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Oregon Bulletin

February 1, 2011

 

Oregon Liquor Control Commission
Chapter 845

Rule Caption: Amend rule to delegate authority to the Administrator in connection with contested case procedural
matters.

Adm. Order No.: OLCC 16-2010

Filed with Sec. of State: 12-22-2010

Certified to be Effective: 1-1-11

Notice Publication Date: 9-1-2010

Rules Amended: 845-003-0670

Subject: This rule describes the specific authorities that the Commissioners delegate to others, such as the agency Administrator, in connection with contested cases and states that the Commissioners retain all authority not specifically delegated. We needed to amend this rule in order to delegate to the Administrator the specific authority to prepare and issue orders to address procedural matters arising prior to or after a hearing in a contested case, such as orders granting or denying late hearing requests and requests related to discovery, depositions and participation as a party in a contested case.

Rules Coordinator: Jennifer Huntsman—(503) 872-5004

845-003-0670

Retained Authority of Commissioners

(1) The Commissioners retain all authority not specifically delegated.

(2) The Commissioners delegate to the Administrator the authority to prepare and issue an order granting or denying late hearing requests (frequently called requests for relief from default) as provided in OAR 137-003-0528.

(3) The Commissioners delegate to the Administrator the authority to prepare and issue an order granting or denying requests to participate as a party, limited party or interested agency in a contested case under OAR 137-003-0535 or 137-003-0540 and to make all decisions incidental to the request, including, but not limited to, specifying the areas of participation and procedural limitations of participation, granting or denying late petitions, shortening the time within which responses to the petition shall be filed and/or postponing the hearing until disposition is made of the petition.

(4) The Commissioners delegate to the Administrator the authority to prepare and issue an order granting or denying a petition for an order to take a deposition of a party pursuant to OAR 137-003-0572. This authority includes, but is not limited to, the ability to designate the terms of the deposition such as the location, manner of recording, time of day and persons permitted to be present during the deposition.

(5) The Commissioners delegate to the Administrator the authority to prepare and issue an order granting or denying discovery motions pursuant to OAR 137-003-0570 submitted prior to referral of the contested case to the Office of Administrative Hearings and, if applicable, after the assigned administrative law judge issues a proposed order.

(6) The Commissioners delegate to the Administrator the authority to respond to questions transmitted to the agency as set forth at OAR 137-003-0635. The scope of the issues that may be transmitted to the agency includes the agency’s interpretation of its rules and applicable statutes and which rules or statutes apply to a proceeding.

(7) The Commissioners delegate to the Administrator the authority to prepare and issue a Final Order based upon an informal disposition by settlement.

(8) The Commissioners delegate to the Administrator the authority to prepare and issue a Final Order by Default when the default is the result of a party’s failure to request a hearing or withdrawal of a hearing request; or when a party, after requesting a hearing, fails to appear at the hearing and the agency file does not constitute the sole record.

(9) The Commissioners delegate to the ALJ the authority to prepare and issue a Final Order by Default when the default is the result of a party’s failure to appear at the time scheduled for hearing and the agency file constitutes the sole record.

(10) The Commissioners delegate to the Administrator the authority to prepare and issue a Final Order based upon a proposed order where exceptions are not filed timely and the order is not otherwise subject to review by the Commissioners.

(11) The Commissioners delegate to the Administrator the authority to grant or deny requests for extension of time within which to file exceptions or comments to a proposed order, in conformity with the requirements of OAR 845-003-0590(3).

(12) The Commissioners delegate to the Administrator the authority to prepare and issue an order granting or denying a motion to postpone oral argument to the Commissioners on any comments or exceptions to a proposed order.

(13) The Commissioners delegate to the Administrator the authority to summarily deny requests for reconsideration or rehearing and any stay request based on these requests for reconsideration or rehearing when exceptions or a request to reopen the record has been made by the same participant in the same case.

(14) The Commissioners delegate to the Administrator the authority to prepare and issue an order granting or denying a request to stay the enforcement of a Final Order pending judicial review and in cases where judicial review has not been requested.

(15) “Administrator” means the Executive Director of the Oregon Liquor Control Commission or his or her designee.

Stat. Auth.: ORS 183.341(2) & 471.730(5)(6)

Stats. Implemented: ORS 183.341(2)

Hist.: OLCC 9-1998, f. 10-21-98, cert. ef. 1-1-99; OLCC 1-2000(Temp), f. & cert. ef. 1-14-00 thru 7-11-00; OLCC 8-2000, f. 6-23-00, cert. ef. 7-1-00; OLCC 9-2003, f. 6-27-03, cert. ef. 7-1-03; OLCC 18-2003, f. 11-24-03, cert. ef. 12-1-03; OLCC 2-2005, f. 4-21-05, cert. ef. 5-1-05; OLCC 1-2008, f. 1-16-08, cert. ef. 2-1-08; OLCC 16-2010, f. 12-22-10, cert. ef. 1-1-11

 

Rule Caption: Amend two rules to eliminate inconsistencies regarding minimum server age at temporary sales licensed events.

