WSR 03-02-097

PROPOSED RULES

LIQUOR CONTROL BOARD


[ Filed January 2, 2003, 9:47 a.m. ]

     Original Notice.

     Preproposal statement of inquiry was filed as WSR 00-23-112.

     Title of Rule: Chapter 314-29 WAC, Violation of Liquor Control Board law or rule.

     Purpose: The purpose of this proposed rule making is to revise the penalty guideline schedule for violations of Liquor Control Board laws and rules by liquor licensees. This rule making would create new rules to replace existing rules on this subject.

     Statutory Authority for Adoption: RCW 66.08.030, 66.24.010, 66.24.120.

     Statute Being Implemented: RCW 66.24.010, 66.24.120.

     Summary: The proposed changes would have the following effects:

•     Add more detailed penalty guidelines for nonretail violations. Currently there is one catchall category for violations involving the manufacture, supply, and/or distribution of liquor by nonretail licensees and prohibited practices between nonretail and retail licensees.

•     Add a standard penalty guideline schedule for violations of alcohol impact area (AIA) rules. Because the agency has not updated the penalty guideline rules since the AIA rules were adopted, the standard guideline for violations of the AIA rules is not currently listed.

•     Clarify existing language for clarity, with no substantive changes.

     Name of Agency Personnel Responsible for Drafting: Teresa Berntsen, Rules Coordinator, 3000 Pacific Avenue S.E., Olympia, (360) 664-1648; Implementation and Enforcement: Rick Phillips, Enforcement Director, 3000 Pacific Avenue S.E., Olympia, (360) 664-1780.

     Name of Proponent: Washington State Liquor Control Board, governmental.

     Rule is not necessitated by federal law, federal or state court decision.

     Explanation of Rule, its Purpose, and Anticipated Effects: The purpose of this proposed rule making is to revise the penalty guideline schedule for violations of Liquor Control Board laws and rules by liquor licensees.

     Proposal Changes the Following Existing Rules: Delete current rules and rewrite language in new sections in order to:

•     Add more detailed penalty guidelines for nonretail violations. Currently there is one catchall category for violations involving the manufacture, supply, and/or distribution of liquor by nonretail licensees and prohibited practices between nonretail and retail licensees.

•     Add a standard penalty guideline schedule for violations of AIA rules. Because we have not updated the penalty guideline rules since the AIA rules were adopted, the standard guideline for violations of the AIA rules is not currently listed.

•     Clarify existing language, with no substantive changes.

     The new sections would replace the following existing rules: WAC 314-12-170 What are the penalties if a retail liquor licensee violates the liquor laws or rules, 314-12-300 Group one (1) violations against public safety, 314-12-310 Group two (2) offenses -- Conduct violations, 314-12-320 Group three (3) offenses -- Regulatory violations, 314-12-330 Can the board impose sanctions or penalties other than those indicated in WAC 314-12-170?, and 314-12-340 What are some examples of mitigating and aggravating circumstances?

     No small business economic impact statement has been prepared under chapter 19.85 RCW. No disproportionate impact to small businesses.

     RCW 34.05.328 does not apply to this rule adoption. The Washington State Liquor Control Board is not a listed agency in RCW 34.05.328.

     Hearing Location: Liquor Control Board Headquarters, Board Room, 3000 Pacific Avenue S.E., Olympia, WA, on February 5, 2003, at 10 a.m.

     Assistance for Persons with Disabilities: Contact Teresa Berntsen by February 4, 2003, TDD (360) 586-4727 or (360) 664-1648.

     Submit Written Comments to: Teresa Berntsen, Rules Coordinator, P.O. Box 43080, Olympia, WA 98504, fax (360) 664-9689, by February 12, 2003.

     Date of Intended Adoption: February 19, 2003.

January 2, 2003

Merritt D. Long

Chair


NEW SECTION
WAC 314-29-003   Purpose.   The purpose of chapter 314-29 WAC is to outline what a liquor licensee can expect if a licensee or employee violates a liquor control board law or rule.

[]


NEW SECTION
WAC 314-29-015   What are the penalties if a liquor license holder violates a liquor law or rule?   (1) The purpose of WAC 314-29-015 through WAC 314-29-040 is to outline what penalty a liquor licensee can expect if a licensee or employee violates a liquor control board law or rule (the penalty guidelines for mandatory alcohol server training permit holders are in WAC 314-17-100 through WAC 314-17-110).

     (2) Penalties for violations by liquor licensees or employees are broken down into four categories:

     (a) Group One - Public Safety Violations, WAC 314-29-020.

