74th OREGON LEGISLATIVE ASSEMBLY--2007 Regular Session
NOTE: Matter within { + braces and plus signs + } in an
amended section is new. Matter within { - braces and minus
signs - } is existing law to be omitted. New sections are within
{ + braces and plus signs + } .
LC 590
A-Engrossed
House Bill 2171
Ordered by the House May 10
Including House Amendments dated May 10
Ordered printed by the Speaker pursuant to House Rule 12.00A (5).
Presession filed (at the request of Governor Theodore R.
Kulongoski for Oregon Liquor Control Commission)
SUMMARY
The following summary is not prepared by the sponsors of the
measure and is not a part of the body thereof subject to
consideration by the Legislative Assembly. It is an editor's
brief statement of the essential features of the measure.
Allows { - manufacturer of wine or cider - } { + person + }
to sell and ship { + wine or cider + } directly to Oregon
resident if { - manufacturer - } { + person + } holds direct
shipper permit issued by Oregon Liquor Control Commission. Limits
issuance of permit to persons with { - license - } { +
certain licenses + } issued by this state or another state
{ - that authorizes person to manufacture wine or cider - } .
Establishes procedure for issuance of permit. Imposes
requirements for sales and shipments under permit.
Takes effect on 91st day following adjournment sine die.
A BILL FOR AN ACT
Relating to alcoholic beverages; creating new provisions;
amending ORS 471.223, 471.229, 471.404, 471.810, 473.050,
473.060, 473.090, 473.100 and 473.170; repealing ORS 473.040
and 473.057; and prescribing an effective date.
Be It Enacted by the People of the State of Oregon:
SECTION 1. ORS 471.229 is amended to read:
471.229. { - (1) Any resident of this state who is at least
21 years of age is entitled to receive not more than two cases of
wine or cider per month for personal use, containing not more
than nine liters per case, from another state without payment of
additional state tax, fees or charges if the state from which the
wine or cider is sent allows its residents to receive wine or
cider from this state without imposition of state tax, fees or
charges. For privilege tax purposes, receipt of a shipment into
this state under this subsection shall not be considered to
constitute a sale in this state. No person who transports wine or
cider pursuant to this section shall deliver more than two cases
of wine or cider to the same address at one time. No person who
receives wine or cider pursuant to this section shall resell any
of the wine or cider. - }
{ - (2) A licensee who holds an off-premises sales license or
any other license that authorizes retail sale of wine or cider
for consumption off the licensed premises may ship not more than
two cases of wine or cider, containing not more than nine liters
per case, per shipment, for personal use and not for resale,
directly to a resident of another state if the state to which the
wine or cider is sent allows residents of this state to receive
wine or cider sent from that state without payment of additional
state tax, fees or charges. The sale shall be considered to have
occurred in this state. - }
{ - (3) The shipping container of any wine or cider sent into
or out of this state under this section must be clearly labeled
to indicate that the container contains alcoholic beverages and
cannot be delivered to a person who is not at least 21 years of
age or to a person who is visibly intoxicated. - }
{ - (4) For purposes of ORS 471.305, an order for wine or
cider that is received in writing is a bona fide order. - }
{ - (5) Sales authorized by this section are sales made by a
retailer who is not authorized to sell at wholesale or sales by a
winery of wine or cider produced or bottled by the winery. - }
{ - (6) Out-of-state wine or cider suppliers that supply wine
or cider under subsection (1) of this section must obtain a
license from the Oregon Liquor Control Commission under
procedures prescribed by rule of the commission before selling or
soliciting sales of wine or cider in Oregon. - }
{ - (7) Any person who knowingly or negligently delivers wine
or cider under the provisions of this section to a person under
21 years of age, or who knowingly or negligently delivers wine or
cider under the provisions of this section to a visibly
intoxicated person, violates ORS 471.410, whether or not the
person is licensed or appointed under the provisions of this
chapter. - }
{ + (1) Notwithstanding any other provision of this chapter,
a person may sell and ship wine or cider directly to a resident
of Oregon only if the person holds a direct shipper permit. The
Oregon Liquor Control Commission shall issue a direct shipper
permit only to:
(a) A person that holds a license issued by this state or
another state that authorizes the manufacture of wine or cider;
(b) A person that holds a license issued by this state or
another state that authorizes the sale of wine or cider produced
only from grapes or other fruit grown under the control of the
person;
(c) A person that holds a license authorizing the sale of wine
or cider at retail; or
(d) A nonprofit trade association that holds a temporary sales
license under ORS 471.190 and that has a membership primarily
composed of persons holding winery licenses issued under ORS
471.223 or grower sales privilege licenses issued under ORS
471.227.
