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Oregon Bulletin

January 1, 2014

Oregon Liquor Control Commission, Chapter 845

Rule Caption: Amended to define additional terms.

Adm. Order No.: OLCC 11-2013

Filed with Sec. of State: 11-26-2013

Certified to be Effective: 1-1-14

Notice Publication Date: 9-1-2013

Rules Amended: 845-013-0001

Subject: Manufacturers and wholesalers are generally prohibited from giving services and other gifts to retailers. This rule defines and explains some of the exceptions to this general prohibition. The amendments add one new definition (for “supplier”) to section (2).

Rules Coordinator: Annabelle Henry—(503) 872-5004

845-013-0001

Financial Assistance; Purpose, Limitation, Definitions and Record Keeping

(1) Purpose. ORS 471.398 and 471.400 generally prohibit manufacturers and wholesalers from giving services or things to retailers. The statute makes some exceptions to the general prohibition. OAR 845-013-0001 through 845-013-0090 define and explain the exceptions. The Commission’s basis for its interpretations of point of sale material, items of nominal value and services of nominal value is that manufacturers and wholesalers may promote their products but may not promote a retailer’s business or underwrite a retailer’s business expenses.

(2) Definitions. As used in ORS 471.398, 471.400, and OAR 845-013-0001 through 845-013-0090:

(a) “Customize” means designing or modifying point of sale material or items of nominal value to promote a specific retail business;

(b) “Exterior” means on the outside of the business or clearly visible from the outside;

(c) “Manufacturer” includes brewery, distillery, winery, brew-pub and grower sales privilege licensees;

(d) “Retailer,” “retail license,” and “any licensee authorized to sell alcoholic liquor at retail” includes any officer, director, agent, employee or substantial stockholder of the licensed business;

(e) “Substantial stockholder” as used in subsection (2)(d) of this rule means a person who owns ten percent or more of any class of stock.

(f) “Supplier” includes manufacturers, wholesalers and their respective agents.

(3) General Limitations:

(a) Although Oregon law allows manufacturers and wholesalers to provide the items and services described in these rules, federal laws regarding wine may not. When the federal law is more strict, wine manufacturers and wholesalers must follow the federal law rather than Oregon law. Therefore, manufacturers and wholesalers should check with the Alcohol and Tobacco Tax and Trade Bureau (TTB) before applying these rules to their wine business;

(b) Manufacturers and wholesalers may give or loan the point of sale material (OAR 845-013-0050), items of nominal value (845-013-0060), and services of nominal value (845-013-0070) described in these rules:

(A) Only for the manufacturer’s or wholesaler’s alcoholic beverage products; and

(B) To all retailers without discrimination. Without discrimination means the manufacturer or wholesaler makes all allowable point of sale material, items of nominal value, and services of nominal value available to all the manufacturer’s or wholesaler’s retailers upon request subject to availability. The Commission will not consider it discrimination if a manufacturer or wholesaler gives allowable material, items or services based on the type of business or in proportion to the size of the account;

(c) In addition to the requirements of subsection (3)(b) of this rule, when manufacturers and wholesalers give the services of nominal value (OAR 845- 013-0070) described in these rules, they must not alter or disturb another manufacturer’s or wholesaler’s alcoholic beverage products. This limitation does not apply when a retailer decides to rearrange all the alcoholic beverage products his/her business carries (a general reset). For a general reset, manufacturers and wholesalers may move each other’s products as long as the retailer has notified all the manufacturers and wholesalers whose products are being moved and the retailer moves or helps move the products of any manufacturers or wholesalers who are not present;

(d) Manufacturers and wholesalers may not customize point of sale material (OAR 845-013-0050) or items of nominal value (845-013-0060). Despite this prohibition, a manufacturer or wholesaler may, on items of nominal value and interior point of sale material:

(A) Add the retailer’s name or logo;

(B) Add the retailer’s price for the advertised product(s); or

(C) Leave a blank space for the retailer to add only the retailer’s price for the advertised product(s).

(4) Records. Manufacturers and wholesalers must keep accurate and complete records of any gratuities the manufacturer or wholesaler gives a retailer and of all activities described in OAR 845-013-0010 (Substantial Gratuities), any credit that 845-013-0020(1)(a) and (b) allow and all exchanges and returns that 845-013-0070 (Services of Nominal Value) allows. These records must include dates, times, amounts and names of all persons and premises involved; be kept for two years; and be available for Commission inspection.

