AN
ACT Relating to allowing a licensed distiller to hold a spirits, beer, and wine
license; and reenacting and amending RCW 66.28.010.
BE IT ENACTED BY THE
LEGISLATURE OF THE STATE OF WASHINGTON:
Sec.
1. RCW
66.28.010 and 1998 c 127 s 1 and 1998 c 126 s 11 are each reenacted and 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 a corporation that is not
owned directly or indirectly by the manufacturer, 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. Except as otherwise provided in this section, 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 distiller, domestic
brewery, microbrewery, domestic winery, or a lessee of a licensed domestic
brewer, microbrewery, or domestic winery, from being licensed as a spirits,
beer, and wine restaurant pursuant to chapter 66.24 RCW for the purpose of
selling liquor at a spirits, beer, and wine restaurant premises on the property
on which the primary manufacturing facility of the licensed distiller,
domestic brewer, microbrewery, or domestic winery is located or on contiguous
property owned by the licensed distiller, 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.
