2019 Day at the State Capitol

1. 2019 Day at the State Capitol

2. What: WFIA Day at the State Capitol When: Tuesday, February 5, 2019 Where: John A. Cherberg Bldg. (JAC) A-B-C Conference Rooms

3. What To Bring: • Your ID • 30 second elevator speech on who you are • Business cards • Talking points specific to your business

4. Schedule • 8:30 am - Arrival and Check-In at the Cherberg Building - ABC Rooms • 9:00 am – Briefing • 10:00 am - Legislative Appointments • 12:00 pm - Legislative Luncheon at Governor's Mansion • 1:15 pm - Legislative Appointments 

8. Things to Note • Acronyms • LEG = Legislative Building • JLOB = John L. Obrien Building (House of Representatives offices) • JAC = John A. Cherberg (Senate offices) • INB = Irving R. Newhouse (Senate offices) • Personal Agenda items: • Items in bold are “mandatory” participation

9. Scan Downs • WFIA supports • Grocery store scan down allowances should continue being treated as a bona fide discount under Washington State’s tax code. A grocer receives no service for these allowances and the benefit is passed to the consumer, thus scan downs should be exempt from business & occupation (B&O) tax. • Talking Points: • Scan downs is a type of bona fide discount that have been exempt from B&O tax. • Explain what a scan down allowance is - when a distributor promises the grocer a discount for selling a product during a specific timeframe. Give an example – such as when a distributor offers a discount on Pepsi products for a week in order to move product off the shelves. • Emphasize that there is no service provided in exchange for the discount – the discount goes straight to the consumer.

10. Talking Points Continue • DOR created an advisory opinion in early 2013 formally stating that scan downs were not subject to B&O tax. • However, a court case (Klein Honda) makes DOR believe that scan downs should be subject to B&O tax. They are letting WFIA run a bill which would continue to exempt scan down allowances from B&O tax.

11. Retail Theft • WFIA supports • Amends the definition of theft to include the act of concealment with the intent to remove from store. • Talking Points: • Including concealment with intent to deprive in Washington’s theft laws allow intervening by security personnel earlier thus reducing dangerous interactions outside the store. It will also reduce the possibility of damage to the item or property when items are dumped or dropped as a thief leaves the store realizing they have been spotted.

12. Spirit Sales Legislation • WFIA supports • Allows stores of less than 10,000 square feet to obtain a spirit’s license to sell smaller size spirit bottles (375 milliliters/.79 pint) or less) so long as the spirit is kept in a locked display case or kept behind a counter. • Talking Points: • Smaller stores less than 10,000 sq. ft. already sell beer and wine. 10,000 ft. is an arbitrary number, and it unfairly targets smaller stores by not allowing them to sell spirits. • With more stores carrying spirits products, availability is not an issue, except in rural areas – where many of the smaller stores are. It is time to provide some options for these smaller stores to participate in spirit sales in a regulated and safe manner. • We recognize that convenience stores and smaller grocery stores have limited staff to combat theft, which is why we propose that spirits should be up to a pint and be locked up or placed behind a counter.

13. Carbon Reduction Issues • WFIA Opposes • The imposition of carbon taxes, low carbon fuel standards, and other carbon reduction strategies would be detrimental to the grocery industry. Carbon reduction strategies that imposing fees or taxes increases costs for the grocery industry which relies on trucks for delivery of product and energy/electricity for refrigeration of products and safe lighting in our grocery stores. • Talking Points • Our state continues to be a leader in new environmental regulations impacting energy usage, land use and transportation. • The food industry must rely on trucks to deliver goods, cars to get customers to the stores, energy to run the refrigerators, bakery appliances, etc. • Carbon taxes or low carbon fuel standards do not fix the problem, but only increases costs to businesses, which then increases costs for consumers.

14. Secure Scheduling • WFIA opposes • These proposals would significantly impact costs for our state’s independent grocers, particularly in our smaller communities where labor is less readily available and the need for flexibility is greater. • Talking Points • The current secure scheduling proposed legislation goes above and beyond the Seattle ordinance. It impacts businesses with 100+ employees, requires a minimum of 12 hours between shifts, and employers offer additional hours to current employees and post notice for 7 days before hiring new employees, all while not engaging in a systematic pattern of under scheduling due to the proposed legislation. The proposed legislation is not helping employees, but hurting them by removing all flexibility from scheduling. • The proposed legislation only impacts retail – and even then, only restaurants that have 40+ locations worldwide are impacted while there is no exception for grocery or retail stores.

15. Raising Age Limit for Tobacco to 21 • WFIA opposes • Other jurisdictions (other states/tribes) besides Washington state must also be 21 years or older to ensure a fair market. • Talking Points: • WFIA believes that the age should be raised to 21 for all entities – states and tribes in particular. Thus, a federal solution is needed in order to ensure consistency across all states, tribes and military bases. • At this point in time, there are issues with inconsistent jurisdictions within Washington state with tobacco and alcohol sales. Consumers cross jurisdictional lines (going to another state, tribal land or military bases) to get more accessible products. While they are there, consumers purchase other goods which makes the potential loss more than 4.3% of tobacco sales.

16. Capital Gains • WFIA opposes • These proposals do not exempt the sales of small businesses, which is the retirement of many store owners in the grocery and convenience store industry. • Talking Points: • Many independent grocers and convenience store owners invest in their businesses with the intent of selling their business to fund their retirement. So while retirement accounts are exempt, selling a business to create a retirement is not. (“Life events”). • The current proposals do not take into account capital losses. • A C-corp would not be taxed with capital gains, but individuals or pass-thru entities would be taxed with capital gains. This could present legal issues.

17. Plastic Bag Ban • WFIA Supports • WFIA supports a statewide plastic bag ban as long as state law prevails over local law and there is a fee of $0.10 per paper bag. Additionally, the technical specifications of the bags must be industry standards. • We will not be talking about Plastic Bag Ban unless the Representative/Senator asks about it. If so, use the talking points below. • Talking Points: • A fee of $0.10 is needed to help supplement the cost difference between plastic bags and paper bags. Currently, paper bags cost $0.14 to buy from manufacturers, while plastic bags cost $0.01 to buy from manufacturers. • A statewide ban provides consistency. It simplifies cost and confusion for both retailers and consumers by providing the same fee and the same rules all throughout the state.

18. QUESTIONS/COMMENTS? • Email: Catherine@wa-food-ind.org • Phone: 360-753-5177 ext. 104 • 360-970-9481 (cell) • NOTE: Draft Agenda’s and policy position statements, maps, etc. will be emailed to each attendee as soon as possible.