(5) Retailer Purchase of Items/Services: A manufacturer or wholesaler may, for a reasonable fee, sell to a retailer items, labor, or services that ORS 471.398 prohibits. As used in this section, a reasonable fee for labor or service is one that covers at least the manufacturer’s or wholesaler’s cost; a reasonable fee for the item is at least the cost to the manufacturer or wholesaler who initially purchased or produced the item. The manufacturer or wholesaler and the retailer must keep a record of the sale.

Stat. Auth.: ORS 471, including 471.030, 471.040, 471.730(1) & (5)

Stats. Implemented: ORS 471.398

Hist.: OLCC 8-1987, f. 31-3-87, ef. 4-1-87; OLCC 7-1992, f. & cert. ef. 7-1-92; Renumbered from 845-010-0121; OLCC 19-2000, f. 12-6-00, cert. ef. 1-1-01; OLCC 10-2004, f. 10-15-04 cert. ef. 11-1-04; OLCC 11-2013, f. 11-26-13, cert. ef. 1-1-14


Rule Caption: Inserts a statutory exemption that excuses a specific Commissioner from compliance with its provisions.

Adm. Order No.: OLCC 12-2013

Filed with Sec. of State: 11-26-2013

Certified to be Effective: 1-1-14

Notice Publication Date: 9-1-2013

Rules Amended: 845-004-0001

Subject: ORS 471.710(2) sets forth the interests that an individual is prohibited from holding while serving as a commissioner or an employee of the Commission. This rule defines and describes these interests. However, it omits the statutory exemption that excuses the commissioner designated as the food and alcoholic beverage retail industry representative from compliance with its prohibitions. The amendments correct this omission and clarify the rule by alphabetizing the terms in section (1) and revising language in sections (2) through (4).

Rules Coordinator: Annabelle Henry—(503) 872-5004

845-004-0001

Prohibited Interests in the Alcoholic Beverage Industry

(1) Definitions. For this rule:

(a) “Business connections” include, but are not limited to, the following behaviors and relationships:

(A) Knowingly providing anything of value to a manufacturer or a business licensed by the Commission in return for something of value except for the exchange of commodities or services that are routinely provided to the general public under the same terms, and

(B) Partnerships with a manufacturer or licensee and similar ventures formed for the purpose of making a profit.

(b) “Business licensed by the Commission” means a business or any part of a business that requires an alcoholic beverage license to operate. A person is “employed by a business licensed by the Commission” if:

(A) The person’s job duties include involvement with any portion of the business that requires an alcoholic beverage license to operate, or

(B) The person exercises management control over any portion of the business that requires an alcoholic beverage license to operate.

(c) “Close association” means a relationship that does or could be reasonably perceived to influence commissioner or employee decisions.

(d) “Domestic Partner” means an individual who, along with another individual of the same sex, has received a Certificate of Registered Domestic Partnership pursuant to the Oregon Family Fairness Act.

(e) “Employed by the Commission” means any permanent, temporary or limited duration Commission employee.

(f) “Financial Interest” means knowingly holding an ownership interest as a sole proprietor, partner, limited partner or stockholder, in any business that is licensed by the Commission or manufactures alcoholic beverages sold in Oregon. This definition excludes any investment that the investor does not control in nature, amount or timing.

(g) “Household member” means all persons living as a family unit in the same dwelling as the commissioner or Commission employee.

(h) “Immediate family” means the spouse or Domestic Partner, and juvenile dependent children of the commissioner or Commission employee.

(i) “Knowledge” and “knowingly” mean that the person had actual knowledge of or reasonably should have known of the fact in question.

(j) “Position to take action or make decisions that could affect the licensed business” means that the employee’s job duties include the discretion to take actions or make decisions that are reasonably likely to create more than a trivial cost or benefit for a licensed business in money, time or anything else of value. However, an employee is not in a “position to take action or make decisions that could affect the licensed business” under ORS 471.710(2)(c) or (d) if the Commission removes the employee from actions and decisions affecting the licensed business. The Commission will do so where the removal would not unreasonably effect the employee’s ability to perform his or her job duties.

(2) Prohibitions.

(a) The prohibitions in this section do not apply to the commissioner appointed as the food and alcoholic beverage retail industry representative under ORS 471.705(1).

(b) Financial Interests. No commissioner, employee, household member or family member may hold a financial interest described in this rule.

(c) Employment. No commissioner, employee, household member or family member may be employed by a business licensed by the Commission unless the commissioner or employee is not in a position to take action or make decisions that could affect the licensed business.

(d) Business Connections. No commissioner, employee, household member or family member may have a business connection described in this rule unless the commissioner or employee is not in a position to take action or make decisions that could affect the licensed business.

