BP BHEAD INT H

AN ACT Relating to adult entertainment businesses; amending RCW 7.48A.040; adding a new section to chapter 43.43 RCW; adding a new chapter to Title 18 RCW; prescribing penalties; and providing an effective date.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

NEW SECTION. Sec. 1. It is the purpose of this chapter to regulate certain adult entertainment businesses to promote the health, safety, and welfare of the citizens of the state of Washington. The legislature finds that these businesses, when unregulated, promote illegal activities including obscenity, pornography, sexual offenses, and prostitution.

NEW SECTION. Sec. 2. Unless the context clearly requires otherwise, the definitions in this section apply throughout this chapter.

(1) "Adult entertainment business" means a nightclub, bar, restaurant, theater, concert hall, auditorium, or similar commercial establishment that regularly features live performances by nude or seminude persons.

(2) "Applicant" means a person or persons applying for a license under this chapter.

(3) "Business license" means a license issued by the department under this chapter to an adult entertainment business.

(4) "Department" means the department of licensing.

(5) "Director" means the director of licensing.

(6) "Licensee" means a person or persons in whose name a license has been issued under this chapter.

(7) "Nude" means a state of dress that exposes a person's bare buttock, anus, genital, or breast, or a state of dress which fails to cover opaquely a person's buttock, anus, genital, or areola of the breast.

(8) "Own or operate" means a person has a substantial interest in an adult entertainment business.

(9) "Performer's license" means a license issued by the department under this chapter to a performer in an adult entertainment business.

(10) "Seminude" means a state of dress other than nude that, with respect to a person's torso, opaquely covers only the buttocks, anus, genitals, and areolae of the breasts, as well as portions of the body covered by supporting straps or devices.

(11) "Substantial interest" means the interest possessed by a person when:

(a) With respect to a sole proprietorship, the person, or his or her marital community, owns, operates, manages, or conducts, directly or indirectly, the business, or any part of it; or

(b) With respect to a partnership, the person or his or her marital community, shares in any of the profits, or potential profits, of the business; or

(c) With respect to a corporation, the person or his or her spouse, is an officer, or director, or the person or his or her marital community is a holder, directly or beneficially, of ten percent or more of any class of stock of the business; or

(d) With respect to an organization not covered in (a), (b), or (c) of this subsection, the person or his or her spouse, is an officer or manages the business affairs, or the person or his or her marital community is owner of or otherwise controls ten percent or more of the assets of the business; or

(e) The person, or his or her marital community, furnishes ten percent or more of the capital, whether in cash, goods, or services, for the operation of the business during any calendar year.

NEW SECTION. Sec. 3. (1) It is a gross misdemeanor for a person to own, operate, or manage, or act as the agent for one who owns, operates, or manages, an adult entertainment business in the state of Washington unless the person has obtained a business license pursuant to this chapter.

(2) It is a gross misdemeanor for a performer to appear nude or seminude in an adult entertainment business unless the performer has obtained a performer's license pursuant to this chapter.

NEW SECTION. Sec. 4. (1) Each owner, operator, manager, or agent of a business must obtain and maintain a separate business license.

(2) An application for a business license must be made on a form provided by the department. The applicant shall provide: (a) The name, address, phone number, and date of birth of the applicant; (b) two passport-size color photographs of the applicant; (c) the applicant's principal occupation; (d) a description of the proposed establishment; (e) the nature of the proposed business; (f) the trade name of the proposed business; (g) location of the proposed business; and (h) such other information as the department may require by rule.

(3) At the time of applying, the applicant shall post notice of the application at the proposed business location in a form and manner as required by the department by rule.

NEW SECTION. Sec. 5. (1) The department shall grant or refuse a business license in accordance with this chapter.

(2) Every business license shall be issued in the name of the applicant or applicants, and the holder of a license shall not allow any other person to use it.

(3) No business license may be issued to:

(a) An individual, partnership, or corporation, unless qualified to obtain a business license, as provided in this chapter;

(b) An applicant whose business is conducted by a manager or agent, unless the manager or agent possesses the same qualifications as are required of the business licensee;

(c) A corporation, unless it was created under the laws of the state of Washington or holds a certificate of authority to transact business in the state of Washington;

(d) An applicant who is under eighteen years of age;

(e) An applicant who has failed to provide information reasonably necessary for issuance of the business license or who has falsely answered a question or request for information on the application form; or

(f) An applicant who has proposed the location of the business within a zone where such use is prohibited by state or local authority.

