HOUSE BILL REPORT

SHB 2857

BYHouse Committee on Commerce & Labor (originally sponsored by Representatives Phillips, Vekich, Prentice, Smith, Walker, Leonard, Locke and Wineberry)

Creating a new license for the sale of table and fortified wine.

House Committe on Commerce & Labor

Majority Report:  The substitute bill be substituted therefor and the substitute bill do pass.  (9)

      Signed by Representatives Vekich, Chair; Cole, Vice Chair; Smith, Ranking Republican Member; Forner, Jones, Leonard, O'Brien, Prentice and Wolfe.

Minority Report:  Do not pass.  (2)

      Signed by Representatives R. King and Walker.

House Staff:Jim Kelley (786-7166)

AS PASSED HOUSE FEBRUARY 13, 1990

BACKGROUND:

In 1987, in an attempt to address the problem of public intoxication, the Legislature enacted a law creating a restricted class F wine retailer license.  This law applies only to those counties with over 300,000 population.  Upon application or annual renewal of class F licenses, the Liquor Control Board may issue a class F license or a class F restricted license.  The class F license permits the sale of table wine and fortified wine.  The class F restricted license permits the sale of only table wine. "Table wine" is any wine containing less than 14 percent alcohol by volume, while "fortified wine" is any wine containing 14 percent or more alcohol by volume.

In deciding which license to issue, the board determines whether the applicant's sale of fortified wine would be against the public interest.  The board must consider the following factors:  1) The likelihood that the applicant will sell fortified wine to intoxicated persons; 2) Law enforcement problems in the vicinity that may arise from the sale of fortified wine at the 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 in the area.

The application of this law has been challenged in court on the grounds that, as applied, it violates equal protection and that board decisions based on this law have been clearly erroneous, arbitrary, and capricious.  In Ralfco Inc. v. Washington State Liquor Control Board, the King County Superior Court granted a motion to stay, pending review, an Administrative Law Judge's order which had upheld the board's refusal to renew the petitioners' unrestricted class F license.  The case is still pending review.

SUMMARY:

As of July 1, 1991, the class F and class F restricted wine retailer licenses are abolished.  Any class F license issued on or after July 1, 1990 will be effective only through June 30, 1991. Fees for class F licenses issued after July 1, 1990 will be prorated.

A new license is created (class Q) entitling the licensee to sell table wine but not fortified wine.  The board will begin to issue this license on July 1, 1991.

As of July 1, 1991, another new license is created (class R), available to holders of class Q licenses only, entitling the licensee to sell fortified wine.  There are four discretionary factors that the board must consider when deciding whether to issue a class R license.  These are:  1) If there is a social service agency, including a mission, a detoxification center, a half-way house, a work release facility, a public health center or a government-operated or funded alcohol treatment center within 500 feet of the premises; 2) The history of law enforcement problems caused by the sale of fortified wine at the establishment; 3) The past practice of the applicant involving the sale of fortified wine; and 4) Objections of city or county officials to the issuance or renewal of the license.

If a social service agency, within 500 feet of the premises, objects in writing to the issuance of the license,  within 20 days of being notified, the board shall not issue the license.

The definition of fortified wine is changed to any wine containing more than 14 percent alcohol by volume.  Further, the board, by rule, may exempt from the classification of fortified wine any wine that it deems does not contribute significantly to the problem of public intoxication.

Fiscal Note:      Requested January 20, 1990.

House Committee ‑ Testified For:    Representative Larry Phillips, Prime Sponsor; Steven Freng, King County; Mike Doubleday, City of Seattle; Jan Drago, Downtown Seattle Association; and Bob Santos, Seattle International District PDA.

House Committee - Testified Against:      Phil Cohen, Ralfco Inc. Grocery; Sharon Foster, Wine Institute; Dick Ducharme, Washington Beer and Wine Wholesalers Association; Jan Gee, Washington State Food Dealers, Washington Retail Association; and Mark Tobin, Safeway.

House Committee - Testimony For:    This bill is not a panacea for alcoholism, but it is well crafted to treat some of the symptoms.  Drinking fortified wine has only one purpose, to get drunk fast.  Some irresponsible retailers are a real part of the problem.  Public intoxication, panhandling, and street fighting are major problems in Seattle and it has been a goal of the Seattle business community for five years to address them.  This bill does address these problems.

House Committee - Testimony Against:      This bill does not address the real problems and it will not work.  Alcoholics will find something to drink that will get them drunk.  This bill amounts to prohibition and prohibition does not work.