(3) Reporting Requirements.

(a) The reporting requirements in this section do not apply to the commissioner appointed as the food and alcoholic beverage retail industry representative under ORS 471.705(1).

(b) Close Association. A commissioner or employee who has a close association with an alcoholic beverage licensee must:

(A) Inform the Commission of the association as soon as the commissioner or employee has knowledge of the association, and

(B) Refrain from participating in any decision that directly affects the licensee.

(c) An applicant for a Commission job must disclose all financial interests, current employment relationships and business connections that the applicant, or any person in the applicant’s household or immediate family, has with the alcoholic beverage industry of which the applicant has knowledge. If the Commission determines that a prohibited financial interest, employment relationship or business connection exists, the applicant must divest the financial interest, employment relationship or business connection before he or she may be hired.

(d) A Commission employee must report all financial interests, current employment relationships and business connections that the employee, or any person in the employee’s household or immediate family, has with the alcoholic beverage industry to his or her supervisor as soon as the employee has knowledge of it. If the financial interest, employment relationship or business connection is prohibited, the Commission will set a reasonable time period for divestiture. If divestiture does not occur within the given time period, the Commission will terminate the employee’s employment.

(4) Disciplinary Action. The Commission will appropriately discipline any employee who:

(a) Fails to report a prohibited financial interest, employment relationship or business connection as required under this rule, or

(b) Knowingly acquires or establishes a financial interest, employment relationship or business connection prohibited under this rule.

Stat. Auth.: ORS 471 including 471.030, 471.730(1) & (5)

Stats. Implemented: ORS 471.710

Hist.: OLCC 4-1988, f. & cert. ef. 7-1-88; OLCC 15-1989, f. 10-31-89, cert. ef. 11-1-89; OLCC 9-2008, f. 6-12-08, cert. ef. 7-1-08; OLCC 12-2013, f. 11-26-13, cert. ef. 1-1-14


Rule Caption: Amends two rules as a package regulating direct shipment of malt beverages, wine and cider.

Adm. Order No.: OLCC 13-2013

Filed with Sec. of State: 12-12-2013

Certified to be Effective: 1-1-14

Notice Publication Date: 9-1-2013

Rules Amended: 845-006-0392, 845-006-0396

Subject: OAR 845-006-0392 defines when retailers may make same and next-day delivery of wine and cider. OAR 845-006-0396 defines when retailers may make same and next-day delivery of malt beverages. The Commission amended both rules in 2012. However, due to a technical error both amendments were recently invalidated. The proposed amendments permanently restore the 2012 amendments, which allow a retailer to accept an order for the delivery of wine, cider and/or malt beverages until 7:00 pm and to deliver that order before 9:00 pm on the same day if the quantities delivered do not exceed two standard bottles of wine or cider and two six-packs of malt beverages per Oregon residence. Incorporating more recent stakeholder feedback, the adopted amendments also allow a retailer to alternatively accept an order for the delivery of wine, cider and/or malt beverages between 7:01 pm and 9:00 pm and to deliver that order before 10:00 pm on the same day if the quantities delivered do not exceed one standard bottle of wine or cider and one six-pack of malt beverages per Oregon residence.

Rules Coordinator: Annabelle Henry—(503) 872-5004

845-006-0392

Requirements for Direct Shipment of Wine and Cider to a Resident of Oregon

This rule sets the requirements for direct shipment and same-day delivery of wine and cider to a resident of Oregon. A licensee must be approved by the Commission under OAR 845-005-0417 in order to provide direct shipment or same-day delivery of wine and cider. The provisions of this rule apply retroactively to May 1, 2012.

(1) A person may sell and ship wine or cider to a resident of Oregon only if the person holds:

(a) A valid Direct Shipper Permit and holds a license issued by this state or another state that authorizes the person to hold a Direct Shipper Permit; or

(b) An off-premises sales license issued by the Commission.

(2) A person holding a Direct Shipper Permit must ship not more than a total of two cases of wine or cider containing not more than nine liters per case per month to a resident of Oregon who is at least 21 years of age.

(3) A person holding a Direct Shipper Permit or an off-premises sales license must retain a record for a minimum of eighteen months of the amount of alcohol contained in the shipment to the resident.

