Original Notice.

     Preproposal statement of inquiry was filed as WSR 12-24-089.

     Title of Rule and Other Identifying Information: WAC 314-02-107 What are the requirements for a spirits retail license?

     Hearing Location(s): Washington State Liquor Control Board, Board Room, 3000 Pacific Avenue S.E., Olympia, WA 98504, on February 27, 2013, at 10:00 a.m.

     Date of Intended Adoption: March 6, 2013.

     Submit Written Comments to: Karen McCall, P.O. Box 43080, Olympia, WA 98504-3080, e-mail rules@liq.wa.gov, fax (360) 664-6989, by February 27, 2013.

     Assistance for Persons with Disabilities: Contact Karen McCall by February 27, 2013, (360) 664-1631.

     Purpose of the Proposal and Its Anticipated Effects, Including Any Changes in Existing Rules: The passage of Initiative 1183 and the privatization of spirits theft and product loss is significant and increasing. This is contributing to increased underage access to alcohol. Rules are needed to clarify reporting requirements of product loss due to theft and internal shrinkage.

     Reasons Supporting Proposal: This rule making is the result of a petition from the Washington Association of Sheriffs and Police Chiefs. Law enforcement feels stolen spirits product has created a public safety issue.

     Statutory Authority for Adoption: RCW 66.24.630 and 66.08.030.

     Statute Being Implemented: RCW 66.24.630.

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

     Name of Proponent: Washington state liquor control board, governmental.

     Name of Agency Personnel Responsible for Drafting: Karen McCall, Rules Coordinator, 3000 Pacific Avenue S.E., Olympia, WA 98504, (360) 664-1631; Implementation: Alan Rathbun, Licensing Director, 3000 Pacific Avenue S.E., Olympia, WA 98504, (360) 664-1615; and Enforcement: Justin Nordhorn, Enforcement Chief, 3000 Pacific Avenue S.E., Olympia, WA 98504, (360) 664-1726.

     No small business economic impact statement has been prepared under chapter 19.85 RCW. A fiscal impact statement was not required.

     A cost-benefit analysis is not required under RCW 34.05.328.

January 23, 2013

Sharon Foster

Chairman

OTS-5243.1

AMENDATORY SECTION(Amending WSR 12-12-065, filed 6/5/12, effective 7/6/12)

WAC 314-02-107   What are the requirements for a spirits retail license?   (1) The requirements for a spirits retail license are as follows:

     (a) Submit a signed acknowledgment form indicating the square footage of the premises. The premises must be 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 (floor plans one-eighth inch to one foot scale may be required by the board); and

     (b) Submit a signed acknowledgment form indicating the licensee has a security plan which addresses:

     (i) Inventory management;

     (ii) Employee training and supervision; and

     (iii) Physical security of spirits product with respect to preventing sales to underage or apparently intoxicated persons and theft of product.

     (2) A grocery store licensee or a specialty shop licensee may add a spirits retail liquor license to their current license if they meet the requirements for the spirits retail license.

     (3) The board may not deny a spirits retail license to qualified applicants where the premises is less than ten thousand square feet if:

     (a) The application is for a former contract liquor store location;

     (b) The application is for the holder of a former state liquor store operating rights sold at auction; or

     (c) There is no spirits retail license holder in the trade area that the applicant proposes to serve; and

     (i) The applicant meets the operational requirements in WAC 314-02-107 (1)(b); and

     (ii) If a current liquor licensee, has not committed more than one public safety violation within the last three years.

     (4) Spirit retail licensees must report to the board quarterly on a form provided by the board, spirits product loss due to theft and internal shrinkage.

[Statutory Authority: RCW 66.08.030, 66.24.055, 66.24.160, 66.24.630, and 66.24.640. 12-12-065, § 314-02-107, filed 6/5/12, effective 7/6/12.]