WSR 17-21-112 PROPOSED RULES LIQUOR AND CANNABIS BOARD [Filed October 18, 2017, 10:48 a.m.] Original Notice. Preproposal statement of inquiry was filed as WSR 17-15-051. Title of Rule and Other Identifying Information: WAC 314-02-060 What is a caterer's endorsement?, 314-02-061 What is required for offsite storage of liquor under a caterer's endorsement?, 314-02-092 What is a combination spirits, beer, and wine license?, 314-02-103 What is a wine reseller endorsement?, 314-38-020 Permits—Fees established, and 314-38-110 Nonprofit wine auction permit. Hearing Location(s): On November 29, 2017, at 10:00 a.m., at 3000 Pacific Avenue S.E., Olympia, WA. Date of Intended Adoption: December 13, 2017. Submit Written Comments to: Karen McCall, P.O. Box 43098, Olympia, WA 98504, email rules@lcb.wa.gov, fax 360-664-9689, by November 29, 2017. Assistance for Persons with Disabilities: Contact Karen McCall, phone 360-664-1631, fax 360-664-9689, email rules@lcb.wa.gov, by November 29, 2017. Purpose of the Proposal and Its Anticipated Effects, Including Any Changes in Existing Rules: Rules are needed to implement 2017 liquor legislation. Reasons Supporting Proposal: Licensees need to know the requirements for new licenses passed in the 2017 legislative session. Rule is not necessitated by federal law, federal or state court decision. Name of Proponent: Washington state liquor and cannabis board, governmental. Name of Agency Personnel Responsible for Drafting: Karen McCall, Rules Coordinator, 3000 Pacific Avenue S.E., Olympia, WA, 360-664-1631; Implementation: Becky Smith, Licensing Director, 3000 Pacific Avenue S.E., Olympia, WA, 360-664-1615; and Enforcement: Justin Nordhorn, Enforcement Chief, 3000 Pacific Avenue S.E., Olympia, WA, 360-664-1726. A school district fiscal impact statement is not required under RCW 28A.305.135. A cost-benefit analysis is not required under RCW 34.05.328. The proposed rules are required to implement 2017 legislation. This rule proposal, or portions of the proposal, is exempt from requirements of the Regulatory Fairness Act because the proposal: Is exempt under RCW 19.85.025(3) as the rule content is explicitly and specifically dictated by statute; and rules adopt, amend, or repeal a procedure, practice, or requirement relating to agency hearings; or a filing or related process requirement for applying to an agency for a license or permit. October 18, 2017 Jane Rushford Chair
AMENDATORY SECTION (Amending WSR 17-12-030, filed 5/31/17, effective 7/1/17)
WAC 314-02-060 What is a caterer's endorsement?
(1) A spirits, beer, and wine restaurant ((and)), a beer and/or wine restaurant, and a tavern applicant or licensee may apply for a caterer's endorsement, in order to extend the on-premises license privilege to allow the sale and service of liquor at locations other than liquor licensed premises. See RCW 66.24.420(6) ((and)), 66.24.320(2), and 66.24.330 for more information about this endorsement.
(2) The annual fee for this endorsement is three hundred fifty dollars.
AMENDATORY SECTION (Amending WSR 09-02-012, filed 12/29/08, effective 1/29/09)
WAC 314-02-061 What is required for offsite storage of liquor under a caterer's endorsement?
A spirits, beer, and wine restaurant licensee with a caterer's endorsement, ((or)) a beer and/or wine restaurant licensee with a caterer's endorsement, or a tavern licensee with a caterer's endorsement, may store its alcohol at locations described in RCW 66.24.320, 66.24.330, and 66.24.420 that are not on the licensed premises if the following conditions are met:
(1) The licensee must display the approval letter for storing liquor at each location;
(2) Liquor storage must be within the event location where catering services for events are provided;
(3) If the location is one for which the licensee has an on-going contract or agreement to provide liquor service at catered events, the contract or agreement must include the following:
(a) Names of the parties;
(b) Location and address where on-going liquor catering services are provided;
(c) A sketch and description of the facility that includes where the liquor will be stored, how the liquor will be secured to ensure public safety, and the provisions that restrict access to the liquor storage area to the licensee and the licensee's employees; and
(d) Signatures of the parties.
(4) For locations owned or leased by the licensee and for which the licensee provides liquor service at catered events, the licensee must submit copies of documents that evidence the ownership or leasehold interest.
NEW SECTION
WAC 314-02-092 What is a combination spirits, beer, and wine license?
