Original Notice.

     Preproposal statement of inquiry was filed as WSR 12-15-081.

     Title of Rule and Other Identifying Information: Internet sales and home delivery of spirits.

     Hearing Location(s): Washington State Liquor Control Board, Board Room, 3000 Pacific Avenue S.E., Lacey, WA 98504, on October 24, 2012, at 10:00 a.m.

     Date of Intended Adoption: October 31, 2012.

     Submit Written Comments to: Karen McCall, P.O. Box 43080, Olympia, WA 98504, e-mail rules@liq.wa.gov, fax (360) 664-9689, by October 24, 2012.

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

     Purpose of the Proposal and Its Anticipated Effects, Including Any Changes in Existing Rules: Initiative 1183 changed the state of Washington from a controlled liquor system to a privatized liquor system. Rules need to be written to reflect internet sales and delivery of spirits, formalize associated public safety regulations, and to provide clear direction to spirits retail liquor licensees in these areas.

     Reasons Supporting Proposal: Creating rules clarifies policies surrounding internet sales and delivery of spirits by spirits retail liquor licensees.

     Statutory Authority for Adoption: RCW 66.08.030.

     Statute Being Implemented: RCW 66.24.630.

     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 McCall, Rules Coordinator, 3000 Pacific Avenue S.E., Olympia, WA 98504, (360) 664-1631; Implementation: Alan Rathbun, Licensing Director, 3000 Pacific Avenue S.E., Olympia, WA 98504, (360) 664-1615; and Enforcement: Justin Nordhorn, Enforcement Chief, 3000 Pacific Avenue S.E., Olympia, WA 98504, (360) 664-1726.

     No small business economic impact statement has been prepared under chapter 19.85 RCW. A fiscal impact statement was not required.

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

September 12, 2012

Sharon Foster

Chairman

OTS-4977.1

NEW SECTION
WAC 314-03-030   Consumer orders, internet sales, and delivery for spirits retail licensees.   A spirit retail licensee may accept orders for spirits from, and deliver spirits to, customers.

     (1) Resale. Spirits shall not be for resale.

     (2) Stock location. Spirits must come directly from a licensed retail location.

     (3) How to place an order. Spirits may be ordered in person at a licensed location, by mail, telephone, or internet, or by other similar methods.

     (4) Sales and payment.

     (a) Only a spirits retail licensee or a licensee's direct employees may accept and process orders and payments. A contractor may not do so on behalf of a spirits retail licensee, except for transmittal of payment through a third-party service. A third-party service may not solicit customer business on behalf of a spirits retail licensee.

     (b) All orders and payments shall be fully processed before spirits transfers ownership or, in the case of delivery, leaves a licensed premises.

     (c) Payment method. Payment methods include, but are not limited to: Cash, credit or debit card, check or money order, electronic funds transfer, or an existing prepaid account. An existing prepaid account may not have a negative balance.

     (d) Internet. To sell spirits via the internet, a new spirits retail license applicant must request internet-sales privileges in his or her application. An existing spirits retail licensee must notify the board prior to beginning internet sales. A corporate entity representing multiple stores may notify the board in a single letter on behalf of affiliated spirits retail licensees, as long as the liquor license numbers of all licensee locations utilizing internet sales privileges are clearly identified.

     (5) Delivery location. Delivery shall be made only to a residence or business that has an address recognized by the United States postal service; however, the board may grant an exception to this rule at its discretion. A residence includes a hotel room, a motel room, or other similar lodging that temporarily serves as a residence.

     (6) Hours of delivery. Spirits may be delivered each day of the week between the hours of 6:00 a.m. and 2:00 a.m. Delivery must be fully completed by 2:00 a.m.

     (7) Age requirement.

     (a) Under chapter 66.44 RCW, any person under twenty-one years of age is prohibited from purchasing, delivering, or accepting delivery of liquor.

     (b) A delivery person must verify the age of the person accepting delivery before handing over liquor.

     (c) If no person twenty-one years of age or older is present to accept a liquor order at the time of delivery, the liquor shall be returned.

     (8) Intoxication. Delivery of liquor is prohibited to any person who shows signs of intoxication.

     (9) Containers and packaging.

     (a) Individual units of spirits must be factory sealed in bottles. For the purposes of this subsection, "factory sealed" means that a unit is in one hundred percent resalable condition, with all manufacturer's seals intact.

     (b) The outermost surface of a liquor package, delivered by a third party, must have language stating that:

     (i) The package contains liquor;

     (ii) The recipient must be twenty-one years of age or older; and

     (iii) Delivery to intoxicated persons is prohibited.

     (10) Required information.

     (a) Records and files shall be retained at the licensed premises. Each delivery sales record shall include the following:

     (i) Name of the purchaser;

     (ii) Name of the person who accepts delivery;

     (iii) Street addresses of the purchaser and the delivery location; and

     (iv) Time and date of purchase and delivery.

     (b) A private carrier must obtain the signature of the person who receives liquor upon delivery.

     (c) A sales record does not have to include the name of the delivery person, but it is encouraged.

     (11) Web site requirements. When selling over the internet, all web site pages associated with the sale of liquor must display the spirits retail licensee's registered trade name.

     (12) Accountability. A spirits retail licensee shall be accountable for all deliveries of liquor made on its behalf.

     (13) Violations. The board may impose administrative enforcement action upon a licensee, or suspend or revoke a licensee's delivery privileges, or any combination thereof, should a licensee violate any condition, requirement, or restriction.

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