Chapter 351 Oregon Laws 1999

Session Law

AN ACT

HB 2892

Relating to alcoholic beverages; creating new provisions; amending ORS 461.217, 461.300, 471.001, 471.038, 471.039, 471.205, 471.210, 471.215, 471.218, 471.220, 471.223, 471.227, 471.229, 471.235, 471.242, 471.253, 471.262, 471.289, 471.290, 471.295, 471.297, 471.301, 471.307, 471.310, 471.312, 471.315, 471.316, 471.322, 471.326, 471.330, 471.340, 471.345, 471.355, 471.385, 471.392, 471.394, 471.396, 471.401, 471.402, 471.405, 471.406, 471.410, 471.440, 471.448, 471.480, 471.482, 471.485, 471.490, 471.495, 471.501, 471.510, 471.542, 471.685, 471.695, 471.732, 471.740, 471.757, 471.805, 473.015, 473.030, 624.010, 652.320 and 652.335; repealing ORS 471.017, 471.022, 471.245, 471.250, 471.257, 471.259, 471.260, 471.264, 471.265, 471.267, 471.270, 471.275, 471.280, 471.285, 471.287, 472.005, 472.020, 472.030, 472.040, 472.050, 472.060, 472.100, 472.111, 472.114, 472.116, 472.117, 472.119, 472.125, 472.195, 472.205, 472.211, 472.220, 472.320, 472.415, 472.420 and 472.990; and prescribing an effective date.

LICENSE CONSOLIDATION

Be It Enacted by the People of the State of Oregon:

SECTION 1. Sections 2 to 7 of this 1999 Act are added to and made a part of ORS chapter 471.

SECTION 2. Full on-premises sales license. (1) The holder of a full on-premises sales license may sell by the drink at retail wine, malt beverages, cider and distilled liquor. Except as provided in this section, all alcoholic beverages sold under a full on-premises sales license must be consumed on the licensed premises.

(2) A full on-premises sales license may be issued only to:

(a) Private clubs as described in subsection (7) of this section.

(b) Public passenger carriers as provided in section 4 of this 1999 Act.

(c) Commercial establishments as defined in ORS 471.001 (2).

(d) Public locations, other than those described in paragraphs (a) to (c) of this subsection, where food is cooked and served, and other food service amenities are provided, as prescribed by rules of the Oregon Liquor Control Commission.

(e) A caterer, subject to the requirements of section 5 of this 1999 Act.

(3) The holder of a full on-premises sales license shall allow a patron to remove a partially consumed bottle of wine from the licensed premises if the wine is served in conjunction with the patron's meal, the patron is not a minor and the patron is not visibly intoxicated.

(4) The holder of a full on-premises sales license is entitled to purchase a commission appointed pursuant to ORS 471.750 at a discount of not more than five percent off the regular listed price fixed by the commission, together with all taxes, in a manner prescribed by commission rule. For purposes of compensation by the commission, the appointed agent shall be credited with such sales at full retail cost.

(5) The holder of a full on-premises sales license may purchase distilled liquor only from a retail sales agent of the commission or from another person licensed under this section who has purchased the distilled liquor from a retail sales agent of the commission.

(6) The holder of a full on-premises sales license may sell factory-sealed containers of wine to a person who organizes a private gathering on the licensee's premises if the wine was acquired as part of a larger purchase of wine by the licensee for the purpose of the gathering and only part of the larger purchase was consumed at the gathering. Wine sold under this subsection may be sold only for an amount adequate to compensate the licensee for the amounts paid by the licensee for the wine.

(7) A private club, including fraternal and veterans organizations, may qualify for a full on-premises sales license under this section only if the club meets minimum membership, charter time and food service requirements set by commission rule and the club is an association of persons, whether incorporated or unincorporated, for the promotion of some common object, not including associations organized for any commercial or business purpose the object of which is money profit, owning, hiring or leasing a building or space in a building, of such extent and character as in the judgment of the commission may be suitable and adequate for the reasonable and comfortable use and accommodation of its members and their guests and provided with suitable and adequate space and equipment, implements and facilities, and employing a sufficient number of servants or employees for serving food and meals for its members and their guests; provided that no member or any officer, agent or employee of the club is paid, or directly or indirectly receives in the form of salary or other compensation, any profits from the disposition or sale of alcoholic liquor to the club or to the members of the club or its guests introduced by members, beyond the amount of such salary as may be fixed and voted on at annual meetings by the members, directors or other governing body of the club, and that, in the judgment of the commission, shall be reasonable and proper compensation for the services of such member, officer, agent or employee.

SECTION 3. Limited on-premises sales license. (1) The holder of a limited on-premises sales license may sell by the drink at retail wine, malt beverages and cider. Except as provided in this section, all alcoholic beverages sold under a limited on-premises sales license must be consumed on the licensed premises.

(2) The holder of a limited on-premises sales license may sell malt beverages in factory-sealed containers for consumption off the licensed premises. Containers sold under this subsection may not hold less than seven gallons per container.

(3) The holder of a limited on-premises sales license shall allow a patron to remove a partially consumed bottle of wine from the licensed premises if the wine is served in conjunction with the patron's meal, the patron is not a minor and the patron is not visibly intoxicated.

(4) Sales of alcoholic beverages under a limited on-premises sales license must consist principally of sales by the drink for consumption on the licensed premises.

SECTION 4. Issuance of full or limited on-premises sales license to public passenger carrier. (1) The Oregon Liquor Control Commission may grant a full or limited on-premises sales license to the owner or operator of a licensed public passenger carrier only as specified in this section. A public passenger carrier licensed by the commission under this section must serve food as required by rules of the commission.

(2) The commission may issue a full on-premises sales license to:

(a) An airline for use in operating aircraft that are licensed to carry at least 40 passengers and that arrive at or depart from an airport in this state.

(b) A railroad corporation for use in operating passenger trains in this state.

(c) The owner or operator of one or more tour boats that are licensed to carry at least 40 passengers to or from any port of this state and that are primarily used for nonfishing purposes.

(3) The commission may issue a limited on-premises sales license to any of the persons specified in subsection (2) of this section. In addition, the commission may issue a limited on-premises sales license to the owner or operator of a licensed public passenger carrier not described in subsection (2) of this section if the carrier is a mobile vehicle that is licensed to carry at least 40 passengers.

SECTION 5. Catering and other temporary off-premises service under full or limited on-premises sales license. (1) The holder of a full or limited on-premises sales license may cater a temporary event at a location other than the licensed premises if the event is not open to the general public. Catering of an event under this subsection must be pursuant to a contract with a client. The contract must provide that the licensee will furnish food and beverage services for no more than 100 patrons. The licensee must serve food as required by rules of the commission. The licensee may cater events under this subsection without giving advance notice to the Oregon Liquor Control Commission if, before the event occurs, the commission gives written approval to the licensee authorizing catering pursuant to this subsection. Events catered under the provisions of this subsection must meet all requirements for enclosure of premises that may be imposed by the commission for the purposes of this section. Notwithstanding sections 2 (3) and 3 (2) and (3) of this 1999 Act, the licensee may not permit patrons of the event to remove any alcoholic beverages from the premises of the event.

(2) In addition to catered events under subsection (1) of this section, the commission may by rule allow the exercise of the privileges of a full or limited on-premises sales license at temporary events held at locations other than the licensed premises. The commission may:

(a) Require notice to the commission before the exercise of license privileges at temporary events under this subsection;

(b) Require that written approval by the commission be obtained before the exercise of license privileges at temporary events under this subsection;

(c) Establish eligibility criteria for the exercise of license privileges at temporary events under this subsection; and

(d) Establish fees reasonably calculated to cover administrative expenses incurred by the commission in administering this subsection.

SECTION 6. Off-premises sales license. (1) The holder of an off-premises sales license may sell factory-sealed containers of wine, malt beverages and cider. Containers of malt beverages sold under the license may not hold more than two and one-quarter gallons.

(2) The holder of an off-premises sales license may provide sample tasting of alcoholic beverages on the licensed premises if the licensee makes written application to the Oregon Liquor Control Commission and receives approval from the commission to conduct tastings on the premises. Tastings must be limited to the alcoholic beverages that may be sold under the privileges of the license.

(3) An off-premises sales license may not be issued for use at a premises that is mobile.

(4) Except as provided in ORS 471.402, a manufacturer or wholesaler may not provide or pay for sample tastings of alcoholic beverages for the public on premises licensed under an off-premises sales license.

SECTION 7. Temporary sales licenses. (1) The holder of a temporary sales license may sell at retail by the drink wine, malt beverages, cider and distilled liquor. Distilled liquor served by the holder of a temporary sales license must be purchased from a retail sales agent of the Oregon Liquor Control Commission. Except as provided in this section, all alcoholic beverages sold under a temporary sales license must be consumed on the licensed premises. The holder of a temporary sales license must provide food service as required by commission rule.

(2) A temporary sales license may be issued only to:

(a) Nonprofit or charitable organizations that are registered with the state.

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

(c) State agencies.

(d) Local governments, and agencies and departments of local governments.

(e) Persons not otherwise described in this subsection if, under the rules of the commission applicable to the presence of minor patrons on licensed premises, minor patrons would be allowed to be anywhere on the licensed premises during the time that the event is occurring.

(3) The holder of a temporary sales license may raffle or auction wine, malt beverages or cider in factory-sealed containers for consumption off the licensed premises.

(4) The commission may by rule establish additional eligibility requirements for temporary sales licenses.

(5) Subject to such qualifications as the commission may establish by rule, persons who hold a full or limited on-premises sales license are eligible for temporary sales licenses.

(6) A person holding a temporary sales license is not required to obtain a temporary restaurant license or mobile unit license under ORS chapter 624 if only wine, malt beverages and cider in single-service containers are served and only nonperishable food items that are exempted from licensure by the Health Division are served.

CONSOLIDATED BEER AND WINE LICENSES

(Consolidated Licenses)

SECTION 8. ORS 471.250 (restaurant license), 471.260 (package store license), 471.264 (exemption from Health Division license for special license), 471.265 (retail malt beverage license), 471.267 (special retail beer and wine license) and 471.275 (public passenger carrier license) are repealed.

(License exemptions)

SECTION 9. Section 10 of this 1999 Act is added to and made a part of ORS chapter 471.

SECTION 10. Persons exempted from license requirement. (1) Hospitals, sanitariums, convalescent homes, rest homes, retirement homes and facilities for the care of the elderly that have been licensed or registered by the state may sell and serve alcoholic beverages to patients, inmates and residents, and to bona fide visitors and guests of patients, inmates and residents, without a license issued under this chapter. Facilities authorized to sell and serve alcoholic beverages without a license under this subsection may not sell or serve alcoholic beverages after 10 p.m. except upon a physician's prescription.

(2) A person who operates a private residence that is not a boarding house but that accommodates transient guests for a limited duration may sell and serve wine, malt beverages and cider to registered overnight guests without a license. Facilities authorized to sell and serve alcoholic beverages without a license under this subsection must have six or fewer guest units.

(3) A person who is an employee or agent of the holder of a license issued under this chapter that authorizes wholesale distribution of alcoholic beverages may, on behalf of the licensee, sell alcoholic beverages in factory-sealed containers to retail licensees and wholesalers.

(4) A pharmacist licensed under the laws of this state may sell alcoholic beverages without a license. Pharmacists may only sell alcoholic beverages under the provisions of this section if the alcoholic beverages are drugs as defined in ORS 689.005. A pharmacist may sell alcoholic beverages under the provisions of this subsection pursuant to a prescription, in containers of not more than one quart capacity.

(5) A wine collector, or the agent of a wine collector, may sell wine in factory-sealed containers at auction without a license. Any wine sold under this subsection must have been held by the collector for at least a six-month period. A wine collector must receive written approval from the Oregon Liquor Control Commission before conducting a sale under this subsection. No more than one sale in a 12-month period may be conducted by a wine collector under the provisions of this subsection.

(6) A nonprofit or charitable organization registered with the state may sell wine and malt beverages in factory-sealed containers at auction without a license. The organization must receive written approval from the commission before conducting a sale under this subsection. No more than one sale in a 12-month period may be conducted by an organization under the provisions of this subsection.

(7) A manufacturer may sell proprietary or patent medicines, perfumes, lotions, flavoring extracts, medicinal tinctures and other preparations unfit for beverage purposes without a license.

SECTION 11. ORS 471.245 (bottler license), 471.257 (health care facility license), 471.259 (bed and breakfast license), 471.270 (druggist license), 471.280 (industrial alcohol license), 471.285 (agent license) and 471.287 (salesperson license) are repealed.

CONSOLIDATED DISPENSER LICENSES

SECTION 12. ORS 472.100 (Class A, B and C dispenser licenses), 472.116 (community events dispenser license), 472.117 (special events dispenser license), 472.119 (caterer dispenser license), 472.125 (hotel dispenser license), 472.195 (special dispenser license), 472.205 (seasonal dispenser license) and 472.211 (tour boat dispenser license) are repealed.

