S-0599.1

SENATE BILL 5549

BySenators Liias, King, Hunt, and Braun

AN ACT Relating to modernizing resident distillery marketing and sales restrictions; amending RCW 66.24.140, 66.24.145, 66.28.040, 66.24.630, and 66.28.310; and adding new sections to chapter 66.24 RCW.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

Sec. 1. RCW 66.24.140 and 2017 c 260 s 1 are each amended to read as follows:

(1) There is a license to distillers, including blending, rectifying, and bottling; fee two thousand dollars per annum, unless provided otherwise as follows:

(a) For distillers producing one hundred fifty thousand gallons or less of spirits with at least half of the raw materials used in the production grown in Washington, the license fee must be reduced to one hundred dollars per annum;

(b) The board must license stills used and to be used solely and only by a commercial chemist for laboratory purposes, and not for the manufacture of liquor for sale, at a fee of twenty dollars per annum;

(c) The board must license stills used and to be used solely and only for laboratory purposes in any school, college, or educational institution in the state, without fee; and

(d) The board must license stills that have been duly licensed as fruit and/or wine distilleries by the federal government, used and to be used solely as fruit and/or wine distilleries in the production of fruit brandy and wine spirits, at a fee of two hundred dollars per annum.

(2) Any distillery licensed under this section may:

(a) Sell, for off-premises consumption, spirits of ((its))the distillery's own production ((for consumption off the premises)), spirits produced by another distillery or craft distillery licensed in this state, or vermouth or sparkling wine products produced by a licensee in this state. A distillery selling spirits or other alcohol authorized under this subsection must comply with the applicable laws and rules relating to retailers;

(b) Contract distilled spirits for, and sell contract distilled spirits to, holders of distillers' or manufacturers' licenses, including licenses issued under RCW 66.24.520, or for export; and

(c) ((Provide samples subject to the following conditions:

(iv) Every person who participates in any manner in the service of these samples must obtain a class 12 alcohol server permit))Serve samples of spirits for free or for a charge, and sell servings of spirits, vermouth, and sparkling wine to customers for on-premises consumption, at the premises of the distillery indoors, outdoors, or in any combination thereof, and at the distillery's off-site tasting rooms in accordance with this chapter, subject to the following conditions:

(e) A distillery may sell nonalcoholic products at retail.

Sec. 2. RCW 66.24.145 and 2015 c 194 s 2 are each amended to read as follows:

(1)(a) Any craft distillery may sell, for off-premises consumption, spirits of its own production ((for consumption off the premises)), spirits produced by another craft distillery or distillery licensed in this state, and vermouth and sparkling wine products produced by a licensee in this state.

(b) A craft distillery selling spirits or other alcohol authorized under this subsection must comply with the applicable laws and rules relating to retailers.

(2) Any craft distillery may contract distilled spirits for, and sell contract distilled spirits to, holders of distillers' or manufacturers' licenses, including licenses issued under RCW 66.24.520, or for export.

(3) Any craft distillery licensed under this section may ((provide, free or for a charge, one-half ounce or less samples of spirits of its own production to persons on the premises of the distillery. The maximum total per person per day is two ounces. Every person who participates in any manner in the service of samples must obtain a class 12 alcohol server permit. Spirits samples may be adulterated with nonalcoholic mixers, water, and/or ice.

(4)))serve samples of spirits for free or for a charge, and sell servings of spirits, vermouth, and sparkling wine products to customers for on-premises consumption, at the premises of the distillery indoors, outdoors, or in any combination thereof, and at the distillery's off-site tasting rooms, in accordance with this chapter, subject to the following conditions:

(5)(a) A distillery or craft distillery licensee may apply to the board for an endorsement to sample and sell spirits of its own production at retail ((for off-premises consumption)) at a qualifying farmers market. The annual fee for this endorsement is seventy-five dollars. Sampling is limited to a total of no more than two ounces of spirits of the distillery's or craft distillery's own production. The samples may be adulterated with the addition of ice, water, juice, or other nonalcoholic mixers. Bottles sold are for off-premises consumption only.

(b) For each month during which a distillery or craft distillery ((will))samples and sells spirits at a qualifying farmers market, the distillery or craft distillery must provide the board or its designee a list of the dates, times, and locations at which bottled spirits may be offered for sale. This list must be received by the board before the spirits may be offered for sale at a qualifying farmers market.

(c) Each approved location in a qualifying farmers market is deemed to be part of the distillery or craft distillery license for the purpose of this title((. The approved locations under an endorsement granted under this subsection do not include tasting or sampling privileges)), but shall not be counted against the allowed number of off-site tasting rooms allowed under this chapter. The distillery or craft distillery may not store spirits at a farmers market beyond the hours that the bottled spirits are offered for sale. The distillery or craft distillery may not act as a distributor from a farmers market location.

(d) Before a distillery or craft distillery ((may))samples and sells((bottled)) spirits at a qualifying farmers market, the farmers market must apply to the board for authorization for any distillery or craft distillery with an endorsement approved under this subsection to sample and sell bottled spirits at retail at the farmers market. A farmers market may restrict the participation of a distillery or craft distillery to bottle sales for off-premise consumption only and not allow the sampling of spirits. This application must include, at a minimum: (i) A map of the farmers market showing all booths, stalls, or other designated locations at which an approved distillery or craft distillery ((may))samples and sells bottled spirits. If sampling is allowed it must be in a location with an adequate line of demarcation or barrier so as to prevent those under twenty-one years of age from accessing the booth or stalls. Such location may be in proximity to an identified and approved wine or beer consumption area of the farmers market, if any; and (ii) the name and contact information for the on-site market managers who may be contacted by the board or its designee to verify the locations at which bottled spirits may be sold. Before authorizing a qualifying farmers market to allow an approved distillery or craft distillery to sample and sell bottled spirits at retail at its farmers market location, the board must notify the persons or entities of such application for authorization pursuant to RCW 66.24.010 (8) and (9). An authorization granted under this subsection (((4)))(5)(d) may be withdrawn by the board for any violation of this title or any rules adopted under this title.

(e) For the purposes of this subsection (((4)))(5), "qualifying farmers market" has the same meaning as defined in RCW 66.24.170.

(((5)))(6) The board must adopt rules to implement the alcohol server permit requirement and may adopt additional rules to implement this section.

(((6)))(7) Distilling is an agricultural practice.