AN ACT Relating to liquor license consolidation and fees; amending RCW 66.24.420, 66.28.010, 66.24.455, 66.44.340, and 66.44.350; adding new sections to chapter 66.24 RCW; repealing RCW 66.24.320, 66.24.330, 66.24.340, 66.24.350, 66.24.360, 66.24.370, 66.24.375, 66.24.380, 66.24.490, 66.24.500, and 66.24.510; providing effective dates; and declaring an emergency.

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

NEW SECTION. Sec. 1. (1) There shall be a retail license to be known as a class A restaurant license. Subject to the limitations in this section, the license shall allow the sale of beer and wine at retail for consumption on the premises, and the sale of unpasteurized beer for consumption off the premises. The license may be issued only to hotels, restaurants, drug stores or soda fountains, dining places on boats and airplanes, clubs, and at sports arenas or race tracks during recognized professional athletic events.

(2) Unpasteurized beer sold under this section must be in original sealed packages of the manufacturer or bottler of not less than seven and three-fourths gallons or in a sanitary container brought to the premises by the purchaser and filled at the tap by the retailer at the time of sale.

(3) A patron of a restaurant, hotel, or club licensed under this section may remove from the premises, recorked or recapped in its original container, any portion of wine which was purchased for consumption with a meal.

(4) The fee for the license is five hundred dollars per year.

NEW SECTION. Sec. 2. (1) There shall be a retail license to be known as a class B tavern license. Subject to the limitations in this section, the license shall allow the sale of beer and wine at retail, for consumption on the premises, and the sale of unpasteurized beer for consumption off the premises. The license may be issued only to a person operating a tavern.

(3) The fee for the license is five hundred dollars per year.

NEW SECTION. Sec. 3. (1) There shall be a retail license to be known as a class E off-premises license. Subject to the limitations in this section, the license shall allow the sale at retail of pasteurized beer, and table and fortified wine, in bottles and original packages, not to be consumed upon the premises where sold. The license may be issued to any store other than the state liquor stores.

(2) Licensees under this section whose business is primarily the sale of beer or wine at retail may provide, free or for a charge, single-serving samples of two ounces or less to customers for the purposes of sales promotion. Sampling activities of licensees under this section shall be 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 wholesaler of liquor.

(3) For the purposes of this section, "pasteurized beer" includes, in addition to the usual and customary meaning, bottle-conditioned beer which has been fermented partially or completely in the container in which it is sold to the retail customer and which may contain residual active yeast. The bottles and original packages in which such bottle-conditioned beer may be sold under this section shall not exceed one hundred seventy ounces in capacity.

(4) In counties with a population of over three hundred thousand, the board shall issue a restricted class E license, authorizing the licensee to sell pasteurized beer and table wine only, if the board finds upon issuance or renewal of the license that the sale of fortified wine 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 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 at the establishment; and

(c) Whether the sale of fortified wine 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 by the licensee would be against the public interest is on those persons objecting.

(5) The fee for the license is three hundred dollars per year for each store, except that the fee for a holder of a class A or B license is one hundred fifty dollars per year for each store.

NEW SECTION. Sec. 4. (1) There shall be a retail license to be know as a class G special occasion license. The license shall allow the sale of beer, wine, and spirituous liquor, including mixed drinks and cocktails compounded or mixed on the premises only, at picnics or other special occasions at a specified date and place.

(2) Except as provided in subsection (4) of this section, the sale, service, and consumption of liquor under this section shall be confined to specified premises or designated areas only.

(3) Spirituous liquor so sold shall be purchased at a state liquor store or agency without discount at retail prices including all taxes.

(4) A holder of a class G special occasion license may sell, at no more than two licensed events per year, limited quantities of wine in unopened bottles and original packages to persons in attendance at the special occasion, not to be consumed on the premises.

(5) The fee for the license is seventy-five dollars per day.

Sec. 5. Section 2, chapter 13, Laws of 1970 ex. sess. as last amended by section 45, chapter 5, Laws of 1981 1st ex. sess. and RCW 66.24.420 are each amended to read as follows:

(1) The class H license shall be issued in accordance with the following schedule of annual fees:

(a) The annual fee for said license, if issued to a club, ((~~whether inside or outside of incorporated cities and towns,~~)) shall be seven hundred dollars.