Adm. Order No.: OLCC 17-2010

Filed with Sec. of State: 12-22-2010

Certified to be Effective: 1-1-11

Notice Publication Date: 9-1-2010

Rules Amended: 845-005-0440, 845-009-0010

Subject: OAR 845-005-0440 Temporary Sales Licenses: This rule describes the required qualifications for and privileges associated with the Commission’s issuance of a Temporary Sales License (TSL). The rule was silent on the minimum required age for servers at these temporary sales licensed events.

      To improve consistency and clarity around the requirements for these temporary events, staff proposed the addition of a new section (11) which states that alcohol servers must be at least 21 years of age with limited exceptions for the performance of non-alcohol related duties. These exceptions parallel those currently allowed for minor permittees (age 18 to 20) on an annually licensed premises.

      OAR 845-009-0010 Service Permit Requirements: This rule describes who is and isn’t required to have a service permit. Because the rule language stated that all employees at a temporary sales licensed event must be at least 21 years of age without exception and did not distinguish between an employee and a volunteer, staff proposed deleting the minimum age requirement from this rule and instead including it in the Temporary Sales License rule (as stated above). Staff also proposed a couple of housekeeping amendments. The first deletes subsection (1)(d) since the current requirements for those who deliver wine, cider & malt beverages are now contained in OAR 845-006-0392 & -0396, which were amended as part of the implementation of the new Wine Shipper Permits in 2008. And the second creates a new subsection (2)(c) describing the statutory service permit exception for nonprofit or charitable organization TSLs.

Rules Coordinator: Jennifer Huntsman—(503) 872-5004

845-005-0440

Temporary Sales Licenses

(1) A person must obtain from the Commission a license or authority to sell alcoholic beverages. ORS 471.405 establishes a prohibition on sale of alcoholic beverages without a license or authority. ORS 471.406 defines sale of alcoholic beverages. This rule sets the requirements for obtaining a Temporary Sales License.

(2) Definitions. For this rule:

(a) “License day” means from 7:00 am until 2:30 am on the succeeding calendar day. The license fee is $50 per license day or for any part of a license day.

(b) “Nonprofit trade association” means an organization comprised of individual or business members where the organization represents the interests of the members and is registered with the state of Oregon as a nonprofit association.

(c) “Serious violation history” means:

(A) Two or more category III or IIIa administrative violations of any type, or category IV violations involving minors. However, if the circumstances of a violation include aggravation, one violation may be sufficient; or

(B) One category I, II or IIa administrative violation; or

(C) Two or more crimes or offenses involving liquor laws.

(d) “Bar” means a counter at which the preparation, pouring, serving, sale, or consumption of alcoholic beverages is the primary activity.

(e) “Food counter” means a counter in an area in which minors are allowed and at which the primary activity at all times is the preparation, serving, sale, or consumption of food.

(f) “Video lottery game” means a video lottery game terminal authorized by the Oregon State Lottery. Examples include but are not limited to video poker and video slots. Keno monitors are not considered a video lottery game.

(g) “Social game” means a game other than a lottery, if authorized by a local county or city ordinance pursuant to ORS 167.121, between players in a private business, private club, or place of public accommodation where no house player, house bank, or house odds exist and there is no house income from the operation of the social game.

(3) ORS 471.190 authorizes the Commission to issue a Temporary Sales License. Temporary Sales Licenses are issued in increments of one license day. The Commission will not approve more than seven license days on a single application. The Commission may limit approval of any application to a single license day or to any number of license days fewer than seven days. The Commission may issue a Temporary Sales License only to applicants that qualify under the Commission’s licensing standards and that are:

(a) A nonprofit or charitable organization that is registered with the state, including nonprofit trade associations where at least 51% of the total membership is comprised of persons that hold winery licenses issued under ORS 471.223 or grower sales privilege licenses issued under 471.227; or

(b) A political committee that has a current statement of organization filed under ORS 260.039 or 260.042; or

(c) An agency of the State; or

(d) A local government or an agency or department of a local government; or

(e) Any applicant not described in (3)(a)–(3)(d) of this subsection, including licensees of the Commission.

(4) A Temporary Sales License may authorize the licensee to sell wine, malt beverages and cider at retail for consumption on the licensed premises and for consumption off the licensed premises. All alcohol sold for consumption off the licensed premises must be in a manufacturer-sealed container that does not hold more than two and one-quarter gallons.

(5) A Temporary Sales License may authorize the licensee to sell distilled liquor by the drink at retail for consumption on the licensed premises.

(6) The Commission may authorize sales of manufacturer-sealed containers of wine, malt beverages or cider under a Temporary Sales License for the purpose of a raffle. The Commission shall issue a Temporary Sales License for the purpose of a raffle only to a nonprofit or charitable organization that is registered with the state.