(2) A person may apply for a direct shipper permit by filing an
application with the commission. The application must be made in
such form as may be prescribed by the commission. The person must
include in the application the number of the license issued to
the person by the commission, or a true copy of the license
issued to the person by another state. If the application is
based on a license issued by another state, or the application is
by a nonprofit trade association described in subsection (1)(d)
of this section, the person or association must pay a $50
registration fee and maintain a bond or other security described
in ORS 471.155 in the minimum amount of $1,000.
(3) Sales and shipments under a direct shipper permit:
(a) May be made only to a person who is at least 21 years of
age;
(b) May be made only for personal use and not for the purpose
of resale; and
(c) May not exceed two cases, containing not more than nine
liters per case, to any resident per month.
(4) Sales and shipments under a direct shipper permit must be
made directly to a resident of this state in containers that are
conspicuously labeled with the words: 'CONTAINS ALCOHOL:
SIGNATURE OF PERSON AGE 21 YEARS OR OLDER REQUIRED FOR DELIVERY.
'
(5) A person holding a direct shipper permit must take all
actions necessary to ensure that a carrier used by the permit
holder does not deliver any wine or cider unless the carrier:
(a) Obtains the signature of the recipient of the wine or cider
upon delivery;
(b) Verifies by inspecting government-issued photo
identification that the recipient is at least 21 years of age;
and
(c) Determines that the recipient is not visibly intoxicated at
the time of delivery.
(6)(a) A person holding a direct shipper permit must report to
the commission all shipments of wine or cider made to Oregon
residents under the permit as required by ORS chapter 473. The
report must be made in a form prescribed by the commission.
(b) A person holding a direct shipper permit must allow the
commission to audit the permit holder's records upon request and
shall make those records available to the commission in this
state.
(c) A person holding a direct shipper permit consents to the
jurisdiction of the commission and the courts of this state for
the purpose of enforcing the provisions of this section and any
related laws or rules.
(7)(a) A person holding a direct shipper permit must timely pay
to the commission all taxes imposed under ORS chapter 473 on wine
and cider sold and shipped 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.
(b) A person holding a direct shipper permit based on a license
issued by another state must timely pay to the commission all
taxes imposed under ORS chapter 473 on all wine or cider sold and
shipped directly to Oregon residents under the permit. The permit
holder, not the purchaser, is responsible for the tax.
(8) A direct shipper permit must be renewed annually. If the
person holds the permit based on an annual license issued by
another state, the permit may be renewed by paying a $50 renewal
fee and providing the commission with a true copy of a current
license issued to the person by the other state. If the person
holds the permit based on an annual license issued by this state,
the permit may be renewed at the same time that the license is
renewed.
(9) The commission may refuse to issue or may suspend or revoke
a direct shipper permit if the permit holder fails to comply with
the provisions of this section. A person may sell and ship wine
or cider under a direct shipper permit only for as long as the
person has the license issued by this state or another state that
authorizes the person to hold a direct shipper permit.
(10) Any person who knowingly or negligently delivers wine or
cider under the provisions of this section to a person under 21
years of age, or who knowingly or negligently delivers wine or
cider under the provisions of this section to a visibly
intoxicated person, violates ORS 471.410.
(11) A person may not make sales and shipments of wine or cider
directly to Oregon residents unless the person holds a direct
shipper permit issued under this section. Any person who
knowingly makes, participates in, transports, imports or receives
a shipment of wine or cider that is in violation of this section
commits a misdemeanor as provided in ORS 471.990 (1). + }
SECTION 2. ORS 471.223 is amended to read:
471.223. (1) A winery license shall allow the licensee:
(a) To import, bottle, produce, blend, store, transport or
export wines or cider.
(b) To sell wines or cider at wholesale to the Oregon Liquor
Control Commission or to licensees of the commission.