(b) The annual fee for said license, if issued to any other class H licensee ((~~in incorporated cities and towns~~)), shall be graduated according to the ((~~population thereof~~)) type of beverage service available as follows:

!tp1,1,1,1 !tl((~~Incorporated~~

!tl~~Cities and towns!tj1!tcFees~~

!tl~~Less than 20,000!tj1!tc$1,200~~

!tl~~20,000 or over!tj1!tc$2,000~~))

!tlService bar!tj1!tc$1,000

!tlFull service lounge!tj1!tc$2,000

!tlMultiple lounges!tj1!tc$3,000

(c) The ((~~annual fee for said license when issued to any other class H licensee outside of incorporated cities and towns shall be: Two thousand dollars; this~~)) fee shall be prorated according to the calendar quarters, or portion thereof, during which the licensee is open for business, except in case of suspension or revocation of the license.

(d) Where the license shall be issued to any corporation, association or person operating a bona fide restaurant in an airport terminal facility providing service to transient passengers with more than one place where liquor is to be dispensed and sold, such license shall be issued upon the payment of the annual fee, which shall be a master license and shall permit such sale within and from one such place. Such license may be extended to additional places on the premises at the discretion of the board and a duplicate license may be issued for each such additional place: PROVIDED, That the holder of a master license for a restaurant in an airport terminal facility shall be required to maintain in a substantial manner at least one place on the premises for preparing, cooking and serving of complete meals, and such food service shall be available on request in other licensed places on the premises: PROVIDED, FURTHER, That an additional license fee of twenty-five percent of the annual master license fee shall be required for such duplicate licenses.

(e) Where the license shall be issued to any corporation, association, or person operating dining places at publicly owned civic centers with facilities for sports, entertainment, and conventions, with more than one place where liquor is to be dispensed and sold, such license shall be issued upon the payment of the annual fee, which shall be a master license and shall permit such sale within and from one such place. Such license may be extended to additional places on the premises at the discretion of the board and a duplicate license may be issued for each such additional place: PROVIDED, That the holder of a master license for a dining place at such a publicly owned civic center shall be required to maintain in a substantial manner at least one place on the premises for preparing, cooking and serving of complete meals, and food service shall be available on request in other licensed places on the premises: PROVIDED FURTHER, That an additional license fee of ten dollars shall be required for such duplicate licenses.

(f) Where the license shall be issued to any corporation, association or person operating more than one building containing dining places at privately owned facilities which are open to the public and where there is a continuity of ownership of all adjacent property, such license shall be issued upon the payment of an annual fee which shall be a master license and shall permit such sale within and from one such place. Such license may be extended to the additional dining places on the property at the discretion of the board and a duplicate license may be issued for each additional place: PROVIDED, That the holder of the master license for the dining place shall not offer alcoholic beverages for sale, service, and consumption at the additional place unless food service is available at both the location of the master license and the duplicate license: PROVIDED FURTHER, That an additional license fee of twenty dollars shall be required for such duplicate licenses.

(2) The board, so far as in its judgment is reasonably possible, shall confine class H licenses to the business districts of cities and towns and other communities, and not grant such licenses in residential districts, nor within the immediate vicinity of schools, without being limited in the administration of this subsection to any specific distance requirements.

(3) The board shall have discretion to issue class H licenses outside of cities and towns in the state of Washington. The purpose of this subsection is to enable the board, in its discretion, to license in areas outside of cities and towns and other communities, establishments which are operated and maintained primarily for the benefit of tourists, vacationers and travelers, and also golf and country clubs, and common carriers operating dining, club and buffet cars, or boats.

(4) The total number of class H licenses issued in the state of Washington by the board, not including those class H licenses issued to clubs, shall not in the aggregate at any time exceed one license for each fifteen hundred of population in the state, determined according to the yearly population determination developed by the office of financial management pursuant to RCW 43.62.030.

