BILL REQ. #:  S-0965.4 

Read first time 02/11/2003.   Referred to Committee on Commerce & Trade.

     AN ACT Relating to regulation of the sale of beer containing more than five and seven-tenths percent of alcohol by weight; amending RCW 66.04.010, 66.24.360, and 66.24.371; and adding a new section to chapter 66.08 RCW.

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

Sec. 1   RCW 66.04.010 and 2000 c 142 s 1 are each amended to read as follows:
     In this title, unless the context otherwise requires:
     (1) "Alcohol" is that substance known as ethyl alcohol, hydrated oxide of ethyl, or spirit of wine, which is commonly produced by the fermentation or distillation of grain, starch, molasses, or sugar, or other substances including all dilutions and mixtures of this substance. The term "alcohol" does not include alcohol in the possession of a manufacturer or distiller of alcohol fuel, as described in RCW 66.12.130, which is intended to be denatured and used as a fuel for use in motor vehicles, farm implements, and machines or implements of husbandry.
     (2) "Beer" means any malt beverage or malt liquor as these terms are defined in this chapter.
     (3) "Beer distributor" means a person who buys beer from a brewer or brewery located either within or beyond the boundaries of the state, beer importers, or foreign produced beer from a source outside the state of Washington, for the purpose of selling the same pursuant to this title, or who represents such brewer or brewery as agent.
     (4) "Beer importer" means a person or business within Washington who purchases beer from a United States brewery holding a certificate of approval (B5) or foreign produced beer from a source outside the state of Washington for the purpose of selling the same pursuant to this title.
     (5) "Brewer" means any person engaged in the business of manufacturing beer and malt liquor. Brewer includes a brand owner of malt beverages who holds a brewer's notice with the federal bureau of alcohol, tobacco, and firearms at a location outside the state and whose malt beverage is contract-produced by a licensed in-state brewery, and who may exercise within the state, under a domestic brewery license, only the privileges of storing, selling to licensed beer distributors, and exporting beer from the state.
     (6) "Board" means the liquor control board, constituted under this title.
     (7) "Club" means an organization of persons, incorporated or unincorporated, operated solely for fraternal, benevolent, educational, athletic or social purposes, and not for pecuniary gain.
     (8) "Consume" includes the putting of liquor to any use, whether by drinking or otherwise.
     (9) "Dentist" means a practitioner of dentistry duly and regularly licensed and engaged in the practice of his profession within the state pursuant to chapter 18.32 RCW.
     (10) "Distiller" means a person engaged in the business of distilling spirits.
     (11) "Domestic brewery" means a place where beer and malt liquor are manufactured or produced by a brewer within the state.
     (12) "Domestic winery" means a place where wines are manufactured or produced within the state of Washington.
     (13) "Druggist" means any person who holds a valid certificate and is a registered pharmacist and is duly and regularly engaged in carrying on the business of pharmaceutical chemistry pursuant to chapter 18.64 RCW.
     (14) "Drug store" means a place whose principal business is, the sale of drugs, medicines and pharmaceutical preparations and maintains a regular prescription department and employs a registered pharmacist during all hours the drug store is open.
     (15) "Employee" means any person employed by the board, including a vendor, as hereinafter in this section defined.
     (16) "Fund" means 'liquor revolving fund.'
     (17) "Hotel" means every building or other structure kept, used, maintained, advertised or held out to the public to be a place where food is served and sleeping accommodations are offered for pay to transient guests, in which twenty or more rooms are used for the sleeping accommodation of such transient guests and having one or more dining rooms where meals are served to such transient guests, such sleeping accommodations and dining rooms being conducted in the same building and buildings, in connection therewith, and such structure or structures being provided, in the judgment of the board, with adequate and sanitary kitchen and dining room equipment and capacity, for preparing, cooking and serving suitable food for its guests: PROVIDED FURTHER, That in cities and towns of less than five thousand population, the board shall have authority to waive the provisions requiring twenty or more rooms.
     (18) "Importer" means a person who buys distilled spirits from a distillery outside the state of Washington and imports such spirituous liquor into the state for sale to the board or for export.
     (19) "Imprisonment" means confinement in the county jail.
     (20) "Liquor" includes the four varieties of liquor herein defined (alcohol, spirits, wine and beer), and all fermented, spirituous, vinous, or malt liquor, or combinations thereof, and mixed liquor, a part of which is fermented, spirituous, vinous or malt liquor, or otherwise intoxicating; and every liquid or solid or semisolid or other substance, patented or not, containing alcohol, spirits, wine or beer, and all drinks or drinkable liquids and all preparations or mixtures capable of human consumption, and any liquid, semisolid, solid, or other substance, which contains more than one percent of alcohol by weight shall be conclusively deemed to be intoxicating. Liquor does not include confections or food products that contain one percent or less of alcohol by weight.
     (21) "Manufacturer" means a person engaged in the preparation of liquor for sale, in any form whatsoever.