(c) To sell wines or cider at retail directly to the consumer
for consumption on or off the licensed premises.
(d) To sell malt beverages at retail for consumption on or off
the licensed premises.
(e) To conduct the activities allowed under paragraph (a), (b),
(c) or (d), or all, of this subsection at a second or third
premises as may be designated by the commission.
(f) To purchase from or through the commission brandy or other
distilled liquors for fortifying wines.
(g) To obtain a special events winery license that shall
entitle the holder to conduct the activities allowed under
paragraph (c) of this subsection at a designated location other
than the one set forth in the winery license for a period not to
exceed five days.
(2) In order to hold a winery license the licensee shall
principally produce wine or cider in this state.
(3) On and after July 1, 1990, a winery licensee is not
authorized to import wine or cider in bottles unless the brand of
wine or cider is owned by the licensee.
{ - (4) A winery licensee is authorized to ship not more than
two cases of wine or cider per month for personal use and not for
resale, containing not more than nine liters per case to any
resident of this state who is at least 21 years of age. The
shipping container of any wine or cider shipped under this
subsection must be clearly labeled to indicate that the container
contains alcoholic beverages and cannot be delivered to a person
who is not at least 21 years of age or to a person who is visibly
intoxicated. Orders for shipments under this subsection may be
taken by phone, mail or any other form of communication. - }
{ + (4) A winery licensee may sell and ship wine or cider
directly to a resident of this state only if the licensee has a
direct shipper permit issued under ORS 471.229. + }
(5)(a) Except as provided in paragraph (b) of this subsection,
a winery licensee, or any person having an interest in the
licensee, may also hold a full on-premises sales license. If a
person holds both a winery license and a full on-premises sales
license, nothing in this chapter shall prevent the sale by the
licensee of both distilled liquor and wine or cider bottled and
produced under the winery license.
(b) The commission may not issue a full on-premises sales
license to a winery licensee under the provisions of this
subsection if the winery licensee, or any person having an
interest in the licensee or exercising control over the licensee,
is a distillery, a brewery that brews more than 200,000 barrels
of malt beverages annually or a winery that produces more than
200,000 gallons of wine or cider annually.
(6) More than one winery licensee may exercise the privileges
of a winery license at a single location. The commission may not
refuse to issue a winery license to a person for the production
of wine or cider on specified premises based on the fact that
other winery licensees also produce wine or cider on those
premises.
SECTION 3. ORS 471.404 is amended to read:
471.404. (1) No alcoholic liquor shall be imported into this
state by any person not holding a brewery, winery, distillery or
wholesaler's license, except as follows:
(a) Alcoholic liquor ordered by and en route to the Oregon
Liquor Control Commission.
(b) Wines for sacramental purposes according to rules adopted
by the commission.
(c) Alcoholic liquor that is in transit on a common carrier to
a destination outside Oregon.
(d) Alcoholic liquor coming into Oregon on a common carrier
according to orders placed by a licensed brewery, winery or
wholesaler.
(e) Imported alcoholic liquor pursuant to a permit issued under
subsection (2) of this section.
{ + (f) Wine or cider shipped directly to a resident of this
state under a direct shipper permit issued pursuant to ORS
471.229. + }
(2) The commission may require importers of alcoholic liquor to
secure a permit for each importation and may charge a reasonable
fee based on quantity and type for the permit.
SECTION 4. ORS 471.810 is amended to read:
471.810. (1) At the end of each month, the Oregon Liquor
Control Commission shall certify the amount of moneys available
for distribution in the Oregon Liquor Control Commission Account,
and after withholding such moneys as it may deem necessary to pay
its outstanding obligations shall within 35 days of the month for
which a distribution is made direct the State Treasurer to pay
the amounts due, upon warrants drawn by the Oregon Department of
Administrative Services, as follows:
(a) Fifty-six percent, or the amount remaining after the
distribution under subsection (4) of this section, credited to
the General Fund available for general governmental purposes
wherein it shall be considered as revenue during the quarter
immediately preceding receipt;
(b) Twenty percent to the cities of the state in such shares as
the population of each city bears to the population of the cities
of the state, as determined by the State Board of Higher
Education last preceding such apportionment, under ORS 190.510 to
190.610;
(c) Ten percent to counties in such shares as their respective
populations bear to the total population of the state, as
estimated from time to time by the State Board of Higher
Education; and
(d) Fourteen percent to the cities of the state to be
distributed as provided in ORS 221.770 and this section.