ENCLOSURE OF LICENSED PREMISES

SECTION 13. ORS 471.017 is repealed and section 14 of this 1999 Act is enacted in lieu thereof.

SECTION 14. Enclosure of licensed premises. (1) The Oregon Liquor Control Commission may not license a location that does not have defined boundaries.

(2) A licensed premises need not be enclosed by a wall, fence or other structure, but the commission may require that any licensed premises be enclosed as a condition of issuing or renewing a license.

(3) Except as provided in section 4 of this 1999 Act, the commission may not license premises that are mobile.

U-BREW AUTHORIZATION

SECTION 15. ORS 471.205 is amended to read:

471.205. (1) No person shall brew, ferment, distill, blend or rectify any alcoholic liquor unless licensed so to do by the Oregon Liquor Control Commission. However, the Liquor Control Act does not apply to the making or keeping of naturally fermented wines and fruit juices or beer in the home, for home consumption and not for sale.

(2) Notwithstanding subsection (1) of this section, the holder of a brewery-public house license or a brewery license may allow patrons to brew malt beverages not to exceed 14 percent alcoholic content by volume if the brewing is conducted under the direct supervision of the licensee or employees of the licensee. Malt beverages produced under this subsection may not be sold by the patron or consumed on the licensed premises.

LIMITATION ON DESIGNATION OF MALT BEVERAGE AS BEER

SECTION 15a. ORS 471.448 is amended to read:

471.448. Malt beverages may not be labeled or otherwise designated as beer for purposes of retail sale in this state unless the malt beverage contains [five and seven-tenths] six percent or less alcohol by volume.

SECTION 15b. ORS 471.220 is amended to read:

471.220. (1) A brewery license shall allow the manufacture, importation, storage, transportation, wholesale sale and distribution to licensees of the Oregon Liquor Control Commission, and the export of malt beverages. Except as specifically provided in this section, no brewery licensee shall sell any malt beverages to be consumed on the licensed premises. No brewery licensee shall sell within the State of Oregon any beer containing more than [five and seven-tenths] six percent alcohol by volume.

(2) A brewery licensee may:

(a) Sell malt beverages brewed on the licensed premises for consumption on the licensed premises; and

(b) Sell malt beverages brewed on the licensed premises and containing not more than eight percent alcohol by volume, in quantities of not less than five gallons, to an unlicensed organization, lodge, picnic party or private gathering. Such malt beverages shall not be sold by any such unlicensed group.

VIDEO LOTTERY GAME TERMINALS

SECTION 16. ORS 461.217 is amended to read:

461.217. (1) A video lottery game terminal that offers a video lottery game authorized by the Director of the Oregon State Lottery shall be placed for operation only on the premises of an establishment that has a contract with the Oregon State Lottery as a video lottery game retailer. The terminal must be within the control of an employee of the video lottery game retailer. It shall not be placed in any other business or location.

(2) A video lottery game terminal shall be placed only on the premises of an establishment licensed by the Oregon Liquor Control Commission with a [Class A dispenser, Class B dispenser, Retail Malt Beverage, Restaurant or Seasonal dispenser] full or limited on-premises sales license. A video lottery game terminal shall be placed only in that part of the premises that is [restricted to minors and that is used primarily for the consumption of alcoholic beverages] posted by the commission as being closed to minors. In addition to the requirements of this subsection, the director may by rule establish such other criteria and conditions as the director determines appropriate for the placement of video lottery game terminals in establishments.

(3) No more than five video lottery machines shall be placed in or on premises described in subsection (2) of this section.

SECTION 17. ORS 461.300 is amended to read:

461.300. (1) The Oregon State Lottery Commission shall adopt rules specifying the terms and conditions for contracting with lottery game retailers so as to provide adequate and convenient availability of tickets or shares to prospective buyers of each lottery game as appropriate for each such game. The foregoing shall not preclude the lottery from selling tickets or shares directly to the public.

(2)(a) The Director of the Oregon State Lottery shall, pursuant to this chapter, and the rules of the commission, select as lottery game retailers such persons as deemed to best serve the public convenience and promote the sale of tickets or shares. No person under the age of 18 shall be a lottery game retailer. In the selection of a lottery game retailer, the director shall consider factors such as financial responsibility, integrity, reputation, accessibility of the place of business or activity to the public, security of the premises, the sufficiency of existing lottery game retailers for any particular lottery game to serve the public convenience and the projected volume of sales for the lottery game involved.

(b) Prior to the execution of any contract with a lottery game retailer, the lottery game retailer shall disclose to the lottery the names and addresses of the following:

(A) If the lottery game retailer is a corporation but not a private club as [defined] described in [ORS 472.100] section 2 of this 1999 Act, the officers, directors and each stockholder in such corporation; except that, in the case of stockholders of publicly held equity securities of a publicly traded corporation, only the names and addresses of those known to the corporation to beneficially own five percent or more of such securities need be disclosed.

(B) If the lottery game retailer is a trust, the trustee and all persons entitled to receive income or benefit from the trust.

(C) If the lottery game retailer is an association but not a private club as [defined] described in [ORS 472.100] section 2 of this 1999 Act, the members, officers and directors.

(D) If the lottery game retailer is a subsidiary but not a private club as [defined] described in [ORS 472.100] section 2 of this 1999 Act, the officers, directors and each stockholder of the parent corporation thereof; except that, in the case of stockholders of publicly held equity securities of a publicly traded corporation, only the names and addresses of those known to the corporation to beneficially own five percent or more of such securities need be disclosed.

(E) If the lottery game retailer is a partnership or joint venture, all of the general partners, limited partners or joint venturers.

(F) If the parent company, general partner, limited partner or joint venturer of any lottery game retailer is itself a corporation, trust association, subsidiary, partnership or joint venturer, then all of the information required in this section shall be disclosed for such other entity as if it were itself a lottery game retailer to the end that full disclosure of ultimate ownership be achieved.

(G) If any member, 18 years of age or older, of the immediate family of any video lottery game retailer, or any member, 18 years of age or older, of the immediate family of any individual whose name is required to be disclosed under this paragraph, is involved in the video lottery game retailer's business in any capacity, then all of the information required in this section shall be disclosed for such immediate family member as if the family member were a video lottery game retailer.

(H) If any member, 18 years of age or older, of the immediate family of any lottery game retailer, other than a video lottery game retailer, is involved in the lottery game retailer's business in any capacity, then the lottery game retailer shall identify the immediate family member to the Oregon State Lottery, and shall report the capacity in which the immediate family member is involved in the lottery game retailer's business. Full disclosure of immediate family members working in the business may only be required as provided in paragraph (c) of this subsection.

(I) If the lottery game retailer is a private club as [defined] described in [ORS 472.100] section 2 of this 1999 Act, the treasurer, officers, directors and trustees who oversee or direct the operation of the food, beverage, lottery or other gambling-related activities of the private club and each manager in charge of the food, beverage, lottery or other gambling-related activities of the private club.

(c) The director may require full disclosure of any immediate family member of any lottery game retailer who is involved in the lottery game retailer's business as if the family member were a lottery game retailer if the director has just cause for believing the family member may be a threat to the integrity, honesty, fairness or security of the lottery and its games.

(d) The commission may refuse to grant a lottery game retail contract to any lottery game retailer or any natural person whose name is required to be disclosed under paragraph (b) of this subsection, who has been convicted of violating any of the gambling laws of this state, general or local, or has been convicted at any time of any crime. The lottery may require payment by each lottery game retailer to the lottery of an initial nonrefundable application fee or an annual fee, or both, to maintain the contract to be a lottery game retailer.

(e) No person shall be a lottery game retailer who is engaged exclusively in the business of selling lottery tickets or shares. A person lawfully engaged in nongovernmental business on state or political subdivision property or an owner or lessee of premises which lawfully sells alcoholic beverages may be selected as a lottery game retailer. State agencies, except for the state lottery, political subdivisions or their agencies or departments may not be selected as a lottery game retailer. The director may contract with lottery game retailers on a permanent, seasonal or temporary basis.

(3) The authority to act as a lottery game retailer shall not be assignable or transferable.

(4) The director may terminate a contract with a lottery game contractor for such bases of termination as shall be included in such contract, which bases shall include, but not be limited to, the knowing sale of lottery tickets or shares to any person under the age of 18 years.

(5) Notwithstanding subsection (4) of this section, when a lottery game retail contract requires the lottery game retailer to maintain a minimum weekly sales average, the lottery game retailer may avoid termination of the contract for failure to meet the minimum weekly sales average by agreeing, prior to termination, to pay the state lottery the difference between the actual weekly cost incurred by the lottery to maintain the contract and the weekly proceeds that are collected by the lottery from the sales of that lottery game retailer, less expenses that are dedicated by statute, rule or contract to other purposes. The director may not terminate the contract of a lottery game retailer for failure to meet a minimum weekly sales average unless the director first allows the lottery game retailer an opportunity to make the payment described in this subsection.

LICENSE FEES

SECTION 18. ORS 471.290 is amended to read:

471.290. (1) Any person desiring a license or renewal of a license under this chapter [or ORS chapter 472] shall make application to the Oregon Liquor Control Commission upon forms to be furnished by the commission showing the name and address of the applicant, location of the place of business which is to be operated under the license, and such other pertinent information as the commission may require. No license shall be granted or renewed until the applicant has complied with the provisions of the Liquor Control Act, the provisions of the Oregon Distilled Liquor Control Act and the rules of the commission.

[(2) Except as provided in this section, the commission shall assess a nonrefundable fee for processing each application for any license authorized by this chapter or ORS chapter 472, in an amount equal to 25 percent of the license fee. The commission shall not begin to process any license application until the application fee is paid. If the commission allows an applicant to apply at the same time for alternative licenses at one premises, only the application fee for the most expensive license shall be required. If a license is granted or committed, the application fee of 25 percent shall be applied against the annual license fee. This subsection shall not apply to an agent license, a salesperson license, a certificate of approval, a druggist license, a health care facility license or to any license which is issued for a period of less than 30 days.]

(2) The commission may reject any application that is not submitted in the form required by rule. The commission shall give applicants an opportunity to be heard if an application is rejected. A hearing under this subsection is not subject to the requirements for contested case proceedings under ORS 183.310 to 183.550.

(3) Subject to subsection (4) of this section, the commission shall assess a nonrefundable fee for processing a renewal application for any license authorized by this chapter [or ORS chapter 472] only if the renewal application is received by the commission less than 20 days before expiration of the license. If the renewal application is received prior to expiration of the license but less than 20 days prior to expiration, this fee shall be 25 percent of the annual license fee. If a renewal application is received by the commission after expiration of the license but no more than 30 days after expiration, this fee shall be 40 percent of the annual license fee. This subsection shall not apply to [an agent license, a salesperson license,] a certificate of approval, [a druggist license, a health care facility license,] a brewery-public house license or to any license which is issued for a period of less than 30 days.

(4) The commission may waive the fee imposed under subsection (3) of this section if it finds that failure to submit a timely application was due to unforeseen circumstances or to a delay in processing the application by the local governing authority that is no fault of the licensee.

(5) The annual license fee is nonrefundable and shall be paid by each applicant upon the granting or committing of a license. The annual license fee and the minimum bond required of each class of license under this chapter are as follows:

___________________________________________________________________

Minimum

License Fee Bond

Brewery, including

Certificate of Approval $ 500 $ 1,000

Winery 250 1,000

Distillery 100 None

Wholesale Malt

Beverage and Wine 275 1,000

[Bottler 150 None]

[Restaurant 200 None]

[Package Store 50 None]

[Druggist 5 None]

[Railroad System or Public

Passenger Carrier

or Boat 100 None]

[Industrial Alcohol 50 None]

[Retail Malt Beverage 200 None]

[Health Care Facility 5 None]

Warehouse 100 1,000

[Special retail beer

license may be

issued for any picnic,

convention, fair, civic

or community enterprise

or business promotion on

a licensed premises at $ 10 per day]

[Special retail wine

license may be issued

for any special auction,

wine raffle,

picnic, convention,

fair, civic or community

enterprise or business

promotion on a licensed

premises at $ 10 per day]

Special events winery

license may be

issued to a

winery licensee at $ 10 per day

[Bed and breakfast

license $ 5 per guest unit]

Brewery-Public House,

including Certificate

of Approval $250 $ 1,000

Full On-Premises Sales $400 $___

Limited On-Premises Sales $200 $___

Off-Premises Sales $100 $___

Temporary Sales $ 25 for events

lasting less than

five hours

$ 100 for events

lasting 5 hours

or longer

Grower sales privilege

license $250 $ 1,000

Special events grower

sales privilege

license $ 10 per day

[Agent $125 for five years]

[Salesperson $ 25 for five years]

[Winery Salesperson $ 35 for five years]

___________________________________________________________________

[(6)(a) The annual license fee for a Class A dispenser license is $400.]

[(b) The annual license fee for a Class B dispenser license is:]

[_________________________________________________________________]

For clubs with fewer than

500 members............................................. $100

For clubs with 500 but fewer than

1,000 members.......................................... $200

For clubs with 1,000

or more members...................................... $300

[_________________________________________________________________]

[(c) The annual license fee for a Class C dispenser license is $300.]

