Effective Date of Rule: Thirty-one days after filing.

     Purpose: During the 2009 legislative session, SHB 1435 was passed into law granting the liquor control board administrative authority to approve, deny, suspend, or revoke retail, wholesale, or distributor cigarette and tobacco products licenses. New laws are required to implement this legislation. The new rules provide guidance and clarity to applicants wanting to apply for these types of licenses and current licensees wanting to make changes to their license.

     Statutory Authority for Adoption: RCW 82.24.510, 82.24.550, 82.26.150, 82.26.220.

      Adopted under notice filed as WSR 09-22-100 on November 4, 2009.

     Number of Sections Adopted in Order to Comply with Federal Statute: New 0, Amended 0, Repealed 0; Federal Rules or Standards: New 0, Amended 0, Repealed 0; or Recently Enacted State Statutes: New 12, Amended 0, Repealed 0.

     Number of Sections Adopted at Request of a Nongovernmental Entity: New 0, Amended 0, Repealed 0.

     Number of Sections Adopted on the Agency's Own Initiative: New 12, Amended 0, Repealed 0.

     Number of Sections Adopted in Order to Clarify, Streamline, or Reform Agency Procedures: New 0, Amended 0, Repealed 0.

     Number of Sections Adopted Using Negotiated Rule Making: New 0, Amended 0, Repealed 0;      Pilot Rule Making: New 0, Amended 0, Repealed 0; or Other Alternative Rule Making: New 0, Amended 0, Repealed 0.

     Date Adopted: December 16, 2009.

Sharon Foster

Board Chairman

OTS-2671.3

     (a) The board may require proof concerning the applicant's identity.

     (b) The board may conduct an investigation of the applicants' criminal history and administrative violation history, per RCW 82.24.510 and 82.26.150.

     (2) Failure to respond to the board's requests for information within the timeline provided may cause the application to be denied.

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     (1) Failure to meet qualifications or requirements for the specific cigarette or tobacco products license, as outlined in this chapter and chapters 82.24 and 82.26 RCW.

     (2) Failure to submit information or documentation requested by the board.

     (3) Misrepresentation of fact by any applicant.

     (4) Willfully withholding information.

     (5) Submitting false or misleading information.

     (6) The applicant has failed to submit payments of the taxes imposed under chapter 82.24 or 82.26 RCW along with reports and returns to the department of revenue as required.

     (7) If the applicant is a corporation and the corporation is not currently registered with the secretary of state.

     (8) The applicant is currently the subject of an outstanding felony arrest warrant.

     (9) The existence of disqualifying criminal history standards outlined in WAC 314-33-020.

     (10) The existence of disqualifying liquor and cigarette and tobacco products law or rule violation history standards outlined in WAC 314-33-025.

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     (2) When the board processes a criminal history check on an applicant, it uses a point system to determine a person's qualification for a license. The board will not normally issue a cigarette and tobacco products license to an applicant who has accumulated eight or more points as indicated below:

Description	Time period during which points will be assigned from date of conviction	Points assigned
Felony conviction	Five years	12 points
Gross misdemeanor conviction for violation of chapters 82.24 and 82.26 RCW	Five years	12 points
Other gross misdemeanor conviction	Three years	5 points
Misdemeanor conviction	Three years	4 points
Nondisclosure of any of the above	n/a	4 points each

     (3) If a case is pending for an alleged offense that would earn eight or more points, the board will hold the application for the disposition of the case. If the disposition is not settled within ninety days, the board may administratively close the application.

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     (1) Request an administrative hearing per chapter 34.05 RCW; or

     (2) Reapply for the license no sooner than one year from the original denial date.

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OTS-2672.5

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     (2) Any person possessing both a cigarette license and a tobacco products license is subject to suspension and revocation of both licenses for violation of either chapter 82.24 or 82.26 RCW or this chapter. For example, if a person has both a cigarette license and a tobacco products license, revocation of the tobacco products license will also result in revocation of the cigarette license.

     (3) A person whose license has been suspended or revoked must not sell or permit the sale of tobacco products or cigarettes during the period of the suspension or revocation.

     (4) For the purposes of this rule, "cigarettes" has the same meaning as in RCW 82.24.010 and "tobacco products" has the same meaning as in RCW 82.26.010.

     (5) Any person whose license has been revoked must wait one year following the date of revocation before requesting a hearing for reinstatement. Reinstatement hearings are held pursuant to chapter 34.05 RCW.

