BILL REQ. #:  S-2380.1 

READ FIRST TIME 03/10/03.   

     AN ACT Relating to the liquor control board fully implementing a retail business plan; amending RCW 66.08.030, 66.08.050, 66.08.060, and 41.06.380; adding new sections to chapter 66.08 RCW; adding a new section to chapter 66.16 RCW; creating a new section; and repealing RCW 66.16.080.

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

NEW SECTION.  Sec. 1   The legislature intends that the liquor control board shall generate additional revenues to state and local governments and be operated in a manner that improves efficiency. The legislature further intends that the liquor control board implement a retail business plan to support efficiency and increased revenue by expanding hours of sales to include Sundays, operating during the most efficient days and hours of sales, and devising and implementing additional strategies to maximize revenue-generating opportunities. The legislature finds that the eventual implementation of the liquor control board's merchandising business system will enable the board to make decisions about hours of sales and purchasing that will increase efficiency and revenues.

NEW SECTION.  Sec. 2   A new section is added to chapter 66.08 RCW to read as follows:
     The board shall devise a retail business plan to implement strategies to improve the efficiency and quality of retail sales operations and maximize revenue-generating opportunities. The board shall present the retail business plan and its supporting study under section 4 of this act to the appropriate policy and fiscal committees of the legislature by January 31, 2004. Strategies to be implemented include, but are not limited to:
     (1) Expanding hours of retail sales operations to include Sunday sales in liquor stores as appropriate under subsection (2) of this section;
     (2) Implementing store hours that will be of the best service to customers and generate the most revenue, based on the study in section 4 of this act;
     (3) Implementing a plan of in-store merchandising, including point-of-sale advertising, and product specific point-of-sale promotional displays and carousels, including displays designed and provided by vendors;
     (4) Implementing a plan for in-store merchandising of brands and gift packs; and
     (5) Appointing liquor vendors, as referenced in RCW 66.08.050, in any area that could support additional retail sales.

NEW SECTION.  Sec. 3   A new section is added to chapter 66.08 RCW to read as follows:
     The board shall open ten state-operated retail stores on Sunday by September 1, 2003. The board shall select the ten stores that are expected to gross the most revenues on Sunday due to their proximity to shopping centers and other businesses that are open on Sunday, and other appropriate locations based on the experience of liquor stores in other states that have increased gross sales due to Sunday hours. The board shall open for at least five hours on Sunday, and shall adjust nonpeak hours without high sales during the week as appropriate to offset the costs of opening on Sunday to the extent possible without affecting revenues. Hours must also meet the needs of restaurants and taverns licensed under RCW 66.24.320, 66.24.330, and 66.24.400. To the best of its ability, the board shall track gross sales and expenses at these stores and compare them to previous years' sales and projected sales and expenses prior to opening on Sunday.

NEW SECTION.  Sec. 4   A new section is added to chapter 66.08 RCW to read as follows:
     In order to implement section 2 of this act, the board shall study the days and hours of Washington state liquor store operation that improve efficiency and yield maximum revenue for the state. The study shall include, but is not limited to:
     (1) The hours and days of sale in Washington state liquor stores that generate the greatest sales based on data from the merchandising business system, the ten store openings under section 3 of this act, and other sources;
     (2) Information about how the private retail sector and other control states have implemented hours that improve efficiency and increase revenues; and
     (3) Information about what types of store locations in other states generate more revenue due to Sunday sales.

NEW SECTION.  Sec. 5   A new section is added to chapter 66.16 RCW to read as follows:
     Liquor vendors, as referenced in RCW 66.08.050, may sell liquor on Sundays but are not required to do so.

