FINAL BILL REPORT

SHB 1158

                                  C 386 L 87

BYHouse Committee on Commerce & Labor (originally sponsored by Representatives Wang, Schmidt, Zellinsky, Vekich, Fisch, J. Williams and Ferguson)

Establishing a liquor license for qualified duty free exporters to sell beer and wine to vessels for consumption outside the state of Washington.

House Committe on Commerce & Labor

Senate Committee on Commerce & Labor

SYNOPSIS AS ENACTED

BACKGROUND:

SALE OF BEER AND WINE BY SHIP CHANDLERS.  A license is required to sell beer and wine in the state. Currently, there is no license authorizing ship chandlers to sell beer and wine to vessels for consumption outside the state.

PROCEDURES FOR SALE OF LIQUOR.  Under present law, licensed liquor manufacturers wholesalers are not permitted to extend credit to licensed liquor retailers.  The limitation on the extension of credit pertains to the sale of both liquor and nonliquor products.

SALE OF FORTIFIED WINE.  For purposes of the Liquor Control Board provisions, "wine" means any alcoholic beverage obtained by fermentation of fruits or other agricultural product containing sugar, to which any saccharine substances may have been added before, during or after fermentation, which contains not more than 24 percent of alcohol by volume.

A class F license authorizes a retailer to sell wine for consumption off the premises.

CLASS I SPECIAL OCCASION LICENSE.  A class I liquor license authorizes a class H licensee to sell liquor to members and guests of a society or organization on special occasions at a location other than the class H licensed premises. The licensee must obtain approval from the Liquor Control Board for each special occasion event at which the class I license will be used.

When the board receives a request to use a class I license, the board must notify the chief executive officer of the incorporated city or town or the county legislative authority, whichever is applicable.  Each local government has 10 days from the receipt of the notification to file written objections to the proposed use of the class I license.

SUMMARY:

SALE OF BEER AND WINE BY SHIP CHANDLERS.  A new class S ship chandlers liquor license is created, which authorizes qualified duty free exporters to sell beer and wine to vessels for consumption outside the state.

To qualify for an exporter's license, the exporter shall have a basic permit issued by the U.S. Bureau of Alcohol, Tobacco, and Firearms, a customs house license in conjunction with a common carriers bond, a customs bonded warehouse or the ability to operate from a foreign trade zone and a notarized signed statement from the purchaser stating that the product is for consumption outside the state.

The fee for the license is $100 per year.  Beer and wine sold and delivered to licensed exporters shall be considered exported from the state.

SALE OF BEER AND WINE.  The Liquor Control Board may by rule establish procedures for the sale of nonliquor products by licensed persons, in accordance with normal commercial practices as defined in the retail sales tax provisions.

SALE OF FORTIFIED WINE.  The definition of "wine" is separated into "table wine" and "fortified wine."  "Table wine" is wine containing less than 14 percent of alcohol by volume. "Fortified wine" is wine containing 14 percent of alcohol or more by volume, but does not include wines that are sealed or capped by cork closure and aged two years or more or wine containing 14 percent alcohol or more by volume solely as a result of the natural fermentation process. Wine does not need to be labeled as "table" or "fortified" wine.

Class F licensees in counties with a population over 300,000 (King, Pierce, Snohomish, and Spokane), shall receive a restricted class F license, authorizing the sale of table wine only, if the Liquor Control Board finds that the sale of fortified wine would be against the public interest. In determining the public interest, the board shall consider at least the following factors:  1) the likelihood that the applicant will sell fortified wine to intoxicated persons; 2) law enforcement problems that may arise in the vicinity of the applicant's establishment; and 3) whether the sale of fortified wine would be detrimental to or inconsistent with a government-operated or funded alcohol treatment or detoxification program.

State liquor stores in counties with a population over 300,000 are also prohibited from selling fortified wine if the sale would be against the public interest.  For both class F licensees and state liquor stores, the burden of establishing that the sale of fortified wine would be against the public interest is on those persons objecting.

CLASS I SPECIAL OCCASION LICENSE.  The provision that the city, town or county in which a proposed class I special occasion event will be held have 10 days to object to the use of the license is deleted.

VOTES ON FINAL PASSAGE:

      House 92   0

      Senate    44     4(Senate amended)

      House       (House refused to concur)

Free Conference Committee

      Senate    36     3

      House 93   3

EFFECTIVE:May 15, 1987