(7) Applicants must apply in writing for a Temporary Sales License, using the application form provided by the Commission. The Commission may require additional forms, documents, or information as part of the application. The Commission may refuse to process any application not complete, not accompanied by the documents or disclosures required by the form or the Commission, or that does not allow the Commission sufficient time to investigate it. Sufficient time is typically one to three weeks prior to the event date. The Commission may give applicants the opportunity to be heard if the Commission refuses to process an application. A hearing under this subsection is not subject to the requirements for contested case proceedings under ORS 183.310 to 183.550.

(8) The application for a Temporary Sales License under this rule shall include:

(a) A written, dated, and signed plan the Commission determines adequately manages:

(A) The event to prevent problems and violations;

(B) Patronage by minors as set out in subsection (9) of this rule; and

(C) Alcohol consumption by adults.

An application is not complete if this plan is not approved by the Commission. The Commission may use subsection (7) of this rule to refuse to process any application that is not complete;

(b) Identification of the individuals to be employed by the licensee to manage events on the licensed premises;

(c) Identification of the premises proposed to be licensed;

(d) Menu and proposal showing compliance with the food service standards of OAR 845-006-0465;

(e) Statement of the type of event to be licensed, type and extent of entertainment to be offered, expected patronage overall and by minors, type of food service to be offered, proposed hours of food service, and proposed hours of operation;

(f) The recommendation in writing of the local governing body where the licensed premises will be located;

(g) License fees as established by ORS 471.311.

(9) A plan for managing patronage by minors under subsection (8)(a) of this rule must meet the following requirements:

(a) If the Temporary Sales License will be on any part of a premises, room, or area with a permanent license issued by the Commission, the Commission must be convinced that the plan will follow the minor posting and control plan, including any temporary relaxation of the minor posting, assigned to that premises, room, or area under the permanent license. The Commission must also be convinced that the plan will prevent minors from gaining access to alcoholic beverages and any portion of the licensed premises prohibited to minors.

(b) If the Temporary Sales License will not be on any part of a premises, room, or area with a permanent license issued by the Commission, the Commission must be convinced that the plan will prevent minors from gaining access to alcoholic beverages and any portion of the licensed premises the Commission prohibits to minors.

(10) Minors are prohibited from the licensed premises or portions of the licensed premises as follows;

(a) Minors may not sit or stand at a bar; however, minors may sit or stand at a food counter;

(b) Minors may not be in an area where there is video lottery games, social games, or nude entertainment or where such activities are visible.

(c) Minors may not be in an area where the licensee’s approved written plan designates that minors will be excluded.

(11) Minimum Age of Servers. Alcohol servers at temporary sales licensed locations must be at least 21 years of age to sell or serve alcoholic beverages, with the following exceptions:

(a) In areas of the licensed premises not prohibited to minors, persons who are 18, 19, and 20 years of age may:

(A) Take orders for, serve and sell alcoholic beverages for on-premises consumption if the activity is incidental to the selling or serving of food in that area of the licensed premises, and may sell alcoholic beverages in manufacturer-sealed containers for off-premises consumption; or

(B) Sell tokens/script, including verifying age, to be redeemed for alcoholic beverages or food at the event.

(b) In areas of the licensed premises prohibited to minors, persons who are 18, 19, and 20 years of age may deliver food, restock non-alcohol supplies and perform other non-alcohol related duties, however the person shall not remain in the prohibited area longer than is necessary to perform these duties.

(12) Alcohol servers at locations licensed under subsections (3)(b)–(e) of this rule must hold valid service permits unless specifically exempted under authority of subsection (13) of this rule.

(13) The Commission may waive the service permit requirement for the holder of a Temporary Sales License issued under subsections (3)(b)–(e) of this rule, and the licensee’s alcohol servers, if:

(a) The license is used only for package sales; or if

(b) The Commission concludes alcohol service by individuals who do not hold a service permit does not pose a significant risk for public safety problems or non-compliance with liquor laws; and

(c) Each alcoholic beverage point-of-sale at the licensed location is staffed, at all times alcoholic beverages are being sold or served, by an individual who has completed a Server Education course successfully within 5 years prior to the date of the event.

(14) At events licensed under subsection (3)(a) of this rule, before allowing alcohol servers to sell or serve alcoholic beverages, the licensee must ensure that all alcohol servers have met one of the following standards:

(a) The alcohol server has a valid service permit or has successfully completed a Server Education course within 5 years prior to the date of the event, or

(b) The alcohol server has attended training provided by the licensee, and has read, signed and dated the Commission-provided brochure, What Every Volunteer Alcohol Server Needs to Know. The licensee-provided training must address the topics included in the brochure, including but not limited to: minors and proper checking of identification, and how to recognize and respond appropriately to visibly intoxicated persons. At any time while on duty, the alcohol server shall make the signed brochure available for immediate inspection by any inspector or investigator employed by the Commission or by any other peace officer.

(15) If there are compliance problems with an operator or an event, the Commission may add other requirements for the education of servers at events licensed under this rule.

(16) The Commission may deny, cancel or restrict a Temporary Sales License for any reason for which the Commission may deny, cancel or restrict a regular license.

