•	To date, 72% of our rules have been reviewed. An internal rules committee is currently revising these rules to make them more efficient and readable, or repealing the rules when appropriate.

The majority of the WACs that we have reviewed are still in the rule making process, for the reasons outlined in this report. As a result, the agency's reported totals of rules that have been revised or repealed do not accurately reflect the amount of activity that has taken place in the last year.

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The agency has chosen to have its review committee perform an intense, line-by-line scrutiny of each WAC, starting with the most complex rules first. The agency has also used this review to implement many process and customer service improvements.

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The agency has greatly expanded its outreach and access to the rule making process. Our list of interested persons and the time spent consulting with them have grown steadily. This expanded consultative process includes work with such diverse groups as the Washington Restaurant Association, the Joint Artists and Musicians Political Action Committee, local law enforcement, and the prevention community. Customers, stakeholders, and interested persons, often with competing interests, have been closely involved in all aspects of our rule making process. Activities include initial evaluation, drafting, and redrafting of existing rules. As a result, there has been a great deal of effective participation by stakeholders in all decisions before rule publication.

Our stakeholders have commented on this renewed partnership. Recent comments from written correspondence received by the board include:

•	"I want to thank you for taking the time to actively solicit industry input and response for each rule as it works its way through the process. I do believe stakeholder input is extremely important, especially for an agency that regulates every aspect of our business operations. I'm sure history will show that this is good for the board, and the industry it regulates and the public we all serve."
•	"Thank you for the opportunity to comment upon rules and policies...the City is pleased with the Board's interest in seeking information regarding the potential impacts of decisions made and actions taken by the Board...the Board is to be commended for the participatory and collaborative environment being developed."
•	"I wanted to let you know that [we] very much appreciate the opportunity to comment on these and all your other rules early on in the regulatory review process. In our view, the Board and yourself should be given high marks for the level of stakeholder input you request regarding proposed rule changes. We consider this consistency and the opportunity for early input invaluable. It may lengthen the process a little, but we feel the ultimate product is far better. Keep up the good work."

•	The Liquor Control Board has undertaken many steps to ensure regulatory review is an agency priority. We have educated staff on the importance of participatory rule review; we have used the agency's newsletter and Website to promote rule review as an agency commitment; and we educate field staff and the public on the agency's regulatory review process at each of the board's monthly out of town meetings held throughout the state.
•	The agency has also expanded its services cross-culturally, branching out to Korean-speaking licensees who represent a sizable portion of the community we regulate. We have worked specifically with the Korean-American Grocers' Association to identify areas of interest in our rule-making process and to translate proposed rules into Korean to encourage maximum feedback.
•	Several process improvements and customer services enhancements have been completed or are underway through the regulatory review process:

*	Streamlining and simplifying the beer and wine tax reporting requirements, and giving licensees the ability to report via the Internet.
*	Simplifying the requirements necessary to obtain and hold certain liquor licenses, in order to bring these processes into line with current business practices; e.g., e-mail, electronic recordkeeping, etc. (proposed rules currently represent a 61% word reduction).
*	Revising and reorganizing various rules that relate to general requirements for liquor licensees (proposed rules represent a 52% word reduction).
*	Streamlining the requirements for liquor license applicants, in order to reduce duplication and have a more user-friendly application process. Currently the guidelines for the application process are found throughout various chapters of WAC and in policy manuals. The proposed rules guide applicants through a step-by-step process.
*	Simplifying the administrative violation process in order to make the procedure more understandable for licensees and save staff time. This streamlined process, initiated by a Process Improvement Team, has eliminated four months of processing time and review by the board, and has saved mailing costs.
*	Simplifying and reducing requirements for label approval for beer and wine tax reporting, in order to make criteria for approval more objective and understandable, and to eliminate duplication with federal requirements.
*	Revising rules to allow for electronic funds transfer as a method of payment between a distributor and a retailer.

•	The agency will address statutory change recommendations in the 2001 legislative session, and plans to eliminate the requirement for several permits that the regulatory review committee has determined are no longer necessary.

Summary of rule making actions:

WAC Sections Reviewed	WAC Sections Amended	WAC Sections Repealed	Percentage of Total WAC Sections Reviewed	WAC Pages Eliminated
222	17	2	71	3

Summary of agency actions in response to petitions for rule making:

The Liquor Control Board has had one petition for rule making in the last year. In June of 1999, the board was petitioned to amend WAC 314-12-140 to allow retailers who sell alcohol to provide beer and wine distributors hand trucks, floor jacks, forklifts, and other equipment necessary to unload, move, store, and rotate beer and wine stock. The board denied this petition for rule making under advice of staff and counsel, who indicated the proposed changes would be in conflict with current law (RCW 66.28.010, the "Tied House" statute). The petitioner has been encouraged to participate in the board's review of this rule and related WACs.

Results of policy review:

The agency has completed its review of the policies and interpretive statements that fall under the definition of WAC per the Administrative Procedure Act. As a result, we are either converting these policies into WAC or eliminating them.

The majority of policies that directly affect the public are found in the agency's Licensing and Regulation Division and our Education and Enforcement Division manuals. Both divisions, in cooperation with the regulatory review committee, are in the process of greatly reducing and simplifying the remaining policies and procedures.

Results of review of agency's reporting requirements for businesses:

•	Through the work of a process improvement team and the regulatory review committee, the agency is in rule making to greatly simplify the beer and wine tax reporting requirements and to institute electronic tax reporting via the Internet. Stakeholder input has been very favorable.
•	Last year the Licensing and Regulation Division implemented an electronic format for beer and wine price postings. The improvement to this reporting requirement resulted in significant savings and customer service improvements and won the Governor's Award for Service and Quality Improvement.

If you have any questions, please do not hesitate to contact me at 664-1711. Our rules coordinator, Teresa Berntsen, can be reached at 664-1648.

Eugene A. Prince

Chairman

© Washington State Code Reviser's Office