(4) Upon receipt of an application for a business license, the department shall give notice of the application to the chief executive officer of the incorporated city or town, if the application is for a business license within an incorporated city or town, or to the county legislative authority, if the application is for a business license outside the boundaries of incorporated cities or towns, or to all the appropriate executive officers in the case of a regional adult entertainment business plan. Upon the granting of a business license under this chapter the department shall send a duplicate of the license or written notification to the chief executive officer of the incorporated city or town in which the license is granted, or to the county legislative authority if the license is granted outside the boundaries of incorporated cities or towns, or to all chief executive officers of impacted cities, towns, or counties participating in a regional adult entertainment business plan.

(5)(a) Except as set forth in (b) of this subsection, the department shall not issue an initial business license covering any premises, if at the time the initial license is to be issued the premises are within a buffer zone of one thousand feet surrounding any residential zone, single or multifamily dwelling, church, park, playground, day care center, or elementary or secondary school. The one thousand feet shall be measured on a straight line between the closest points of the property on which the premises are located and the property of the residential zone, dwelling, church, park, playground, day care center, or school. For the purpose of this section, church means a building erected for and used exclusively for religious worship and schooling or other activity in connection with the worship and schooling. The department may rely on the measurements of the relevant local jurisdictions in determining the boundaries of a buffer zone.

(b) The legislative authority of a city, town, or county:

(i) Shall establish a buffer zone less than that established in (a) of this subsection if the legislative authority finds (A) that the adverse secondary effects of adult entertainment businesses on public health, safety, or welfare would not be greater as a result of the smaller buffer zone or (B) that failure to establish a smaller buffer zone will effectively prohibit any adult entertainment business in the city, town, or county and there is no regional agreement with neighboring cities, towns, or counties that provides adequate opportunities for such businesses; or

(ii) May establish a buffer zone greater than that established in (a) of this subsection if the legislative authority finds (A) that the adverse secondary effects of adult entertainment businesses on public health, safety, or welfare would not be reasonably and effectively mitigated without the larger buffer zone and (B) that establishing a larger buffer zone will not effectively prohibit any adult entertainment business in the city, town, or county, or that there is a regional agreement with neighboring cities, towns, or counties that provides adequate opportunities for such businesses.

(c) If the location requirements established pursuant to this chapter effectively preclude location of adult entertainment businesses within a city, town, or county, such city, town, or county shall join with neighboring cities, towns, or counties in a regional adult entertainment business location plan in order to provide reasonable opportunity for location of adult entertainment businesses in the regional area.

NEW SECTION. Sec. 6. (1) The department may, subject to the provisions of this chapter and as provided by rule, suspend or cancel a business license; and all rights of the licensee under this chapter shall be suspended or terminated, as the case may be.

(2) Upon receipt of notice of the suspension or cancellation of a business license, the licensee shall forthwith deliver the license to the department. Where the business license has been suspended only, the department shall return the license to the licensee at the expiration or termination of the period of suspension.

NEW SECTION. Sec. 7. (1) Every business license issued under this chapter is subject to all conditions and restrictions imposed by this chapter. All conditions and restrictions imposed by the department in the issuance of an individual business license shall be listed on the face of the individual license along with the trade name, address, and expiration date.

(2) Every business licensee shall post and keep posted its license in a conspicuous place on the premises.

NEW SECTION. Sec. 8. The department shall not issue a business license to a transferee until the transferee has applied for and received a business license under this chapter.

NEW SECTION. Sec. 9. (1)(a) At the time of the original issuance of a business license, the department shall prorate the license fee charged to the new licensee according to the number of calendar quarters, or portion thereof, remaining until the first renewal of that license is required.

(b) Unless canceled sooner, every business license issued by the department shall expire at midnight of the thirtieth day of June of the fiscal year for which it was issued. However, if the department deems it feasible and desirable to do so, it may establish, by rule pursuant to chapter 34.05 RCW, a system for staggering the annual renewal dates for business licenses. If such a system of staggered annual renewal dates is established by the department, the business license fees provided by this chapter shall be appropriately prorated during the first year that the system is in effect.

(2) The adult entertainment business license fee shall be established under RCW 43.24.086, but shall be at least seven hundred fifty dollars per annum, and shall be paid at the time of application. One-half of the fee shall be refunded if the application is withdrawn prior to a denial of the license by the department.

NEW SECTION. Sec. 10. (1) The holder of a business license may not assign or transfer the license, except that a transfer may be made to the surviving spouse of a deceased licensee if the transferor and transferee were maintaining a marital community and the license was issued in the name of one or both of them.