(17) The Commission may deny or restrict a Temporary Sales License if the applicant has a serious violation history at events previously licensed with a Temporary Sales License within the past 36 months.

(18) The Commission shall limit the issuance of Temporary Sales Licenses to the same applicant at the same location to no more than 31 license days from January 1 to December 31 of each year, unless the Commission determines that the applicant would be eligible for an annual license based on the applicant’s personal qualifications and the total number of license days at the same location does not exceed 60 in that calendar year.

(19) The Commission may refund the Temporary Sales License fee if the application is withdrawn by the applicant or denied by the Commission, if the event does not take place because of circumstances beyond the applicant’s control, or if the Commission determines the applicant does not need a license for the event proposed in the application.

(20) When the Commission approves a written plan under subsection (8)(a) of this rule, the licensee must follow that written plan. Failure to follow that written plan is a category III violation.

(21) If the licensee fails to prevent minors from gaining access to alcoholic beverages or fails to prevent minors from gaining access to any portion of the licensed premises prohibited to minors, the Commission may immediately prohibit minors from the licensed premises or portion(s) of the premises.

Stat. Auth.: ORS 471, 471.030, 471.040, 471.190 & 471.730(1) & (5)

Stats. Implemented: ORS 471.190, 471.360 & 471.482

Hist.: OLCC 19-2000, f. 12-6-00, cert. ef. 1-1-01; OLCC 4-2001(Temp), f. & cert. ef. 8-15-01 thru 2-11-02; OLCC 13-2001, f. 12-18-01, cert. ef. 2-12-02; OLCC 14-2002, f. 10-25-02 cert. ef. 11-1-02; OLCC 24-2007, f. 12-17-07, cert. ef. 1-1-08; OLCC 17-2010, f. 12-22-10, cert. ef. 1-1-11

845-009-0010

Service Permit Requirements

(1) Who Needs a Service Permit. ORS 471.360 requires the following persons to have service permits:

(a) Any person who mixes, sells or serves alcoholic beverages for consumption on licensed premises;

(b) Any person who directly supervises persons who mix, sell or serve alcoholic beverages for consumption on licensed premises;

(c) The individual principals of a licensed corporation or partnership who mix, sell or serve alcoholic beverages for consumption on licensed premises or who directly supervise those who do.

(2) Exceptions. The following are exceptions to the service permit requirement:

(a) An individual named on the license as a licensee does not need a service permit;

(b) ORS 471.360 allows the Commission to waive the service permit requirement if the licensee’s primary business is not the sale or service of alcoholic beverages or food. Under this authority, the Commission waives the service permit requirement for Public Passenger Carriers whose primary business is transportation (for example airlines, and most trains), and does not waive the requirement for Public Passenger Carriers whose primary business is touring (for example tour boats in Oregon waters more than 30 days per calendar year, and small excursion-type railroads). The Commission waives the service permit requirement for some temporary licenses (see OAR 845-005-0440(9) (13), Temporary Sales Licenses).

(c) Per ORS 471.190, employees and volunteers serving alcoholic beverages for a nonprofit or charitable organization with a temporary sales license are not required to have service permits (see OAR 845-005-0440(14), Temporary Sales Licenses).

(3) Authority to Sell and Serve Based on an Application:

(a) ORS 471.375 allows some service permit applicants to begin selling or serving alcoholic beverages after the applicant completes an official service permit application and an authorized person as defined by 471.375 endorses indorses and sends the application to the Commission;

(b) The authority to sell or serve alcoholic beverages based on an application does not apply to any applicant:

(A) Who has had a service permit denied or cancelled within the three years before the current application;

(B) Who has had a service permit denied because they failed to complete the required alcohol server education program. When the applicant completes an alcohol server education course and passes the exam, the applicant may then sell and serve alcoholic beverages;

(C) Whose service permit application meets the criteria in OAR 845-009-0005, Return of Applications;

(D) Whose service permit is currently suspended.

Stat. Auth.: ORS 471, 471.030, 471.040, 471.190 & 471.730(1) & (5)

Stats. Implemented: ORS 471.190, 471.360, 471.365(2) & 471.375

Hist.: OLCC 2-1989, f. 3-1-89, cert. ef. 4-1-89; OLCC 3-1991, f. 3-1-91, cert. ef. 4-1-91; OLCC 19-2000, f. 12-6-00, cert. ef. 1-1-01; OLCC 10-2001(Temp), f. 10-12-01, cert. ef. 11-1-01 thru 4-29-02; OLCC 5-2002, f. 4-12-02, cert. ef. 4-29-02; OLCC 9-2003, f. 6-27-03, cert. ef. 7-1-03; OLCC 10-2004, f. 10-15-04 cert. ef. 11-1-04; OLCC 4-2005, f. 6-7-05, cert. ef. 7-1-05; OLCC 17-2010, f. 12-22-10, cert. ef. 1-1-11

 

Rule Caption: Amend prohibited conduct rule’s drinking on duty section to expand the definition of “on duty.”