[(d) The license fee for a seasonal dispenser license is $40 per month.]

[(e) The annual license fee for a caterer dispenser license is $300.]

[(f) The annual license fee for a hotel dispenser license is $400.]

[(7)] (6) The fee for a certificate of approval or special certificate of approval granted under ORS 471.289 is nonrefundable and must be paid by each applicant upon the granting or committing of a certificate of approval or special certificate of approval. No bond is required for the granting of a certificate of approval or special certificate of approval. Certificates of approval are valid for a period commencing on the date of issuance and ending on December 31 of the fifth calendar year following the calendar year of issuance. The fee for a certificate of approval is $175. Special certificates of approval are valid for a period of 30 days. The fee for a special certificate of approval is $10.

LOCAL GOVERNMENT RECOMMENDATION

SECTION 19. Section 20 of this 1999 Act is added to and made a part of ORS chapter 471.

SECTION 20. (1) The Oregon Liquor Control Commission may require that every applicant for issuance or renewal of a license under this chapter acquire a written recommendation from the governing body of the county if the place of business of the applicant is outside an incorporated city, and from the city council if the place of business of the applicant is within an incorporated city. The commission may take such written recommendation into consideration before granting or refusing the license.

(2) If the commission requires that an applicant for issuance of a new license acquire the written recommendation of a local government, the applicant must give notice to the local government when an application is made for issuance of the license. If the local government files a favorable recommendation with the commission within 30 days after the notice is given, the commission shall proceed with consideration of the application. The commission shall proceed with consideration of the application as though the local government had made a favorable recommendation unless, within 30 days after notice is given to the local government:

(a) The local government files an unfavorable recommendation with the commission with a statement of the grounds for the unfavorable recommendation; or

(b) The local government files a request for additional time with the commission that sets forth the reason additional time is needed by the local government, a statement that the local government is considering making an unfavorable recommendation on the application, and the specific grounds on which the local government is considering making an unfavorable recommendation.

(3) If the commission requires that an applicant for renewal of a license acquire the written recommendation of a local government under this section, the commission shall give notice to the local government when an application is due for renewal of the license. If the local government files a favorable recommendation with the commission within 60 days after the notice is given, the commission shall proceed with consideration of the application. The commission shall proceed with consideration of the application as though the local government had made a favorable recommendation unless within 60 days after notice is given to the local government:

(a) The local government files an unfavorable recommendation with the commission with a statement of the grounds for the unfavorable recommendation; or

(4) The commission shall suspend consideration of an application subject to this section for a reasonable period of time if a local government requests additional time under subsection (2)(b) or (3)(b) of this section and the grounds given by the local government are valid grounds for an unfavorable determination under this chapter or rules adopted by the commission. The commission shall by rule establish the period of time that shall be granted to a local government pursuant to a request under subsections (2)(b) and (3)(b) of this section.

(5) The commission shall by rule establish valid grounds for unfavorable recommendations by local governments under this section. Valid grounds established by the commission under this section for an unfavorable recommendation by a local government must be limited to those grounds considered by the commission in making an unfavorable determination on a license application.

(6) A licensee filing an application for issuance or renewal of a license that is subject to this section must remit to the local government the fees established under subsections (7) and (8) of this section. The commission shall give notice to the applicant for license renewal of the amount of the fees and the name of the local government collecting the fees. The commission is not responsible for collecting the fees charged by the local government or for ensuring that the fees have been paid. An applicant for a license renewal shall certify in the application form filed with the commission that the applicant has paid any fees required under this section.

(7) An applicant required to seek a written recommendation from a local government must pay an application fee to the local government, in an amount determined by the governing body of the city or county, for each application for a license. The application fee established by a local government under this subsection may not exceed $25.

(8) After public notice and hearing, the governing body of a city or county may adopt an ordinance, rule or resolution prescribing licensing guidelines to be followed in making recommendations on license applications under this chapter and in allowing opportunity for public comment on applications. If the guidelines are approved by the commission as consistent with commission rules, after public notice and hearing the governing body may adopt an ordinance, rule or regulation establishing a system of fees that is reasonable and necessary to pay expenses of processing the written recommendation. Processing fees under this subsection are in lieu of fees under subsection (7) of this section. In no case shall the processing fee under this subsection be greater than $100 for an original application, $75 for a change in ownership, change in location or change in privilege application, and $35 for a renewal or temporary application.

SECTION 21. ORS 471.210 is amended to read:

471.210. (1) The Oregon Liquor Control Commission shall provide for the licensing of persons and cities within the state to manufacture, distribute, take orders for and sell spirits, wines, beer and other alcoholic liquors. Except as provided in subsection (2) of this section, every licensee or applicant for a brewery, winery, wholesale, warehouse, grower sales privilege or brewery-public house license shall give, and at all times maintain on file with the commission, a bond with a corporate surety authorized to transact business in this state. The bond shall be in form and amount acceptable to the commission, shall be payable to the commission and conditioned that such licensee or applicant will pay any fine imposed for any violation of any provision of the Liquor Control Act and that the licensee or applicant will pay all license fees, privilege taxes, taxes on alcoholic liquors, together with penalties and interest thereon, levied or assessed against the licensee or applicant under statutes relating to the importation, manufacture, distribution, sale or taxation of alcoholic liquors in the State of Oregon.

(2) Under such conditions as the commission may prescribe, a brewery, winery, wholesale, warehouse, grower sales privilege or brewery-public house licensee or applicant may deposit in lieu of the bond required by subsection (1) of this section, the equivalent value in cash, bank letters of credit recognized by the State Treasurer or negotiable securities of a character approved by the State Treasurer. The deposit is to be made in a bank or trust company for the benefit of the commission. Interest on deposited funds or securities shall accrue to the depositor.

[(3) The commission may require that every applicant for a license under this chapter or ORS chapter 472 acquire the recommendation in writing of the governing body of the county in the event the place of business of the applicant is outside an incorporated city, and of the city council if the place of business of the applicant is within an incorporated city. The commission may take such recommendation into consideration before granting or refusing the license. The applicant shall pay to such recommending authority a fee determined by the governing body of the recommending authority, not to exceed $25, for each application for a license.]

[(4) After public notice and hearing, the governing body of a city or county may adopt an ordinance, rule or resolution prescribing licensing guidelines to be followed in making recommendations on license applications under this chapter and ORS chapter 472, and in allowing opportunity for public comment on applications. If the guidelines are approved by the commission as consistent with commission rules, after public notice and hearing the governing body may adopt an ordinance, rule or regulation establishing a system of fees that is reasonable and necessary to pay expenses of processing the written recommendation. In no case shall the fees be greater than $100 for an original application, $75 for a change-in-ownership or change in location or change in privilege application and $35 for a renewal or temporary application.]

STATUTORY ADJUSTMENTS FOR LICENSE CONSOLIDATION

SECTION 22. ORS 471.218 is amended to read:

471.218. (1) For the purpose of providing coverage for injuries suffered by persons by reason of the conduct of intoxicated persons who were served alcoholic beverages on licensed premises while visibly intoxicated, all persons holding a license described in this section must either:

(a) Maintain liquor liability insurance of not less than $300,000; or

(b) Maintain a bond with a corporate surety authorized to transact business in this state in the amount of not less than $300,000.

(2) The Oregon Liquor Control Commission may by rule require liquor liability insurance or bond in an amount larger than the minimum amount provided for in subsection (1) of this section.

[(3) The requirements of this section apply to the following licenses:]

[(a) Class A, B and C dispenser licenses;]

[(b) Caterer and seasonal dispenser licenses;]

[(c) Restaurant licenses;]

[(d) Retail malt beverage licenses;]

[(e) Brewery-public house licenses;]

[(f) Special events dispenser licenses; and]

[(g) Community events dispenser licenses issued for one-year periods.]

[(4) The requirements of this section apply to the following licenses if the event that is licensed is open to the public and attendance at the event is anticipated to exceed 300 per day:]

[(a) Special retail beer licenses;]

[(b) Special retail wine licenses;]

[(c) Special dispenser licenses;]

[(d) Community events dispenser licenses issued for periods of less than one year;]

[(e) Special events winery licenses; and]

[(f) Special events grower sales privilege licenses.]

(3) The requirements of this section apply to full on-premises sales licenses, limited on-premises sales licenses and brewery-public house licenses. The requirements of this section apply to temporary sales licenses, special events winery licenses and special events grower sales privilege licenses if the event that is licensed is open to the public and attendance at the event is anticipated to exceed 300 individuals per day.

[(5)] (4) The requirements of this section apply to winery licenses, brewery licenses and grower sales privilege licenses unless an applicant for issuance of the license or renewal of the license submits with the application for issuance or renewal of the license an affidavit that states that the licensee will not allow consumption of alcoholic beverages on the premises.

[(6)] (5) All licensees subject to the requirements of this section must supply proof of compliance at the time the license is issued or renewed. The commission by rule shall determine the manner in which proof of compliance may be made under the provisions of this subsection.

SECTION 23. 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.

(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 which 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 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 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.

(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 [dispenser license issued under ORS chapter 472] full on-premises sales license. If a person holds both a winery license and a [dispenser license] full on-premises sales license, nothing in this chapter [or ORS chapter 472] 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 [dispenser] 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.

SECTION 23a. ORS 471.227 is amended to read:

471.227. (1) A grower sales privilege license shall allow the licensee to perform the following activities only for fruit or grape wine or cider where all of the fruit or grapes used to make the wine or cider are grown in Oregon under the control of the licensee:

(a) To import, store, transport or export such wines or cider.

(b) To sell such wines or cider at wholesale to the Oregon Liquor Control Commission or licensees of the commission.

(d) To conduct the activities allowed under paragraph (a), (b) or (c), or all, of this subsection at a second or third premises as may be designated by the commission.

(e) To obtain a special events grower sales privilege license which 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 grower sales privilege license for a period not to exceed five days.

(2) For purposes of ORS 471.392 to 471.400, a grower sales privilege licensee shall be considered a manufacturer.

(3) A person holding a winery license in another state is not eligible for a license under this section.

(4) A person licensed under this section is not eligible for a [package store license or a retail malt beverage license] limited on-premises sales license or an off-premises sales license.

(5) As used in this section, "control" means the grower either owns the land upon which the fruit or grapes are grown or has a legal right to perform or does perform all of the acts common to fruit farming or viticulture under terms of a lease or similar agreement of at least three years' duration.

(6) For the purposes of tax reporting, payment and record keeping, the provisions of law that shall apply to a manufacturer under ORS chapter 473 shall apply to a grower sales privilege licensee, but such a licensee is not a manufacturer for purposes of ORS 473.050 (5).

SECTION 24. 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 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 is sent allows its residents to receive wine 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 pursuant to this section shall deliver more than two cases of wine to the same address at one time. No person who receives wine pursuant to this section shall resell any of the wine.

(2) A licensee who holds [a package store] an off-premises sales license or [a] any other license [for] that authorizes retail sale of wine for consumption off the licensed premises may ship not more than two cases of wine, 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 is sent allows residents of this state to receive wine 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 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 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 produced or bottled by the winery.

(6) Out-of-state wine suppliers that supply wine 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 in Oregon.

(7) Any person who knowingly or negligently delivers wine under the provisions of this section to a person under 21 years of age, or who knowingly or negligently delivers wine 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 [or ORS chapter 472].

SECTION 25. ORS 471.235 is amended to read:

471.235. (1) A wholesale malt beverage and wine license shall allow the importation, storage, transportation, wholesale sale and distribution to licensees of the Oregon Liquor Control Commission, and the export of wine, cider [of alcoholic content not in excess of 21 percent alcohol by volume,] and malt beverages, and the importation and sale to the commission and the export of wine of alcoholic content in excess of 21 percent alcohol by volume. No such licensee shall sell any alcoholic liquor for consumption upon the licensed premises. However, a wholesale malt beverage and wine licensee may sell naturally fermented wine or cider [containing not more than 21 percent alcohol by volume] in quantities of not less than four gallons nor more than 55 gallons at any one time to consumers for consumption not on the licensed premises. Wholesale malt beverage and wine licensees may sell malt beverages containing not more than eight percent alcohol by volume in quantities not less than five gallons to any unlicensed organization, lodge, picnic party or private gathering. Such malt beverages shall not be sold by such unlicensed group. A wholesale malt beverage and wine license shall permit the licensee also to sell malt beverages at wholesale only, to persons holding licenses authorizing them to resell such beverages at retail. Employees of wholesale malt beverage and wine licensees [who have salesperson licenses] may serve sample tastings of malt beverages, cider and wine at alcoholic beverage industry trade shows, seminars and conventions and at alcoholic beverage industry sample tastings for employees of retail licensees.

(2) Nothing in subsection (1) of this section shall be considered to prohibit the transportation or wholesale sale or distribution of malt beverage or wine by a wholesale malt beverage and wine licensee to any alcoholic treatment center licensed by the Health Division of the Department of Human Resources.