Sec. 6   RCW 66.08.030 and 2002 c 119 s 2 are each amended to read as follows:
     (1) For the purpose of carrying into effect the provisions of this title according to their true intent or of supplying any deficiency therein, the board may make such ((regulations)) rules not inconsistent with the spirit of this title as are deemed necessary or advisable. All ((regulations so made)) rules shall be a public record and shall be filed in the office of the code reviser, and ((thereupon)) shall have the same force and effect as if incorporated in this title. ((Such regulations)) These rules, together with a copy of this title, shall be published in pamphlets and shall be distributed as directed by the board.
     (2) Without ((thereby)) limiting the generality of the provisions contained in subsection (1) of this section, it is declared that the power of the board to make ((regulations)) rules in the manner set out in that subsection shall extend to:
     (a) Regulating the equipment and management of stores and warehouses in which state liquor is sold or kept, and prescribing the books and records to be kept therein and the reports to be made thereon to the board;
     (b) Prescribing the duties of the employees of the board, and regulating their conduct in the discharge of their duties;
     (c) Governing the purchase of liquor by the state and the furnishing of liquor to stores established under this title;
     (d) Determining the classes, varieties, and brands of liquor to be kept for sale at any store;
     (e) Prescribing((, subject to RCW 66.16.080,)) the hours during which the state liquor stores shall be kept open for the sale of liquor;
     (f) Providing for the issuing and distributing of price lists showing the price to be paid by purchasers for each variety of liquor kept for sale under this title;
     (g) Prescribing an official seal and official labels and stamps and determining the manner in which they shall be attached to every package of liquor sold or sealed under this title, including the prescribing of different official seals or different official labels for different classes of liquor;
     (h) Providing for the payment by the board in whole or in part of the carrying charges on liquor shipped by freight or express;
     (i) Prescribing forms to be used for purposes of this title or the ((regulations)) rules, and the terms and conditions to be contained in permits and licenses issued under this title, and the qualifications for receiving a permit or license issued under this title, including a criminal history record information check. The board may submit the criminal history record information check to the Washington state patrol and to the identification division of the federal bureau of investigation in order that these agencies may search their records for prior arrests and convictions of the individual or individuals who filled out the forms. The board shall require fingerprinting of any applicant whose criminal history record information check is submitted to the federal bureau of investigation;
     (j) Prescribing the fees payable in respect of permits and licenses issued under this title for which no fees are prescribed in this title, and prescribing the fees for anything done or permitted to be done under the ((regulations)) rules;
     (k) Prescribing the kinds and quantities of liquor which may be kept on hand by the holder of a special permit for the purposes named in the permit, regulating the manner in which the same shall be kept and disposed of, and providing for the inspection of the same at any time at the instance of the board;
     (l) Regulating the sale of liquor kept by the holders of licenses which entitle the holder to purchase and keep liquor for sale;
     (m) Prescribing the records of purchases or sales of liquor kept by the holders of licenses, and the reports to be made thereon to the board, and providing for inspection of the records so kept;
     (n) Prescribing the kinds and quantities of liquor for which a prescription may be given, and the number of prescriptions which may be given to the same patient within a stated period;
     (o) Prescribing the manner of giving and serving notices required by this title or the ((regulations)) rules, where not otherwise provided for in this title;
     (p) Regulating premises in which liquor is kept for export from the state, or from which liquor is exported, prescribing the books and records to be kept therein and the reports to be made thereon to the board, and providing for the inspection of the premises and the books, records and the liquor so kept;
     (q) Prescribing the conditions and qualifications requisite for the obtaining of club licenses and the books and records to be kept and the returns to be made by clubs, prescribing the manner of licensing clubs in any municipality or other locality, and providing for the inspection of clubs;
     (r) Prescribing the conditions, accommodations, and qualifications requisite for the obtaining of licenses to sell beer and wines, and regulating the sale of beer and wines ((thereunder));
     (s) Specifying and regulating the time and periods when, and the manner, methods, and means by which manufacturers shall deliver liquor within the state; and the time and periods when, and the manner, methods, and means by which liquor may lawfully be conveyed or carried within the state;
     (t) Providing for the making of returns by brewers of their sales of beer shipped within the state, or from the state, showing the gross amount of ((such)) the sales and providing for the inspection of brewers' books and records, and for the checking of the accuracy of any ((such)) returns;
     (u) Providing for the making of returns by the wholesalers of beer whose breweries are located beyond the boundaries of the state;
     (v) Providing for the making of returns by any other liquor manufacturers, showing the gross amount of liquor produced or purchased, the amount sold within and exported from the state, and to whom so sold or exported, and providing for the inspection of the premises of any ((such)) liquor manufacturers, their books and records, and for the checking of any ((such)) return;
     (w) Providing for the giving of fidelity bonds by any or all of the employees of the board((: PROVIDED, That)). However, the premiums ((therefor)) shall be paid by the board;
     (x) Providing for the shipment by mail or common carrier of liquor to any person holding a permit and residing in any unit which has, by election pursuant to this title, prohibited the sale of liquor therein;
     (y) Prescribing methods of manufacture, conditions of sanitation, standards of ingredients, quality and identity of alcoholic beverages manufactured, sold, bottled, or handled by licensees and the board; and conducting from time to time, in the interest of the public health and general welfare, scientific studies and research relating to alcoholic beverages and the use and effect thereof;
     (z) Seizing, confiscating, and destroying all alcoholic beverages manufactured, sold, or offered for sale within this state which do not conform in all respects to the standards prescribed by this title or the ((regulations)) rules of the board((: PROVIDED, Nothing herein contained shall be construed as authorizing)). The liquor board ((to)) may not prescribe, alter, limit, or in any way change the present law as to the quantity or percentage of alcohol used in the manufacturing of wine or other alcoholic beverages.

