounces or as follows:

     (a) If less than 1 pint, in fluid ounces, or fractions of a pint;

     (b) If 1 pint, 1 quart, or 1 gallon, the net contents shall be so stated;

     (c) If more than 1 pint, but less than 1 quart, the net contents shall be stated in fractions of a quart, or in pints and fluid ounces;

     (d) If more than 1 quart, but less than 1 gallon, the net contents shall be stated in fractions of a gallon, or in quarts, pints, and fluid ounces;

     (e) If more than 1 gallon, the net contents shall be stated in gallons and fractions thereof;

     (f) The net contents need not be stated on any label if the net contents are displayed by having the same blown, branded, or burned in the container in letters or figures in such manner as to be plainly legible under ordinary circumstances and such statement is not obscured in any manner in whole or in part.

     (3) Container size limitations -- Barrels. Whole barrels (31 gallons), 1/2 barrels (15.5 gallons), 1/4 barrels (7.75 gallons), 1/6 barrels (5.16 gallons). Packaged beer -- Maximum capacity for individual containers, 170 fluid ounces: Provided, however, That the board may, in its discretion, authorize other container and/or barrel size packages which have been approved for marketing within the United States by the Bureau of Alcohol, Tobacco, and Firearms, United States Treasury Department: Provided further, That the board may, in its discretion, authorize a brewery with spirit, beer and wine restaurant privileges to dispense beer directly from conditioning tanks/vessels to the spirit, beer and wine restaurant area provided the taxes have been paid prior to dispensing.

     (4) The net contents of individual containers shall be stated on the outside of any multicontainer package where the individual container label or bottle size is not visible to the consumer at the point of purchase.

     (5) Gift packages. A beer importer or beer wholesaler may prepare and sell "gift packages" consisting of containers of beer differing in case quantities from the manufacturer's original case capacities provided the tax has been paid on the previously purchased beer in accordance with RCW 66.24.290 and provided written approval by the board has been obtained.

[Statutory Authority: RCW 66.08.030, 15.88.030, 19.126.020, 66.04.010, 66.08.180, 66.16.100, 66.20.010, 66.20.300, 66.20.310, 66.24.150, 66.24.170, 66.24.185, 66.24.200, 66.24.206, 66.24.210, 66.24.230, 66.24.240, 66.24.244, 66.24.250, 66.24.375, 66.24.380, 66.24.395, 66.24.400, 66.24.420, 66.24.425, 66.24.440, 66.24.450, 66.24.455, 66.24.495, 66.24.540, 66.28.010, 66.28.040, 66.28.050, 66.28.170, 66.28.180, 66.28.190, 66.28.200, 66.28.310, 66.44.190, 66.44.310, 66.98.060 and 82.08.150. 98-18-097, § 314-20-030, filed 9/2/98, effective 10/3/98. Statutory Authority: RCW 66.08.030. 93-10-070, § 314-20-030, filed 5/3/93, effective 6/3/93; 89-06-013 (Order 278, Resolution No. 287), § 314-20-030, filed 2/23/89; 89-01-005 (Order 272, Resolution No. 281), § 314-20-030, filed 12/8/88. Statutory Authority: RCW 66.08.050. 86-22-050 (Order 201, Resolution No. 210), § 314-20-030, filed 11/4/86. Statutory Authority: RCW 66.08.030. 86-01-026 (Order 171, Resolution No. 180), § 314-20-030, filed 12/11/85. Statutory Authority: RCW 66.08.030 and 66.98.070. 83-24-061 (Order 135, Resolution No. 144), § 314-20-030, filed 12/7/83, effective 2/15/84; 78-02-031 (Order 64), § 314-20-030, Rule 39, filed 1/17/78; Order 49, § 314-20-030, filed 8/26/76, effective 9/26/76; Order 19, § 314-20-030, filed 8/10/72; Rule 39, filed 6/13/63.]

[Rule 53, filed 6/13/63.]

&sqbul;     Authorized representative for beer produced outside of the United States, shipping beer to licensed Washington beer distributors or importers.

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     Reviser's note: The unnecessary underscoring in the above section occurred in the copy filed by the agency and appears in the Register pursuant to the requirements of RCW 34.08.040.
AMENDATORY SECTION(Amending WSR 00-17-065, filed 8/9/00, effective 9/9/00)

WAC 314-20-170   Holders of certificates of approval.   Each ((brewer holding a)) beer certificate of approval holder may ship beer only to licensed beer importers or distributors.(([.])) As required by RCW 66.24.270 (((sec. 23-F of the Washington State Liquor Act))) and by the written agreement embodied in the application for certificate of approval,(([,])) each brewer holding a certificate of approval shall file the report(s) required by WAC 314-19-015(([:][.]))

     All reports shall be made upon forms prescribed(([,])) and furnished by the Washington state liquor control board.