Adm. Order No.: OLCC 18-2010

Filed with Sec. of State: 12-22-2010

Certified to be Effective: 1-1-11

Notice Publication Date: 9-1-2010

Rules Amended: 845-006-0345

Subject: This rule describes a variety of acts which both licensees (including their employees or agents) and service permittees are prohibited from engaging in. Section (1) specifies that no licensee or permittee will drink or be under the influence of intoxicants while “on duty.” Due to recent case history, staff recommended the amendment of section (1) regarding drinking on duty. These amendments expand the definition of “on duty” to include working outside of a scheduled work shift. Whether a person is paid or scheduled for work is not determinative of whether a person is considered “on duty.” Instead it hinges on their performing acts on behalf of the licensee which involve the mixing, sale or service of alcoholic beverages, checking identification or controlling conduct on the premises.

Rules Coordinator: Jennifer Huntsman—(503) 872-5004

845-006-0345

Prohibited Conduct

The Commission holds licensees accountable for the acts of their agents and employees. (OAR 845-006-0362). No employee or agent of a licensee may violate any provision of this rule. A violation of any section of this rule by an employee or agent of a licensee is considered a violation by the licensee.

(1) Drinking on Duty: No licensee or permittee will drink or be under the influence of intoxicants while on duty.

(a) “On duty” means from the beginning of a work shift that involves the mixing, sale or service of alcoholic beverages, checking identification or controlling conduct on the premises, to the end of the shift including coffee and meal breaks.

(b) “On duty” also means, for those working outside a scheduled work shift, having the authority to put himself or herself on duty and performing acts on behalf of the licensee which involve the mixing, sale or service of alcoholic beverages, checking identification or controlling conduct on the premises. Whether a person is paid or scheduled for work is not determinative of whether the person is considered “on duty” under this subsection.

(c) “A work shift that involves the sale and service of alcoholic beverages” includes supervising those who mix, sell or serve, check identification or control the premises.

(d) Being under the influence of intoxicants on duty is a Category II violation.

(e) Drinking on duty is a Category III violation.

(2) No licensee or permittee will fail to call the police when a Commission regulatory employee directs the licensee or permittee to call. Violation of this section is a Category II violation.

(3) Evidence:

(a) No licensee or permittee will:

(A) Destroy, damage, alter, remove, or conceal potential evidence, or attempt to do so;

(B) Refuse to give a Commission regulatory employee or police officer this evidence when the employee or officer lawfully requests it; or

(C) Ask or encourage another person to do subsections (a) or (b) of this section.

(b) Violation of this section is a Category III violation.

(4) Access to Premises:

(a) No licensee or permittee will deny entrance to the licensed premises during regular business hours to a Commission regulatory employee or police officer who enters or wants to enter to conduct reasonable search to ensure compliance with alcoholic beverage law. Once the regulatory employee or police officer is on the licensed premises, no licensee or permittee will ask the regulatory employee or officer to leave until the regulatory employee or officer has had an opportunity to conduct a reasonable search to ensure compliance with the alcoholic beverage laws;

(b) Examination of premises that are or appear closed occurs only when there is reason to believe an alcoholic beverage law violation is occurring. No licensee or permittee will refuse or fail to promptly admit a Commission regulatory employee or police officer to the licensed premises when the regulatory employee or officer identifies him/herself and asks to enter to conduct a reasonable search to ensure compliance with the alcoholic beverage laws.

(c) Violation of this section is a Category II violation.

(5) Open Containers: No licensee or permittee will permit a person to take an open container of alcoholic beverages from the licensed premises, except as ORS 471.178, 471.200 and 471.175 allow. Except for tastings as allowed in OAR 845-006-0450, no Off-Premises Sales licensee will permit an open container of alcoholic beverages on the licensed premises unless the licensee also holds another license at the premises that allows on-premises consumption. Violation of this section is a Category V violation.

(6) Liquor on Premises: No licensee or permittee will have or permit any alcoholic liquor on the licensed premises which the license does not allow the licensee to sell or serve. Notwithstanding this requirement, a limited on-premises or brewery-public house sales licensee may have distilled spirits on the premises if the distilled spirits are used only for cooking, are kept in a container only in the food preparation area, and the container is clearly marked “for cooking only”. Violation of this section is a Category V violation.

(7) Drive-up Window: No licensee or permittee will sell or deliver any alcoholic beverages through a drive-up window. Violation of this section is a Category III violation.

(8) Liquor as a Prize: Except as allowed in ORS 471.408, no licensee or permittee will give or permit any alcoholic beverage as a prize, premium, or consideration for any lottery, contest, game of chance or skill, exhibition, or any competition of any kind on the licensed premises. Violation of this section is a Category V violation.

(9) “Good Faith Effort”: ORS 471.315(1)(a)(G), and 471.412(2) prohibit a licensee or permittee from knowingly allowing a visibly intoxicated person to drink alcoholic beverages. A licensee or permittee who makes a good faith effort to remove the alcoholic beverage does not violate these statutes.

