AN ACT Relating to modification of the liquor tied-house provisions and requiring retailers to pay cash for beer and wine purchases from wholesalers; amending RCW 66.24.360, 66.28.040, and 66.28.155; creating new sections; and repealing RCW 66.28.010 and 66.28.190.

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

NEW SECTION. Sec. 1. The legislature finds that the existing "tied-house" law governing business practices between liquor manufacturers and wholesalers, and liquor retailers, as interpreted by AGLO 1973 No. 28, is unnecessarily restrictive. The intent of this act is to specifically reverse AGLO 1973 No. 28 and except as otherwise provided, conform state law to the parallel federal law. 27 U.S.C. Sec. 205 (b) and (c). The legislature further intends that in adopting rules implementing this act, the board shall be guided by federal rules to the extent possible.

NEW SECTION. Sec. 2. It shall be unlawful for any manufacturer, importer, or wholesaler, or person financially interested, directly or indirectly, in such business, whether resident or nonresident, to induce any licensed retailer to purchase liquor from such person to the exclusion in whole or in part of liquor sold or offered for sale by other persons, by any of the following means:

(1) By acquiring or holding any interest in any license with respect to the premises of the retailer;

(2) By acquiring any interest in real or personal property owned, occupied, or used by the retailer in the conduct of the retailer's business;

(3) By furnishing, giving, renting, lending, or selling to a retailer, any equipment, fixtures, signs, supplies, money, services, or other thing of value, subject to such exceptions as the board shall by rule prescribe, having due regard for public health, the quantity and value of articles involved, established trade customs not contrary to the public interest and the purposes of this section;

(4) By paying or crediting the retailer for any advertising, display, or distribution service;

(5) By guaranteeing any loan or the repayment of any financial obligation of the retailer; or

(6) By requiring the retailer to take and dispose of a certain quota of liquor.

NEW SECTION. Sec. 3. It shall be unlawful for any manufacturer, importer, or wholesaler, or person financially interested, directly or indirectly, in such business, whether resident or nonresident to induce any wholesaler or licensed retailer to purchase liquor from such person to the exclusion in whole or in part of liquor sold or offered for sale by other persons by (1) commercial bribery; or (2) by offering or giving any bonus, premium, or compensation to any officer, employee, or representative of the wholesaler or licensed retailer. Engaging in any of the conduct described in this section shall be prima facie evidence that the conduct was done to induce the purchase of liquor to the exclusion in whole or in part of liquor sold or offered for sale by other persons.

NEW SECTION. Sec. 4. (1) It shall be unlawful for any wholesaler to extend, and for any retailer to accept, credit for the purchase of beer and wine.

(2) Licensed wholesalers may sell at wholesale products other than beer and wine on thirty-day credit terms to licensed retailers, but complete and separate accounting records shall be maintained on all sales of products other than beer and wine to assure that such persons are in compliance with subsection (1) of this section.

NEW SECTION. Sec. 5. It shall be unlawful for any manufacturer, importer, or wholesaler, or person financially interested, directly or indirectly, in such business, whether resident or nonresident, to give, loan, furnish, or supply any substantial gratuities to a licensed retailer. The board shall adopt rules defining "substantial gratuities." The rules shall include the provision that "substantial gratuities" does not include (1) food and beverages for consumption at a meeting at which the primary purpose is the discussion of business, (2) tickets or admission fees for athletic events or other forms of entertainment if the manufacturer, wholesaler, or importer accompanies the retailer to the event, and (3) transportation to and from activities allowed under this section in the personal vehicle of the manufacturer, wholesaler, or importer.

Sec. 6. Section 1, chapter 217, Laws of 1937 as last amended by section 1, chapter 46, Laws of 1987 and RCW 66.24.360 are each amended to read as follows:

There shall be a beer retailer's license to be designated as class E license to sell pasteurized beer at retail in bottles and original packages, not to be consumed upon the premises where sold, at any store other than the state liquor stores; fee seventy-five dollars per annum for each store: PROVIDED, That a holder of a class A or a class B license shall be entitled to the privileges permitted in this section by paying an annual fee of twenty-five dollars for each store. Licensees under this section whose business is primarily the sale of beer and/or wine at retail 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 shall be subject to ((~~RCW 66.28.010~~)) section 2 of this 1989 act and RCW 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.

For the purpose 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.

Sec. 7. Section 30, chapter 62, Laws of 1933 ex. sess. as last amended by section 15, chapter 452, Laws of 1987 and RCW 66.28.040 are each amended to read as follows:

Except as permitted by the board under RCW 66.20.010, no brewer, wholesaler, distiller, winery, importer, rectifier, or other manufacturer of liquor shall, within the state, by himself, his clerk, servant, or agent, give to any person any liquor; but nothing in this section nor in ((~~RCW 66.28.010~~)) section 2 of this 1989 act shall prevent a brewer, wholesaler, winery, or importer from furnishing samples of beer or wine to authorized licensees for the purpose of negotiating a sale, in accordance with regulations adopted by the liquor control board, provided that the samples are subject to taxes imposed by RCW 66.24.290 and 66.24.210; nothing in this section shall prevent the furnishing of samples of liquor to the board for the purpose of negotiating the sale of liquor to the state liquor control board; nothing in this section shall prevent a brewery, winery, or wholesaler from furnishing beer or wine for instructional purposes under RCW 66.28.150; nothing in this section shall prevent a winery or wholesaler from furnishing wine without charge to a not-for-profit group organized and operated solely for the purpose of enology or the study of viticulture which has been in existence for at least six months and any wine so furnished shall be used solely for such educational purposes, provided that the wine furnished shall be subject to the taxes imposed by RCW 66.24.210; nothing in this section shall prevent a brewer from serving beer without charge, on the brewery premises; nothing in this section shall prevent donations of wine for the purposes of RCW 66.12.180; and nothing in this section shall prevent a domestic winery from serving wine without charge, on the winery premises.

Sec. 8. Section 1, chapter 196, Laws of 1984 and RCW 66.28.155 are each amended to read as follows:

A brewery, winery, wholesaler, or its licensed agent may conduct educational activities or provide product information to the consumer on the licensed premises of a retailer. Information on the subject of wine or beer, including but not limited to, the history, nature, quality, and characteristics of a wine or beer, methods of harvest, production, storage, handling, and distribution of a wine or beer, and the general development of the wine and beer industry may be provided by a brewery, winery, wholesaler, or its licensed agent to the public on the licensed premises of a retailer. The retailer requesting such activity shall attempt to schedule a series of brewery, winery, and wholesaler appearances in an effort to equitably represent the industries. Nothing in this section permits a brewery, winery, wholesaler, or its licensed agent to receive compensation or financial benefit from the educational activities or product information presented on the licensed premises of a retailer. ((~~The promotional value of such educational activities or product information shall not be considered advancement of moneys or of moneys' worth within the meaning of RCW 66.28.010.~~))

NEW SECTION. Sec. 9. The following acts or parts of acts are each repealed:

(1) Section 90, chapter 62, Laws of 1933 ex. sess., section 14, chapter 174, Laws of 1935, section 6, chapter 217, Laws of 1937, section 6, chapter 173, Laws of 1975 1st ex. sess., section 3, chapter 74, Laws of 1975-'76 2nd ex. sess., section 2, chapter 219, Laws of 1977 ex. sess., section 7, chapter 85, Laws of 1982, section 1, chapter 363, Laws of 1985 and RCW 66.28.010; and

(2) Section 1, chapter 50, Laws of 1988 and RCW 66.28.190.