(3) A wholesale malt beverage and wine licensee may impose an additional handling fee on any wine sold to any retailer in this state if the quantity of wine sold to the retailer is less than the smallest multiple-package case available to be sold and the handling fee is uniform for all licensees.

SECTION 26. ORS 471.253, as amended by section 142, chapter 59, Oregon Laws 1999 (Enrolled Senate Bill 564), is amended to read:

471.253. (1) A brewery-public house license shall allow the licensee:

(a) To manufacture annually on the licensed premises, store, transport, sell to wholesale malt beverage and wine licensees of the Oregon Liquor Control Commission and export malt beverages;

(b) To sell malt beverages manufactured on or off the licensed premises at retail for consumption on or off the premises;

(c) To sell malt beverages in brewery-sealed packages at retail directly to the consumer for consumption off the premises;

(d) To sell on the licensed premises at retail malt beverages manufactured on or off the licensed premises in unpasteurized or pasteurized form directly to the consumer for consumption off the premises, delivery of which may be made in a securely covered container supplied by the consumer;

(e) To sell wine and cider [containing not more than 21 percent alcohol by weight] at retail for consumption on or off the premises; and

(f) To conduct the activities described in paragraphs (b) to (e) of this subsection at one location other than the premises where the manufacturing occurs.

(2) In addition to the privileges specified in subsection (1) of this section, in any calendar year a brewery-public house licensee may sell at wholesale to licensees of the commission malt beverages produced by the brewery-public house licensee if the brewery-public house licensee produced 500 barrels or less of malt beverages in the immediately preceding calendar year.

[(2)] (3) A brewery-public house licensee, or any person having an interest in the licensee, is a retail licensee for the purposes of ORS 471.394 and, except as otherwise provided by this section and ORS 471.396, may not acquire or hold any right, title, lien, claim or other interest, financial or otherwise, in, upon or to the premises, equipment, business or merchandise of any manufacturer or wholesaler, as defined in ORS 471.392. A brewery-public house licensee, or any person having an interest in the licensee, is also a manufacturer for the purposes of ORS 471.398 and, except as otherwise provided by this section and ORS 471.400, may not acquire or hold any right, title, lien, claim or other interest, financial or otherwise, in, upon or to the premises, equipment, business or merchandise of any other retail licensee, as defined in ORS 471.392.

[(3)] (4) A brewery-public house licensee, or any person having an interest in the licensee, is a retail licensee for the purposes of ORS 471.398 and, except as otherwise provided by this section and ORS 471.400, may not accept directly or indirectly any financial assistance described in ORS 471.398 from any manufacturer or wholesaler, as defined in ORS 471.392. A brewery-public house licensee, or any person having an interest in the licensee, is also a manufacturer for the purposes of ORS 471.398 and, except as otherwise provided by this section and ORS 471.400, may not provide directly or indirectly any financial assistance described in ORS 471.398 to any retail licensee, as defined in ORS 471.392. The prohibitions on financial assistance in ORS 471.398 do not apply to financial assistance between manufacturing and retail businesses licensed to the same person under the provisions of this section.

[(4)] (5) Notwithstanding subsection [(2)] (3) of this section, a brewery-public house licensee, or any person having an interest in the licensee, may also hold a winery license authorized by ORS 471.223. A brewery-public house licensee, or any person having an interest in the licensee, may also hold a warehouse license authorized by ORS 471.242.

[(5)] (6) Notwithstanding subsection [(2)] (3) of this section, a brewery-public house licensee is eligible for [a retail malt beverage license and for special one-day retail beer and wine licenses] limited on-premises sales licenses and temporary sales licenses.

[(6)(a)] (7)(a) Notwithstanding subsection [(2)] (3) of this section, and except as provided [by paragraph (b) of] in this subsection, a brewery-public house licensee, or any person having an interest in the licensee, may also hold a [dispenser] full on-premises sales license [issued under ORS chapter 472]. If a person holds both a brewery-public house license and a [dispenser] full on-premises sales license, nothing in this chapter shall prevent the sale by the licensee of both distilled liquor and malt beverages manufactured under the brewery-public house license.

(b) The commission may not issue a [dispenser] full on-premises sales license to a brewery-public house licensee under the provisions of this subsection if the brewery-public house licensee, or any person having an interest in the licensee or exercising control over the licensee, is 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 annually.

(c) The commission may not issue a [dispenser] full on-premises sales license to a brewery-public house licensee under the provisions of this subsection if the brewery-public house licensee, or any person having an interest in the licensee or exercising control over the licensee, is a distillery, unless the distillery produces only pot distilled liquor and produces no more than 12,000 gallons of pot distilled liquor annually.

[(7)] (8) Notwithstanding any other provision of this chapter, a brewery-public house licensee, or any person having an interest in the licensee, may also hold a distillery license if the licensee produces only pot distilled liquor, and produces no more than 12,000 gallons of pot distilled liquor annually. No provision of this chapter prevents a brewery-public house licensee from becoming a retail sales agent of the commission for the purpose of selling distilled liquors.

[(8)] (9) Notwithstanding subsection [(2)] (3) of this section, the commission by rule may authorize a brewery-public house licensee to co-produce special events with other manufacturers.

[(9)(a)] (10)(a) Notwithstanding subsection [(2)] (3) of this section, a brewery-public house licensee may hold, directly or indirectly, an interest in a manufacturer or wholesaler, provided that the interest does not result in exercise of control over, or participation in the management of, the manufacturer's or wholesaler's business or business decisions and does not result in exclusion of any competitor's brand of alcoholic liquor.

(b) Notwithstanding subsection [(2)] (3) of this section, a manufacturer or wholesaler, and any officer, director or substantial stockholder of any corporate manufacturer or wholesaler, may hold, directly or indirectly, an interest in a brewery-public house licensee, provided that the interest does not result in exercise of control over, or participation in the management of, the licensee's business or business decisions and does not result in exclusion of any competitor's brand of alcoholic liquor.

[(10)] (11) For purposes of ORS chapter 473, a brewery-public house licensee shall be considered to be a manufacturer.

SECTION 27. ORS 471.262 is amended to read:

471.262. (1) Upon receiving an application for [a package store license as defined in ORS 471.260] an off-premises sales license, the Oregon Liquor Control Commission may grant a temporary letter of authority for a period not exceeding 90 days, if it finds:

(a) The applicant is located in an area presently zoned for commercial use and presents documentation of such zoning to the commission.

(b) The applicant pays the fee prescribed by the commission for a temporary letter of authority.

(2) A temporary letter of authority issued under this section does not constitute a license for the purposes of ORS 183.310 to 183.550. The commission summarily and without prior administrative proceedings may revoke a temporary letter of authority at any time during the 90 days if:

(a) The commission finds that any of the grounds for refusing a [permanent] license under ORS 471.295 exist; or

(b) The city or county in which the applicant is located provides evidence of reasonable grounds to the commission:

(A) That the temporary letter of authority should be revoked; or

(B) That [a package store] an off-premises sales license should not be issued.

SECTION 28. ORS 471.307 is amended to read:

471.307. A [restaurant license or dispenser] full or limited on-premises sales license issued to a hotel or arena under the provisions of this chapter [or ORS chapter 472 shall authorize] authorizes the person to whom the license is issued to provide for in-room supplies of the alcoholic beverages otherwise authorized to be sold under the license. Any in-room supply of alcoholic beverages that are available for purchase by patrons of the hotel or arena shall be kept in a locked cabinet, and shall conform with any rules that the Oregon Liquor Control Commission may promulgate to [insure] ensure the enforcement of other provisions of this chapter [and ORS chapter 472].

SECTION 29. ORS 471.316 is amended to read:

471.316. (1) Notwithstanding any other provision of this chapter, the Oregon Liquor Control Commission shall suspend the license of a licensed premises listed in subsection (4) of this section if the commission determines that:

(a) Unlawful drug use or sales are occurring on the licensed premises;

(b) The licensee is aware of the unlawful drug use or sales because of arrests for unlawful drug sales on the licensed premises or seizures of unlawful drugs on the licensed premises, or because the licensee or employees of the licensee have personally witnessed unlawful drug use or sales on the licensed premises; and

(c) The licensee fails to take immediate and effective action to prevent unlawful drug use or sales on the licensed premises.

(2) In addition to any suspension imposed under this section, the commission may impose a civil penalty under the circumstances described in subsection (1) of this section not to exceed the maximum amount established under ORS 471.322 (2). Notwithstanding ORS 471.322 (1), the commission shall not allow payment of a civil penalty under this subsection in lieu of the suspension provided for in subsection (1) of this section. A civil penalty under this section shall be imposed in the manner provided by ORS 183.090.

(3) The commission may cancel a license listed in subsection (4) of this section if the license is suspended under the provisions of this section two or more times within a two-year period.

(4) This section applies only to premises licensed under:

(a) A [dispenser] full on-premises sales license [issued under ORS chapter 472].

(b) A [restaurant] limited on-premises sales license.

[(d) A retail malt beverage license.]

SECTION 30. ORS 471.355 is amended to read:

471.355. (1) Except as otherwise provided in this section, all licenses under this chapter [and ORS chapter 472] and renewals thereof shall be issued for a period of one year which shall expire at 12 midnight on March 31, June 30, September 30 or December 31 of each year.

[(2) Agent, salesperson and winery salesperson licenses and renewals shall be issued for a period of five years, which shall expire at 12 midnight on December 31 of the fifth year following issuance. The fee is nonrefundable.]

[(3)] (2) Notwithstanding subsection (1) of this section, a license issued for the first time to an applicant may be issued for less than a year. [Except for agent licenses issued under ORS 471.285 and salesperson licenses and winery salesperson licenses issued under ORS 471.287,] The license fee for the first license issued to an applicant, if the license is issued for a fraction of a year, shall be proportionate to the annual license computed on a quarterly basis, counting a major fraction of a quarter as a whole quarter.

[(4)] (3) The term of a temporary letter of authority or license issued under ORS 471.262[, 472.116, 472.195 or 472.205] or any [other temporary or special events] temporary sales license is the period fixed by the Oregon Liquor Control Commission when the letter or license is issued.

SECTION 31. ORS 471.392 is amended to read:

471.392. For the purposes of ORS 471.392 to 471.400:

(1) "Manufacturer or wholesaler" means:

(a) A person holding a brewery license issued under ORS 471.220, a winery license issued under ORS 471.223, a grower sales privilege license issued under ORS 471.227, a distillery license issued under ORS 471.230, a wholesale malt beverage and wine license issued under ORS 471.235[,] or a warehouse license issued under ORS 471.242[, a bottler license issued under ORS 471.245, an agent license issued under ORS 471.285, a salesperson license issued under ORS 471.287 or a winery salesperson license issued under ORS 471.287].

(b) Any manufacturer of alcoholic liquors whose products are sold in the State of Oregon.

[(2) "Retail licensee" means the holder of any license issued under ORS chapter 472, a restaurant license issued under ORS 471.250, a health care facility license issued under ORS 471.257, a retail malt beverage license issued under ORS 471.265, a bed and breakfast license issued under ORS 471.259, a package store license issued under ORS 471.260, a druggist license issued under ORS 471.270, a public passenger carrier license issued under ORS 471.275, a special retail beer license or a special retail wine license. "Retail licensee" does not include a bona fide trade association that represents retail licensees and that is open to all persons licensed under at least one type of retail license issued under this chapter or ORS chapter 472.]

(2) "Retail licensee" means the holder of a full or limited on-premises sales license, an off-premises sales license or a temporary sales license. "Retail licensee" does not include a bona fide trade association that represents retail licensees and that is open to all persons licensed under at least one type of retail license.

SECTION 32. ORS 471.396 is amended to read:

471.396. (1) The prohibitions of ORS 471.394 (1) do not apply to persons holding winery licenses, [winery salesperson licenses,] grower sales privilege licenses, brewery-public house licenses or brewery licenses, to the extent that retail sales are authorized by the statutes establishing the privileges of each license.

(2)(a) The prohibitions of ORS 471.394 (2) and (3) do not apply to a person who wholesales alcoholic liquor and who is not required to be licensed under the provisions of this chapter [or ORS chapter 472] if the retail licensee does not sell any brand of alcoholic liquor sold or distributed by the person and does not sell any brand of alcoholic liquor produced by any manufacturer doing business with the person selling at wholesale.

(b) The prohibitions of ORS 471.394 (2) and (3) do not apply to a manufacturer of alcoholic liquor if the retail licensee does not sell any brand of alcoholic liquor sold, distributed or produced by the manufacturer and does not sell any brand of alcoholic liquor sold, distributed or produced by any subsidiary or other business entity that the manufacturer owns or manages, or that the manufacturer exercises control over.

