(3)(a) Except as otherwise provided in (c) of this subsection, the board may issue limited spirits retail licenses to applicants holding licenses for off-premises sales of either beer or wine, or both, issued pursuant to RCW 66.24.360(1), but only to applicants that:

(iii) Satisfy all reasonable requirements imposed by statute or regulation for issuance of a retail liquor license, including any enhanced employee training requirements required by the board for holders of limited spirits retail licenses; and

(iv) The board determines will maintain systems for inventory management, employee training, employee supervision, and physical security of the product substantially as effective with respect to preventing sales to, or pilferage by, underage or inebriated persons as those systems currently used by stores holding spirits retail licenses issued pursuant to RCW 66.24.630.

(b) License issuances and renewals pursuant to this section are subject to RCW 66.24.010 and the regulations adopted thereunder, including, without limitation, rights of cities, towns, county legislative authorities, the public, churches, schools, and public institutions to object to, or prevent issuance of, local liquor licenses.

(i) At the time of the application, the applicant holds an existing grocery store license issued pursuant to RCW 66.24.360 and the board determines that the licensee has committed more than one public safety violation within the three years preceding the filing of the application;

(ii) The board reasonably determines that issuance of the limited spirits retail license to the applicant would not be in the best interests of the community to be served by the applicant because it would result in an excessive number of locations where spirits could be purchased in the community;

(iii) The board reasonably determines that issuance of the limited spirits retail license to the applicant would otherwise pose an unacceptable risk to the health and welfare of the community to be served; or

(iv) Issuance of the limited spirits retail license would cause the total number of liquor licenses for the sale of alcohol for off-premises consumption to exceed any limits imposed by the legislature on the number of licenses permitted to be active in the state or any defined portion of the state at the time the application is processed.

(4) Each limited spirits retail licensee must pay to the board, for deposit into the liquor revolving fund, a license issuance fee equivalent to seventeen percent of all spirits sales revenues under the license, exclusive of taxes collected by the licensee and of sales of items on which a license fee payable under this section has otherwise been incurred. The board must establish rules setting forth the timing of the payments and reporting of sales dollar volume by the licensee, with payments required quarterly in arrears.

(5) In addition to the payments required under subsection (4) of this section, each limited spirits retail licensee must pay an annual license renewal fee of one hundred sixty-six dollars. The board must periodically review and adjust the renewal fee as may be required to maintain it as comparable to annual license renewal fees for spirits retail licenses issued pursuant to RCW 66.24.630 or 66.24.035. If required by law at the time, any increase of the annual renewal fee becomes effective only upon ratification by the legislature.

(6) As a condition to receiving and renewing a limited spirits retail license, the licensee must provide training to all individuals who sell spirits or who manage others who sell spirits regarding compliance with the laws and regulations regarding the sale of spirits, including, without limitation, the prohibitions against the sale of spirits to individuals who are underage or visibly intoxicated. The training must be provided before the individual first engages in the sale of spirits and must be renewed at least every five years. The licensee must maintain records documenting the nature and frequency of the training provided. An employee training program is presumptively sufficient if it incorporates all enhanced employee training requirements required by the board for holders of limited spirits retail licenses.

(7) The maximum penalties prescribed by the board in WAC 314-29-020 through 314-29-040 relating to fines and suspensions are doubled for violations relating to the sale of spirits by limited spirits retail licensees. Licensees who comply with all employee training and education requirements established by the board for limited spirits retail licensees are not subject to the doubling of penalties provided in this section for a single violation in any period of twelve calendar months.

(8) Limited spirits retail licensees must comply with all laws and regulations governing spirits retail licensees, except to the extent that doing so would result in a violation of, or failure to fully comply with, this section.

(1)(a) In addition to the spirits distributor license fees required by RCW 66.24.055, each spirits distributor selling spirits to a limited spirits retail licensee must pay to the board, for deposit into the liquor revolving fund, a mitigation fee equivalent to five percent of the amount paid for the spirits by the limited spirits retail licensee, exclusive of any taxes and fees that may be included in the invoice to the retailer.

(b) Each distiller or craft distiller selling spirits to a limited spirits retail licensee must pay to the board, for deposit into the liquor revolving fund, a mitigation fee equivalent to five percent of the amount paid for the spirits by the limited spirits retail licensee, exclusive of any taxes and fees that may be included in the invoice to the retailer.

(2) On or before January 31st of each year, the board will determine the total amount of mitigation fees paid into the liquor revolving fund during the preceding year and disburse those moneys as follows:

(a) The board will retain the first three hundred thousand dollars of mitigation fees collected during a calendar year in the liquor revolving fund and use it for general enforcement purposes.

(b) To the extent sufficient mitigation fees were collected during the preceding calendar year, the board will distribute one million five hundred thousand dollars of the fees to school-based or community-based prevention and treatment programs designated by the board.

(c) After the distributions pursuant to (a) and (b) of this subsection, and to the extent sufficient mitigation fees were collected during the preceding calendar year, the board will transfer two million dollars from the liquor revolving fund to a repayment fund to be disbursed in accordance with subsection (3) of this section.

(d) After the distributions pursuant to (a) through (c) of this subsection, and to the extent sufficient mitigation fees were collected during the preceding calendar year, the board will distribute five hundred thousand dollars of the fees to the Washington association of sheriffs and police chiefs, or such other law enforcement group or agency as the board may designate, for use in enforcement activities related to alcohol sales or consumption.