(2) The commission shall direct the Oregon Department of
Administrative Services to transfer 50 percent of the revenues
from the taxes imposed by ORS 473.030 { - , - } { + and + }
473.035 { - and 473.040 - } to the Mental Health Alcoholism and
Drug Services Account in the General Fund to be paid monthly as
provided in ORS 430.380.
(3) If the amount of revenues received from the taxes imposed
by ORS 473.030 for the preceding month were reduced as a result
of credits claimed under ORS 473.047, the commission shall
compute the difference between the amounts paid or transferred as
described in subsections (1)(b), (c) and (d) and (2) of this
section and the amounts that would have been paid or transferred
under subsections (1)(b), (c) and (d) and (2) of this section if
no credits had been claimed. The commission shall direct the
Oregon Department of Administrative Services to pay or transfer
amounts equal to the differences computed for subsections (1)(b),
(c) and (d) and (2) of this section from the General Fund to the
recipients or accounts described in subsections (1)(b), (c) and
(d) and (2) of this section.
(4) Notwithstanding subsection (1) of this section, no city or
county shall receive for any fiscal year an amount less than the
amount distributed to the city or county in accordance with ORS
471.350 (1965 Replacement Part), 471.810, 473.190 and 473.210
(1965 Replacement Part) during the 1966-1967 fiscal year unless
the city or county had a decline in population as shown by its
census. If the population declined, the per capita distribution
to the city or county shall be not less than the total per capita
distribution during the 1966-1967 fiscal year. Any additional
funds required to maintain the level of distribution under this
subsection shall be paid from funds credited under subsection
(1)(a) of this section.
SECTION 5. ORS 473.050 is amended to read:
473.050. In computing any privilege tax imposed by ORS 473.030
{ - , - } { + or + } 473.035 { - or 473.040 - } :
(1) No malt beverage, cider or wine is subject to tax more than
once.
(2) No tax shall be levied, collected or imposed upon any malt
beverage, cider or wine sold to the Oregon Liquor Control
Commission or exported from the state.
(3) No tax shall be levied, collected or imposed upon any malt
beverage given away and consumed on the licensed premises of a
brewery licensee, or sold to or by a voluntary nonincorporated
organization of army, air corps or navy personnel operating a
place for the sale of goods pursuant to regulations promulgated
by the proper authority of each such service.
(4) No tax shall be levied, collected or imposed upon any malt
beverage, cider or wine determined by the commission to be unfit
for human consumption or unsalable.
(5) No tax shall be levied, collected or imposed upon the first
40,000 gallons, or 151,000 liters, of wine sold annually in
Oregon from a United States manufacturer of wines producing less
than 100,000 gallons, or 379,000 liters, annually.
SECTION 6. ORS 473.060 is amended to read:
473.060. (1) The privilege taxes imposed by ORS 473.030
{ - , - } { + and + } 473.035 { - and 473.040 - } shall be
paid to the Oregon Liquor Control Commission. The taxes covering
the periods for which statements are required to be rendered by
ORS 473.070 shall be paid before the time for filing such
statements expires or, as concerns wines, on or before the 20th
day of the month after such wines have been withdrawn from
federal bond. If not so paid, a penalty of 10 percent and
interest at the rate of one percent a month or fraction of a
month shall be added and collected. The commission may refund any
tax payment imposed upon or paid in error by any licensee, and
may waive the collection or refund the payment of any tax imposed
and collected on wine, cider or malt beverages subsequently
exported from this state, sold to a federal instrumentality or to
the commission, or determined by the commission to be unfit for
human consumption or unsalable.
(2) The commission may waive any interest or penalty assessed
to a manufacturer subject to the tax imposed under ORS 473.030
{ - , - } { + or + } 473.035 { - or 473.040 - } if the
commission, in its discretion, determines that the manufacturer
has made a good faith attempt to comply with the requirements of
this chapter.
(3) Except in the case of fraud, the commission may not assess
any interest or penalty on any tax due under ORS 473.030
{ - , - } { + or + } 473.035 { - or 473.040 - } following
the expiration of 36 months from the date on which was filed the
statement required under ORS 473.070 reporting the quantity of
wine, cider or malt beverages upon which the tax is due.