(3) The prohibitions of ORS 471.394 do not apply solely by reason of the family relationship of a spouse or family member to a manufacturer or wholesaler if:

(a) The manufacturer or wholesaler is licensed by the Oregon Liquor Control Commission to sell alcoholic liquor at wholesale;

(b) The license authorizing sale of alcoholic liquor at wholesale was first issued before January 1, 1965, and has been held continuously since that date;

(c) The spouse or family member holds or seeks a license that authorizes the retail sale of alcoholic liquor for off-premises consumption only; and

(d) The manufacturer or wholesaler does not directly or indirectly sell alcoholic liquor to the spouse or family member.

(4) The prohibitions of ORS 471.394 do not apply solely by reason of the family relationship of a spouse or family member to the retail licensee if the manufacturer or wholesaler is licensed by the commission to sell alcoholic liquor at wholesale and does not directly or indirectly sell alcoholic liquor to the spouse or family member.

(5) Notwithstanding ORS 471.394, a manufacturer or wholesaler, and any officer, director or substantial stockholder of any corporate manufacturer or wholesaler, may hold, directly or indirectly, an interest in a [Class A dispenser, Class C dispenser, seasonal dispenser, tour boat, retail malt beverage or restaurant] full or limited on-premises sales licensee, provided that the interest does not result in exercise of control over, or participation in the management of, the licensee's business or business decisions, and does not result in exclusion of any competitor's brand of alcoholic liquor.

(6) Notwithstanding ORS 471.394, a [Class A dispenser, Class C dispenser, seasonal dispenser, tour boat, retail malt beverage or restaurant] full or limited on-premises sales licensee, and any officer, director or substantial stockholder of any corporate [Class A dispenser, Class C dispenser, seasonal dispenser, tour boat, retail malt beverage or restaurant] full or limited on-premises sales licensee, may hold, directly or indirectly, an interest in a manufacturer or wholesaler, provided that the interest does not result in exercise of control over, or participation in the management of, the manufacturer's or wholesaler's business or business decisions, and does not result in exclusion of any competitor's brand of alcoholic liquor.

(7) Notwithstanding ORS 471.394, an institutional investor with a financial interest in a wholesaler or manufacturer may hold, directly or indirectly, an interest in a retail licensee unless the institutional investor controls, is controlled by, or is under common control with, a wholesaler or manufacturer. Notwithstanding ORS 471.394, an institutional investor with a financial interest in a retail licensee may hold, directly or indirectly, an interest in a wholesaler or manufacturer unless the institutional investor controls, is controlled by, or is under common control with, a retail licensee. The provisions of this subsection apply only to an institutional investor that is a state or federally chartered bank, a state or federally chartered mutual savings bank, a mutual fund or pension fund, or a private investment firm. The principal business activity of the institutional investor must be the investment of capital provided by depositors, participants or investors. The institutional investor must maintain a diversified portfolio of investments. The majority of the institutional investor's investments may not be in businesses that manufacture, distribute or otherwise sell alcoholic beverages. The institutional investor, and the officers, directors, substantial shareholders, partners, employees and agents of the institutional investor, may not participate in management decisions relating to the sale or purchase of alcoholic beverages made by a licensee in which the institutional investor holds an interest.

SECTION 33. ORS 471.402 is amended to read:

471.402. The holder of a brewery license issued under ORS 471.220, a winery license issued under ORS 471.223, a grower sales privilege license issued under ORS 471.227, a brewery-public house license issued under ORS 471.253, a warehouse license issued under ORS 471.242 or a manufacturer certificate of approval issued under ORS 471.289 may provide or pay for sample tastings of wine, cider or malt beverages for the public on premises licensed under a [package store] full or limited on-premises sales license or under an off-premises sales license [issued under ORS 471.260, a restaurant license issued under ORS 471.250, a retail malt beverage license issued under ORS 471.265 or a Class A, Class B or Class C dispenser license].

SECTION 34. ORS 471.480 is amended to read:

471.480. (1) Any employee 18 years of age or older of a person who holds [any package store] an off-premises sales license from the Oregon Liquor Control Commission may sell any alcoholic liquor authorized by such license on the licensed premises.

(2) Any employee 18 years of age or older of a person who holds a wholesale malt beverage and wine license from the Oregon Liquor Control Commission may assist [a salesperson, as defined in ORS 471.287,] the licensee in the delivery of any alcoholic liquor authorized by such license.

SECTION 35. ORS 471.510 is amended to read:

471.510. ORS 471.506 shall not prohibit the sale of pure alcohol for scientific or manufacturing purposes, or of wines to church officials for sacramental purposes, [or of alcoholic stimulants where they have been prescribed by a regular practicing physician, dated and signed by the physician as provided by ORS 471.270 (2);] nor shall it prevent any person residing in the county or city from ordering and having delivered to the home of the person, for the personal use of self and family, alcoholic liquors purchased from the Oregon Liquor Control Commission or from persons duly licensed to sell them under the Liquor Control Act.

SECTION 36. ORS 471.542 is amended to read:

471.542. [(1) The Oregon Liquor Control Commission shall require applicants for Class A, Class B, Class C, retail malt beverage, restaurant, seasonal dispenser, annual community events dispenser, tour boat, brewery-public house, caterer and winery salesperson licenses and service permits and all renewing Class A, Class B, Class C, retail malt beverage, restaurant, seasonal dispenser, annual community events dispenser, tour boat, brewery-public house, caterer and winery salesperson licensees and permittees to complete an approved alcohol server education program and examination in order to qualify for a license or permit.]

(1) Except as provided in subsection (2) of this section, the Oregon Liquor Control Commission shall require a person applying for issuance or renewal of a server permit or any license that authorizes the sale or service of alcoholic beverages for consumption on the premises to complete an approved alcohol server education program and examination as a condition of the issuance or renewal of the permit or license.

(2) A person applying for issuance or renewal of a license that authorizes the sale or service of alcoholic beverages for consumption on the premises need not complete an approved alcohol server education program and examination as a condition of the issuance or renewal of the license if:

(a) The license has been restricted by the commission to prohibit sale or service of alcoholic beverages for consumption on the premises; or

(b) The person applying for issuance or renewal of the license submits a sworn statement to the commission stating that the person will not engage in sale or service of alcoholic beverages for consumption on the premises, will not directly supervise or manage persons who sell or serve alcoholic beverages on the premises, and will not participate in establishing policies governing the sale or service of alcoholic beverages on the premises.

[(2)] (3) The commission by rule shall establish requirements that licensees and permittees must comply with as a condition of requalifying for a license or permit. The licensee or permittee must comply with those requirements once every five years after completing the initial alcohol server education program and examination. The requirements established by the commission may include retaking the alcohol server education program and examination.

[(3)] (4) The commission may extend the time periods established by this section upon a showing of hardship. The commission by rule may exempt a licensee from the requirements of this section if the licensee does not participate in the management of the business.

[(4)] (5) The standards and curriculum of alcohol server education programs shall include but not be limited to the following:

(a) Alcohol as a drug and its effects on the body and behavior, especially driving ability.

(b) Effects of alcohol in combination with commonly used legal, prescription or nonprescription, drugs and illegal drugs.

(d) State alcohol beverage laws such as prohibition of sale to minors and sale to intoxicated persons, sale for on-premises or off-premises consumption, hours of operation and penalties for violation of the laws.

(e) Drunk driving laws and liquor liability statutes.

(f) Intervention with the problem customer including ways to cut off service, ways to deal with the belligerent customer and alternative means of transportation to get the customer safely home.

(g) Advertising and marketing for safe and responsible drinking patterns and standard operating procedures for dealing with customers.

[(5)] (6) The commission shall impose a fee not to exceed $2.60 a year for each license subject to the alcohol server education requirement, and a fee not to exceed $13 for each service permit application. These fees shall be used for administrative costs of the program and shall be in addition to any other license or permit fees required by law or rule.

[(6)] (7) The commission shall adopt rules to impose reasonable fees for administrative costs of the program on alcohol server education instructors and providers.

[(7)] (8) The commission shall provide the program through independent contractors, private persons or private or public schools certified by the commission.

SECTION 37. ORS 471.695 is amended to read:

471.695. (1) The Oregon Liquor Control Commission may require each applicant for a [Class A dispenser license, a restaurant license, a retail malt beverage license or a seasonal dispenser] full or limited on-premises sales license to submit to fingerprinting. If the applicant is a corporation, the fingerprints of each officer, director and major stockholder of the corporation may be required by the commission. Prior to approving any change in officers, directors or major stockholders, the commission may require the fingerprints of the new officials.

(2) The commission shall require that all employees of the commission who work in the licensing or enforcement divisions be fingerprinted.

(3) Fingerprints acquired under this section may be submitted to appropriate law enforcement agencies for checking to determine any unlawful activities of the licensee, applicant or employee.

(4) As used in this section, "major stockholder" means any person who owns, directly or indirectly, more than 10 percent of any class of any equity security of the corporation.

SECTION 38. ORS 624.010 is amended to read:

624.010. As used in ORS 624.010 to 624.120, unless the context requires otherwise:

(1) "Assistant director" means the Assistant Director for Health or an authorized representative.

(2) "Bed and breakfast facility" means any establishment located in a structure designed for a single family residence and structures appurtenant thereto, regardless of whether the owner or operator of the establishment resides in any of the structures, that:

(a) Has more than two rooms for rent on a daily basis to the public; and

(b) Offers a breakfast meal as part of the cost of the room.

(3) "Division" means the Health Division of the Department of Human Resources.

(4) "Limited service restaurant" means a restaurant serving only prewrapped sandwiches, or a single dish or food product, and nonperishable beverages.

(5) "Restaurant" includes any establishment where food or drink is prepared for consumption by the public or any establishment where the public obtains food or drink so prepared in form or quantity consumable then and there, whether or not it is consumed within the confines of the premises where prepared, and also includes establishments that prepare food or drink in consumable form for service outside the premises where prepared, but does not include railroad dining cars, bed and breakfast facilities or temporary restaurants as defined in subsection (6) of this section.

(6) "Temporary restaurant" means any establishment operating temporarily in connection with any fair, carnival, circus or similar public gathering or entertainment, food product promotion or any other event where food is prepared or served for consumption by the public. "Temporary restaurant" does not include:

(a) An establishment where food is prepared and served by a fraternal, social or religious organization only to its own members and guests.

(b) An approved school lunchroom where food is prepared and served for school and community activities, where the preparation and service are under the direction of the school lunchroom supervisor.

(c) A food product promotion where only samples of a food or foods are offered to demonstrate the characteristics of the food product. For the purposes of this paragraph, a sample shall not include a meal, an individual hot dish or a whole sandwich.

(d) A private residence, or part thereof, including the grounds, areas and facilities held out for the use of the occupants generally, for which a [special retail beer or special retail wine] temporary sales license is issued under [ORS 471.290] section 7 of this 1999 Act for a period not exceeding one day.

SECTION 39. ORS 652.320 is amended to read:

652.320. As used in ORS 652.310 to 652.414, unless the context requires otherwise:

(1) "Commissioner" means the Commissioner of the Bureau of Labor and Industries.

(2) "Court" means a court of competent jurisdiction and proper venue to entertain a proceeding referred to in ORS 652.310 to 652.414.

(3) "Demand" means a written demand for payment made during business hours on an employer or any appropriate representative of an employer by an employee or by some person having and exhibiting due authority to act in said employee's behalf.

(4) "Pay" means to deliver or tender compensation at a previously designated and reasonably convenient place in this state, during working hours, in legal tender or by order or negotiable instrument payable and paid in legal tender without discount on demand in this state or by deposit without discount in an employee's account in a bank, national bank, mutual savings bank, credit union or savings and loan association in this state, provided the employee and the employer have agreed to such deposit.

(5) "Payment" means the delivery, tender or deposit of compensation in the medium of payment described in subsection (4) of this section. Such delivery, tender or deposit shall be made to or for the account of the employee concerned or to or for the account of any person having due authority to act in said employee's behalf.

(6) "Production" means a live presentation organized for the economic gain of any person or organization utilizing the personal services of one or more musicians and supporting technical personnel.

(7) "Producer-promoter" means a person, firm, association or corporation which supervises, finances or attempts to organize a production in this state other than:

(a) The proprietor of a commercial establishment with a [Class A or Class B dispenser license or tavern] full or limited on-premises sales license issued under ORS chapter 471 who is staging a production on the proprietor's own premises;

(b) Any nonprofit organization staging a production for the sole benefit of the organization, its members or the general public; or

(8) "Rate of payment" means the rate at which payment is made or is to be made in the manner described in this section.

(9) "Wage claim" means an employee's claim against an employer for compensation for the employee's own personal services, and includes any wages, compensation, damages or civil penalties provided by law to employees in connection with a claim for unpaid wages.

SECTION 40. ORS 652.335 is amended to read:

652.335. (1) A person operating a commercial establishment where food is cooked and served who holds a [dispenser license issued under ORS 472.100] full on-premises sales license issued under section 2 of this 1999 Act is liable for all valid wage claims of individuals employed in the kitchen facilities and dining space of such establishment who are not employed by such person, if the wage claims cannot be enforced against the employer of such individuals. The Commissioner of the Bureau of Labor and Industries may in such a case proceed under ORS 652.310 to 652.414 against the person operating the establishment as if that person had employed the individuals assigning the wage claims.