     (22) "Malt beverage" or "malt liquor" means any beverage such as beer, ale, lager beer, stout, and porter obtained by the alcoholic fermentation of an infusion or decoction of pure hops, or pure extract of hops and pure barley malt or other wholesome grain or cereal in pure water containing not more than eight percent of alcohol by weight, and not less than one-half of one percent of alcohol by volume. For the purposes of this title, any such beverage containing between five and seven-tenths percent up to and including eight percent of alcohol by weight shall be referred to as "mid-strength beer" except for microbrew produced by a microbrewery that qualifies for a tax exemption under RCW 66.24.290(3)(b) and is not approved for an alternation of operations under 27 C.F.R. Sec. 25.81, and any such beverage containing more than eight percent of alcohol by weight shall be referred to as "strong beer."
     (23) "Package" means any container or receptacle used for holding liquor.
     (24) "Permit" means a permit for the purchase of liquor under this title.
     (25) "Person" means an individual, copartnership, association, or corporation.
     (26) "Physician" means a medical practitioner duly and regularly licensed and engaged in the practice of his profession within the state pursuant to chapter 18.71 RCW.
     (27) "Prescription" means a memorandum signed by a physician and given by him to a patient for the obtaining of liquor pursuant to this title for medicinal purposes.
     (28) "Public place" includes streets and alleys of incorporated cities and towns; state or county or township highways or roads; buildings and grounds used for school purposes; public dance halls and grounds adjacent thereto; those parts of establishments where beer may be sold under this title, soft drink establishments, public buildings, public meeting halls, lobbies, halls and dining rooms of hotels, restaurants, theatres, stores, garages and filling stations which are open to and are generally used by the public and to which the public is permitted to have unrestricted access; railroad trains, stages, and other public conveyances of all kinds and character, and the depots and waiting rooms used in conjunction therewith which are open to unrestricted use and access by the public; publicly owned bathing beaches, parks, and/or playgrounds; and all other places of like or similar nature to which the general public has unrestricted right of access, and which are generally used by the public.
     (29) "Regulations" means regulations made by the board under the powers conferred by this title.
     (30) "Restaurant" means any establishment provided with special space and accommodations where, in consideration of payment, food, without lodgings, is habitually furnished to the public, not including drug stores and soda fountains.
     (31) "Sale" and "sell" include exchange, barter, and traffic; and also include the selling or supplying or distributing, by any means whatsoever, of liquor, or of any liquid known or described as beer or by any name whatever commonly used to describe malt or brewed liquor or of wine, by any person to any person; and also include a sale or selling within the state to a foreign consignee or his agent in the state. "Sale" and "sell" shall not include the giving, at no charge, of a reasonable amount of liquor by a person not licensed by the board to a person not licensed by the board, for personal use only. "Sale" and "sell" also does not include a raffle authorized under RCW 9.46.0315: PROVIDED, That the nonprofit organization conducting the raffle has obtained the appropriate permit from the board.
     (32) "Soda fountain" means a place especially equipped with apparatus for the purpose of dispensing soft drinks, whether mixed or otherwise.
     (33) "Spirits" means any beverage which contains alcohol obtained by distillation, including wines exceeding twenty-four percent of alcohol by volume.
     (34) "Store" means a state liquor store established under this title.
     (35) "Tavern" means any establishment with special space and accommodation for sale by the glass and for consumption on the premises, of beer, as herein defined.
     (36) "Vendor" means a person employed by the board as a store manager under this title.
     (37) "Winery" means a business conducted by any person for the manufacture of wine for sale, other than a domestic winery.
     (38) "Wine" means any alcoholic beverage obtained by fermentation of fruits (grapes, berries, apples, et cetera) or other agricultural product containing sugar, to which any saccharine substances may have been added before, during or after fermentation, and containing not more than twenty-four percent of alcohol by volume, including sweet wines fortified with wine spirits, such as port, sherry, muscatel and angelica, not exceeding twenty-four percent of alcohol by volume and not less than one-half of one percent of alcohol by volume. For purposes of this title, any beverage containing no more than fourteen percent of alcohol by volume when bottled or packaged by the manufacturer shall be referred to as "table wine," and any beverage containing alcohol in an amount more than fourteen percent by volume when bottled or packaged by the manufacturer shall be referred to as "fortified wine." However, "fortified wine" shall not include: (a) Wines that are both sealed or capped by cork closure and aged two years or more; and (b) wines that contain more than fourteen percent alcohol by volume solely as a result of the natural fermentation process and that have not been produced with the addition of wine spirits, brandy, or alcohol.
     This subsection shall not be interpreted to require that any wine be labeled with the designation "table wine" or "fortified wine."
     (39) "Wine distributor" means a person who buys wine from a vintner or winery located either within or beyond the boundaries of the state for the purpose of selling the same not in violation of this title, or who represents such vintner or winery as agent.
     (40) "Wine importer" means a person or business within Washington who purchases wine from a United States winery holding a certificate of approval (W7) or foreign produced wine from a source outside the state of Washington for the purpose of selling the same pursuant to this title.