     (b) Group Two - Conduct Violations, WAC 314-29-025.

     (c) Group Three - Regulatory Violations, WAC 314-29-030.

     (d) Group Four - Violations involving the manufacture, supply, and/or distribution of liquor by nonretail licensees and prohibited practices between nonretail licensees and retail licensees, WAC 314-29-035.

     (3) For the purposes of chapter 314-29 WAC, a "two year window" for violations is measured from the date one violation occurred to the date a subsequent violation occurred.

     (4) The following schedules are meant to serve as guidelines. Based on mitigating or aggravating circumstances, the liquor control board may impose a different penalty than the standard penalties outlined in these schedules.

(a) Mitigating circumstances (b) Aggravating circumstances
Examples of mitigating circumstances that may result in a fewer number of days of suspension or a lower monetary option include, but are not limited to, having in place business policies and practices such as:

•     Using licensee certification cards that are correctly filled out and filed;

•     Having direct on site supervision of employees;

•     Having a signed acknowledgment of the business' alcohol policy on file for each employee;

•     Having an employee training plan that includes annual training on liquor laws;

•     Showing cooperation with local law enforcement; etc.

 Examples of aggravating circumstances that may result in a higher number of days of suspension, a higher monetary option, or cancellation of a liquor license include, but are not limited to:

•     Failing to cooperate with local law enforcement or liquor control board employees;

•     Not calling for local law enforcement when requested by a customer or liquor control board agent;

•     Not checking to ensure employees are of legal age or have appropriate work permits;

•     Committing the violation willfully; etc.

[]


NEW SECTION
WAC 314-29-020   Group one violations against public safety.   Group 1 violations are considered the most serious because they present a direct threat to public safety. Proposed penalties for violations in the public safety category are cumulative. For example, if a licensee received an administrative violation for the sale of alcohol to a minor, and then within two years received a violation for serving an apparently intoxicated person, the proposed standard penalty would be a 7 day suspension with no monetary option.


Violation Type 1st Violation 2nd Violation in a two-year window 3rd Violation in a two-year window 4th Violation in a two-year window
Sale or service to minor: Sale or service of alcohol to a person under 21 years of age. 5 day suspension or $500 monetary option 7 day suspension with no monetary option 30 day suspension with no monetary option Cancellation of license
Minor

frequenting a tavern, lounge, or other age restricted area.

 5 day suspension or $500 monetary option

 7 day suspension with no monetary option

 30 day suspension with no monetary option

 Cancellation of license
Sale or service to apparently intoxicated

person: Sale or service of alcohol to, or permitting consumption or possession by, an apparently intoxicated person.

 5 day suspension or $500 monetary option 5 day suspension or $2,500 monetary option 10 day suspension or $5,000 monetary option Cancellation of license
Disorderly

conduct by licensee or employee, or permitting on premises.

 5 day suspension or $500 monetary option 5 day suspension or $2,500 monetary option 10 day suspension or $5,000 monetary option Cancellation of license
Criminal conduct: Permitting or engaging in criminal conduct. 5 day suspension or $500 monetary option 7 day suspension with no monetary option 30 day suspension with no monetary option Cancellation of license

[]


NEW SECTION
WAC 314-29-025   Group two conduct violations.   Group 2 violations are violations involving conduct of the licensee, employees, or patrons.

Violation Type 1st Violation 2nd Violation in a two-year window 3rd Violation in a two-year window 4th Violation in a two-year window
Misuse or unauthorized use of liquor license. 5 day suspension or $1,500 monetary option Cancellation of license Cancellation of license Cancellation of license
Sale of alcohol in violation of a board-approved alcohol impact area. 5 day suspension or $500 monetary option 7 day suspension or $1,500 monetary option 10 day suspension with no monetary option Cancellation of license
Employee under legal age or with no mandatory alcohol server training permit. 5 day suspension or $250 monetary option 5 day suspension or $1,500 monetary option 10 day suspension or $3,000 monetary option Cancellation of license
Hours of service: Sales, service, removal, or consumption of alcohol between 2:00 a.m. and 6:00 a.m. 5 day suspension or $250 monetary option 5 day suspension or $1,500 monetary option 10 day suspension or $3,000 monetary option Cancellation of license
Food service: Required food service not available. 5 day suspension or $250 monetary option 5 day suspension or $1,500 monetary option 10 day suspension or $3,000 monetary option Cancellation of license
Substituting, tampering, unlawful removal, possession, or unauthorized sale of liquor. 5 day suspension or $250 monetary option 5 day suspension or $1,500 monetary option 10 day suspension or $3,000 monetary option Cancellation of license
Lewd conduct: Engaging in or permitting conduct in violation of WAC 314-11-050. 5 day suspension or $250 monetary option 5 day suspension or $1,500 monetary option 10 day suspension or $3,000 monetary option Cancellation of license
Inspections: Refusing to allow inspection(s) by law enforcement. 5 day suspension or $100 monetary option 5 day suspension or $500 monetary option 10 day suspension or $1,000 monetary option 20 day suspension with no monetary option
Retailer/nonretailer violation: Violation on the part of a retail licensee that involves a nonretail licensee. 5 day suspension or $100 monetary option 5 day suspension or $500 monetary option 10 day suspension or $1,000 monetary option 20 day suspension with no monetary option