(4) A person holding a Direct Shipper Permit or an off-premises sales license must ship:

(a) Only wine or cider and only in manufacturer-sealed containers;

(b) Only to a resident of Oregon who is at least 21 years of age and only if the wine or cider is for personal use and not for the purpose of resale;

(c) Only for delivery to a resident who is not visibly intoxicated at the time of receiving the alcohol;

(d) The product in a container that is conspicuously labeled with the words “Contains alcohol: signature of person age 21 years or older required for delivery” or similar language approved by the Commission;

(e) Only pursuant to an order for the wine or cider that is received by the permit holder or licensee prior to shipment of the alcohol;

(f) Only for next-day delivery, unless the permit holder or licensee has been approved for same-day delivery; and

(g) Only to a home or business where the home or business has a permanent street address.

(5) If the permit holder or licensee ships via a for-hire carrier, the permit holder and licensee must use a for-hire carrier with a plan approved by the Commission under OAR 845-005-0424 and must comply with sections (2), (3) and (4) of this rule, as applicable.

(6) If the permit holder or licensee does not use a for-hire carrier, in addition to complying with sections (2), (3) and (4) of this rule, as applicable, the person making the delivery of the wine or cider must:

(a) Be age 18 or over;

(b) Verify that the person receiving the alcohol is at least 21 years of age;

(c) Determine that the person receiving the alcohol is not visibly intoxicated; and

(d) Collect information that must be retained by the permit holder or licensee for a minimum of eighteen months from the date of delivery of the alcohol to the resident. The information retained must include:

(A) The date and time the alcohol was delivered to the resident;

(B) The name or information that can be used to determine the name of the person delivering the alcohol to the resident; and

(C) The name, signature, and delivery address of the person receiving the alcohol.

(7) Same-day delivery for a permit holder. If a permit holder has also obtained approval to make same-day delivery of wine or cider, in addition to complying with sections (2), (3), (4) and either (5) or (6) of this rule, the permit holder must receive the order from the resident no later than 4:00 pm on the day the order is delivered, ensure that the wine and cider is delivered before 9:00 pm, and deliver not more than a total of two cases of wine or cider containing not more than nine liters per case per day to a resident of Oregon (and must also follow section (2) of this rule).

(8) Same-day delivery for a licensee. If a licensee has also obtained approval to make same-day delivery of wine or cider, in addition to complying with sections (3), (4) and either (5) or (6) of this rule, the licensee must:

(a) Receive the order from the resident no later than 4:00 pm on the day the order is delivered, ensure that the wine and cider is delivered before 9:00 pm, and deliver not more than a total of two cases of wine or cider containing not more than nine liters per case per day per Oregon residence;

(b) Receive the order from the resident no later than 4:00 pm on the day the order is delivered, ensure that the wine and cider is delivered before 9:00 pm, and may deliver an unlimited amount of wine or cider if the alcohol accounts for no more than 25 percent of the retail cost of the order (i.e., at least 75 percent of the retail cost of the order must be items other than alcohol);

(c) Receive the order from the resident no later than 9:00 am on the day the order is delivered, ensure that the wine and cider is delivered before 9:00 pm, and may deliver an unlimited amount of wine or cider;

(d) Receive the order from the resident no later than 7:00 pm on the day the order is delivered, ensure that the wine and cider is delivered before 9:00 pm, and deliver not more than a total of 1500 milliliters of wine or cider (approximately two standard bottles) per day per Oregon residence; or

(e) Receive the order from the resident between 7:01 pm and 9:00 pm on the day the order is delivered, ensure that the wine or cider is delivered before 10:00 pm, and deliver not more than a total of 750 milliliters of wine or cider (approximately one standard bottle) per day per Oregon residence.

(9) A permit holder must:

(a) Allow the Commission to audit the permit holder’s records of wine and cider shipments to Oregon residents upon request and shall make those records available to the Commission in Oregon no later than 60 days after the Commission mails the notice;

(b) Report to the Commission all shipments of wine or cider made to a resident of Oregon under the permit as required by ORS Chapter 473. The report must be made in a form prescribed by the Commission; and

(c) Timely pay to the Commission all taxes imposed under ORS Chapter 473 on wine and cider sold and shipped directly to a resident of Oregon under the permit. For the purpose of the privilege tax imposed under ORS Chapter 473, all wine or cider sold and shipped pursuant to a direct shipper permit is sold in this state. The permit holder, not the purchaser, is responsible for the tax.

(10) If the permit holder is located in a state outside of Oregon, it consents to the jurisdiction of the Commission and the courts of this state for the purpose of enforcing the provisions of this rule and any related laws or rules.

(11) A violation of section (9) of this rule is a Category IV violation. A violation of any other section of this rule is a Category III violation. In lieu of a criminal citation, the Commission may assess an administrative penalty for shipping wine or cider without a valid Direct Shipper Permit in violation of section (1) of this rule against any Oregon license held by the shipper, including a Certificate of Approval issued pursuant to ORS 471.244.