(2) This section does not impose any liability not otherwise imposed by law for compensation for the performance of an individual's personal services in excess of a period of 60 days, nor does it subject the person operating an establishment described in this section to criminal penalties for violation of any law providing for payment of wages.

ELIMINATION OF DUPLICATIVE

STATUTORY PROVISIONS

SECTION 41. ORS 471.022, 472.005, 472.020, 472.030, 472.040, 472.050, 472.060, 472.111, 472.114, 472.220, 472.320, 472.415, 472.420 and 472.990 are repealed.

SECTION 42. ORS 471.001 is amended to read:

471.001. As used in this chapter and ORS [chapters 472 and] chapter 473:

(1) "Alcoholic beverage" and "alcoholic liquor" mean any liquid or solid containing more than one-half of one percent alcohol by volume and capable of being consumed by a human being.

(2) "Commercial establishment" means a place of business where food is cooked and served and having adequate kitchen facilities for the preparation and serving of meals and having for that purpose proper dining space. "Commercial establishment" includes athletic clubs and golf clubs operated for profit. A commercial establishment must serve meals to the general public or, if the commercial establishment is an athletic club or golf club, must serve meals to the club's members and guests.

(3) "Commission" means the Oregon Liquor Control Commission.

(4) "Distilled liquor" means any alcoholic beverage other than a wine, cider or malt beverage. "Distilled liquor" includes distilled spirits.

(5) "Licensee" means any person holding a license issued under this chapter [or ORS chapter 472].

(6) "Malt beverage" means an alcoholic beverage obtained by the fermentation of grain that contains not more than 14 percent alcohol by volume. "Malt beverage" includes beer, ale, porter, stout and similar alcoholic beverages containing not more than 14 percent alcohol by volume. "Malt beverage" does not include cider or an alcoholic beverage obtained by fermentation of rice.

(7) "Manufacturer" means every person who produces, brews, ferments, manufactures or blends an alcoholic beverage within this state or who imports or causes to be imported into this state an alcoholic beverage for sale or distribution within the state.

(8) "Permittee" means a person holding a permit issued under ORS 471.360 to 471.390.

(9) "Premises" or "licensed premises" means a location licensed under this chapter [or ORS chapter 472] and includes all enclosed areas at the location that are used in the business operated at the location, including offices, kitchens, rest rooms and storerooms, including all public and private areas where patrons are permitted to be present. "Premises" or "licensed premises" includes areas outside of a building that the commission has specifically designated as approved for alcoholic beverage service or consumption.

(10) "Wine" means any fermented vinous liquor or fruit juice, or other fermented beverage fit for beverage purposes that is not a malt beverage, containing more than one-half of one percent of alcohol by volume and not more than 21 percent of alcohol by volume. "Wine" includes fortified wine. "Wine" does not include cider.

SECTION 43. ORS 471.038 is amended to read:

471.038. (1) Nonbeverage food products described in subsection (6) of this section may be sold at retail by any holder of a license issued by the Oregon Liquor Control Commission that authorizes the sale of alcoholic liquor at retail, or in any store operated by the commission under the provisions of ORS 471.750. Any nonbeverage food product containing more than one-half of one percent of alcohol by volume must be clearly labeled to reflect the alcohol content of the product and clearly labeled on the front of the package to indicate that the product may not be sold to persons under 21 years of age.

(2) Except as provided by this section, sales of nonbeverage food products described in subsection (6) of this section are subject to all provisions of this chapter [and ORS chapter 472], including the prohibitions on sales to persons under 21 years of age and the prohibitions on sales to persons who are visibly intoxicated.

(3) Nonbeverage food products described in subsection (6) of this section may be imported, stored and distributed in this state without a license issued by the commission. Nonbeverage food products described in subsection (6) of this section are not subject to the privilege taxes imposed by ORS chapter 473.

(4) Manufacturers of nonbeverage food products described in subsection (6) of this section are not subject to the provisions of ORS 471.392 to 471.400, 471.485, 471.490 or 471.495 or any other provision of this chapter relating to manufacturers of alcoholic liquor. A manufacturer of nonbeverage food products described in subsection (6) of this section may sell and deliver the product directly to a licensee authorized under this section to sell the product at retail.

(5) The holder of a distillery license issued under ORS 471.230 who is also a manufacturer of nonbeverage food products described in subsection (6) of this section may purchase distilled liquor directly from other distilleries.

(6) The provisions of this section apply only to nonbeverage food products that contain not more than five percent alcohol by weight or 10 percent alcohol by volume, whichever is greater.

SECTION 44. ORS 471.039 is amended to read:

471.039. (1) Notwithstanding any provision of this chapter [or ORS chapter 472], the Oregon Liquor Control Commission may not require the owners, operators and employees of a cruise ship to have a license or permit issued under the provisions of this chapter [or ORS chapter 472] for the purpose of possessing, transporting, storing, selling or serving alcoholic beverages that are described in subsection (3) of this section.

(2) The provisions of ORS 471.740 do not apply to alcoholic beverages that are described in subsection (3) of this section.

(3) The provisions of this section apply only to alcoholic beverages that are served aboard a cruise ship and that are served solely for the purpose of onboard consumption by a cruise ship's passengers, guests, officers and employees.

(4) For the purposes of this section, "cruise ship" means a marine vessel used primarily for nonfishing purposes that is licensed to carry at least 500 passengers, provides overnight accommodations for those passengers and operates on the rivers or waterways within the boundaries of the State of Oregon, including docking and dry docking, fewer than 45 days during a calendar year.

SECTION 45. ORS 471.215 is amended to read:

471.215. The licenses described in this chapter [and ORS chapter 472] may be issued by the Oregon Liquor Control Commission, subject to its regulations and restrictions and the provisions of the Liquor Control Act and the Oregon Distilled Liquor Control Act.

SECTION 46. ORS 471.295 is amended to read:

471.295. The Oregon Liquor Control Commission may refuse to license any applicant under the provisions of this chapter [or ORS chapter 472] if the commission has reasonable ground to believe any of the following to be true:

(1) That there are sufficient licensed premises in the locality set out in the application, or that the granting of a license in the locality set out in the application is not demanded by public interest or convenience.

(2) That the applicant has not furnished an acceptable bond as required by ORS 471.290 or is not maintaining the insurance or bond required by ORS 417.218.

(3) That, except as allowed by ORS 471.392 to 471.400, any applicant to sell at retail for consumption on the premises has been financed or furnished with money or property by, or has any connection with, or is a manufacturer of, or wholesale dealer in, alcoholic liquor.

(4) That the applicant:

(a) Is in the habit of using alcoholic beverages, habit-forming drugs or controlled substances to excess.

(b) Has made false statements to the commission.

(d) Has been convicted of violating any of the alcoholic liquor laws of this state, general or local, or has been convicted at any time of a felony.

(e) Has maintained an insanitary establishment.

(f) Is not of good repute and moral character.

(g) Did not have a good record of compliance with the alcoholic liquor laws of this state and the rules of the commission when previously licensed.

(h) Is not the legitimate owner of the business proposed to be licensed, or other persons have ownership interests in the business which have not been disclosed.

(i) Is not possessed of or has not demonstrated financial responsibility sufficient to adequately meet the requirements of the business proposed to be licensed.

(j) Is unable to read or write the English language or to understand the laws of Oregon relating to alcoholic liquor or the rules of the commission.

(5) That there is a history of serious and persistent problems involving disturbances, lewd or unlawful activities or noise either in the premises proposed to be licensed or involving patrons of the establishment in the immediate vicinity of the premises if the activities in the immediate vicinity of the premises are related to the sale or service of alcohol under the exercise of the license privilege. Behavior which is grounds for refusal of a license under this section, where so related to the sale or service of alcohol, includes, but is not limited to obtrusive or excessive noise, music or sound vibrations; public drunkenness; fights; altercations; harassment; unlawful drug sales; alcohol or related litter; trespassing on private property; and public urination. Histories from premises currently or previously operated by the applicant may be considered when reasonable inference may be made that similar activities will occur as to the premises proposed to be licensed. The applicant may overcome the history by showing that the problems are not serious or persistent or that the applicant demonstrates a willingness and ability to control adequately the premises proposed to be licensed and patrons' behavior in the immediate vicinity of the premises which is related to the licensee's sale or service of alcohol under the licensee's exercise of the license privilege.

SECTION 47. ORS 471.297 is amended to read:

471.297. (1) The Oregon Liquor Control Commission may grant a temporary letter of authority for a period not to exceed 90 days on change of ownership applications for licenses granted under this chapter [and ORS chapter 472] if the applicant pays the fee prescribed by the commission for a temporary letter of authority. A temporary letter of authority issued under this section does not constitute a license for the purposes of ORS 183.310 to 183.550.

(2) The commission summarily and without prior administrative proceedings may revoke a temporary letter of authority any time during the 90 days if the commission finds that any of the grounds for refusing a [permanent] license under ORS 471.295 or canceling or suspending a license under ORS 471.315 exist.

(3) A person subject to subsection (2) of this section shall be given an interview under the direction of the commission if the person requests an interview prior to revocation of a temporary letter of authority. However, the proceedings are not a contested case under ORS 183.310 to 183.550.

SECTION 48. ORS 471.301 is amended to read:

471.301. (1) A license granted under the Liquor Control Act or the Oregon Distilled Liquor Control Act shall:

(a) Be a purely personal privilege.

(b) Be valid for the period stated in the license.

(c) Be renewable in the manner provided in ORS 471.290, except for a cause which would be grounds for refusal to issue such license under ORS 471.295.

(d) Be revocable or suspendible as provided in ORS 471.315.

(e) Be transferable from the place for which the license was originally issued to another location subject to the provisions of the Liquor Control Act, the Oregon Distilled Liquor Control Act, any rules of the Oregon Liquor Control Commission and any municipal ordinance or local regulation.

(f) Cease upon the death of the licensee, except as provided in subsection (2) of this section.

(g) Not constitute property.

(h) Not be alienable.

(i) Not be subject to attachment or execution.

(j) Not descend by the laws of testate or intestate devolution.

(2) The commission may, by order, provide for the manner and conditions under which:

(a) Alcoholic liquors left by any deceased, insolvent or bankrupt person or licensee, or subject to a security interest, may be foreclosed, sold under execution or otherwise disposed of.

(b) The business of any deceased, insolvent or bankrupt licensee may be operated for a reasonable period following the death, insolvency or bankruptcy.

(c) A business licensed pursuant to this chapter [or ORS chapter 472] subject to a security interest may be continued in business by a secured party as defined in ORS 79.1050 for a reasonable period after default on the indebtedness by the debtor.

(d) A license granted under this chapter [or ORS chapter 472] may be transferred from the place for which the license was originally issued to another location.

SECTION 49. ORS 471.310 is amended to read:

471.310. Any city may, without further charter authority, become a licensee under this chapter [or ORS chapter 472].

SECTION 50. ORS 471.312 is amended to read:

471.312. (1) Whenever the Oregon Liquor Control Commission proposes to refuse to renew or to suspend or cancel any license issued under this chapter [or ORS chapter 472] because of adverse neighborhood impact of the licensee's operation, notwithstanding ORS 183.435, the commission shall grant the affected licensee 20 days from notification of the proposed commission action to request a hearing.

(2) Notwithstanding ORS 183.482 (3), the Oregon Liquor Control Commission shall not stay any order refusing a license or suspending or canceling any license if the order was entered on grounds stated in ORS 471.295 (5) or 471.315 (1)(c).

SECTION 51. ORS 471.315 is amended to read:

471.315. (1) The Oregon Liquor Control Commission may cancel or suspend any license issued under this chapter [or ORS chapter 472], or impose a civil penalty in lieu of or in addition to suspension as provided by ORS 471.322, if it finds or has reasonable ground to believe any of the following to be true:

(a) That the licensee:

(A) Has violated any provision of this chapter[, ORS chapter 472] or ORS 474.115 or any rule of the commission adopted pursuant thereto.

(B) Has made any false representation or statement to the commission in order to induce or prevent action by the commission.

(C) Is not maintaining an acceptable bond as required by ORS 471.290 or is not maintaining the insurance or bond required by ORS 471.218.

(D) Has maintained an insanitary establishment.

(E) Is insolvent or incompetent or physically unable to carry on the management of the establishment of the licensee.

(F) Is in the habit of using alcoholic liquor, habit-forming drugs or controlled substances to excess.

(G) Knowingly has sold alcoholic liquor to persons under 21 years of age or to persons visibly intoxicated at the time of sale or has knowingly allowed the consumption of alcoholic liquor on the licensed premises by a person who is visibly intoxicated at the time of consumption.

(H) Has misrepresented to a customer or the public any alcoholic liquor sold by the licensee.

(I) Since the granting of the license, has been convicted of a felony, of violating any of the liquor laws of this state, general or local, or of any misdemeanor or violation of any municipal ordinance committed on the licensed premises.

