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Oregon Bulletin

April 1, 2011

 

Oregon Liquor Control Commission
Chapter 845

Rule Caption: Amend interest in the business rule to add clarity to the term “unlicensable”.

Adm. Order No.: OLCC 1-2011

Filed with Sec. of State: 2-23-2011

Certified to be Effective: 3-1-11

Notice Publication Date: 11-1-2010

Rules Amended: 845-005-0311

Subject: This rule defines “interest in the business”, including financial interest, for the purposes of describing to whom the Commission’s license refusal reasons apply. Staff recommended amending section (4) of this rule to clarify the term “unlicensable”. There has been some confusion amongst both licensees and staff as to the meaning of this term. This amendment adds language directly from the authorizing statute (ORS 471.757) in order to add more specificity to the concept of “unlicensable”.

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

845-005-0311

True Name on Application; Interest in Business

(1) True name on application: Applications for licenses must specify the real and true names of all persons who own or have an interest in the business proposed to be licensed by the Commission, and these persons or in the case of corporations, a duly authorized officer, must sign the application.

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

(3) Interest in the business: For purposes of section (1) of this rule, the following persons have an “interest in the business”:

(a) Any person who receives or is entitled to receive, directly or indirectly, any of the profits of a licensed business except persons who receive any of the profits as:

(A) A bonus paid to an employee, if the employee is on a fixed wage or salary and the bonus is not more than 25 percent of the employee’s pre-bonus annual compensation, or the bonus is based on a written incentive/bonus program and is not unreasonable or out of the ordinary for the services rendered;

(B) Repayment of a loan or payment on a contract to purchase property unless the loan or contract holder exercises control over or participates in the management of the business;

(C) Reasonable payment for rent under a bona fide lease or rental obligation unless the lessor or property manager exercises control over or participates in the management of the business;

(D) Reasonable payment for a franchise under a bona fide franchise agreement;

(E) Payment of dividends to corporate stockholders.

(b) A person who does not receive any of the profits but receives compensation that is out of the ordinary for the services rendered. “Out of the ordinary” includes both over and under compensations;

(c) Any person or firm who contracts to provide food service or to manage or operate any part of the licensed premises, other than as an employee;

(d) Any person who invests money or other property in the licensed business, other than a stockholder. Any stockholder who owns ten percent or more stock must receive Commission approval (OAR 845-006-0475). For purposes of this subsection, a bona fide loan that entitles the lender to a return of only the principal and interest on the principal is not an investment;

(e) A contract purchaser of a licensed business. A contract purchaser may not operate or invest prior to Commission approval. A contract purchaser may make contract payments into an escrow account prior to Commission approval of the change of ownership, but may not operate the business other than as an employee.

(4) ORS 471.757 allows the Commission to deny, cancel or suspend a license if circumstances exist with regard to any person who has any financial interest in the licensed business or place of business such that the Commission would have a basis to cancel or refuse to issue a license to the person with a financial interest if that person were the licensee or applicant. For purposes of ORS 471.757, financial interest exists if a person may financially benefit or suffer based on the performance of the licensed business. Examples of persons having a financial interest in the business include:

(a) Any person who rents or leases property to or for the licensed business;

(b) Any person who invests or loans money or other property for the licensed business;

(c) Any person who gives money or property for the licensed business and who

(A) Exercises control over or participates in the management of the licensed business; or

(B) Is employed by the licensed business; or

(d) The spouse or domestic partner of the licensee or license applicant. For purposes of this rule, domestic partners (lower case) are individuals who share the same regular and permanent address and who share joint financial assets, resources, accounts or obligations, such as home ownership, checking or banking accounts, brokerage accounts or health care coverage. Domestic partner (lower case) also includes a “Domestic Partner” (upper case), which 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.

(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

 

Rule Caption: Address neighborhood livability issues by tying license notice requirements and additional restrictions to licensing criteria.