[]


NEW SECTION
WAC 314-29-030   Group three regulatory violations.   Group 3 violations are violations involving administrative requirements.


Violation Type 1st Violation 2nd Violation in a two-year window 3rd Violation in a two-year window 4th Violation in a two-year window
Keg registration: Failure to properly register kegs. 5 day suspension or $500 monetary option 5 day suspension or $1,000 monetary option 10 day suspension or $1,500 monetary option 20 day suspension with no monetary option
Signs: Failure to post required signs. 5 day suspension or $100 monetary option 5 day suspension or $500 monetary option 10 day suspension or $1,000 monetary option 20 day suspension with no monetary option
Records: Improper record keeping. 5 day suspension or $100 monetary option 5 day suspension or $500 monetary option 10 day suspension or $1,000 monetary option 20 day suspension with no monetary option
Advertising: Advertising violations other than those involving prohibited practices between a nonretail and a retail licensee. 5 day suspension or $100 monetary option 5 day suspension or $500 monetary option 10 day suspension or $1,000 monetary option 20 day suspension with no monetary option
Inventory: Inventory below required amount. 5 day suspension or $100 monetary option 5 day suspension or $500 monetary option 10 day suspension or $1,000 monetary option 20 day suspension with no monetary option
Unauthorized alterations, change of trade name, or added activity. 5 day suspension or $100 monetary option 5 day suspension or $500 monetary option 10 day suspension or $1,000 monetary option 20 day suspension with no monetary option
Lighting: Inadequate lighting. 5 day suspension or $100 monetary option 5 day suspension or $500 monetary option 10 day suspension or $1,000 monetary option 20 day suspension with no monetary option
Liquor purchased from unauthorized source or sale below cost in violation of liquor law or rule. 5 day suspension or $100 monetary option 5 day suspension or $500 monetary option 10 day suspension or $1,000 monetary option 20 day suspension with no monetary option

[]


NEW SECTION
WAC 314-29-035   Group four violations.   Group 4 violations are violations involving the manufacture, supply, and/or distribution of liquor by nonretail licensees and prohibited practices between a nonretail licensee and a retail licensee.