(a) As used in ORS 471.412(2) and this rule, “good faith effort” means:

(A) Placing a hand on the drink and trying to remove it; or

(B) Making a verbal request for the drink, if the server has reason to believe that touching the patron’s drink could cause a disturbance.

(b) The Commission will issue letters of reprimand for the first three violations of this section within a two-year period. A fourth violation within a two-year period is a Category III violation assessed at the fourth level (cancellation).

(10) Promotions.

(a) The following practices are prohibited:

(A) The sale, offer or service to any person of an unlimited number of alcoholic beverage(s) during any set period of time for a fixed price;

(B) The sale, offer or service of alcoholic beverages by the drink for a price per drink that is less than the licensee’s cost for the alcohol to any person paying a fixed “buy in” price, entry fee, cover or door charge;

(C) Price reductions on alcoholic beverages by the drink from 12:00 midnight until 2:30 a.m. A price reduction is a lower price as compared to the usual, customary, or established non-discounted price the licensee charges for a drink of that type on the licensed premises;

(D) The sale, offer or service of distilled spirits by the bottle for consumption on the premises, except as allowed in OAR 845-006-0433 (Minibars in Hotel Guest Rooms) and OAR 845-006-0434 (Minibars in Arena Suites). This subsection does not prohibit a Full On-Premises Public Location Sales Licensee (F-PL) or Full On-Premises Catering Sales Licensee (F-Cat) from charging clients by the bottle for distilled spirits that are served by the drink at hotel suites, banquets, receptions or catered events where the reasonably projected attendance is at least 20 patrons;

(E) Operating, encouraging or permitting games of chance or skill, contests, exhibitions, or competitions of any kind on the licensed premises that involve drinking alcoholic beverages, (i.e. beer pong, “21 for 21”);

(F) Dispensing, pouring or otherwise serving any alcoholic beverage directly into a person’s mouth, including through any device such as a “bong”;

(G) Permitting use of an alcohol vaporization device on a premises licensed for the sale of alcoholic liquor. An alcohol vaporization device, also called an alcohol without liquid machine, is a device, machine or process which mixes spirits, alcoholic liquors or any product containing alcoholic liquor with oxygen or any other gas to produce a vaporized product for consumption by humans by inhalation.

(b) Violation of this section is a Category III violation.

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

Stats. Implemented: ORS 471.030, 471.040 471.175, 471.178, 471.200, 471.315(1)(a)(G), 471.405(1), 471.408, 471.412, 471.675 & 471.730

Hist.: OLCC 19-2000, f. 12-6-00, cert. ef. 1-1-01; OLCC 6-2001, f. 8-15-01, cert. ef. 9-1-01; OLCC 4-2003, f. 3-31-03 cert. ef. 4-1-03; OLCC 5-2007, f. 3-22-07, cert. ef. 4-1-07; OLCC 3-2009, f. 4-21-09, cert. ef. 5-1-09; OLCC 18-2010, f. 12-22-10, cert. ef. 1-1-11

 

Rule Caption: Adoption of winery rules governing privilege tax reporting, exemptions, and payment.

Adm. Order No.: OLCC 19-2010

Filed with Sec. of State: 12-22-2010

Certified to be Effective: 1-1-11

Notice Publication Date: 9-1-2010

Rules Adopted: 845-008-0050, 845-008-0070, 845-008-0080, 845-008-0090

Rules Ren. & Amend: 845-010-0154 to 845-008-0060

Subject: In April 2009, the Commission accepted a petition from the Oregon Winegrowers Association (OWA) and initiated action to adopt the rules in this package. These new winery rules govern the reporting and payment of privilege tax in the areas of: tax reporting & liability, small winery exemption, export exemption, penalties & interest, and refunds.

Rules Coordinator: Jennifer Huntsman—(503) 872-5004

845-008-0050

Tax Reporting and Tax Liability

All wineries must file tax statements with the Commission which include the quantity of wine produced, purchased or received during the calendar year. This rule explains the criteria to qualify as an annual reporter as well as the reporting requirements for both annual and monthly reporters.

(1) Annual Reporting Eligibility and Requirements.

(a) A winery is eligible to file a single annual tax statement for any particular calendar year if the winery either:

(A) Was not liable for any privilege tax in the prior calendar year and does not expect to be liable for any privilege tax in the current calendar year; or

(B) The winery is in its first calendar year of operation and does not expect to be liable for any privilege tax in the current calendar year.

(b) A winery that files annual tax statements must:

(A) Submit the statement and all required tax schedules for a given calendar year by January 20 of the following year;

(B) Submit a tax statement that shows the total amount of wine removed from federal bond during the calendar year preceding the reporting date as well as any exemptions being claimed for wine that was removed from bond;

(C) Submit by the January 20 reporting date any tax owed on wine removed from bond during a calendar year and not subject to exemption; and

(D) Submit an annual tax statement and supporting schedules by the due date even if the winery did not remove any wine from federal bond or the winery is claiming exemptions for all of the wine it removed from bond.