(2) A change in an owner or operator of a licensed business or a change in the manager or agent of a business must be reported to the department within thirty days, and any new owner, operator, manager, or agent must meet the requirements of section 5 of this act. The department shall charge a fee established under RCW 43.24.086 that is at least seventy-five dollars for the processing of a change in an owner, operator, manager, or agent.

NEW SECTION. Sec. 11. The department in suspending a business license may further provide in the order of suspension that such suspension shall be vacated upon payment to the department by the licensee of a monetary penalty in an amount fixed by the department but not to exceed ten thousand dollars.

NEW SECTION. Sec. 12. (1)(a) An application for a performer's license must be made on a form provided by the department. The performer shall provide the following: (i) The performer's name, including all aliases, address, phone number, and date of birth; (ii) two passport-size color photographs of the performer; (iii) principal occupation; (iv) the name and address of any business, if known, at which the performer will perform; and (v) such other information as the department may require by rule.

(b) Identifying information provided by an applicant under this subsection is exempt from public disclosure, and the department shall not disclose such information except to the extent necessary to carry out its responsibilities under this chapter, or to comply with a request from another governmental entity, or to comply with a court order.

(2) No performer's license may be issued to:

(a) A performer who is under eighteen years of age;

(b) A performer who has failed to provide information reasonably necessary for issuance of the license or has falsely answered a question or request for information on the application form.

(3) The performer's license fee shall be established under RCW 43.24.086, but shall be at least seventy-five dollars per annum and shall be paid at the time of application. One-half of the fee shall be refunded if the application is withdrawn prior to denial of the license by the department.

(4) Every performer shall keep his or her performer's license on the premises while performing.

NEW SECTION. Sec. 13. Every business licensed under section 5 of this act shall file monthly reports with the department pursuant to rule. The reports shall include the following: (1) The name, address, and date of birth of all performers appearing nude or seminude during the month; and (2) such further information as the department may require.

NEW SECTION. Sec. 14. An action, order, or decision of the department as to a denial of an application for the issuance or renewal of a business or performer's license or as to a revocation, suspension, or modification of a license is subject to the applicable provisions of chapter 34.05 RCW.

(1) An opportunity for a hearing must be provided a licensee prior to a revocation or modification of a business or performer's license and, except as provided in subsection (3) of this section, prior to the suspension of a license.

(2) No hearing shall be required until demanded by the applicant or licensee.

(3) The department may summarily suspend a business or performer's license for a period of up to thirty days without a prior hearing if it finds that public health, safety, or welfare imperatively requires emergency action, and incorporates a finding to that effect in its order; and proceedings for revocation or other action must be promptly instituted and determined.

NEW SECTION. Sec. 15. No provision in this chapter limits the authority of cities, towns, and counties from further regulating adult entertainment businesses as to hours of operation, location of premises, or manner of operation.

The provisions of this chapter relating to the licensing of any adult entertainment business shall not be exclusive and any city, town, or county within whose jurisdiction the adult entertainment business is located may require any registrations or licenses, or charge any fee for the same or similar purpose; and nothing in this chapter shall limit or abridge the authority of any city, town, or county to levy and collect a general and nondiscriminatory license fee levied upon all businesses, or to levy a tax based upon gross business conducted by any firm within the city, town, or county.

NEW SECTION. Sec. 16. The director has the following authority:

(1) To adopt, amend, or repeal such rules as are deemed necessary to carry out this chapter;

(2) To investigate all complaints or reports of conduct in violation of this chapter and to hold hearings as provided in this chapter;

(3) To issue subpoenas and administer oaths in connection with any investigation, hearing, or proceeding held under this chapter;

(4) To take or cause depositions to be taken and use other discovery procedures as needed in any investigation, hearing, or proceeding held under this chapter;

(5) To compel attendance of witnesses at hearings;

(6) To take emergency action ordering summary suspension of a business or performer's license, or restriction or limitation of the licensee's practice pending further disciplinary action under section 21 of this act;

(7) To use the office of administrative hearings as authorized in chapter 34.12 RCW to conduct hearings. However, the director or the director's designee shall make the final decision in the hearing;

(8) To enter into contracts for professional services determined to be necessary for adequate enforcement of this chapter;

(9) To grant or deny business or performer's license applications, and to impose any sanction against a license applicant or license holder provided by this chapter;

(10) To establish or increase in accordance with RCW 43.24.086 business and performer's license fees above the minimum set by this chapter;

(11) To enter into an assurance of discontinuance in lieu of issuing a statement of charges or conducting a hearing. The assurance shall consist of a statement of the law in question and an agreement not to violate the stated provision. The applicant or license holder shall not be required to admit to any violation of the law, nor shall the assurance be construed as such an admission. Violation of an assurance under this subsection is grounds for disciplinary action;

(12) To designate individuals authorized to sign subpoenas and statements of charges; and

(13) To employ such investigative, administrative, and clerical staff as necessary for the enforcement of this chapter.