(e) In the event mitigation fees from the prior year remain in the liquor revolving fund after the distributions pursuant to (a) through (d) of this subsection have been made, the board will distribute:

(iii) Ten percent of the excess fees to the Washington association of sheriffs and police chiefs, or such other law enforcement group or agency as the board may designate, for use in enforcement activities related to alcohol sales or consumption.

(a) Any person who purchased former state liquor store operating rights at auction under RCW 66.24.620(4)(c) is eligible for reimbursement of the full amount paid at the auction, together with interest in an amount to be determined by the board, provided the person:

(b) The board will promptly create an application form for use by persons seeking reimbursement pursuant to this section and will make the application form available to the public within ninety days after the effective date of this section.

(c) The board will establish procedures for processing the applications and for appealing any determinations made by the board as to an applicant's eligibility for reimbursement or the amounts to be reimbursed to an applicant.

(d) As soon as reasonably practicable after beginning to process the applications, the board will notify each applicant as to whether the applicant is eligible for reimbursement and, if so, the amount to be reimbursed.

(e) The board's determination will be binding upon an applicant unless the applicant challenges the determination, in accordance with rules adopted by the board for that purpose, within forty-five days after the applicant learns of the determination.

(f) When the board determines that there is enough money in the repayment fund, it will cease moving moneys into the repayment fund and will promptly reimburse each eligible applicant in the amount approved by the board or established pursuant to an appeal by the applicant under (c) of this subsection.

(g) Any person electing to relinquish his or her spirits retail license pursuant to this section must relinquish the license simultaneously with his or her receipt of the full amount approved by the board for that license. The person may, but is not required to, continue operating under the license until such time as he or she receives reimbursement hereunder.

(4) On or before the 31st day of January following the cessation of transfers to the repayment fund and reimbursement to all eligible applicants, and on or before each January 31st thereafter, the board will disburse mitigation fees as follows:

(1) There is a license for spirits distributors to (a) sell spirits purchased from manufacturers, distillers, or suppliers including, without limitation, licensed Washington distilleries, licensed spirits importers, other Washington spirits distributors, or suppliers of foreign spirits located outside of the United States, to spirits retailers including, without limitation, spirits retail licensees, special occasion license holders, interstate common carrier license holders, restaurant spirits retailer license holders, spirits, beer, and wine private club license holders, hotel license holders, sports entertainment facility license holders, and spirits, beer, and wine nightclub license holders, and to other spirits distributors; and (b) export the same from the state.

(2) ((By January 1, 2012, the board must issue spirits distributor licenses to all applicants who, upon December 8, 2011, have the right to purchase spirits from a spirits manufacturer, spirits distiller, or other spirits supplier for resale in the state, or are agents of such supplier authorized to sell to licensees in the state, unless the board determines that issuance of a license to such applicant is not in the public interest.

(3)))(a) As limited by (b) of this subsection ((and subject to (c) of this subsection)), each spirits distributor licensee must pay to the board, for deposit into the liquor revolving fund, a license issuance fee calculated as ((follows:

(i) In each of the first twenty-seven months of licensure, ten percent of the total revenue from all the licensee's sales of spirits made during the month for which the fee is due, respectively; and

(ii) In the twenty-eighth month of licensure and each month thereafter,)) five percent of the total revenue from all the licensee's sales of spirits made during the month for which the fee is due, respectively.

(c) ((By March 31, 2013, all persons holding spirits distributor licenses on or before March 31, 2013, must have paid collectively one hundred fifty million dollars or more in spirits distributor license fees. If the collective payment through March 31, 2013, totals less than one hundred fifty million dollars, the board must, according to rules adopted by the board for the purpose, collect by May 31, 2013, as additional spirits distributor license fees the difference between one hundred fifty million dollars and the actual receipts, allocated among persons holding spirits distributor licenses at any time on or before March 31, 2013, ratably according to their spirits sales made during calendar year 2012. Any amount by which such payments exceed one hundred fifty million dollars by March 31, 2013, must be credited to future license issuance fee obligations of spirits distributor licensees according to rules adopted by the board.

(d))) A retail licensee selling for resale must pay a distributor license fee under the terms and conditions in this section on resales of spirits the licensee has purchased on which no other distributor license fee has been paid. A limited spirits retail licensee must also pay a mitigation fee equivalent to five percent of all spirits sales revenues under the license on resales of spirits the licensee has purchased on which no other distributor license fee has been paid. The board must establish rules setting forth the frequency and timing of such payments and reporting of sales dollar volume by the licensee, with payments due quarterly in arrears. The board will process and distribute mitigation fees paid under this section in the same manner and subject to the same regulations as the mitigation fees established in section 2 of this act.

(((4)))(3) In addition to the payment set forth in subsection (((3)))(2) of this section, each spirits distributor licensee renewing its annual license must pay an annual license renewal fee of one thousand three hundred twenty dollars for each licensed location.

(((5)))(4) There is no minimum facility size or capacity for spirits distributor licenses, and no limit on the number of such licenses issued to qualified applicants. License applicants must provide physical security of the product that is substantially as effective as the physical security of the distribution facilities currently operated by the board with respect to preventing pilferage. License issuances and renewals are subject to RCW 66.24.010 and the regulations promulgated thereunder, including without limitation rights of cities, towns, county legislative authorities, the public, churches, schools, and public institutions to object to or prevent issuance of local liquor licenses. ((However, existing distributor premises licensed to sell beer and/or wine are deemed to be premises "now licensed" under RCW 66.24.010(9)(a) for the purpose of processing applications for spirits distributor licenses.))