Stat. Auth.: ORS 471, 471.030, 471.040, 471.186 & 471.730(1) & (5)

Stats. Implemented: ORS 471.186, 471.282 & 473

Hist.: OLCC 23-2007(Temp), f. 12-14-07, cert. ef. 1-1-08 thru 6-28-08; OLCC 6-2008(Temp), f. & cert. ef. 4-18-08 thru 6-28-08; OLCC 8-2008, f. 6-12-08, cert. ef. 6-29-08; OLCC 4-2012, f. 4-10-12, cert. ef. 5-1-12; OLCC 4-2013(Temp), f. 7-12-13, cert. ef. 7-15-13 thru 1-11-14; OLCC 13-2013, f. 12-12-13, cert. ef. 1-1-14

845-006-0396

Requirements for Same-Day and Next-Day Retail Delivery of Malt Beverages to a Resident of Oregon

This rule sets the requirements for same-day and next-day delivery of malt beverages to a resident of Oregon. A licensee must be approved by the Commission under OAR 845-005-0420 in order to provide same-day delivery of malt beverages. The provisions of this rule apply retroactively to May 1, 2012.

(1) A licensee qualified to make same-day or next-day delivery of malt beverages under OAR 845-005-0420 must ship:

(a) Only malt beverages and only in a manufacturer-sealed container. A container must not hold more than two and one-quarter gallons;

(b) Only to a resident of Oregon who is at least 21 years of age and only if the malt beverage is for personal use and not for the purpose of resale;

(c) Only for delivery to a resident who is not visibly intoxicated at the time of receiving the alcohol;

(d) The malt beverage in a package that is conspicuously labeled with the words “Contains alcohol: signature of person age 21 years or older required for delivery” or similar language approved by the Commission;

(e) Only pursuant to an order for the malt beverage that is received by the licensee prior to shipment of the alcohol;

(f) Only for next-day delivery unless the licensee has been approved for same-day delivery by the Commission; and

(g) Only to a home or business where the home or business has a permanent street address.

(2) A licensee must retain a record for a minimum of eighteen months of the amount of alcohol contained in the shipment to the resident.

(3) If the licensee ships via a for-hire carrier, in addition to complying with sections (1) and (2) of this rule, the licensee must use a for-hire carrier with a plan approved by the Commission under OAR 845-005-0424.

(4) If the licensee does not use a for-hire carrier, in addition to complying with sections (1) and (2) of this rule, the person delivering the malt beverage must:

(a) Be age 18 or over;

(b) Verify that the person receiving the alcohol is at least 21 years of age;

(c) Determine that the person receiving the alcohol is not visibly intoxicated; and

(d) Collect information that must be retained by the licensee for a minimum of eighteen months from the date of delivery of the alcohol to the resident. The information retained must include:

(A) The date and time the alcohol was delivered to the resident;

(B) The name or information which can be used to determine the name of the person delivering the alcohol to the resident; and

(C) The name, signature, and delivery address of the person receiving the alcohol.

(5) Same-day delivery. If the licensee is approved to make same-day delivery of malt beverages, in addition to complying with sections (1), (2) and either (3) or (4) of this rule, the licensee must:

(a) Receive the order from the resident no later than 4:00 pm on the day the order is delivered, ensure that the malt beverage is delivered before 9:00 pm, and deliver not more than a total of five gallons of malt beverage per day per Oregon residence;

(b) Receive the order from the resident no later than 4:00 pm on the day the order is delivered, ensure that the malt beverage is delivered before 9:00 pm, and may deliver an unlimited amount of malt beverage if the alcohol accounts for no more than 25 percent of the retail cost of the order (i.e., at least 75 percent of the retail cost of the order must be items other than alcohol);

(c) Receive the order from the resident no later than 9:00 am on the day the order is delivered, ensure that the malt beverage is delivered before 9:00 pm, and may deliver an unlimited amount of malt beverage;

(d) Receive the order from the resident no later than 7:00 pm on the day the order is delivered, ensure that the malt beverage is delivered before 9:00 pm, and deliver not more than a total of 160 ounces of malt beverage (approximately two standard six-packs) per day per Oregon residence; or

(e) Receive the order from the resident between 7:01 pm and 9:00 pm on the day the order is delivered, ensure that the malt beverage is delivered before 10:00 pm, and deliver not more than a total of 80 ounces of malt beverage (approximately one standard six-pack) per day per Oregon residence.

(6) Sanction. A violation of any section of this rule is a Category III violation.