[Statutory Authority: RCW 66.08.030, 66.24.210, 66.24.230, 66.24.290, 66.24.305, 66.24.270, 66.24.215, 66.24.580, 66.24.206. 00-17-065, § 314-20-170, filed 8/9/00, effective 9/9/00; Rule 56, filed 6/13/63.]

     Reviser's note: The typographical error in the above section occurred in the copy filed by the agency and appears in the Register pursuant to the requirements of RCW 34.08.040.
NEW SECTION
WAC 314-24-001   Definitions.   (1) Per RCW 66.04.010(2), an "authorized representative" means a person who:

     (a) Is required to have a federal basic permit issued by the alcohol and tobacco tax and trade bureau;

     (b) Has his/her business located in the United States outside of the state of Washington;

     (c) Acquires ownership of wine that is produced anywhere outside Washington by a winery which does not hold a certificate of approval issued by the board, for transportation into and resale in the state of Washington.

     (d) Is appointed by the winery referenced in (c) of this subsection as its exclusive authorized representative for marketing and selling its products within the United States, in accordance with a written agreement between the authorized representative and the winery. The board may waive the requirement for the written agreement of exclusivity in situations consistent with the normal marketing practices of certain products, such as classified growths.

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     Reviser's note: The unnecessary underscoring in the above section occurred in the copy filed by the agency and appears in the Register pursuant to the requirements of RCW 34.08.040.
AMENDATORY SECTION(Amending WSR 98-18-097, filed 9/2/98, effective 10/3/98)

WAC 314-24-040   Wine labels -- Certificate of label approval required -- Labels to be submitted.   No wine shall be imported or sold within the state of Washington until the certificate of approval holder, or domestic winery, or United States importer of foreign wine, shall have obtained from the board a certificate of label approval for such wine.

     (1) A request for certificate of label approval must be submitted to the board on forms prescribed by the board, together with the following:

     (a) Two labels of the brand and type for which approval is requested for wines under seven percent alcohol by volume; and

     (b) One copy of the federal certificate of label approval for such wine which has been issued by the Bureau of Alcohol, Tobacco, and Firearms, U.S. Treasury Department.

     (2) Any change in label or product which requires reissuance of federal approval under the provisions of 27 CFR Part 4, must also be submitted to the board in accordance with the foregoing provisions of this regulation.

     (3) Every producer, importer, bottler, ((or)) distributor, or wine certificate of approval holder ((of wine)) shall, upon request of the board or its authorized representative, furnish without cost to the board, samples of any brand of wine upon its premises for the purpose of analysis in order to determine whether the wine conforms to the quality standards set by the board in WAC 314-24-060 and conforms with commercial standards.

     (4) No label shall be used that is misleading.

     (5) No label will be approved which is designed to be especially appealing to children or other persons under legal age to consume. Persons who appear to be under legal age to consume may be depicted on a label when, in the discretion of the board, the depiction is dignified and does not promote illegal consumption of liquor.

[Statutory Authority: RCW 66.08.030, 15.88.030, 19.126.020, 66.04.010, 66.08.180, 66.16.100, 66.20.010, 66.20.300, 66.20.310, 66.24.150, 66.24.170, 66.24.185, 66.24.200, 66.24.206, 66.24.210, 66.24.230, 66.24.240, 66.24.244, 66.24.250, 66.24.375, 66.24.380, 66.24.395, 66.24.400, 66.24.420, 66.24.425, 66.24.440, 66.24.450, 66.24.455, 66.24.495, 66.24.540, 66.28.010, 66.28.040, 66.28.050, 66.28.170, 66.28.180, 66.28.190, 66.28.200, 66.28.310, 66.44.190, 66.44.310, 66.98.060 and 82.08.150. 98-18-097, § 314-24-040, filed 9/2/98, effective 10/3/98. Statutory Authority: RCW 66.08.030. 92-03-110, § 314-24-040, filed 1/21/92, effective 2/21/92; 89-02-014 (Order 274, Resolution No. 283), § 314-24-040, filed 12/28/88. Statutory Authority: RCW 66.08.030 and 66.28.110. 88-17-095 (Order 254, Resolution No. 263), § 314-24-040, filed 8/23/88; Order 57, § 314-24-040, filed 7/28/77, effective 9/1/77; Order 42, § 314-24-040, Rule 62, filed 11/6/75; Order 19, § 314-24-040, filed 8/10/72; Order 5, § 314-24-040, filed 8/7/69, effective 9/8/69; Rule 62, filed 6/13/63.]

&sqbul;     Authorized representative for wine produced outside of the United States, shipping wine to licensed Washington wine distributors or importers.

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     Reviser's note: The unnecessary underscoring in the above section occurred in the copy filed by the agency and appears in the Register pursuant to the requirements of RCW 34.08.040.
AMENDATORY SECTION(Amending WSR 98-18-097, filed 9/2/98, effective 10/3/98)

WAC 314-24-220   Licensing and operation of bonded wine warehouses.   (1) There shall be a license for bonded wine warehouses pursuant to RCW 66.24.185, and this type of license shall be known as a bonded wine warehouse licensee. Applications for a bonded wine warehouse license shall be on forms prescribed by the board and shall be accompanied by such information as the board may request including, but not limited to, a written description of the proposed method of shipping, receiving, inventory control, and security.