Adm. Order No.: OLCC 2-2011

Filed with Sec. of State: 2-23-2011

Certified to be Effective: 3-1-11

Notice Publication Date: 11-1-2010

Rules Amended: 845-005-0331, 845-005-0355, 845-006-0480

Subject: OAR 845-005-0331 Licensing Exterior Areas: This rule describes the refusal basis for licensing an exterior area of a premises. The rule lists the reasons the Commission will refuse to license an exterior area unless the applicant can show good cause to overcome the refusal basis. Staff proposed an additional refusal reason, section (5), for when an applicant or licensee will allow entertainment in the exterior area after midnight. This should assist the Commission in addressing late night noise issues that may impact neighborhood livability.

      OAR 845-005-0355 Restricting License Privileges and Conduct of Operations: This rule describes the conditions under which the Commission may restrict a license or service permit. Staff proposed an additional reason to impose restrictions, section (1)(d), where if an applicant or licensee submits a qualifying control or operating plan as good cause to overcome a license refusal basis, the Commission shall impose as restrictions on the license those elements of the control plan that were essential to the decision to grant the license. As with any other restrictions, these will remain in place until removed and failure to comply with the restrictions is a Category I violation. In addition, staff proposed additional language in section (2)(b) related to determining public interest or convenience reasons to restrict a license. The new language specifies that excessive or obtrusive noise, music or sound vibrations is one of the areas of violations where restrictions can be designed to eliminate or prevent contributing conditions.

      OAR 845-006-0480 Change in Premises or Operation: Prior Notice Required: This rule provides a way for a licensee to make changes in their business operation while still assuring the Commission that the changes will meet our licensing criteria. With these amendments licensees are only required to notify the Commission when there are changes to the premises that effect licensure, such as a change in the physical dimensions, a change in the business trade name, or a change that could reasonably affect the assigned minor posting.

      Overall, the amendments in this rule package are designed to provide the Commission with additional tools to address neighborhood livability issues, specifically in the area of excessive and late night noise. At the same time, by tying required notices and additional restrictions to licensure, the amendments help focus both our enforcement and licensing efforts on those factors in a business’ ongoing operating plan that impact what is within our authority to regulate.

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

845-005-0331

Licensing Exterior Areas

(1) The Commission shall refuse to license an exterior area, and may revoke its approval of an outdoor area previously licensed, for any of the reasons listed in this rule unless the applicant shows good cause that outweighs the refusal basis. The following sections state the refusal reasons that apply to exterior areas.

(2) The applicant or licensee requests licensing of an area controlled by the local governing body, and the local governing body has not approved, or withdraws its approval of, the use proposed by the applicant or licensee.

(3) The exterior area proposed to be licensed is not adjacent to the licensee’s existing or the applicant’s proposed licensed premises.

(4) The applicant or licensee fails to demonstrate there will be adequate supervision of the area so as to prevent violations of the liquor laws.

(5) The applicant or licensee will allow entertainment in the exterior area between 12:00 a.m. and 7:00 a.m.

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

Stats. Implemented: ORS 471.313

Hist.: OLCC 19-2000, f. 12-6-00, cert. ef. 1-1-01; OLCC 2-2011, f. 2-23-11, cert. ef. 3-1-11

845-005-0355

Restricting License Privileges and Conduct of Operations

(1) The Commission may restrict a license or service permit when:

(a) In the absence of a restriction, the Commission has a basis to cancel, suspend/fine or deny the license or service permit;

(b) In addition to all or part of a suspension or fine, a restriction may prevent the recurrence of the problem(s) that caused the violation(s);

(c) The Commission determines that a restriction is in the public interest or convenience; or

(d) The Commission has a basis to refuse the license and the applicant or licensee has submitted a qualifying control or operating plan as good cause to overcome the refusal basis. In these circumstances the Commission shall impose as restrictions those elements of the control or operating plan that the Commission determines are essential to overcoming the refusal basis.