(4) A manufacturer may appeal a tax imposed under ORS 473.030
{ - , - } { + or + } 473.035 { - or 473.040 - } in the
manner of a contested case under ORS chapter 183.
SECTION 7. ORS 473.090 is amended to read:
473.090. The privilege tax required to be paid by ORS 473.030
{ - , - } { + and + } 473.035 { - and 473.040 - }
constitutes a lien upon, and has the effect of an execution duly
levied against, any and all property of the manufacturer,
attaching at the time the beverages subject to the tax were
produced, purchased or received, as the case may be, and
remaining until the tax is paid or the property sold in payment
thereof. The lien created by this section is paramount to all
private liens or encumbrances.
SECTION 8. ORS 473.100 is amended to read:
473.100. (1) Whenever any manufacturer is delinquent in the
payment of the privilege tax provided for in ORS 473.030
{ - , - } { + and + } 473.035 { - and 473.040 - } , the
Oregon Liquor Control Commission or its duly authorized
representative shall seize any property subject to the tax and
sell, at public auction, property so seized, or a sufficient
portion thereof to pay the privilege tax due, together with any
penalties imposed under ORS 473.060 for such delinquency and all
costs incurred on account of the seizure and sale.
(2) Written notice of the intended sale and the time and place
thereof, shall be given to such delinquent manufacturer and to
all persons appearing of record to have an interest in the
property, at least 10 days before the date set for the sale. The
notice shall be enclosed in an envelope addressed to the
manufacturer at the last-known residence or place of business of
the manufacturer in this state, if any; and in the case of any
person appearing of record to have an interest in such property,
addressed to such person at the last-known place of residence of
the person, if any. The envelope shall be deposited in the United
States mail, postage prepaid. In addition, notice shall be
published for at least 10 days before the date set for such sale,
in a newspaper of general circulation published in the county in
which the property seized is to be sold. If there is no newspaper
of general circulation in such county, the notice shall be posted
in three public places in such county for the 10-day period. The
notice shall contain a description of the property to be sold, a
statement of the amount of the privilege taxes, penalties and
costs, the name of the manufacturer and the further statement
that, unless the privilege taxes, penalties and costs are paid on
or before the time fixed in the notice for the sale, the
property, or so much thereof as may be necessary, will be sold in
accordance with law and the notice.
SECTION 9. ORS 473.170 is amended to read:
473.170. (1) No manufacturer shall:
(a) Fail to pay the privilege tax prescribed in ORS 473.030
{ - , - } { + and + } 473.035 { - and 473.040 - } when it
is due; or
(b) Falsify the statement required by ORS 473.070.
(2) No person shall:
(a) Refuse to permit the Oregon Liquor Control Commission or
any of its representatives to make an inspection of the books and
records authorized by ORS 473.140 to 473.160;
(b) Fail to keep books of account prescribed by the commission
or required by this chapter;
(c) Fail to preserve the books for two years for inspection of
the commission; or
(d) Alter, cancel or obliterate entries in the books of account
for the purpose of falsifying any record required by this chapter
to be made, maintained or preserved.
SECTION 10. { + ORS 473.040 and 473.057 are repealed. + }
SECTION 11. { + (1) Except as provided in subsection (2) of
this section, the amendments to ORS 471.223, 471.229, 471.404,
471.810, 473.050, 473.060, 473.090, 473.100 and 473.170 by
sections 1 to 9 of this 2007 Act and the repeal of ORS 473.040
and 473.057 by section 10 of this 2007 Act become operative
January 1, 2008.
(2) Prior to January 1, 2008, the Oregon Liquor Control
Commission may adopt rules and take all other measures determined
by the commission to be necessary for implementation of the
amendments to ORS 471.223, 471.229, 471.404, 471.810, 473.050,
473.060, 473.090, 473.100 and 473.170 by sections 1 to 9 of this
2007 Act and the repeal of ORS 473.040 and 473.057 by section 10
of this 2007 Act on January 1, 2008. + }
SECTION 12. { + This 2007 Act takes effect on the 91st day
after the date on which the regular session of the Seventy-fourth
Legislative Assembly adjourns sine die. + }
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