The Board consists of five members and is responsible for control, manufacture, barter, possession, and sale of alcoholic beverages in the state. The Legislative Audit, dated September 8, 1997, indicated that the Board was fulfilling its responsibility by licensing establishments to manufacture, distribute or sell alcoholic beverages to the public and enforcing the alcohol control laws in Title 4. At the time the Audit was issued, the Auditor recommended extending the Board to June 30, 2002. Since the Legislature did not extend the Board last year, this bill would add an extra year to the extension date recommended by the audit.

This bill permits a local governing body to recommend that a liquor license be issued, renewed, relocated, or transferred with conditions. The Board shall impose these conditions unless the Board finds them arbitrary, capricious, or unreasonable. The local governing body is to assume responsibility for monitoring compliance with the conditions, except as otherwise provided by the Board.

The bill also permits a "corkage" policy to be adopted by a licensee. This would allow a customer, with the permission of the licensee, to bring fine wine onto a restaurant location, turn the wine over to the licensee for serving and control, and permit the licensee to charge a fee for serving the wine. This is a common practice in many locations across the world.

Another provision of the bill would permit a licensee to make arrangements to deliver a hospitality basket to a cruise ship or a hotel room and to deliver, between 8:00 a.m. and 5:00 p.m., alcohol to a responsible adult for a social event.

At the request of the ABC Board, the bill also includes language adding limited liability organizations (limited liability companies and limited liability partnerships) to be brought under the licensing authority of the Board. The bill sets forth what requirements these organizations would have to meet in order to receive a license from the Board.

The House Finance Committee added two provisions to this bill: one deletes the one-year residency requirement for receipt of a license and the other amends the peace officer powers of ABC employee to include the investigation of violations of laws against prostitution, promoting prostitution, gambling, promoting gambling and related offenses.

Over the years, the Legislature has made certain policy decisions concerning the licensing of brewpubs and breweries. This bill addresses some concerns that have been raised because of the history of these licenses. In 1980, brewery licenses were authorized and 04.11.450 (prohibited financial interests) was put in place to state that certain combination of licenses could not be held. In 1988, the Legislature authorized brewpub licenses, which were not transferable, and which had to be held in conjunction with a beverage dispensary license.

In 1995, by passage of HCS CSSB 87 (JUD), the Legislature placed a category of exempted licensees in the restaurant or eating place license section and thus created a "tavern" situation. In 1996, with an effective date of October 1, 1996, the Legislature went back and grandfathered in certain exempt licenses and then prohibited the future combination of a brewery license and a restaurant or eating place license. Five licensees were covered by the 1996 exemption and currently hold the grandfathered brewery/restaurant licenses. Because of this legislation and the addition of "restaurant or eating place" in the prohibited financial interest section, it is no longer possible to obtain a brewery license or a beverage dispensary license (which is necessary for a brewpub license) in combination with a restaurant or eating place license. This has placed the current businesses in a situation where their expansion opportunities are limited.

Currently a grandfathered restaurant/brewery combination licensee can sell beer at its own restaurant or other licensed premises, has no beer production cap, must use a distributor or self-distribute, and may never open a second location. If SCS CSHB 69 (RLS) is adopted, a grandfathered brewery/restaurant licensee can continue to operate under the grandfather provisions or elect to purchase a beverage dispensary license and become a brewpub. If the desire is to become a brewpub, then the licensee must: relinquish the brewery license; accept a 75,000 gallon per year production cap; sell beer manufactured on premises licensed under beverage dispensary license for consumption on the licensed premises or other licensed premises of the licensee that are also licensed as a beverage dispensary; and may sell its manufactured beer to a wholesaler. All of this will permit expansion of businesses.

Your support would be appreciated.