(1) Per RCW 66.24.632, a combination spirits, beer, and wine license is a retail license that allows a licensee to sell beer and wine, including strong beer, at retail in bottles, cans, and original containers for off-premises consumption, and to:
(a) Sell spirits in original containers to consumers for off-premises consumption and to permit holders;
(b) Sell spirits in original containers to retailers licensed to sell spirits for consumption on the premises, for resale at their licensed premises according to the terms of their licenses. No single sale may exceed twenty-four liters; and
(c) Export spirits.
(2) A combination spirits, beer, and wine licensee that intends to sell to an on-premises retailer must possess a basic permit under the Federal Alcohol Administration Act. This permit must provide for purchasing distilled spirits for resale at wholesale. A copy of the federal basic permit must be submitted to the board. A federal basic permit is required for each location from which the combination spirits, beer, and wine licensee plans to sell to an on-premises retailer.
(3) A sale by a combination spirits, beer, and wine licensee is a retail sale only if not for resale to an on-premises spirits retailer. On-premises retail licensees that purchase spirits from a combination spirits, beer, and wine licensee must abide by RCW 66.24.630.
(4) A combination spirits, beer, and wine licensee must pay to the board seventeen percent of all spirits sales. (see WAC 314-02-109 for quarterly reporting requirements).
Reporting of spirits sales and payment of fees must be submitted on forms provided by the board.
(5) The board may issue a combination spirits, beer, and wine license:
(a)(i) For premises comprising at least ten thousand square feet of fully enclosed retail space within a single structure, including store rooms and other interior areas. This does not include any area encumbered by a lease or rental agreement; and
(ii) To applicants that the board determines will maintain appropriate systems for inventory management, employee training, employee supervision, and physical security of the product.
(b) For premises of a former contract liquor store; or
(c) To a holder of former state liquor store operating rights sold at auction.
(6) A spirits retail licensee may apply for a sampling endorsement to conduct spirits, beer, and wine sampling if they meet the following criteria:
(a) Be a participant in the responsible vendor program;
(b) Advertising:
(i) For combination spirits, beer, and wine retail licensees, advertising samplings may not be placed in the windows or outside of the premises that can be viewed from the public right of way;
(ii) Advertising of sampling may be advertised but not state that sampling is free of charge.
(c) Samplings are to be conducted in the following manner:
(i) Samplings service area and facilities must be located within the licensee's fully enclosed retail area and must be of a size and design that the licensee can observe and control persons in the area;
(ii) The licensee must provide a sketch of the sampling area. Fixed or moveable barriers are required around the sampling area to ensure that persons under twenty-one years of age and apparently intoxicated persons cannot possess or consume alcohol. The sketch is to be included with the application for the spirits sampling endorsement;
(iii) Each sample may be no more than one-half ounce of spirits, and no more than a total of one and one-half ounces of spirits samples per person during any one visit to the premises. Spirits samples may be altered with mixers, water, and/or ice. Beer and wine samples must be two ounces or less, up to a total of four ounces per person during any one visit to the premises;
(iv) The licensee must have food available for the sampling participants;
(v) Customers must remain in the service area while consuming samples;
(vi) All employees serving spirits, beer, or wine during sampling events must hold a class 12 server permit;
(vii) There must be at least two employees on duty when conducting sampling events;
(d) Licensees are required to send a list of scheduled sampling events to their regional enforcement office at the beginning of each month. The date and time for each sampling must be included;
(e) The cost for a beer and wine sampling endorsement is two hundred dollars. There is no charge for a spirits sampling endorsement.
(7) A grocery store licensee may sell beer in kegs or other containers holding at least four gallons and less than five and one-half gallons of beer. See WAC 314-02-115 regarding keg registration requirements.
(8) A grocery store licensee may sell beer and wine over the internet. See WAC 314-03-020 regarding internet sales and delivery.
(9) A grocery store applicant or licensee may apply for an international exporter endorsement for five hundred dollars a year, which allows the sale of beer and wine for export to locations outside the United States.
(10) A grocery store licensee may apply for an endorsement to sell beer and cider growlers.
(a) Beer and cider must be sold in sanitary containers provided by the purchaser, licensee or the manufacturer and filled by the employee at the time of purchase.
(b) The taps must be located behind a counter where only employees have access or the taps must have locks preventing use unless unlocked and operated by an employee.
(c) Only employees of the licensee are permitted to operate the taps.
(d) All employees operating a tap must hold a class 12 alcohol server permit.
(e) The cost for the endorsement is one hundred twenty dollars.
AMENDATORY SECTION (Amending WSR 17-08-099, filed 4/5/17, effective 5/6/17)
WAC 314-02-103 What is a wine retailer reseller endorsement?