(c) If a winery discovers during the calendar year that it will owe tax, it no longer qualifies for annual filing and must begin monthly filing on the 20th of the following month. The month when monthly filing begins is also the catch-up month when any tax owed year-to-date must be submitted to the Commission.

(d) Failure to file a tax statement and supporting schedules or to pay tax owed by the January 20 due date may result in the assessment of penalties and interest as set forth in OAR 845-008-0080.

(2) Monthly Reporting Requirements.

(a) A winery that does not qualify for annual reporting must file a monthly tax statement. If a winery knows or reasonably should know that it will have a tax liability in the current calendar year, it must report monthly.

(b) A winery that files monthly tax statements must:

(A) Submit the statement and all required tax schedules by the 20th of each month for the preceding calendar month;

(B) Submit a tax statement that shows the total amount of wine removed from federal bond during the calendar month preceding the reporting date as well as any exemptions being claimed for wine that was removed from bond;

(C) Submit any tax owed on wine removed from bond during a calendar month and not subject to exemption by the monthly reporting date; and

(D) Submit a monthly tax statement and supporting schedules by the due date even if the winery did not remove any wine from federal bond or the winery is claiming exemptions for all of the wine it removed from bond.

(c) Failure to file a tax statement and supporting schedules or to pay tax owed by the monthly due date may result in the assessment of penalties and interest as set forth in OAR 845-008-0080.

Stat. Auth.: ORS 471 & 473, 471.030, 471.730(1), (3) & (5), & 473.020

Stats. Implemented: ORS 473.060 & 473.070

Hist.: OLCC 19-2010, f. 12-22-10, cert. ef. 1-1-11

845-008-0060

Small Winery Exemption

ORS 473.050(5) provides that no tax shall be levied, collected or imposed upon the first 40,000 gallons of wine sold annually in Oregon from a United States manufacturer of wine producing less than 100,000 gallons annually. This rule explains the criteria to qualify for this small winery exemption.

(1) A winery qualifies to take the small winery exemption if the winery produces less than 100,000 gallons of wine during the calendar year in which the exemption is claimed. A winery’s total production for the year is measured by the volume of wine produced by fermentation as reported to the Alcohol and Tobacco Tax and Trade Bureau (TTB) for the calendar year. Wine is considered produced for Oregon tax purposes when fermentation is completed or the wine is removed from the fermentor.

(2) The winery claiming the small winery exemption must hold a federal basic permit to produce wine and must have produced a minimum of 1 gallon of wine in the calendar year that the exemption is taken. A winery that holds a federal basic permit to produce wine but does not produce any wine during a calendar year may not take the small winery exemption on any wine it removed from federal bond during that calendar year.

(3) A winery may exempt no more than 40,000 gallons of wine under this exemption during a calendar year. While eligibility for the small winery exemption is based on the current year’s wine production (less than 100,000 gallons), the exemption itself (no more than 40,000 gallons combined total) can be taken on any wine removed from bond during the year regardless of the year it was produced.

(4) A winery may claim the small winery exemption for wine that it removes from federal bond and intends, at the time of removal, to sell in Oregon. The exemption may be taken at the time of removal if the winery intends in good faith to sell the wine in Oregon. Wine qualifies as being sold in Oregon if ownership of the wine is, or is expected to be, transferred to a person or entity located within this state.

(5) The winery claiming the small winery exemption must have removed the exempt wine from federal bond. No exemption is available for wine that was not removed from bond by the winery claiming the exemption, such as wine that the winery received or imported federally tax-paid, or wine that the winery has transferred to another entity in bond.

(6) The Commission will deny the small winery exemption if it determines that allowance of the exemption would benefit a winery who would otherwise fail to qualify for use of the exemption.

(7) Wine that is claimed as exempt under the small winery exemption may not be claimed as exempt from tax under any other provisions of ORS 473.

(8) A bonded winery or warehouse may claim the small winery exemption on behalf of an eligible small winery for wine that the winery or warehouse receives from the transferring small winery and removes from bond, provided that all of the following requirements are met:

(a) The wine on which the exemption is claimed must have been produced by the small winery that transfers the exemption and must be eligible for exemption if it were to have been removed from bond by the transferring winery. The exemption may not be transferred on wine that the transferring winery received from another producer.

(b) The winery or warehouse taking the exemption on behalf of the transferring winery must remove the wine from bond.

(c) The transferring winery must hold title to the wine for which the exemption is transferred at the time the wine is removed from bond.

(d) The total amount of the exemption that may be claimed by a winery or warehouse on behalf of a small winery in any calendar year may not exceed 40,000 gallons minus all amounts claimed under the small winery exemption by the transferring small winery or by others on its behalf for that year. The transferring winery must provide to the transferee all information necessary for the transferee to determine the amount of exemption it may claim.

Stats Auth: ORS 471 & 473, 471.030, 471.730(1), (3) & (5), & 473.020

Stats implemented: ORS 473.050

Hist.: OLCC 13-2008, f. 12-17-08, cert. ef. 12-20-08; Renumbered from 845-010-0154 by OLCC 19-2010, f. 12-22-10, cert. ef. 1-1-11

845-008-0070

Export Exemption

ORS 473.050(2) provides that no tax shall be levied, collected or imposed upon any wine exported from the state. This rule explains the criteria to qualify for this export exemption.

