SENATE BILL REPORT

                   SB 6253

              As Reported By Senate Committee On:

              Commerce & Labor, February 4, 1998

Title:  An act relating to credit and debit card purchases in state liquor stores.

Brief Description:  Reimbursing agency liquor vendors for credit sales of liquor.

Sponsors:  Senators Schow, Horn, Swecker, Rasmussen, Goings and T. Sheldon.

Brief History:

Committee Activity:  Commerce & Labor:  2/3/98, 2/4/98 [DPS].

SENATE COMMITTEE ON COMMERCE & LABOR

Majority Report:  That Substitute Senate Bill No. 6253 be substituted therefor, and the substitute bill do pass.

  Signed by Senators Schow, Chair; Horn, Vice Chair; Franklin and Newhouse.

Minority Report:  Do not pass substitute.

  Signed by Senator Heavey.

Staff: Traci Ratzliff (786-7452)

Background:  In 1997, the Liquor Control Board was authorized to allow the use of credit and debit cards by non-licensees for purchases of liquor in all state liquor stores and agency liquor stores.  The board was given rule-making authority to implement the use of credit and debit cards at both state liquor stores and agency liquor stores.

The board was authorized to use money from the liquor revolving fund to pay transaction fees associated with credit and debit card purchases.  The law was silent on the payment of other costs associated with credit and debit card purchases incurred by liquor vendors operating agency liquor stores.

As of December 1997, all state liquor stores were equipped to use credit and debit cards for retail liquor purchases.  The board has initiated the rule-making process for implementing the use of credit and debit cards by liquor vendors in agency stores.  Pending adoption of rules, those liquor vendors who wish to use credit and debit cards for liquor purchases may do so at their own expense.

Agency liquor stores are located in areas of the state where no state liquor store exists. The board may appoint a person as a liquor vendor who sells spirits either through an existing private retail business such as a drug store or grocery store or as a separate business.  Liquor vendors operating agency stores are considered independent contractors. 

A report evaluating the implementation of this program was due January 1, 1998.

Summary of Substitute Bill:  The Liquor Control Board is authorized to pay for the costs of supplying, installing and maintaining equipment used by agency liquor vendor stores for the sale of liquor by debit or credit card in these stores.  This equipment must only be used for the purchase of liquor.  The costs associated with such equipment is paid for from the liquor revolving fund.

Statutory reference to transaction fees associated with credit and debit card purchases is clarified to include transaction fees for both state liquor stores and liquor vendors= agency stores.

Substitute Bill Compared to Original Bill:  The original bill was not considered.

Appropriation:  None.

Fiscal Note:  Requested on January 29, 1998.

Effective Date:  Ninety days after adjournment of session in which bill is passed.

Testimony For:  Liquor agency vendors are acting as agents for the state as it relates to the sale of liquor.  Therefore, we feel that the state should cover the costs of the equipment needed to allow the use of debit or credit cards for the purchase of liquor in agency vendor stores.

Testimony Against:  None.

Testified:  Wally Balmer and Diane Steggall, Washington State Liquor Agency Association (pro); Rick Garza, Mike Donaldson, Lewis Solomon, Liquor Control Board (neutral).