     (2) The bonded wine warehouse shall be physically separated from any other use in such manner as prescribed by the board, and as a condition of license approval, the applicant must furnish the board appropriate documentation indicating the location of the bonded wine warehouse is properly zoned for the intended use. Wine not under federal excise tax bond shall be identified as federally tax-paid and physically separated on the premises to the extent required under the license holder's federal basic permit.

     (3) A bonded wine warehouse may provide storage for a domestic winery and for a certificate of approval holder ((United States winery outside the state of Washington holding a Washington certificate of approval)). The wine may or may not be under federal bond, and the Washington wine tax provided in RCW 66.24.210 shall not be due until the wine is removed from bond and shipped to a licensed Washington wine distributor or, pursuant to RCW 66.12.020, to the liquor control board who will be responsible to pay the tax based on their purchases.

     (4) Every bonded wine warehouse licensee shall have on file and available for inspection records of all wine transactions, including receipts and shipments of wine and the total inventory on hand at the bonded warehouse.

     (5) Removals of wine from a bonded wine warehouse may be made only for shipment (a) to a licensed independent Washington wine distributor; (b) to another licensed bonded wine warehouse; (c) to the liquor control board; (d) out of state; (e) for return to the producing winery; or (f) to a producing domestic winery licensee. For purposes of this section, "producing domestic winery licensee" means the licensed Washington winery that produced the wine and its licensed agents. For purposes of this section, a "licensed agent" shall be an accredited representative, licensed pursuant to chapter 314-44 WAC, of only one producing domestic winery at the time of removal by such agent. A producing domestic winery licensee may take possession of wine from a bonded wine warehouse, after accepting an order therefor, and deliver the wine to a purchasing retail or special occasion licensee only by transporting the wine directly from the bonded wine warehouse to the licensed premises of the purchasing retail or special occasion licensee; provided, however, that in no event may a producing domestic winery licensee remove, in the aggregate, during any one calendar year, more than two thousand cases of wine for delivery directly to retail and special occasion licensees. Producing domestic winery licensees shall maintain records of removals and deliveries of wine from bonded wine warehouses and shall file with the liquor control board annually reports of the quantity of wine removed and delivered directly to retail and special occasion licensees. Invoicing shall be by the titleholder. The titleholder shall report shipments to, and returns from the bonded wine warehouse and sales to Washington wine distributors, and/or the liquor control board on the twentieth day of the month following the month of shipment and/or sale on forms furnished by, or acceptable to, the board.

     (6) At no time shall title to wine stored at the bonded wine warehouse pass to the operator of the bonded wine warehouse.

     (7) "Storage of bottled wine only" as used in RCW 66.24.185(1) shall mean the storage of wine packaged for sale at retail (i.e., other than in bulk form).

     (8) As a condition precedent to license issuance, a bonded wine warehouse licensee shall guarantee payment to the state of any and all taxes under RCW 66.24.210 in the event the winery or other entity storing wine in the bonded wine warehouse fails to immediately pay such tax when due. Such guarantee shall be in the form of the bond referred to in subsection (9) of this section.

     (9) As required by RCW 66.24.185(5) every holder of a bonded wine warehouse license must, at all times when said license is in force, have in effect and on file with the board a bond executed by a surety authorized to do business in the state of Washington, in a form approved by the board and in the amount of five thousand dollars.

[Statutory Authority: RCW 66.08.030, 15.88.030, 19.126.020, 66.04.010, 66.08.180, 66.16.100, 66.20.010, 66.20.300, 66.20.310, 66.24.150, 66.24.170, 66.24.185, 66.24.200, 66.24.206, 66.24.210, 66.24.230, 66.24.240, 66.24.244, 66.24.250, 66.24.375, 66.24.380, 66.24.395, 66.24.400, 66.24.420, 66.24.425, 66.24.440, 66.24.450, 66.24.455, 66.24.495, 66.24.540, 66.28.010, 66.28.040, 66.28.050, 66.28.170, 66.28.180, 66.28.190, 66.28.200, 66.28.310, 66.44.190, 66.44.310, 66.98.060 and 82.08.150. 98-18-097, § 314-24-220, filed 9/2/98, effective 10/3/98. Statutory Authority: RCW 66.08.030 and 66.24.185. 96-11-076, § 314-24-220, filed 5/13/96, effective 6/13/96; 85-24-042 (Order 170, Resolution No. 179), § 314-24-220, filed 11/27/85. Statutory Authority: RCW 66.24.185, 66.08.030 and 66.98.070. 85-10-029 (Order 158, Resolution No. 167), § 314-24-220, filed 4/24/85.]

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