(1) The export exemption can be used to recover taxes already paid to the Commission or to offset a current tax liability.

(2) A winery may claim the export exemption for wine that it removes from federal bond and exports from the state. The exemption may be taken at the time of removal if the winery intends in good faith to export the wine. Wine qualifies as being exported if the wine is, or is expected to be, transported to a location outside of Oregon. All export exemptions must be supported by proof of export such as a bill of lading or other shipping documentation.

(3) Wine that is claimed as exempt under the small winery exemption may not be claimed as exempt from tax under the export exemption.

(4) A winery may claim a refund for wine on which tax was paid to the Commission in a prior period if the wine is subsequently exported from the state. No refund will be issued if no tax was paid by the winery to the Commission on the wine being exported. No refund may be claimed on wine that was previously exempted from tax.

Stat. Auth.: ORS 471 & 473, 471.030, 471.730(1), (3) & (5), & 473.020

Stats. Implemented: ORS 473.050 & 473.060

Hist.: OLCC 19-2010, f. 12-22-10, cert. ef. 1-1-11

845-008-0080

Penalties and Interest

This rule describes the penalties and interest that may be assessed on a winery’s outstanding tax liability.

(1) Unless waived, the Commission will assess a penalty of 10% and interest at the rate of 1% per month on any tax that is not paid on the due date as specified in OAR 845-008-0050(1)(d) or (2)(c).

(2) ORS 473.060(2) provides that the Commission may waive any interest or penalty assessed on unpaid taxes if the Commission determines that the winery has made a good faith effort to comply with the privilege tax requirements set forth in ORS Chapter 473, OAR chapter 845 division 8, 845-010-0151, and 845-010-0170.

(3) Failure to file any tax statement and supporting schedules by the due date is a Category IV violation. Failure to file an accurate and complete tax statement and supporting schedules by the due date may result in the assessment of penalties and interest on any outstanding tax liability.

Stat. Auth.: ORS 471 & 473, 471.030, 471.730(1), (3) & (5), & 473.020

Stats. Implemented: ORS 473.060 & 473.140

Hist.: OLCC 19-2010, f. 12-22-10, cert. ef. 1-1-11

845-008-0090

Refunds

ORS 473.060(1) provides that the Commission may refund any tax payment imposed upon or paid in error by a winery. This rule explains the criteria for the refund process.

(1) A refund is the Commission returning money to the winery for over-paid taxes. It is distinguished from a credit, which is also for over-paid taxes but is used to offset a new tax liability.

(2) Refunds of privilege tax paid in a prior reporting period will be issued upon a written request with proper documentation showing that the tax was paid in error or that an exemption applies to wine on which tax was previously paid to the Commission. A refund will be issued only to the entity that previously paid the tax for which the refund is being claimed.

(3) If the refund request is for an amount over $1,000 an audit may be required before a refund will be issued.

(4) If at audit it is determined that a refund was issued in error and there is in fact an outstanding tax liability, then penalties and interest may be assessed.

Stat. Auth.: ORS 471 & 473, 471.030, 471.730(1), (3) & (5), & 473.020

Stats. Implemented: ORS 473.060

Hist.: OLCC 19-2010, f. 12-22-10, cert. ef. 1-1-11

 

Rule Caption: Adopt rule requiring public input process for increases in the retail price of distilled spirits.

Adm. Order No.: OLCC 20-2010

Filed with Sec. of State: 12-22-2010

Certified to be Effective: 1-1-11

Notice Publication Date: 9-1-2010

Rules Adopted: 845-015-0138

Subject: The Distilled Spirits Council of the United States (DISCUS) submitted a petition requesting the adoption of a new rule relating to the retail price of distilled spirits. The petitioner proposed a new rule setting forth a required public input process for increases in the retail price of distilled spirits sold to the public. The new rule requires 45 days notice to the public, including a public hearing for oral testimony and a written comment period, before any change in the pricing formula resulting in a price increase can be made.

Rules Coordinator: Jennifer Huntsman—(503) 872-5004

845 015 0138

Retail Price for Distilled Spirits

Before the Commission implements a surcharge or change in the mark-up formula for distilled spirits that would result in an increase in the retail price of distilled spirits sold to the public, the Commission shall:

(1) Provide at least 45 days public notice before such a price increase takes effect;

(2) Provide the opportunity for submission of written comments regarding the proposed price increase;

(3) Conduct a public meeting for the purpose of receiving verbal comment regarding the proposed price increase; and

(4) Consider any written or verbal comments before implementing such a price increase.

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

Stats. Implemented: ORS 471.745

Hist.: OLCC 20-2010, f. 12-22-10, cert. ef. 1-1-11

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, 2010.

2.) Copyright 2011 Oregon Secretary of State: Terms and Conditions of Use

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