(2) In determining public interest or convenience reasons to restrict a license or permit, the Commission considers factors that include but are not limited to:

(a) The character or environment of the neighborhood in which the licensed premises operate;

(b) The need to eliminate or prevent conditions that have contributed to or that the Commission reasonably believes will contribute to liquor or criminal law violations by the licensee, patrons of the licensed premises or the public, including conditions that have or are likely to contribute to noise, music or sound vibrations from inside or outside the premises that a reasonable person would consider excessive or obtrusive; or

(c) The need to limit the availability of alcohol to minors, visibly intoxicated persons or street drinkers.

(3) The Commission has determined that it is not in the public interest or convenience to issue or renew:

(a) A license that allows off-premises sales in an area frequented by street drinkers, unless the Commission restricts the sales of the alcoholic beverages associated with street drinkers;

(b) A license to a relative or associate of a person whose license was cancelled, surrendered or not renewed because of problems at the premises that involved the person, unless the Commission restricts the relative or associate from permitting the person from being on the premises;

(c) A license or permit to a person who has a recent history or record of alcohol or drug problems, unless the Commission requires the person to complete an alcohol/drug treatment program and follow the program’s recommendations regarding alcohol/drug use or to abstain from alcohol/drug use.

(4) When the Commission restricts a license or service permit, it notifies the licensee or permittee. If the licensee or permittee disagrees with the restriction, the licensee or permittee has the right to a hearing under the procedures in ORS chapter 183; OAR chapter 137, division 003; and OAR chapter 845, division 003.

(5) A licensee or permittee who has a restricted license or permit must exercise license or permit privileges only in compliance with the restriction(s). Failure to comply with the restriction(s) is a Category I violation.

(6) A restriction remains in effect until the Commission removes it. The licensee or permittee may ask the Commission to remove or modify a restriction. The written request must explain why the licensee or permittee believes the Commission should remove or modify the restriction. The Commission will notify the licensee or permittee, in writing, of its decision to approve or deny the request and the basis for its decision. If the Commission denies the request, the licensee or permittee has the right to a hearing under the procedures in ORS chapter 183; OAR chapter 137, division 003; and chapter 845, division 003.

(7) As used in subsections (2)(c) and (3)(a) of this rule, “street drinkers” means people who drink unlawfully in streets, alleys, parks and other similar public places.

(8) As used in subsection (2)(b) of this rule, “conditions” means conditions in the immediate vicinity of the premises that are related to the exercise of the license privileges and conditions in the premises or in the areas around the premises that the applicant/licensee controls.

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

Stats. Implemented: ORS 471.313, 471.405(1)

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 7-2006(Temp), f. & cert. ef. 6-15-06 thru 12-11-06; OLCC 13-2006, f. 10-19-06, cert. ef. 12-12-06; OLCC 2-2011, f. 2-23-11, cert. ef. 3-1-11

845-006-0480

Changes in Premises or Operation: Notice Required

(1) The Commission issues licenses with the understanding that the licensee will operate the business as proposed at the time of licensing. The Commission also realizes that a licensee may need to change the business during the licensing year. This rule provides a way for a licensee to make changes, and for the Commission to be assured that the changes will meet the criteria for licensing.

(2) A licensee licensed to sell alcoholic beverages at retail for on-premises consumption must notify the Commission in writing and provide an updated floor plan whenever the licensee changes the physical dimensions of the licensed premises within 30 days of the change.

(3) A licensee must notify the Commission in writing whenever the licensee changes the business trade name within 30 days of the change.

(4) A licensee licensed to sell alcoholic beverages for on-premises consumption must notify the Commission in writing of any change to the premises or the business operation that could reasonably affect the minor posting assigned to the premises or any room or area of the premises prior to the change.

(5) Failure to provide the notice that this rule requires is a Category V violation.

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

Stats. Implemented: ORS 471.313, 471.315

Hist.: OLCC 19-2000, f. 12-6-00, cert. ef. 1-1-01; OLCC 2-2011, f. 2-23-11, cert. ef. 3-1-11

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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