BILL REQ. #:  H-0525.2 

Read first time 01/12/11.   Referred to Committee on State Government & Tribal Affairs.

     AN ACT Relating to alcohol sales in state liquor stores and contract liquor stores; amending RCW 66.08.050; adding a new section to chapter 66.08 RCW; and creating new sections.

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

NEW SECTION.  Sec. 1   The legislature finds that the state of Washington currently contracts out part of its retail liquor sales by allowing contract liquor stores to sell liquor. The legislature finds that selective further contracting out of the state's retail liquor sales will result in a system that is more efficient and cost-effective for the state than the current hybrid system of state liquor stores and contract liquor stores. In addition, the legislature finds that it is in the best interests of the state to consider how to implement a full contract liquor store system. Therefore, the legislature intends to convert selected state liquor stores to contract liquor stores; convert additional state liquor stores to contract liquor stores on a pilot basis; monitor and evaluate the impact of the conversions; and determine under what conditions a full contract liquor store system would be more efficient and cost-effective for the state. In converting state liquor stores to contract liquor stores, the legislature intends that there be no revenue loss to the state. Further, the legislature intends that this act constitutes a law preventing the liquor control board from carrying out the terms of leases for state liquor stores being converted.

NEW SECTION.  Sec. 2   A new section is added to chapter 66.08 RCW to read as follows:
     (1) The board must convert at least twenty state liquor stores to contract liquor stores between September 1, 2011, and July 1, 2013. The board must select stores for conversion under this subsection that the board determines will result in the greatest efficiency and cost-effectiveness for the state.
     (2) In addition to the conversion of state liquor stores in subsection (1) of this section, the board must convert ten state liquor stores to contract liquor stores on a pilot basis between September 1, 2011, and July 1, 2012. The board must select medium and high volume stores for conversion under this subsection so as to best allow the board to recommend under what conditions a full contract liquor store system would be more efficient and cost-effective for the state.
     (3) Nothing in this section affects the authority of the board to relocate or close contract liquor stores.

NEW SECTION.  Sec. 3   (1) The liquor control board must study the contracting out the state's retail sale of liquor under section 2 of this act. The study must include:
     (a) An analysis of the revenue generating capacity for the state of newly established contract stores compared to the converted state liquor stores;
     (b) A comparison between the newly established contract stores and the state liquor stores of key performance indicators including, but not limited to, inventory audit results, inventory turns, product selection, square footage, and the impact on customer satisfaction, including the impact on licensees of the board;
     (c) An analysis of access to liquor by intoxicated and underage persons; and
     (d) An assessment of conditions under which a full contract liquor store system would be more efficient and cost-effective for the state.
     (2) The board must report its findings and recommendations to the appropriate committees of the legislature by December 31, 2013.

Sec. 4   RCW 66.08.050 and 2005 c 151 s 3 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, subject to section 2 of this act;
     (2) Appoint in cities and towns and other communities, in which no state liquor store is located, contract liquor stores. An independently owned grocery store under sixty thousand square feet holding a license under RCW 66.24.360 may apply for and receive a contract liquor store appointment. Legislative approval is required to increase the number of contract liquor stores. 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 contract liquor store for the purpose of sale of liquor products of its own manufacture on the licensed premises only. Such contract liquor stores shall be authorized to sell liquor under the guidelines provided by law, rule, or contract, and such contract liquor stores 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)). However, 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.