(5) Notwithstanding the provisions of subsection (4) of this section, the board shall refuse a class H license to any applicant if in the opinion of the board the class H licenses already granted for the particular locality are adequate for the reasonable needs of the community.

NEW SECTION. Sec. 6. (1) There shall be a retail license to be known as a class I catering license. Subject to the limitations in this section, the license shall allow the sale and service of liquor at retail, for consumption on the premises, to members and guests of a society or organization on special occasions at a specified date and place on premises other than the licensed premises. The license may be issued to the holder of a class A, B, or H license. A class H licensee may sell spiritous liquor by the individual glass, beer, and wine under this section. A class A or B licensee may sell only beer and wine under this section. The license may be issued for a specified date and place or for a year.

(2) The licensee shall be allowed to remove liquor for sale and service at such special occasion locations from the liquor stocks at the licensed premises of the licensee.

(3) the holder of an annual class I catering license shall notify the board prior to each event at which the license will be utilized. The licensee shall provide to the board all necessary or requested information concerning the society or organization which will be holding the function at which the license will be utilized.

(4) The holder of an annual class I catering license shall also notify the appropriate local authorities.

(5) A class H club licensee may use a class I license only for events of the club.

(6) (a) licensee may conduct catering activities under this section only if the society or organization sponsoring the function is a "society or organization" as defined in (b) of this subsection, or attendance at the function will be limited to members and invited guests of the sponsoring society or organization.

(b) "Society or organization" means a not-for-profit group organized and operated solely for charitable, religious, social, political, educational, civic, fraternal, athletic, or benevolent purposes. No portion of the profits from events sponsored by a not-for-profit group may be paid directly or indirectly to members, officers, directors, or trustees except for services performed for the organization. Any compensation paid to its officers and executives must be only for actual services and at levels comparable to the compensation for like positions within the state. A society or organization which is registered with the secretary of state or the federal internal revenue service as a nonprofit organization may submit such registration as proof that it is a not-for-profit group.

(7) The fee for the license is five hundred dollars per year for an annual license or twenty-five dollars per event.

Sec. 7. Section 90, chapter 62, Laws of 1933 ex. sess. as last amended by section 1, chapter 363, Laws of 1985 and RCW 66.28.010 are each amended to read as follows:

(1) No manufacturer, importer, or wholesaler, or person financially interested, directly or indirectly, in such business, whether resident or nonresident, shall have any financial interest, direct or indirect, in any licensed retail business, nor shall any manufacturer, importer, or wholesaler own any of the property upon which such licensed persons conduct their business, nor shall any such licensed person, under any arrangement whatsoever, conduct his business upon property in which any manufacturer, importer, or wholesaler has any interest. Except as provided in subsection (3) of this section, no manufacturer, importer, or wholesaler shall advance moneys or moneys' worth to a licensed person under an arrangement, nor shall such licensed person receive, under an arrangement, an advance of moneys or moneys' worth: PROVIDED, That "person" as used in this section only shall not include those state or federally chartered banks, state or federally chartered savings and loan associations, state or federally chartered mutual savings banks, or institutional investors which are not controlled directly or indirectly by a manufacturer, importer, or wholesaler as long as the bank, savings and loan association, or institutional investor does not influence or attempt to influence the purchasing practices of the retailer with respect to alcoholic beverages. No manufacturer, importer, or wholesaler shall be eligible to receive or hold a retail license under this title, nor shall such manufacturer, importer, or wholesaler sell at retail any liquor as herein defined: PROVIDED, That nothing in this section shall prohibit a licensed brewer or domestic winery from being licensed as a retailer pursuant to chapter 66.24 RCW for the purpose of selling beer or wine of its own production at retail on the brewery or winery premises. Such beer and wine so sold at retail shall be subject to the taxes imposed by RCW 66.24.290 and 66.24.210 and to reporting and bonding requirements as prescribed by regulations adopted by the board pursuant to chapter ((~~34.04~~)) 34.05 RCW: PROVIDED FURTHER, That nothing in this section shall prohibit a licensed brewer or domestic winery, or a lessee of a licensed brewer or domestic winery, from being licensed as a class H restaurant pursuant to chapter 66.24 RCW for the purpose of selling liquor at a class H premises on the property on which the primary manufacturing facility of the licensed brewer or domestic winery is located or on contiguous property owned by the licensed brewer or domestic winery as prescribed by regulations adopted by the board pursuant to chapter ((~~34.04~~)) 34.05 RCW.

