WA Senate LBRC - Committee Meeting
(February 20, 2019)

Wednesday February 20, 2019 5:45 PM Observed
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The Washington State Senate Labor and Commerce Committee (WA Senate LBRC) considers issues relating to employment standards, industrial insurance, unemployment insurance and collective bargaining.  The committee also considers regulation of business and professions and has oversight of commerce issues relating to alcohol, tobacco, cannabis, and gaming.

Engagement Options

In-Person

Cherberg Building, 15th Avenue Southwest, Olympia, WA, USA

Observations

On Wednesday, the Washington State Senate Labor and Commerce Committee (WA Senate LBRC) moved substitute bills for SB 5318, SB 5298, and SB 5296.

  • SB 5318 – “Reforming the compliance and enforcement provisions for marijuana licensees.”
    • This bill is the companion legislation to HB 1237. The committee previously hosted a public hearing for SB 5318 on January 31st.
    • Senior Staff Counsel Richard Rogers outlined the substitute bill proposed by Committee Chair Karen Keiser (PSSB 5318) and two amendments (video @ 8:06); the substitute was described as having these effects:
      • Removes the provisions that created an amnesty program for certain violations occurring prior to June 30, 2018.
      • Specifies conditions under which the LCB may issue a notice of correction, similar to the process identified for other agencies (DFW, DOH, DOL & DNR). The sections are placed in Chapter 43.05 – which requires a technical assistance program for regulatory agencies. Includes LCB rulemaking. (Sec. 2 & 3).
      • LCB’s adoption of rules must perfect and expand existing programs for compliance education for licensed marijuana businesses, and institute a program for voluntary compliance solely through the use of advice and consultation, including recommendations of methods to abate violations. This is modeled after the WSHA program. (Sec. 4).
      • Sets forth a program of voluntary compliance and the provision of advisory and consultative services. With the exception of violations with a direct or immediate relationship to public safety, the LCB visits may not result in citations or civil penalties. Modeled after the WSHA program. (Sec. 5).
      • Adds “notices to correct” to written warnings, in lieu of “penalties, sanctions, or other” violations. Requires the LCB to define regulatory violations that have no direct or immediate relationship to public safety. Allows the licensee to correct violations not related to public safety within a reasonable amount of time as defined by the board (versus 7 days). Lowers the standard of LCB review of certain license cancellations from clear, cogent and convincing to by a preponderance of the evidence. (Sec. 6).
      • LCB may not issue a violation if there is misconduct by an employee that was unpreventable and the licensee took reasonable actions to address the misconduct. The possible range of actions to address the misconduct may include additional education and training, or possible termination for serious or repeated misconduct. (Sec. 6).
      • Allows the LCB to consider a history of prior administrative violations when considering a license application or administrative actions against a licensee. Adds cross-references to the new programs listed above, when the LCB is considering a license suspension or cancellation. (Sec. 7).
      • If a settlement agreement is entered between a marijuana licensee and a hearing examiner at or after a settlement conference, the terms of the settlement agreement must be given substantial weight by the board. The board may only disapprove, modify, change, or add to the terms of the settlement agreement including terms addressing penalties and license restrictions, if the board finds the agreements to be clearly erroneous. (Sec. 8).
    • The bill also had two amendments proposed by King, both of which failed.
      • The first (AMD 5318 – Orchid) had additional requirements for licensees applying to move locations, including notification and ability of local governments to object, an expanded definition of “chronic illegal activity,” increased posting notice of licensee relocating, and mandatory public hearings for any person or entity objecting to WSLCB about either a relocation requests approval or denial. King argued that the amendment was mainly about stores near the state’s border and better local control. Keiser said she couldn’t support it as it was “beyond the scope of the actual, underlying bill.”
      • The other (AMD 5318 – Cherry) required WSLCB to assist any law enforcement agency concerned about resale or trafficking of legal products outside the state. King offered the amendment with similar intent as the first but focused on the WSLCB. Keiser raised a similar objection.
    • Keiser called SB 5318 “complicated” and told members she was committed to working with its sponsor, Senator Ann Rivers, to improve and pass it. Keiser said the process was “tried and true” based on experience with other agencies, particularly the Washington Industrial Safety and Health Act (WISHA), made compliance as important as enforcement, and helped licensees. King was gracious, and thought the bill was “moving in the right direction.” Senator Maureen Walsh concurred and said this helped the industry deal with “stigma,” lauded the state for not taking a “heavy handed approach,” and called the bill an important step. Vice Chair Steve Conway differed, mentioning the Cole Memorandum and I-502’s original faith in WSLCB to regulate the market. He said the bill needed more work.
    • The substitute bill passed and heads to the Ways and Means Committee next (video @ 33:17).
  • SB 5298 – “Regarding labeling of marijuana products.” The committee previously hosted a public hearing for SB 5298 on January 31st.
    • Rogers outlined the substitute bill (PSSB 5298) proposed by Keiser (video @ 11:09); from the summary of its effects on the original bill: Restores LCB’s rulemaking authority for labeling.
    • Limits the new labeling provisions to those products which meet the DOH requirements that classifying them compliant marijuana products.
    • Does not create any civil liability on the part of the LCB or the state based on a marijuana licensee’s description of a structure or function claim or the product’s intended role.
    • Delays the effective date to January 1, 2020.
    • Keiser called for support, saying the measure was “particularly for medical marijuana patients” and that work would continue if the House would take up the issue. Ranking Member Curtis King was grateful for Keiser’s work and liked parts of the bill, but voted “without recommendation.” The bill was moved out of committee with a “do pass” recommendation by voice vote along caucus lines (video @ 22:30).
  • SB 5296, “Concerning the liquor and cannabis board,” would modify the powers of the WSLCB as regards alcohol rulemaking, and would also have substantive impacts across the agency’s other areas of responsibility.  The bill was sponsored by Chair Keiser. According to the original bill summary, the measure: Directs the Liquor and Cannabis Board (LCB) to initiate and maintain rule-making efforts to adopt rules to a range of subject matter areas concerning liquor.
    • Requires the LCB to make annual reports to the Legislature regarding specified rule-making activities.
    • Adds two legislators as ex officio members to the LCB [Board].
    • Makes technical corrections to the LCB’s statutes.
    • The committee previously hosted a public hearing for SB 5296 on January 22nd. Later that morning in caucus, WSLCB Board Chair Jane Rushford shared her perspective on the agency’s testimony on the bill.
    • In executive session this week, Rogers outlined the substitute bill proposed by Keiser (video @ 11:51). The substitute bill summary states it only “Makes technical and clarifying changes to the Liquor and Cannabis Board’s statutes.” The substitute removed “all substantive provisions and retains all the technical corrections” – including removal of the proposed change to the composition of the Board.
    • “This is not the same bill it started out to be,” said Keiser, “not by a long shot.” She applauded Rogers work updating WSLCB references in statute to say “Liquor and Cannabis” rather than the agency’s former title “Liquor Control.” Conway said alcohol and cannabis stakeholders recognize Keiser’s efforts to “simplify” the alcohol legislation process, and “separate, a little bit, the cannabis work and the liquor work.”
    • Keiser also announced that she and King would lead an “interim work project” to bring together stakeholders to “make real progress” on the issue.
    • The bill passed unanimously and heads to the Senate Rules Committee (video @ 44:05).

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