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     (1) A brief narrative description of the violation(s) the officer is charging;

     (2) The date(s) of the violation(s);

     (3) A copy of the law(s) and/or regulation(s) allegedly violated;

     (4) An outline of the licensee's options as outlined in WAC 314-34-010; and

     (5) The penalty.

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     (a) Accept the recommended penalty; or

     (b) Request a settlement conference in writing; or

     (c) Request an administrative hearing in writing. A response must be submitted on a form provided by the board.

     (2) What happens if a licensee does not respond to the administrative violation notice within twenty days? If a licensee does not respond to the administrative violation notice within twenty days, the recommended penalty will go into effect.

     (3) What are the procedures when a licensee requests a settlement conference?

     (a) If the licensee requests a settlement conference, the hearing examiner or captain will contact the licensee or permit holder to discuss the violation.

     (b) Both the licensee and the hearing examiner or captain will discuss the circumstances surrounding the charge, the recommended penalty, and any aggravating or mitigating factors.

     (c) If a compromise is reached, the hearing examiner or captain will prepare a compromise settlement agreement. The hearing examiner or captain will forward the compromise settlement agreement, authorized by both parties, to the board for approval.

     (i) If the board approves the compromise, a copy of the signed settlement agreement will be sent to the licensee and will become part of the licensing history.

     (ii) If the board does not approve the compromise, the licensee will be notified of the decision. The licensee will be given the option to renegotiate with the hearings examiner or captain, of accepting the originally recommended penalty, or of requesting an administrative hearing on the charges.

     (d) If the licensee and the hearing examiner or captain cannot reach agreement on a settlement proposal, the licensee may accept the originally recommended penalty, or the hearing examiner or captain will forward a request for an administrative hearing to the board's hearings coordinator.

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     (1) 1st offense - License suspension for not less than thirty consecutive business days.

     (2) 2nd offense - License suspension for not less than ninety days - or more than twelve months.

     (3) 3rd and consecutive offenses - Subject to revocation.

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     (2) During the period of cigarette and/or tobacco products license suspension, the licensee and employees:

     (a) Are required to maintain compliance with all applicable cigarette and tobacco products laws and rules;

     (b) May not remove, alter, or cover the posted suspension notice, and may not permit another person to do so;

     (c) May not place or permit the placement of any statement on the licensed premises indicating that the premises have been closed for any reason other than as stated in the suspension notice;

     (d) May not advertise by any means that the licensed premises is closed for any reason other than as stated in the liquor control board's suspension notice.

     (3) During the period of cigarette and tobacco products license suspension:

     (a) A retail cigarette and/or tobacco products licensee may operate his/her business provided there is no sale, delivery, removal, or receipt of cigarette and tobacco products.

     (b) A cigarette wholesaler and tobacco products distributor licensee may operate his/her business provided there is no sale, delivery, removal, or receipt of cigarette and tobacco products.

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     (a) Taxes - failure to pay taxes as required;

     (b) Stamps - tax stamp violations to include:

     (i) Failure to affix stamps;

     (ii) Forgery/counterfeit; or

     (iii) Possession of unstamped cigarettes.

     (c) Retailer obtaining cigarettes from an unauthorized source;

     (d) Records - improper recordkeeping or failure to submit reports as required;

     (e) Failure to allow inspections of any of the following:

     (i) Premises;

     (ii) Stamps;

     (iii) Vehicles;

     (iv) Cigarettes;

     (v) Books; or

     (vi) Records.

     (f) Transporting violations to include failure to notify and improper records;

     (g) Operating outside the capacity of the license and failure to secure the proper license; and

     (h) License suspension violations.

     (2) The following is a list of other tobacco product violations:

     (a) Taxes - failure to pay taxes as required;

     (b) Records - improper recordkeeping or failure to submit reports as required;

     (c) Failure to allow inspections of any of the following:

     (i) Premises;

     (ii) Vehicles;

     (iii) Tobacco products;

     (iv) Books; or

     (v) Records.

     (d) Transporting violations to include failure to notify and improper records;

     (e) Operating outside of the capacity of the license or failure to secure the proper license;

     (f) Retailer not licensed as a distributor and obtaining tobacco products from an unlicensed distributor;

     (g) Manufacturer representative's violation; and

     (h) License suspension violations.

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