Sec. 2   RCW 66.24.360 and 1997 c 321 s 22 are each amended to read as follows:
     There shall be a beer and/or wine retailer's license to be designated as a grocery store license to sell beer and/or wine at retail in bottles, cans, and original containers, not to be consumed upon the premises where sold, at any store other than the state liquor stores.
     (1) Licensees obtaining a written endorsement from the board may also sell malt liquor in kegs or other containers capable of holding less than five and one-half gallons of liquid.
     (2) The annual fee for the grocery store license is one hundred fifty dollars for each store.
     (3) The board shall issue a restricted grocery store license authorizing the licensee to sell only beer containing under five and seven-tenths percent of alcohol by weight and microbrew produced by a microbrewery that qualifies for a tax exemption under RCW 66.24.290(3)(b) and is not approved for an alternation of operations under 27 C.F.R. Sec. 25.81 and only table wine, if the board finds upon issuance or renewal of the license that the sale of fortified wine or mid-strength beer as defined in RCW 66.04.010(22) would be against the public interest. In determining the public interest, the board shall consider at least the following factors:
     (a) The likelihood that the applicant will sell fortified wine or mid-strength beer to persons who are intoxicated;
     (b) Law enforcement problems in the vicinity of the applicant's establishment that may arise from persons purchasing fortified wine or mid-strength beer at the establishment; and
     (c) Whether the sale of fortified wine or mid-strength beer would be detrimental to or inconsistent with a government-operated or funded alcohol treatment or detoxification program in the area.
     If the board receives no evidence or objection that the sale of fortified wine or mid-strength beer would be against the public interest, it shall issue or renew the license without restriction, as applicable. The burden of establishing that the sale of fortified wine or mid-strength beer by the licensee would be against the public interest is on those persons objecting.
     (4) Licensees holding a grocery store license must maintain a minimum three thousand dollar inventory of food products for human consumption, not including pop, beer, or wine.
     (5) Upon approval by the board, the grocery store licensee may also receive an endorsement to permit the international export of beer and wine.
     (a) Any beer or wine sold under this endorsement must have been purchased from a licensed beer or wine distributor licensed to do business within the state of Washington.
     (b) Any beer and wine sold under this endorsement must be intended for consumption outside the state of Washington and the United States and appropriate records must be maintained by the licensee.
     (c) A holder of this special endorsement to the grocery store license shall be considered not in violation of RCW 66.28.010.
     (d) Any beer or wine sold under this license must be sold at a price no less than the acquisition price paid by the holder of the license.
     (e) The annual cost of this endorsement is five hundred dollars and is in addition to the license fees paid by the licensee for a grocery store license.

Sec. 3   RCW 66.24.371 and 1997 c 321 s 23 are each amended to read as follows:
     (1) There shall be a beer and/or wine retailer's license to be designated as a beer and/or wine specialty shop license to sell beer and/or wine at retail in bottles, cans, and original containers, not to be consumed upon the premises where sold, at any store other than the state liquor stores. Licensees obtaining a written endorsement from the board may also sell malt liquor in kegs or other containers capable of holding less than five and one-half gallons of liquid. The annual fee for the beer and/or wine specialty shop license is one hundred dollars for each store.
     (2) Licensees under this section may provide, free or for a charge, single-serving samples of two ounces or less to customers for the purpose of sales promotion. Sampling activities of licensees under this section are subject to RCW 66.28.010 and 66.28.040 and the cost of sampling under this section may not be borne, directly or indirectly, by any manufacturer, importer, or distributor of liquor.
     (3) The board shall issue a restricted beer and/or wine specialty shop license, authorizing the licensee to sell only beer containing under five and seven-tenths percent of alcohol by weight and microbrew produced by a microbrewery licensed under RCW 66.24.244 and only table wine, if the board finds upon issuance or renewal of the license that the sale of fortified wine or mid-strength beer as defined in RCW 66.04.010(22) would be against the public interest. In determining the public interest, the board shall consider at least the following factors:
     (a) The likelihood that the applicant will sell fortified wine or mid-strength beer to persons who are intoxicated;
     (b) Law enforcement problems in the vicinity of the applicant's establishment that may arise from persons purchasing fortified wine or mid-strength beer at the establishment; and
     (c) Whether the sale of fortified wine or mid-strength beer would be detrimental to or inconsistent with a government-operated or funded alcohol treatment or detoxification program in the area.
     If the board receives no evidence or objection that the sale of fortified wine would be against the public interest, it shall issue or renew the license without restriction, as applicable. The burden of establishing that the sale of fortified wine or mid-strength beer by the licensee would be against the public interest is on those persons objecting.
     (4) Licensees holding a beer and/or wine specialty shop license must maintain a minimum three thousand dollar wholesale inventory of beer and/or wine.

NEW SECTION.  Sec. 4   A new section is added to chapter 66.08 RCW to read as follows:
     Prior to a government subdivision establishing boundaries by ordinance to create an alcohol impact area, it shall petition the board to issue a restricted license under RCW 66.24.360 or 66.24.371.