(b) That any person licensed to sell at retail for consumption on the premises is acting as an agent of, or is a manufacturer or wholesaler of alcoholic liquors, or has borrowed money or property, or has accepted gratuities or rebates, or has obtained the use of equipment from any manufacturer or wholesaler of alcoholic liquor or any agent thereof.

(c) That there is a history of serious and persistent problems involving disturbances, lewd or unlawful activities or noise either in the premises or involving patrons of the establishment in the immediate vicinity of the premises if the activities in the immediate vicinity of the premises are related to the sale or service of alcohol under the exercise of the license privilege. Behavior which is grounds for cancellation or suspension of a license under this section, where so related to the sale or service of alcohol, includes, but is not limited to obtrusive or excessive noise, music or sound vibrations; public drunkenness; fights; altercations; harassment or unlawful drug sales; alcohol or related litter; trespassing on private property; and public urination. Mitigating factors include a showing by the licensee that the problems are not serious or persistent or that the licensee has demonstrated a willingness and ability to control adequately the licensed premises and patrons' behavior in the immediate vicinity of the premises which is related to the licensee's sale or service of alcohol under the licensee's exercise of the license privilege.

(d) That there is any other reason which, in the opinion of the commission, based on public convenience or necessity, warrants canceling or suspending such license.

(2) Civil penalties under this section shall be imposed as provided in ORS 183.090.

SECTION 52. ORS 471.322 is amended to read:

471.322. (1) If a license issued under this chapter[, a license issued under ORS chapter 472] or a service permit issued under ORS 471.360 is suspended for a period of 30 days or less, the Oregon Liquor Control Commission may impose against the affected licensee or permittee in lieu of or in addition to the suspension a civil penalty fixed by the commission in accordance with subsection (2) of this section if the commission is satisfied that such a penalty in lieu of or in addition to suspension is consistent with the purposes of the Liquor Control Act and the Oregon Distilled Liquor Control Act. Upon payment of the penalty in lieu of suspension, the commission shall cancel the suspension.

(2) Except as provided in ORS 471.327, the penalty which the commission may impose pursuant to subsection (1) of this section against a licensee shall not be less than $100 nor more than $2,000. The penalty which the commission may impose pursuant to subsection (1) of this section against a service permittee shall not be less than $25 nor more than $500.

(3) Civil penalties under this section shall be imposed as provided in ORS 183.090.

SECTION 53. ORS 471.326 is amended to read:

471.326. If the action of the Oregon Liquor Control Commission in suspending a license or permit issued under this chapter [or ORS chapter 472] is not sustained upon judicial review under ORS 183.310 to 183.550, the commission shall promptly refund the amount paid pursuant to ORS 471.322 (1) by check or order drawn on the State Treasurer from the Oregon Liquor Control Commission Account.

SECTION 54. ORS 471.330 is amended to read:

471.330. (1) The Oregon Liquor Control Commission has the right after 72 hours' notice to the owner or the agent of the owner to make an examination of the books and may at any time make an examination of the premises of any person licensed under this chapter [or ORS chapter 472], or to check the alcoholic content of liquors carried by the licensee, for the purpose of determining compliance with this chapter[, ORS chapter 472] and the rules of the commission.

(2) The commission shall not require the books of any licensee to be maintained on the premises of the licensee.

SECTION 55. ORS 471.385 is amended to read:

471.385. (1) The Oregon Liquor Control Commission may revoke or suspend a service permit, or impose a civil penalty in lieu of or in addition to suspension as provided by ORS 471.322, if it finds or has reasonable grounds to believe any of the following to be true:

(a) That the permittee has made any false statement in the application for the permit.

(b) That the permittee has been convicted of a felony, of violating any of the liquor laws of the state, general or local, or any misdemeanor or violation of any municipal ordinance committed on the licensed premises.

(c) That the permittee has performed or permitted any act which would constitute a violation of any provision of this chapter [or ORS chapter 472] or any rule of the commission, if the act were performed or permitted by any licensee of the commission.

(2) The issuance, suspension or revocation of a permit under ORS 471.360 to 471.390 does not relieve a licensee from responsibility for any act of an employee on the licensee's premises.

(3) When there has been a violation of this chapter [or ORS chapter 472] or any rule adopted thereunder upon any premises licensed by the commission, the commission may revoke or suspend either the service permit of the employee who violated the law or rule or the license of the licensee upon whose premises the violation occurred, or both the permit and the license.

(4) The commission may revoke or suspend any license issued by the commission if the licensee knowingly indorses a person's application for a permit when the person has been refused a permit or has had a permit suspended or revoked, or when the licensee fails to comply with any provision to be performed by the licensee under ORS 471.360 to 471.390.

(5) Civil penalties under this section shall be imposed as provided in ORS 183.090.

SECTION 56. ORS 471.394 is amended to read:

471.394. (1) Except as provided in ORS 471.396, a person licensed under the provisions of this chapter [or ORS chapter 472] may not sell alcoholic liquor at both retail and wholesale.

(2) Except as provided in ORS 471.396, a manufacturer or wholesaler may not acquire or hold any right, title, lien, claim or other interest, financial or otherwise, in, upon or to the premises, equipment, business or merchandise of a retail licensee.

(3) Except as provided in ORS 471.396, a retail licensee may not acquire or hold any right, title, lien, claim or other interest, financial or otherwise, in, upon or to the premises, equipment, business or merchandise of any manufacturer or wholesaler.

SECTION 57. ORS 471.406 is amended to read:

471.406. Any prohibition on the sale of alcoholic beverages provided for in this chapter [or ORS chapter 472] includes:

(1) Soliciting orders for alcoholic beverages or receiving orders for alcoholic beverages.

(2) Keeping alcoholic beverages for sale or exposing alcoholic beverages for sale.

(3) Delivering alcoholic beverages for value or in any way other than purely gratuitously.

(4) Peddling alcoholic beverages.

(5) Keeping alcoholic beverages with intent to sell.

(6) Trafficking in alcoholic beverages.

(7) For any consideration, promised or obtained, directly or indirectly, or under any pretext or by any means, procuring alcoholic beverages, or allowing alcoholic beverages to be procured, for any other person.

SECTION 58. ORS 471.410 is amended to read:

471.410. (1) No person shall sell, give or otherwise make available any alcoholic liquor to any person who is visibly intoxicated.

(2) No one other than the person's parent or guardian shall sell, give or otherwise make available any alcoholic liquor to a person under the age of 21 years. A person violates this subsection who sells, gives or otherwise makes available alcoholic liquor to a person with the knowledge that the person to whom the liquor is made available will violate this subsection.

(3) No person who exercises control over private real property may knowingly allow any other person under the age of 21 years who is not a child or minor ward of the person to consume alcoholic liquor on the property, or allow any other person under the age of 21 years who is not a child or minor ward of the person to remain on the property if the person under the age of 21 years consumes alcoholic liquor on the property. The prohibitions of this subsection apply only to a person who is present and in control of the location at the time the consumption occurs. The prohibitions of this subsection do not apply to the owner of rental property, or the agent of an owner of rental property, unless the consumption occurs in the individual unit in which the owner or agent resides.

(4) A person who violates subsection (1) or (2) of this section commits a Class A misdemeanor. Upon violation of subsection (2) of this section, the court shall impose at least a mandatory minimum sentence as follows:

(a) Upon a first conviction, a fine of $350.

(b) Upon a second conviction, a fine of $1,000.

(5) The court shall not waive or suspend imposition or execution of the mandatory minimum sentence required by subsection (4) of this section. In addition to the mandatory sentence the court may require the violator to make restitution for any damages to property where the alcoholic liquor was illegally consumed or may require participation in volunteer service to a community service agency.

(6) The mandatory minimum penalty provisions of subsection (4) of this section shall not apply to persons licensed or appointed under the provisions of this chapter [and ORS chapter 472].

(7) A person who violates subsection (3) of this section commits a violation. Upon violation of subsection (3) of this section, the court shall impose at least a mandatory minimum fine as follows:

(a) Upon a first conviction, a fine of $350.

(b) Upon a second or subsequent conviction, a fine of $1,000.

(8) Nothing in this section prohibits any licensee under this chapter from allowing a person who is visibly intoxicated from remaining on the licensed premises so long as the person is not sold or served any alcoholic liquor.

SECTION 59. ORS 471.482 is amended to read:

471.482. (1) The holder of a license issued under this chapter [or ORS chapter 472] may employ persons 18, 19 and 20 years of age who may take orders for, serve and sell alcoholic liquor in any part of the licensed premises when that activity is incidental to the serving of food except in those areas classified by the Oregon Liquor Control Commission as being prohibited to the use of minors. However, no person who is 18, 19 or 20 years of age shall be permitted to mix, pour or draw alcoholic liquor except when pouring is done as a service to the patron at the patron's table or drawing is done in a portion of the premises not prohibited to minors.

(2) A person who is 18, 19 or 20 years of age may enter areas classified by the commission as being prohibited to the use of minors only for the purpose of ordering and picking up alcoholic liquor for service in other parts of the premises. However, the person shall not remain in the areas longer than is necessary to perform those duties.

(3) The commission by rule may permit access to prohibited areas by any minor for nonalcoholic liquor employment purposes as long as the minor does not remain longer than is necessary to perform the duties.

SECTION 60. ORS 471.501 is amended to read:

471.501. Nothing in this chapter prevents a brewery licensed under ORS 471.220 or a brewery-public house licensed under ORS 471.253 from establishing a refund value for malt beverage containers under the provisions of ORS 459A.705 that is in excess of five cents per container for the purpose of encouraging purchasers to return the containers directly to the brewery or brewery-public house. A refund value in excess of five cents per container may be paid under this section only to persons who are not licensed under this chapter [or ORS chapter 472] and who return the containers directly to the brewery or brewery-public house.

SECTION 61. ORS 471.685 is amended to read:

471.685. In case of invasion, disaster, insurrection, riot, or imminent danger thereof, the Governor may, for the duration of such invasion, disaster, insurrection, riot, or imminent danger thereof, immediately suspend without notice any license in the area involved granted under the provisions of this chapter [or ORS chapter 472].

SECTION 62. ORS 471.732 is amended to read:

471.732. (1) The Legislative Assembly finds and declares that the regulation of health and sanitation matters in premises licensed by the Oregon Liquor Control Commission under this chapter [and ORS chapter 472] can best be performed by the Health Division of the Department of Human Resources and the State Department of Agriculture.

(2) It is the policy of the Legislative Assembly and the intent of ORS 471.317 and 624.010 and this section that premises licensed by the Oregon Liquor Control Commission under this chapter [and ORS chapter 472] shall be subject to the laws governing health and sanitation matters, including any applicable licensing requirements, and to the rules adopted thereunder by the Health Division and the State Department of Agriculture.

SECTION 63. ORS 471.757 is amended to read:

471.757. (1) At such times as the Oregon Liquor Control Commission may prescribe and upon forms furnished by the commission, any licensee of the commission under this chapter [or ORS chapter 472] may be required to submit a sworn statement to the commission showing the name, address and the nature and extent of the financial interest of each person, individual and corporate, having a financial interest in the business operated under the license.

(2) The commission shall review the statement and may suspend, cancel or refuse to renew the license of any licensee when conditions exist in relation to any person having a financial interest in the place of business which would constitute grounds for refusing to issue a license or for cancellation or suspension of a license if such person were the licensee. However, in cases where the financial interest is held by a corporation, only the officers and directors of the corporation, any individual or combination of individuals who own a controlling financial interest in the business and any manager of the business shall be considered persons having a financial interest within the meaning of this subsection.

SECTION 64. ORS 471.805 is amended to read:

471.805. (1) Except as otherwise provided in ORS 471.810 (2), all money collected by the Oregon Liquor Control Commission under this chapter and ORS [chapters 472 and] chapter 473 and privilege taxes shall be remitted to the State Treasurer who shall credit it to a suspense account of the commission. Whenever the commission determines that moneys have been received by it in excess of the amount legally due and payable to the commission or that it has received money to which it has no legal interest, or that any license fee or deposit is properly refundable, the commission is authorized and directed to refund such money by check drawn upon the State Treasurer and charged to the suspense account of the commission. After withholding refundable license fees and such sum, not to exceed $250,000, as it considers necessary as a revolving fund for a working cash balance for the purpose of paying travel expenses, advances, other miscellaneous bills and extraordinary items which are payable in cash immediately upon presentation, the commission shall direct the State Treasurer to transfer the money remaining in the suspense account to the Oregon Liquor Control Commission Account in the General Fund.

(2) All necessary expenditures of the commission incurred in carrying out the purposes and provisions required of the commission by law, including the salaries of its employees, purchases made by the commission and such sums necessary to reimburse the $250,000 revolving fund, shall be audited and paid from the Oregon Liquor Control Commission Account in the General Fund, upon warrants drawn by the Oregon Department of Administrative Services, pursuant to claims duly approved by the commission.

(3) Money produced by the operation of this chapter and ORS [chapters 472 and] chapter 473 necessary to pay such expenditures is appropriated from the Oregon Liquor Control Commission Account in the General Fund for such purposes.