Sec. 7   RCW 66.08.050 and 1997 c 228 s 1 are each amended to read as follows:
     The board, subject to the provisions of this title and the rules, shall:
     (1) Determine the localities within which state liquor stores shall be established throughout the state, and the number and situation of the stores within each locality;
     (2) Appoint in cities and towns and other communities((, in which no state liquor store is located,)) liquor vendors. In addition, the board may appoint, in its discretion, a manufacturer that also manufactures liquor products other than wine under a license under this title, as a vendor for the purpose of sale of liquor products of its own manufacture on the licensed premises only. Such liquor vendors shall be agents of the board and be authorized to sell liquor to such persons, firms or corporations as provided for the sale of liquor from a state liquor store, and such vendors shall be subject to such additional rules and regulations consistent with this title as the board may require;
     (3) Establish all necessary warehouses for the storing and bottling, diluting and rectifying of stocks of liquors for the purposes of this title;
     (4) Provide for the leasing for periods not to exceed ten years of all premises required for the conduct of the business; and for remodeling the same, and the procuring of their furnishings, fixtures, and supplies; and for obtaining options of renewal of such leases by the lessee. The terms of such leases in all other respects shall be subject to the direction of the board;
     (5) Determine the nature, form and capacity of all packages to be used for containing liquor kept for sale under this title;
     (6) Execute or cause to be executed, all contracts, papers, and documents in the name of the board, under such regulations as the board may fix;
     (7) Pay all customs, duties, excises, charges and obligations whatsoever relating to the business of the board;
     (8) Require bonds from all employees in the discretion of the board, and to determine the amount of fidelity bond of each such employee;
     (9) Perform services for the state lottery commission to such extent, and for such compensation, as may be mutually agreed upon between the board and the commission;
     (10) Accept and deposit into the general fund-local account and disburse, subject to appropriation, federal grants or other funds or donations from any source for the purpose of improving public awareness of the health risks associated with alcohol consumption by youth and the abuse of alcohol by adults in Washington state. The board's alcohol awareness program shall cooperate with federal and state agencies, interested organizations, and individuals to effect an active public beverage alcohol awareness program;
     (11) Perform all other matters and things, whether similar to the foregoing or not, to carry out the provisions of this title, and shall have full power to do each and every act necessary to the conduct of its business, including all buying, selling, preparation and approval of forms, and every other function of the business whatsoever, subject only to audit by the state auditor: PROVIDED, That the board shall have no authority to regulate the content of spoken language on licensed premises where wine and other liquors are served and where there is not a clear and present danger of disorderly conduct being provoked by such language.

Sec. 8   RCW 66.08.060 and 1933 ex.s. c 62 s 43 are each amended to read as follows:
     (1) The board shall not advertise liquor in any form or through any medium whatsoever.
     (2) The following is not considered advertising for the purposes of this section:
     (a) Placement of signs that are visible through the window of retail stores indicating store hours or changes in store hours;
     (b) Use of media designed to be informational regarding locations or hours of operation, or changes in hours of operation, of retail outlets; and
     (c) In-store merchandising, including point-of-sale advertising, and product specific point-of-sale promotional displays and carousels, including displays designed and provided by vendors.
     (3) The board shall have power to adopt any and all reasonable ((regulations)) rules as to the kind, character, and location of advertising of liquor.

Sec. 9   RCW 41.06.380 and 1979 ex.s. c 46 s 2 are each amended to read as follows:
     Nothing contained in this chapter shall prohibit any department, as defined in RCW 41.06.020, from purchasing services by contract with individuals or business entities if such services were regularly purchased by valid contract by such department prior to April 23, 1979: PROVIDED, That no such contract may be executed or renewed if it would have the effect of terminating classified employees or classified employee positions existing at the time of the execution or renewal of the contract: AND PROVIDED FURTHER, That this section does not apply to the liquor control board appointing liquor vendors, as referenced in RCW 66.08.050.

NEW SECTION.  Sec. 10   RCW 66.16.080 (Sunday closing) and 1988 c 101 s 1 & 1933 ex.s. c 62 s 11 are each repealed.

NEW SECTION.  Sec. 11   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.