HOUSE BILL REPORT

SHB 1158

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

Majority Report:  The substitute bill be substituted therefor and the substitute bill do pass.  (11)

      Signed by Representatives Wang, Chair; Cole, Vice Chair; Fisch, Fisher, R. King, O'Brien, Patrick, Sanders, Sayan, C. Smith and Walker

House Staff:Joan Elgee (786-7166)

AS PASSED HOUSE MARCH 20, 1987

BACKGROUND:

A license is required to sell beer and wine in the state. Currently, there is no license authorizing duty free exporters to sell beer and wine to vessels for consumption outside the state.

SUMMARY:

A new class S liquor license is created, which authorizes qualified duty free exporters to sell beer and wine to vessels for consumption outside the state.  The license also authorizes the exporter to purchase from a licensed brewery, winery, beer or wine wholesaler, and beer or wine importer.

To qualify for an exporter's license, the exporter shall have a basic permit issued by the US Bureau of Alcohol, Tobacco, and Firearms, a customs house license in conjunction with a common carriers bond, a customs bonded warehouse, 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.

EFFECT OF SENATE AMENDMENT(S):   As an alternative to having a customs bonded warehouse, an exporter may qualify for a license by being able to operate from a foreign trade zone.

The Liquor Control Board may by rule, establish procedures for the sale, in accordance with normal commercial practices, of nonliquor products as defined in RCW 82.08.0293 (sales tax exemption for food products) by persons licensed under the liquor provisions.

New provisions are added regarding the 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 by volume or more, 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 by volume or more 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 licenses 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.

Fiscal Note:      Not Requested.

Effective Date:The bill contains an emergency clause and takes effect immediately.

House Committee ‑ Testified For:    Chris Endresen, Exports, Incorporated.

House Committee - Testified Against:      None Presented.

House Committee - Testimony For:    The ability to sell beer and wine to vessels is important to ship chandlery businesses.

House Committee - Testimony Against:      None Presented.

VOTE ON FINAL PASSAGE:

      Yeas 92; Absent 5; Excused 1

Absent:     Representatives Appelwick, Brekke, Lewis, Locke and Wineberry

Excused:    Representative Padden