Stat. Auth.: ORS 471, 471.030, 471.040, 471.730(1) & (5)

Stats. Implemented: ORS 471.305

Hist.: OLCC 19-2000, f. 12-6-00, cert. ef. 1-1-01; OLCC 7-2003(Temp), f. & cert. ef. 5-20-03 thru 11-16-03; OLCC 12-2003, f. 9-23-03, cert. ef. 11-1-03; OLCC 23-2007(Temp), f. 12-14-07, cert. ef. 1-1-08 thru 6-28-08; OLCC 6-2008(Temp), f. & cert. ef. 4-18-08 thru 6-28-08; OLCC 8-2008, f. 6-12-08, cert. ef. 6-29-08; OLCC 4-2012, f. 4-10-12, cert. ef. 5-1-12; OLCC 4-2013(Temp), f. 7-12-13, cert. ef. 7-15-13 thru 1-11-14; OLCC 13-2013, f. 12-12-13, cert. ef. 1-1-14


Rule Caption: Restores technically deficient 2012 rulemaking and clarifies minors on licensed premises requirements and prohibitions.

Adm. Order No.: OLCC 14-2013

Filed with Sec. of State: 12-12-2013

Certified to be Effective: 1-1-14

Notice Publication Date: 10-1-2013

Rules Amended: 845-006-0335

Subject: This rule describes a licensee’s and a permittee’s duty to prevent minors from purchasing or consuming alcohol on the licensed premises and from entering areas prohibited to minors. The Commission amended this rule in 2012; however, due to a technical error the amendments were recently invalidated. The proposed amendments permanently restore the 2012 amendments. The amendments clarify when minor employees and service permittees may be in various posted areas and where minor entertainers may stay when not performing. The amendments also delete language in section (3)(a) to clarify that this section should only be used to charge allowing a minor to drink (and not selling or serving to minors).

Rules Coordinator: Annabelle Henry—(503) 872-5004

845-006-0335

Age Verification; Minors on Licensed Premises

(1) Age Verification:

(a) ORS 471.130 requires a licensee or permittee to verify the age of a person who wants to buy or be served alcoholic beverages when there is “any reasonable doubt” that the person is at least 21 years old. The Commission requires a licensee or permittee to verify the age of anyone who wants to drink alcoholic beverages, or is in an area prohibited to minors, if there is reasonable doubt that the person is at least 21 years old. “Reasonable doubt” exists if the person appears to be under the age of 26;

(b) Whenever a licensee or permittee verifies age, he/she must verify it as ORS 471.130 requires (statement of age card or the specified items of identification) and must reject any obviously altered document or one which obviously does not identify the person offering it;

(c) Licensees must require all their employees who sell, serve, oversee or control the sale or service of alcoholic beverages to verify age as subsection (a) of this section requires.

(2) Sanctions for Failure to Verify Age:

(a) The Commission will sanction a licensee or permittee who does not verify the age of a person who appears to be under the age of 26 only if the person:

(A) Actually is a minor who buys, is served or drinks an alcoholic beverage at the licensed premises (Category III violation); or

(B) Actually is a minor who is in an area of the licensed premises prohibited to minors (Category IV violation).

(b) If the Commission sanctions a licensee or permittee for one or more of the following violations under this rule: Failure to verify the age of a minor; Allowing a minor to drink; or Allowing a minor in an area prohibited to minors, the Commission will not sanction the licensee or permittee separately under ORS 471.130 or 471.410(2) for the same conduct. The Commission may charge a licensee or permittee for one or more violations under this rule and also charge violation of one or more of the statutes in the alternative.

(c) Failure to verify age as ORS 471.130 requires or to reject obviously altered or false identification is a Category III violation.

(3) Minors on Premises: General Prohibitions. No licensee, permittee, or licensee’s employee will permit a minor:

(a) To drink any alcoholic beverage on licensed premises;

(b) To be on licensed premises or an area of the licensed premises prohibited to minors, except as provided in ORS 471.430, 471.480, 471.482 and this rule. (The assigned minor posting(s) describes where on the premises minors are allowed or prohibited. See OAR 845-006-0340, Minor Postings.)

(4) Minor Employee and Minor Service Permittee:

(a) Whenever minors are prohibited from an entire licensed premises, minor employees and minor service permittees are also prohibited. This applies to a premises with a Number I minor posting and when minors are prohibited from the entire premises under a Number IIIA, IV or VI minor posting.

(b) When minors are allowed in a premises or portion of a premises, minor employees and minor service permittees are permitted in the areas of the premises where minors are allowed. This applies to a premises or area with a Number III posting and to a premises or area with a Number IIIA, IV or VI posting during the times when minors are allowed. The primary duty of minor service permittees must be food service.