NEW SECTION. Sec. 17. A person, including but not limited to a customer, licensee, corporation, organization, or state or local governmental agency, may submit a written complaint to the department charging a business or performer's license holder or applicant with a violation of this chapter. If the department determines that the complaint merits investigation, or if the department has reason to believe, without a formal complaint, that a license holder or applicant may have violated this chapter, the department may investigate to determine whether there has been a violation. A person who files a complaint under this section in good faith is immune from suit in any civil action related to the filing or contents of the complaint.

NEW SECTION. Sec. 18. (1) If the department determines, upon investigation pursuant to section 17 of this act, that there is reason to believe a violation of this chapter has occurred, a statement of charge or charges may be prepared and served upon the business or performer's license holder or applicant. The statement of charge or charges shall be accompanied by a notice that the license holder or applicant may request a hearing to contest the charge or charges. The license holder or applicant must file a request for hearing with the department within twenty days after being served the statement of charges. The failure to request a hearing constitutes a default, upon which the director or the director's designee may enter an order pursuant to RCW 34.05.440(1).

(2) If a hearing is requested, the time of the hearing shall be scheduled but the hearing shall not be held earlier than thirty days after service of the charges upon the license holder or applicant. A notice of hearing shall be issued at least twenty days prior to the hearing, specifying the time, date, and place of the hearing.

NEW SECTION. Sec. 19. The procedures governing adjudicative proceedings before agencies under chapter 34.05 RCW, the administrative procedure act, govern all hearings requested under section 18 of this act.

NEW SECTION. Sec. 20. (1) Upon a finding that a business or performer's license holder or applicant has engaged in conduct or violated conditions that are grounds for denial of a license or for disciplinary action under section 21 of this act, the director may issue an order providing for one or any combination of the following:

(a) Revocation of the license;

(b) Suspension of the license for a fixed or indefinite term;

(d) Compliance with conditions of probation for a designated period of time;

(e) Payment of a fine for each violation of this chapter, not to exceed one thousand dollars per violation, which shall be paid to the department;

(f) Denial of the license request.

(2) Any of the actions under this section may be totally or partly stayed by the director. All costs associated with compliance with orders issued under this section are the obligation of the license holder or applicant.

NEW SECTION. Sec. 21. The following conduct, acts, or conditions, constitute grounds for denial of a license or for disciplinary action against any business or performer's license holder or applicant under the jurisdiction of this chapter:

(1) With respect to a license holder, commission of an act that constitutes an obscenity or pornography offense under chapter 9.68 RCW, a sexual exploitation of children offense under chapter 9.68A RCW, a sexual offense under chapter 9A.44 RCW, a prostitution or indecent exposure offense under chapter 9A.88 RCW, or a substantially similar ordinance adopted by the legislative authority of a city, town, or county or other state statute. Conviction in a criminal proceeding is not a condition precedent to disciplinary action under this section. Upon a conviction, however, the judgment and sentence is conclusive evidence at an ensuing disciplinary hearing of the guilt of the license holder or applicant of the crime described in the indictment or information, and of the person's violation of the statute on which it is based. For the purposes of this section, conviction includes a plea of guilty or nolo contendere and also includes all sentence deferrals or suspensions;

(2) Misrepresentation or concealment of a material fact in obtaining a license or in license reinstatement;

(3) All advertising that is false, fraudulent, or misleading;

(4) Failure to cooperate with the department in the conduct of an investigation by:

(a) Not furnishing any requested papers or documents;

(b) Not furnishing in writing a full and complete explanation regarding the matter under investigation; or

(c) Not responding to subpoenas issued by the director, whether or not the recipient of the subpoena is the subject of the investigation;

(5) Failure to comply with an order issued by the director or an assurance of discontinuance entered into with the director;

(6) Aiding and abetting an unlicensed person to own or operate a business or to perform when a license is required;

(7) Interference with an investigation or disciplinary proceeding by willful misrepresentation of facts before the director or the director's authorized representative, or by the use of threats or harassment against any witness to prevent him or her from providing evidence in a disciplinary proceeding or any other legal action;

(8) Violating this chapter or any rule adopted pursuant to this chapter.

