AN
ACT Relating to permitting the licensing of retail alcoholic beverage
businesses in which no manufacturer, importer, or wholesaler has a direct or
indirect interest; amending RCW 66.28.010; and providing an effective date.
BE IT ENACTED BY THE
LEGISLATURE OF THE STATE OF WASHINGTON:
Sec.
1. RCW
66.28.010 and 1997 c 321 s 46 are each amended to read as follows:
(1)(a)
No manufacturer, importer, or distributor, 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, unless the retail business is owned by a corporation in which a
manufacturer or importer has no direct stock ownership and there are no
interlocking officers and directors, the retail license is held by a
corporation that is not owned directly or indirectly by a manufacturer or
importer, the sales of liquor are incidental to the primary activity of
operating the property as a hotel, alcoholic beverages produced by the
manufacturer or importer or their subsidiaries are not sold at the licensed
premises, and the board reviews the ownership and proposed method of operation
of all involved entities and determines that there will not be an unacceptable
level of control or undue influence over the operation or the retail licensee;
nor shall any manufacturer, importer, or distributor 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 or her business
upon property in which any manufacturer, importer, or distributor has any
interest unless title to that property is owned by a corporation in which a
manufacturer has no direct stock ownership and there are no interlocking
officers or directors, the retail license is held by ((an independent
concessionaire which)) a corporation that is not owned directly or
indirectly by the manufacturer ((or property owner)), the sales of
liquor are incidental to the primary activity of operating the property either
as a hotel or as an amphitheater offering live musical and similar live
entertainment activities to the public, alcoholic beverages produced by the
manufacturer or any of its subsidiaries are not sold at the licensed
premises, and the board reviews the ownership and proposed method of operation
of all involved entities and determines that there will not be an unacceptable
level of control or undue influence over the operation of the retail licensee.
Except as provided in subsection (3) of this section, no manufacturer,
importer, or distributor 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. "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
distributor 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 distributor shall be eligible to receive or hold a retail license under this
title, nor shall such manufacturer, importer, or distributor sell at retail any
liquor as herein defined. A corporation granted an exemption under this
subsection may use debt instruments issued in connection with financing
construction or operations of its facilities.
(b)
Nothing in this section shall prohibit a licensed domestic brewery or
microbrewery from being licensed as a retailer pursuant to chapter 66.24 RCW
for the purpose of selling beer or wine at retail on the brewery premises and
nothing in this section shall prohibit a domestic winery from being licensed as
a retailer pursuant to chapter 66.24 RCW for the purpose of selling beer or
wine at retail on the 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 34.05 RCW, and beer and wine that is not produced by
the brewery or winery shall be purchased from a licensed beer or wine
distributor.
(c)
Nothing in this section shall prohibit a licensed domestic brewery,
microbrewery, domestic winery, or a lessee of a licensed domestic brewer,
microbrewery, or domestic winery, from being licensed as a full service
restaurant pursuant to chapter 66.24 RCW for the purpose of selling liquor at a
full service restaurant premises on the property on which the primary
manufacturing facility of the licensed domestic brewer, microbrewery, or
domestic winery is located or on contiguous property owned by the licensed
domestic brewer, microbrewery, or domestic winery as prescribed by rules
adopted by the board pursuant to chapter 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 34.05 RCW manufacturers, distributors, 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 distributor from
providing services to a special occasion licensee for: (i) Installation of
draft beer dispensing equipment or advertising, (ii) advertising, pouring, or
dispensing of beer or wine at a beer or wine tasting exhibition or judging
event, or (iii) a special occasion licensee from receiving any such services as
may be provided by a manufacturer, importer, or distributor. 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
distributor'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 distributor, (ii) is not employed by the distributor, and
(iii) does not influence or attempt to influence liquor purchases by retail
liquor licensees from the distributor.
(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 34.05 RCW.
(4)
A license issued under RCW 66.24.395 does not constitute a retail license for
the purposes of this section.
(5)
A public house license issued under RCW 66.24.580 does not violate the
provisions of this section as to a retailer having an interest directly or
indirectly in a liquor-licensed manufacturer.
NEW SECTION. Sec. 2. This
act takes effect July 1, 1998.