(c) If a premises has one or more areas where minors are prohibited and one or more areas where minors are allowed, the following requirements apply. An example is a premises with a Number III posting in the dining room and a Number II posting in the lounge.

(A) Minor employees who are not service permittees may be in areas prohibited to minors only to restock supplies and perform food service related activities such as setting and clearing tables and delivering food. The minor shall not remain in the prohibited area longer than is necessary to perform these duties.

(B) Minor service permittees may perform the duties of minor employees as described in subsection (4)(c)(A) of this rule as well as enter the prohibited areas to order and pick up alcoholic drinks for service in other areas of the premises where minors are allowed.

(5) Minor Vendor or Contractor. A minor, other than a licensee’s employee, who has a legitimate business purpose, may be in the area of the licensed premises normally prohibited to minors. (For example, a minor who is a plumber may repair the plumbing in a prohibited area).

(6) Minor Entertainer:

(a) A minor entertainer may perform on licensed premises. If the minor entertainer stays on the premises when not performing, he/she must stay in an area where minors are permitted, such as an area with a Number III posting. If there is no break room, dressing room or patron area where minors are permitted, the licensee may, with prior Commission approval, designate space for minor entertainers in an area of the licensed premises normally prohibited to them. At a minimum, this place must be within the bartender’s sight but not at the bar, and there must be no alcoholic beverages in this place. If conditions become unsuitable, the Commission may revoke its approval. If a minor entertainer is not performing and is not in a Commission-approved designated area on the licensed premises, then the minor entertainer must leave the licensed premises.

(b) If the minor is under 18 years old, and the licensee proposes to employ that minor to conduct or assist in conducting any public dance, including but not limited to dancing by the child as a public performance, or to assist in or furnish music for public dancing, the licensee and minor must make sure the minor has the written permission of the appropriate juvenile court judge as required by ORS 167.840(2).

(c) If the minor is under 18 years old, and the licensee proposes to employ that minor to perform or entertain on the licensed premises in a capacity other than described in (6)(b) of this rule, before allowing the minor to perform on the licensed premises the licensee must apply for and receive prior written permission from the Administrator of the Oregon Liquor Control Commission, or the Administrator’s designee. Application must be made upon a form supplied by the Commission. The Administrator or designee shall grant such permission only if:

(A) The parents or legal guardians of the minor have consented to the child’s participation in such activity; and

(B) The Administrator or designee has found that participation in such activity will not be inconsistent with the health, safety and morals of the minor.

(d) Minors under 14 years old must also get a work permit if one is required by the Oregon Bureau of Labor and Industries.

(7) Minor Patron: A minor patron may be in areas of licensed premises normally prohibited to minors in the following circumstances:

(a) If the licensee permits it, a minor may be in the immediate company of his/her spouse or Domestic Partner who is at least 21 years old. “Domestic Partner” means an individual who, along with another individual of the same sex, has received a Certificate of Registered Domestic Partnership pursuant to the Oregon Family Fairness Act. The minor must not buy, possess or drink alcoholic beverages;

(b) A minor may order and eat a meal in a Number IV posted area during the specified meal periods. This meal must at least meet the minimum food service requirements of OAR 845-006-0460.

(8) Sanctions: A violation of subsection (3)(a) of this rule is a Category III violation. A violation of subsection (3)(b) through section (7) of this rule is a Category IV violation.

Stat. Auth.: ORS 471, 471.030, 471.040, 471.430, 471.482 & 471.730

Stats. Implemented: ORS 471.130, 471.410, 471.430, 471.480 & 471.482

Hist.: OLCC 19-2000, f. 12-6-00, cert. ef. 1-1-01; OLCC 12-2002, f. 8-29-02, cert. ef. 1-2-03; OLCC 13-2003(Temp), f. & cert. ef. 9-23-03 thru 3-20-04; OLCC 4-2004, f. & cert. ef. 4-9-04; OLCC 9-2005, f. 11-21-05, cert. ef. 1-1-06; OLCC 9-2008, f. 6-12-08, cert. ef. 7-1-08; OLCC 2-2009, f. 3-17-09, cert. ef. 4-1-09; OLCC 3-2012, f. 4-10-12, cert. ef. 5-1-12; OLCC 5-2013(Temp), f. 7-12-13, cert. ef. 7-15-13 thru 1-11-14; OLCC 14-2013, f. 12-12-13, cert. ef. 1-1-14


Rule Caption: Amends the definitions of “interest in the business” and “financial interest” and clarifies their requirements.