NEW SECTION. Sec. 22. (1) The director may investigate complaints under this chapter concerning ownership or operation of a business without a license or performing without a license. In the investigation of the complaints, the director shall have the same authority as provided the director under section 16 of this act. The director may issue a cease and desist order to a person after notice and hearing and upon a determination that the person has owned or operated a business without a license, or has performed without a license, in violation of this chapter. If the director makes a written finding of fact that the public interest will be irreparably harmed by delay in issuing an order, the director may issue a temporary cease and desist order before the notice and hearing. A cease and desist order does not relieve the person so owning or operating a business or performing without a license from criminal prosecution. The remedy of a cease and desist order is in addition to any criminal liability. A cease and desist order is conclusive proof of unlicensed practice and may be enforced through remedial sanctions under chapter 7.21 RCW. Enforcement of the cease and desist order under chapter 7.21 RCW may be used in addition to, or as an alternative to, any provisions for enforcement of agency orders set out in chapter 34.05 RCW.

(2) The attorney general, a county prosecuting attorney, the department, or any person may, in accordance with the law of this state governing injunctions, maintain an action to enjoin any person owning or operating a business, or performing, without a license required by this chapter from continuing such ownership, operation, or performing until the required license is secured. However, an injunction does not relieve a person from criminal prosecution and the remedy by injunction is in addition to any criminal liability.

NEW SECTION. Sec. 23. A person or business that violates an injunction issued under this chapter shall pay a civil penalty, as determined by the court, of not more than twenty-five thousand dollars, which shall be paid to the department. For the purpose of this section, the superior court issuing any injunction shall retain jurisdiction and the cause shall be continued, and in such cases the attorney general acting in the name of the state may petition for the recovery of civil penalties.

NEW SECTION. Sec. 24. (1) The director or individuals acting on the director's behalf are immune from suit in any civil or criminal action based on any disciplinary proceedings or other official acts performed in the course of their duties in the administration and enforcement of this chapter.

(2) Legislative authorities of cities, towns, and counties are immune from suit in any civil or criminal action based on any official acts performed in the course of their duties in the administration or enforcement of this chapter.

In any challenge to location, distance, or conduct requirements imposed by the legislative authority of a city, town, or county pursuant to this chapter, the legislative authority may request that the state assume some or all of the obligation to defend the constitutionality of this chapter. The attorney general may grant or deny the request. Nothing in this chapter creates any state liability for actions of a city, town, or county.

NEW SECTION. Sec. 25. Existing adult entertainment businesses are exempt from any location restrictions imposed by this chapter until January 1, 1999.

NEW SECTION. Sec. 26. It is a gross misdemeanor for any person to permit any person under the age of eighteen on the premises of any adult entertainment business under his or her control.

NEW SECTION. Sec. 27. It is a class C felony for any person to employ or permit any person under the age of eighteen to appear nude or seminude on the premises of any adult entertainment business under his or her control.

NEW SECTION. Sec. 28. Sections 1 through 27 of this act shall constitute a new chapter in Title 18 RCW.

NEW SECTION. Sec. 29. A new section is added to chapter 43.43 RCW to read as follows:

The department of licensing may request information from the Washington state patrol criminal identification system regarding the conviction of offenses listed under section 21(1) of this act for a license holder who is the subject of an investigation under section 17 of this act.

NEW SECTION. Sec. 30. RCW 7.48A.040 and 1985 c 235 s 1 are each amended to read as follows:

(1) No person shall with knowledge maintain a moral nuisance.

(2) Upon a determination that a defendant has with knowledge maintained a moral nuisance, the court shall impose a civil fine and judgment of an amount as the court shall determine to be appropriate. In imposing the civil fine, the court shall consider the wilfulness of the defendant's conduct and the profits made by the defendant attributable to the lewd matter, lewdness, or prostitution, whichever is applicable. In no event shall the civil fine exceed the greater of ((~~twenty-five~~)) fifty thousand dollars or these profits.

NEW SECTION. Sec. 31. If any provision of this act or its application to any person or circumstance is held invalid, the remainder of the act or the application of the provision to other persons or circumstances is not affected.

NEW SECTION. Sec. 32. This act shall take effect January 1, 1996. The department of licensing may take such steps before then, including the adoption of rules, as are necessary to ensure that this act is implemented on January 1, 1996.