CONSOLIDATED DEFINITIONS OF WINE AND CIDER

SECTION 65. Section 66 of this 1999 Act is added to and made a part of ORS chapter 471.

SECTION 66. For the purposes of this chapter, "cider" means an alcoholic beverage made from the fermentation of the juice of apples or pears that contains not more than 10 percent of alcohol by volume, including, but not limited to, flavored, sparkling or carbonated cider.

SECTION 67. ORS 471.242 is amended to read:

471.242. (1) A warehouse license shall allow the licensee to store, import, bottle, produce, blend, transport and export nontax paid, bonded wine or wine on which the tax is paid and to store, import and export nontax paid malt beverages and cider, or malt beverages and cider on which the tax is paid. Wine, cider and malt beverages may be removed from the licensed premises only for:

(a) Sale for export;

(b) Sale or shipment to a wholesale malt beverage and wine licensee;

(d) Sale or shipment to a winery licensee; or

(e) Shipment of wine or cider produced by a winery licensee to a licensee of the Oregon Liquor Control Commission authorized to sell wine or cider at retail if the shipment is made pursuant to a sale to the retail licensee by a winery licensed under ORS 471.223.

(2) A license applicant must hold an approved registration for a bonded wine cellar or winery under federal law.

(3) For the purposes of tax reporting, payment and record keeping, the provisions that shall apply to a manufacturer under ORS chapter 473 shall apply to a warehouse licensee.

(4) A warehouse must be physically secure in an area zoned for the intended use and be physically separated from any other use.

(5) For purposes of ORS 471.392 to 471.400, a warehouse licensee shall be considered a manufacturer.

(6) For purposes of ORS 473.045, a warehouse licensee shall be considered a winery licensee.

SECTION 68. ORS 471.289 is amended to read:

471.289. (1) No licensee of the Oregon Liquor Control Commission shall manufacture, import into, or purchase in the State of Oregon for resale therein any malt beverages, cider or wine unless the manufacturer of such malt beverages, cider or wine has first obtained from the commission a certificate of approval, except that with respect to malt beverages, cider or wine manufactured outside the United States, the certificate of approval may be obtained by the person importing same into the United States. Such certificate of approval shall be granted only to manufacturers or importers who shall have entered into an agreement with the commission to furnish a report to the commission, on or before the 20th day of each month, showing the quantity of malt beverages, cider or wine delivered to each licensee of the commission during the preceding calendar month, and to faithfully comply with all laws of the State of Oregon pertaining to traffic in malt beverages, cider or wine. If any holder of such certificate, or any officer, agent or employee of such holder, shall violate any term or provision of such agreement, or submit any false or fictitious report, the commission may, in its discretion, suspend or revoke such certificate.

(2) The commission may grant special certificates of approval to manufacturers and importers of malt beverages, cider or wine. A special certificate of approval has the effect of a certificate of approval granted under subsection (1) of this section, but is valid only for a period of 30 days.

SECTION 69. ORS 471.340 is amended to read:

471.340. (1) No wine or cider shall be sold or offered for sale within this state unless it complies with the minimum standards fixed pursuant to law.

(2) The Oregon Liquor Control Commission may require a manufacturer, importer or wholesaler to provide samples of a particular wine or cider, and to provide a laboratory analysis demonstrating to the satisfaction of the commission that the particular wine or cider complies with the minimum standards in this state.

(3) No wine or cider offered for sale within this state may be altered or tampered with in any way by any person not licensed to do so by the commission.

(4) The commission may prohibit the sale of any wine or cider for a reasonable period of time while it is determining whether the wine or cider complies with minimum standards in this state.

SECTION 70. ORS 471.345 is amended to read:

471.345. (1) No retail licensee shall purchase any wine or cider for resale except in sealed containers, the seals of which shall remain unbroken when it is sold for consumption off the premises.

(2) The Oregon Liquor Control Commission may refuse to sell, or may prohibit any licensee from selling, any brand of alcoholic liquor which in its judgment is deceptively labeled or branded as to content, or contains injurious or adulterated ingredients.

SECTION 71. ORS 471.401 is amended to read:

471.401. (1) Notwithstanding any other provision of this chapter, a manufacturer or wholesaler of alcoholic liquor may purchase advertising space and time from a licensee authorized to sell alcoholic liquors at retail if:

(a) The retail licensee operates an arena with a fixed seating capacity of more than 10,000 seats;

(b) The advertising space or time is purchased only in connection with events to be held on the premises of the arena; and

(c) The retail licensee serves other brands of distilled liquors, malt beverages, cider or wine in addition to the brand manufactured or sold by the manufacturer or wholesaler purchasing advertising space or time.

(2) A purchase of advertising space or time under the provisions of this section must be made by written agreement.

SECTION 72. ORS 471.405 is amended to read:

471.405. (1) No person shall peddle or deliver alcoholic beverages to or at any place, where, without a license, alcoholic beverages are sold or offered for sale. No licensee shall sell or offer for sale any alcoholic beverage in a manner, or to a person, other than the license permits the licensee to sell.

(2) No person shall purchase, possess, transport or import, except for sacramental purposes, an alcoholic beverage unless it is procured from or through the Oregon Liquor Control Commission, except as provided otherwise in the Liquor Control Act.

(3) No person not licensed under the Liquor Control Act shall sell, solicit, take orders for or peddle alcoholic beverages.

(4) Notwithstanding the provisions of subsection (2) of this section, an individual entering the state may have in possession an amount not to exceed four liters (135.2 fluid ounces) of distilled liquor, two cases of wine or cider (620 fluid ounces) and two cases of malt beverages (576 fluid ounces). These quantities of alcoholic beverages are exempt from fees collected by the commission.

(5) Upon conviction for unlawfully purchasing or importing alcoholic beverages into this state [wine containing over 21 percent alcohol by volume or any other alcoholic beverage containing over 14 percent alcohol by volume from any source except from or through the commission, or for unlawfully purchasing or importing into this state any wine or any other alcoholic beverage containing 14 percent or less alcohol by volume from any source except from or through the commission or its duly authorized licensees], the person convicted shall forfeit to the commission the alcoholic beverage so purchased or imported. The commission shall thereupon seize the forfeited beverage and it shall then become the commission's property.

SECTION 73. ORS 471.440 is amended to read:

471.440. (1) No mash, wort or wash fit for distillation or for the manufacture of spirituous alcoholic liquors, shall be made, fermented or possessed within this state by any person who does not at the time own a distillery license under the Liquor Control Act. This section does not prevent the possession of mash for the purpose of manufacturing wine, cider or beer for home consumption as provided for in ORS 471.205.

(2) No distillery shall be set up or operated in this state for the purpose of manufacturing alcoholic liquor for beverage purposes except by a person duly licensed under the Liquor Control Act to operate a distillery. Any device or process which separates alcoholic spirits from any fermented substance shall be regarded as a distillery. A distillery is set up when the still is in position over a furnace, or is connected with a boiler, so that heat may be applied, although the worm or worm tank is not in position.

(3) The finding of any mash, wort, wash or distillery in any house, on any premises or within any enclosure, is prima facie evidence that it was made and fermented by, or set up by, and the property of, the person who is in possession of such house, premises or enclosure.

SECTION 74. ORS 471.485 is amended to read:

471.485. No wholesale licensee or agent or employee thereof shall sell or deliver, nor shall any retail licensee purchase or receive any malt beverages, cider or wine for currency on delivery, but such malt beverages, cider or wine shall be paid for prior to delivery thereof, by electronic fund transfer initiated on or before the date of delivery, or by valid check, order, negotiable instrument or voucher payable on the date of delivery. The wholesale licensee may accept cash at the time of delivery if such acceptance does not create or increase the licensee's, or the agents' or employees' of the licensee, exposure to or risk of being victimized by criminal activity.

SECTION 75. ORS 471.490 is amended to read:

471.490. No retail licensee shall deliver any check, order, negotiable instrument or voucher in payment for malt beverages, cider or wine, knowing at the time of such delivery that the maker or drawer has not sufficient funds in the bank or depository to pay the instrument on presentation, nor shall any wholesale licensee accept any such instrument knowing that said instrument is not payable according to its terms, or that there are not sufficient funds to pay such instrument on presentation. Any extension or acceptance of credit under this section shall constitute a violation of ORS 471.398.

SECTION 76. ORS 471.495 is amended to read:

471.495. Any wholesale licensee who receives a check, order, negotiable instrument or voucher in payment for malt beverages, cider or wine, who receives an instrument from a retail licensee which, upon presentation, is not paid by the party on whom it is drawn, shall report such fact forthwith to the Oregon Liquor Control Commission.

SECTION 77. ORS 471.740 is amended to read:

471.740. [Except as authority may be conferred by license issued by the Oregon Liquor Control Commission, the exclusive right to purchase, sell, have in possession for sale, import or transport, except for sacramental purposes and not for sale, any wine containing over 21 percent of alcohol by volume or any other alcoholic liquor containing over eight percent of alcohol by volume is vested in the commission. Such wine or liquor shall be sold only by the commission or its duly authorized and regularly employed agent or representative. It shall be delivered to the purchaser personally. All other wines containing not over 21 percent of alcohol by volume or any other alcoholic liquors containing not over eight percent of alcohol by volume, may be manufactured, sold, possessed, distributed, imported or transported, as provided by this chapter and ORS 474.105 and 474.115 and not otherwise.] Except as provided in this chapter, the Oregon Liquor Control Commission is vested with the exclusive right to purchase, sell, have in possession for sale, import or transport alcoholic beverages.

SECTION 78. ORS 473.015 is amended to read:

473.015. For the purposes of this chapter[:],

[(1) "Wine" means any fermented vinous liquor or fruit juice, or other fermented beverage fit for beverage purposes that is not a malt beverage, containing more than one-half of one percent of alcohol by volume and not more than 21 percent of alcohol by volume. "Wine" includes fortified wine. "Wine" does not include cider.]

[(2)] "cider" means an alcoholic beverage made from the fermentation of the juice of apples or pears that contains not less than one-half of one percent and not more than seven percent of alcohol by volume, including, but not limited[,] to, flavored, sparkling or carbonated cider.

SECTION 79. ORS 473.030 is amended to read:

473.030. (1) A tax is imposed upon the privilege of engaging in business as a manufacturer or as an importing distributor of malt beverages at the rate of $2.60 per barrel of 31 gallons on all such beverages.

(2) A tax is imposed upon the privilege of engaging in business as a manufacturer or as an importing distributor of wines at the rate of 65 cents per gallon on all such beverages.

(3) In addition to the tax imposed by subsection (2) of this section, a manufacturer or an importing distributor of wines containing more than 14 percent alcohol by volume [and not more than 21 percent alcohol by volume] shall be taxed at the rate of 10 cents per gallon.

(4) In addition to the taxes imposed by subsections (2) and (3) of this section, a manufacturer or an importing distributor of wines [containing not more than 21 percent alcohol by volume] shall be taxed at the rate of two cents per gallon. Notwithstanding any other provision of law, all moneys collected by the Oregon Liquor Control Commission pursuant to this subsection shall be paid into the Wine Advisory Board Account established under ORS 576.765.

(5) The rates of tax imposed by this section upon malt beverages apply proportionately to quantities in containers of less capacity than those quantities specified in this section.

(6) The taxes imposed by this section shall be measured by the volume of wine or malt beverages produced, purchased or received by any manufacturer. If the wine or malt beverage remains unsold and in the possession of the producer at the plant where it was produced, no tax imposed or levied by this section is required to be paid until the wine or malt beverage has become sufficiently aged for marketing at retail, but this subsection shall not be construed so as to alter or affect any provision of this chapter relating to tax liens or the filing of statements.

SECTION 80. (1) Except for those licenses eliminated under section 11 of this 1999 Act, this 1999 Act does not affect the validity, or any of the privileges or duties, of a license issued under the provisions of ORS chapter 471 or 472 (1997 Edition) before the effective date of this 1999 Act. ORS 471.253 (2), as created by section 26 of this 1999 Act, applies to all brewery-public house licenses, whether issued before, on or after the effective date of this 1999 Act.

(2) Any person who was licensed before the effective date of this 1999 Act under a license consolidated under the provisions of sections 2 to 8 of this 1999 Act, and who applies after the effective date of this 1999 Act for a license under sections 2 to 7 of this 1999 Act that has substantially the same privileges as the license that was issued before the effective date of this 1999 Act, shall be considered by the Oregon Liquor Control Commission to be applying for a license renewal except that the privileges of the new license shall be as provided by sections 2 to 7 of this 1999 Act. The application for renewal must be made within the time provided by ORS 471.290 (1997 Edition).

SECTION 81. This 1999 Act takes effect January 1, 2001.

SECTION 82. The unit and section captions used in this 1999 Act are provided only for the convenience of the reader and do not become part of the statutory law of this state or express any legislative intent in the enactment of this 1999 Act.

Approved by the Governor June 25, 1999

Filed in the office of Secretary of State June 25, 1999

Effective date January 1, 2001

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