(1) A wine retailer reseller endorsement is issued to the holder of a grocery store liquor license ((or)), the holder of a beer and/or wine specialty shop license, or the holder of a combination spirits, beer, and wine license to allow the sale of wine at retail to on-premises liquor licensees.
(2) For holders of a grocery store license: No single sale to an on-premises liquor licensee may exceed twenty-four liters.
(3) For holders of a beer and/or wine specialty shop license:
(a) No single sale may exceed twenty-four liters, unless the sale is made by a licensee that was formerly a state liquor store or contract liquor store.
(b) May sell a maximum of five thousand liters of wine per day for resale to retailers licensed to sell wine for consumption on the premises.
(4) A grocery store licensee or a beer and/or wine specialty shop licensee with a wine retailer reseller endorsement may accept delivery at its licensed premises or at one or more warehouse facilities registered with the board.
(5) The holder of a wine retailer reseller endorsement may also deliver wine to its own licensed premises from the registered warehouse; may deliver wine to on-premises licensees, or to other warehouse facilities registered with the board. A grocery store licensee or a beer and/or wine specialty shop licensee wishing to obtain a wine retailer reseller endorsement that permits sales to another retailer must possess and submit a copy of their federal basic permit to purchase wine at wholesale for resale under the Federal Alcohol Administration Act. A federal basic permit is required for each location from which the grocery store licensee or beer and/or wine specialty shop licensee holding a wine retailer reseller endorsement plans to sell wine to another retailer.
(6) The annual fee for the wine retailer reseller endorsement for a grocery store licensee is one hundred sixty-six dollars.
(7) The annual fee for the wine retailer reseller endorsement for a beer and/or wine specialty shop licensee is one hundred ten dollars.
(8) Sales made under the reseller endorsement are not classified as retail sales for taxation purposes.
AMENDATORY SECTION (Amending WSR 17-08-099, filed 4/5/17, effective 5/6/17)
WAC 314-38-020 Permits—Fees established.
The fees for permits authorized under RCW 66.20.010 are hereby established as follows:
(1) A fee of five dollars is established for a special permit as authorized by RCW 66.20.010(1).
(2) The fee for a special permit as authorized by RCW 66.20.010(2) for purchase of five gallons or less is established as five dollars and for purchase of over five gallons is established as ten dollars.
(3) A fee for a banquet permit, as authorized by RCW 66.20.010(3), is established in WAC 314-18-040.
(4) The fee for a special business permit, as authorized by RCW 66.20.010(4), is established in WAC 314-38-010(2).
(5) The fee of ten dollars is established for a special permit as authorized by RCW 66.20.010(5).
(6) A fee of five dollars is established for a special permit as authorized by RCW 66.20.010(6).
(7) A special permit as authorized by RCW 66.20.010(7) shall be issued without charge to those eligible entities.
(8) The fee of twenty-five dollars is established for a special permit as authorized by RCW 66.20.010(8).
(9) The fee of twenty-five dollars is established for a special permit as authorized by RCW 66.20.010(9).
(10) The fee of thirty dollars is established for a special permit as authorized by RCW 66.20.010(10).
(11) The fee of seventy-five dollars is established for a special permit as authorized by RCW 66.20.010(11).
(12) The fee of ten dollars is established for a special permit as authorized by RCW 66.20.010(13).
(13) The fee of ten dollars is established for a special permit as authorized by RCW 66.20.010(14).
(14) The fee of ten dollars is established for a special permit as authorized by RCW 66.20.010(15).
(15) The fee of twenty-five dollars is established for a special permit as authorized by RCW 66.20.010(16).
(16) The fee of twenty-five dollars is established for a special permit as authorized by RCW 66.20.010(17).
NEW SECTION
WAC 314-38-110 Nonprofit wine auction permit.
(1) A nonprofit auction permit is for a nonprofit organization to sell wine through a private auction not open to the public.
(2) The nonprofit organization must complete a nonprofit wine auction permit application and submit the application and fee to the WSLCB.
(a) The date and location of the auction must be specified on the application.
(b) The one-time event fee is twenty-five dollars multiplied by the number of wineries that are selling wine at the auction event.
(c) A list of event attendees must be submitted with the wine auction permit application.
(3) The holder of the permit may conduct wine tastings of the wine to be auctioned at the event.
(4) All wine sold by auction cannot be consumed during the event.
(5) Wine from multiple wineries may be sold at the auction. Each winery must be listed on the application.
(6) The permit must be posted in a conspicuous location at the premises for which the permit was issued during all times the permit is in use.
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