Adm. Order No.: OLCC 15-2013

Filed with Sec. of State: 12-12-2013

Certified to be Effective: 1-1-14

Notice Publication Date: 10-1-2013

Rules Amended: 845-005-0311

Subject: Under the current rule, a license application must specify the real and true names of all persons who own or have an interest in the business proposed to be licensed. The current rule defines the term “interest in the business” by providing a list of persons that, by definition, own or hold an interest in the business. The amendments reframe this analysis to focus on conduct that indicates ownership or a right to control the business. Under section (4) of the current rule, the Commission may also require the applicant or licensee to submit a list of persons and legal entities with a financial interest in the business, and the Commission may evaluate those persons and legal entities as if they were the applicant. The amendments clarify the definition of “financial interest” and the actions that the Commission may take after it concludes this evaluation.

Rules Coordinator: Annabelle Henry—(503) 872-5004

845-005-0311

True Name on Application; Interest in Business

(1) True name on application. An application for a license must specify the real and true names of all persons and legal entities that have an ownership interest in the business proposed to be licensed.

(2) License privileges. License privileges are available only to the persons and legal entities specified in the application and only for the premises designated on the license.

(3) Ownership Interest. Under ORS 471.313(4)(h), the Commission may refuse to issue a license if the applicant is not the owner of the business proposed to be licensed or an undisclosed ownership interest exists. For purposes of this rule, an “ownership interest” is indicated by the following behaviors, benefits or obligations:

(a) Any person or legal entity, other than an employee acting under the direction of the owner, that exercises control over, or is entitled to exercise control over, the business;

(b) Any person or legal entity, other than an employee acting under the direction of the owner, that incurs, or is entitled to incur, debt or similar obligations on behalf of the business;

(c) Any person or legal entity, other than an employee acting under the direction of the owner, that enters into, or is entitled to enter into, a contract or similar obligations on behalf of the business; or

(d) Any person or legal entity identified as the lessee of the premises proposed to be licensed.

(4) Financial Interest. Under ORS 471.757, the Commission may require the licensee or applicant to identify the persons and legal entities with a financial interest in the business. The Commission may evaluate any such person as if he or she were the actual licensee or license applicant. If that evaluation reveals any circumstances that would support grounds for the denial, cancellation or suspension of such a license or license application, the Commission may deny, cancel or suspend the license of the actual licensee or issue the license with restrictions. For purposes of this rule, a “financial interest” exists if the performance of the business causes, or is capable of causing, a person or legal entity to benefit or suffer financially. Examples of a financial interest include, but are not limited to:

(a) A licensee;

(b) An employee or agent who receives out-of-the-ordinary compensation. “Out-of-the-ordinary compensation” includes both over- and under- compensation;

(c) Any person who rents or leases real property to a licensee or applicant for use by the business;

(d) Any person who rents or leases personal property to a licensee or applicant for use in the business for a commercially unreasonable rate;

(e) Any person who lends money, real property or personal property to a licensee or applicant for use in the business;

(f) Any person who gives money, real property or personal property to a licensee or applicant for use in the business.

(g) A spouse or domestic partner of the licensee or license applicant. For purposes of this subsection, “domestic partners” includes adults who share the same regular and permanent address and would be financially effected by the success or failure of the business as well as adults who qualify for a “domestic partnership” as defined under ORS 106.310.

(5) For good cause shown, the Commission may waive the requirements in this rule to take into account unusual or extraordinary circumstances.

Stat. Auth.: ORS 471, including 471.030, 471.040 & 471.730(1) & (5)

Stats. Implemented: ORS 471.757

Hist.: OLCC 19-2000, f. 12-6-00, cert. ef. 1-1-01; OLCC 9-2002, f. 6-12-02 cert. ef. 7-1-02; OLCC 9-2008, f. 6-12-08, cert. ef. 7-1-08; OLCC 1-2011, f. 2-23-11, cert. ef. 3-1-11; OLCC 15-2013, f. 12-12-13, cert. ef. 1-1-14

Notes
1.) This online version of the OREGON BULLETIN is provided for convenience of reference and enhanced access. The official, record copy of this publication is contained in the original Administrative Orders and Rulemaking Notices filed with the Secretary of State, Archives Division. Discrepancies, if any, are satisfied in favor of the original versions. Use the OAR Revision Cumulative Index found in the Oregon Bulletin to access a numerical list of rulemaking actions after November 15, 2013.

2.) Copyright Oregon Secretary of State: Terms and Conditions of Use

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