Violation type 1st Violation 2nd Violation in a two-year window 3rd Violation in a two-year window 4th Violation in a two-year window
Providing credit to a retail licensee. 3 day suspension or $500 monetary option 5 day suspension or $2,500 monetary option 10 day suspension or $5,000 monetary option 20 day suspension or $10,000 monetary option
Quantity discount. 3 day suspension or $500 monetary option 5 day suspension or $2,500 monetary option 10 day suspension or $5,000 monetary option 20 day suspension or $10,000 monetary option
Giving away liquor in violation of liquor law or rule. 3 day suspension or $500 monetary option 5 day suspension or $2,500 monetary option 10 day suspension or $5,000 monetary option 20 day suspension or $10,000 monetary option
Consignment sales/return of product in violation of law or rule. 3 day suspension or $500 monetary option 5 day suspension or $2,500 monetary option 10 day suspension or $5,000 monetary option 20 day suspension or $10,000 monetary option
Advertising violations involving prohibited practices between a nonretail and a retail licensee. 3 day suspension or $500 monetary option 5 day suspension or $2,500 monetary option 10 day suspension or $5,000 monetary option 20 day suspension or $10,000 monetary option
Price posting/labeling/packaging violations. 3 day suspension or $500 monetary option 5 day suspension or $2,500 monetary option 10 day suspension or $5,000 monetary option 20 day suspension or $10,000 monetary option
Agents violations: Nonretail licensee employing an unlicensed agent. 3 day suspension or $500 monetary option 5 day suspension or $2,500 monetary option 10 day suspension or $5,000 monetary option 20 day suspension or $10,000 monetary option
Unauthorized product/unapproved storage or delivery. 3 day suspension or $500 monetary option 5 day suspension or $2,500 monetary option 10 day suspension or $5,000 monetary option 20 day suspension or $10,000 monetary option
Sampling/tasting violations. 3 day suspension or $500 monetary option 5 day suspension or $2,500 monetary option 10 day suspension or $5,000 monetary option 20 day suspension or $10,000 monetary option
Entertainment/instruction/meeting/trade show violations. 3 day suspension or $500 monetary option 5 day suspension or $2,500 monetary option 10 day suspension or $5,000 monetary option 20 day suspension or $10,000 monetary option
Providing money or money's worth less than $100. 3 day suspension or $250 monetary option 5 day suspension or $500 monetary option 10 day suspension or $1,000 monetary option 20 day suspension or $2,000 monetary option
Providing money or money's worth $100 to $1,000. 3 day suspension or $500 monetary option 5 day suspension or $2,500 monetary option 10 day suspension or $5,000 monetary option 20 day suspension or $10,000 monetary option
Providing money or money's worth over $1,000. Cost of item or service provided plus: 3 day suspension or $1,000 monetary option Cost of item or service provided plus: 5 day suspension or $2,500 monetary option Cost of item or service provided plus: 10 day suspension or $5,000 monetary option Cost of item or service provided plus: 20 day suspension or $10,000 monetary option
Exclusive or contingency agreements. 3 day suspension or $1,000 monetary option 10 day suspension or $6,000 monetary option 20 day suspension or $12,000 monetary option 30 day suspension or $20,000 monetary option
Unauthorized interest or ownership in retail license. 3 day suspension or $1,000 monetary option 30 day suspension or $20,000 monetary option Cancellation of license
Failure to obtain surety bond/savings account, if required by the board. Immediate suspension of license until surety bond has been obtained and all missing reports are filed and late taxes have been paid.
Failure to file tax/shipment report. 3 day suspension or $250 monetary option 5 day suspension or $500 monetary option 10 day suspension or $1,000 monetary option 20 day suspension or $2,000 monetary option

[]


NEW SECTION
WAC 314-29-040   Information about liquor license suspensions.   (1) On the date a liquor license suspension goes into effect, a liquor control agent will post a suspension notice in a conspicuous place on or about the licensed premises. This notice will state that the license has been suspended by order of the liquor control board due to a violation of a board law or rule.

     (2) During the period of liquor license suspension, the licensee and employees:

     (a) are required to maintain compliance with all applicable liquor laws and rules;

     (b) may not remove, alter, or cover the posted suspension notice, and may not permit another person to do so;

     (b) may not place or permit the placement of any statement on the licensed premises indicating that the premises have been closed for any reason other than as stated in the suspension notice (see WAC 314-01-005(1) for the definition of "licensed premises").

     (c) may not advertise by any means that the licensed premises is closed for any reason other than as stated in the liquor control board's suspension notice.

     (3) During the period of liquor license suspension:

     (a) A retail liquor licensee may operate his/her business provided there is no sale, delivery, service, consumption, removal, or receipt of liquor. No banquet permit or special occasion function may be held on the premises during a period of liquor license suspension.

     (b) A nonretail licensee may operate his/her business provided there is no sale, delivery, service, consumption, removal, or receipt of liquor.

     (c) A manufacturer of alcohol may do whatever is necessary as a part of the manufacturing process to keep current stock that is on hand at the time of the suspension from spoiling or becoming unsaleable during a suspension, provided it does not include bottling the product. The manufacturer may not receive any agricultural products used in the production of alcohol, crush fruit, or bottle alcohol during the period of suspension.

[]

     Reviser's note: The typographical error in the above section occurred in the copy filed by the agency and appears in the Register pursuant to the requirements of RCW 34.08.040.
REPEALER

     The following sections of the Washington Administrative Code are repealed:
314-12-170 What are the penalties if a retail liquor licensee violates the liquor laws or rules?
314-12-180 Suspension notices, posting or advertising of -- Other -- Closing notices prohibited.
314-12-300 Group one (1) violations against public safety.
314-12-310 Group two (2) offenses -- Conduct violations.
314-12-320 Group three (3) offenses -- Regulatory violations.
314-12-330 Can the board impose sanctions or penalties other than those indicated in WAC 314-12-170?
314-12-340 What are some examples of mitigating and aggravating circumstances?

© Washington State Code Reviser's Office