(2) Financial interest, direct or indirect, as used in this section, shall include any interest, whether by stock ownership, mortgage, lien, or through interlocking directors, or otherwise. Pursuant to rules promulgated by the board in accordance with chapter ((~~34.04~~)) 34.05 RCW manufacturers, wholesalers and importers may perform, and retailers may accept the service of building, rotating and restocking case displays and stock room inventories; rotating and rearranging can and bottle displays of their own products; provide point of sale material and brand signs; price case goods of their own brands; and perform such similar normal business services as the board may by regulation prescribe.

(3)(a) This section does not prohibit a manufacturer, importer, or wholesaler from providing services to a class G ((~~or J~~)) retail licensee for: (i) Installation of draft beer dispensing equipment or advertising, (ii) advertising, pouring or dispensing of wine at a wine tasting exhibition or judging event, or (iii) a class G ((~~or J~~)) retail licensee from receiving any such services as may be provided by a manufacturer, importer, or wholesaler: PROVIDED, That nothing in this section shall prohibit a retail licensee, or any person financially interested, directly or indirectly, in such a retail licensee from having a financial interest, direct or indirect, in a business which provides, for a compensation commensurate in value to the services provided, bottling, canning or other services to a manufacturer, so long as the retail licensee or person interested therein has no direct financial interest in or control of said manufacturer.

(b) A person holding contractual rights to payment from selling a liquor wholesaler's business and transferring the license shall not be deemed to have a financial interest under this section if the person (i) lacks any ownership in or control of the wholesaler, (ii) is not employed by the wholesaler, and (iii) does not influence or attempt to influence liquor purchases by retail liquor licensees from the wholesaler.

(c) The board shall adopt such rules as are deemed necessary to carry out the purposes and provisions of subsection (3)(a) of this section in accordance with the administrative procedure act, chapter ((~~34.04~~)) 34.05 RCW.

(4) A license issued under RCW 66.24.395 does not constitute a retail license for the purposes of this section.

Sec. 8. Section 1, chapter 65, Laws of 1974 ex. sess. and RCW 66.24.455 are each amended to read as follows:

Subject to approval by the board, holders of class A((~~, C, D~~)) or H licenses may extend their premises for the sale, service and consumption of liquor authorized under their respective licenses to the concourse or lane areas in a bowling establishment where the concourse or lane areas are adjacent to the food preparation service facility.

Sec. 9. Section 1, chapter 38, Laws of 1969 ex. sess. as last amended by section 1, chapter 5, Laws of 1986 and RCW 66.44.340 are each amended to read as follows:

Employers holding class E ((~~and/or F~~)) licenses exclusively are permitted to allow their employees, between the ages of eighteen and twenty-one years, to sell, stock, and handle beer or wine in, on or about any establishment holding a class E ((~~and/or class F~~)) license exclusively: PROVIDED, That there is an adult twenty-one years of age or older on duty supervising the sale of liquor at the licensed premises: PROVIDED, That minor employees may make deliveries of beer and/or wine purchased from licensees holding class E ((~~and/or class F~~)) licenses exclusively, when delivery is made to cars of customers adjacent to such licensed premises but only, however, when the minor employee is accompanied by the purchaser.

Sec. 10. Section 1, chapter 204, Laws of 1975 1st ex. sess. as amended by section 1, chapter 160, Laws of 1988 and RCW 66.44.350 are each amended to read as follows:

Notwithstanding provisions of RCW 66.44.310, employees of class A((~~, C, D~~)) and/or H licensees eighteen years of age and over may take orders for, serve and sell liquor in any part of the licensed premises except cocktail lounges, bars, or other areas classified by the Washington state liquor control board as off-limits to persons under twenty-one years of age: PROVIDED, That such employees may enter such restricted areas to perform work assignments including picking up liquor for service in other parts of the licensed premises, performing clean up work, setting up and arranging tables, delivering supplies, delivering messages, serving food, and seating patrons: PROVIDED FURTHER, That such employees shall remain in the areas off-limits to minors no longer than is necessary to carry out their aforementioned duties: PROVIDED FURTHER, That such employees shall not be permitted to perform activities or functions of a bartender.

NEW SECTION. Sec. 11. Sections 1 through 4 and 6 of this act are each added to chapter 66.24 RCW.

NEW SECTION. Sec. 12. (1) Sections 1 through 6 of this act are necessary for the immediate preservation of the public peace, health, or safety, or support of the state government and its existing public institutions, and shall take effect June 1, 1989.

(2) Sections 7 through 10 of this act shall take effect June 1, 1990.

NEW SECTION. Sec. 13. The following acts or parts of acts are each repealed:

(1) Section 1, chapter 217, Laws of 1937, section 1, chapter 220, Laws of 1941, section 2, chapter 75, Laws of 1967 ex. sess., section 1, chapter 117, Laws of 1969, section 1, chapter 9, Laws of 1977 ex. sess., section 37, chapter 5, Laws of 1981 1st ex. sess., section 11, chapter 458, Laws of 1987 and RCW 66.24.320;

(2) Section 1, chapter 217, Laws of 1937, section 2, chapter 220, Laws of 1941, section 3, chapter 75 Laws of 1967 1st ex. sess., section 15, chapter 209, Laws of 1973 1st ex. sess., section 2, chapter 9, Laws of 1977 ex. sess., section 38, chapter 5, Laws of 1981 1st ex. sess., section 12, chapter 458, Laws of 1987 and RCW 66.24.330;

(3) Section 1, chapter 217, Laws of 1937, section 3, chapter 220, Laws of 1941, section 4, chapter 75, Laws of 1967 ex. sess., section 3, chapter 9, Laws of 1977 ex. sess., section 1, chapter 94, Laws of 1981, section 39, chapter 5, Laws of 1981 1st ex. sess. and RCW 66.24.340;

(4) Section 1, chapter 217, Laws of 1937, section 5, chapter 75, Laws of 1967 ex. sess., section 40, chapter 5, Laws of 1981 1st ex. sess. and RCW 66.24.350;

(5) Section 1, chapter 217, Laws of 1937, section 6, chapter 75, Laws of 1967 ex. sess., section 41, chapter 5, Laws of 1981 1st ex. sess., section 1, chapter 46, Laws of 1987 and RCW 66.24.360;

(6) Section 1, chapter 217, Laws of 1937, section 7, chapter 75, Laws of 1967 ex. sess., section 16, chapter 209, Laws of 1973 1st ex. sess., section 1, chapter 182, Laws of 1981, section 42, chapter 5, Laws of 1981 1st ex. sess., section 4, chapter 386, Laws of 1987 and RCW 66.24.370;

(7) Section 2, chapter 287, Laws of 1981 and RCW 66.24.375;

(8) Section 1, chapter 217, Laws of 1937, section 5, chapter 178, Laws of 1969 ex. sess., section 17, chapter 209, Laws of 1973 1st ex. sess., section 43, chapter 5, Laws of 1981 1st ex. sess., section 2, chapter 200, Laws of 1988 and RCW 66.24.380;

(9) Section 1, chapter 55, Laws of 1967, section 7, chapter 178, Laws of 1969 ex. sess., section 5, chapter 9, Laws of 1977 ex. sess., section 19, chapter 5, Laws of 1981 1st ex. sess., section 1, chapter 306, Laws of 1985, section 6, chapter 386, Laws of 1987 and RCW 66.24.490;

(10) Section 6, chapter 85, Laws of 1982, section 3, chapter 200, Laws of 1988 and RCW 66.24.500; and

(11) Section 12, chapter 173, Laws of 1975 1st ex. sess., section 47, chapter 5, Laws of 1981 1st ex. sess., section 1, chapter 71, Laws of 1984 and RCW 66.24.510.