74th OREGON LEGISLATIVE ASSEMBLY--2007 Regular Session
NOTE: Matter within { + braces and plus signs + } in an
amended section is new. Matter within { - braces and minus
signs - } is existing law to be omitted. New sections are within
{ + braces and plus signs + } .
LC 1734
A-Engrossed
Senate Bill 451
Ordered by the Senate February 20
Including Senate Amendments dated February 20
Sponsored by Senator WESTLUND, Representative BURLEY
SUMMARY
The following summary is not prepared by the sponsors of the
measure and is not a part of the body thereof subject to
consideration by the Legislative Assembly. It is an editor's
brief statement of the essential features of the measure.
Allows distillery licensee to { - sell wine, malt beverages,
cider and distilled liquor by the drink - } { + hold full
on-premises sales licenses + }. Provides that sales may be made
only on licensed premises and on one other premises
{ - approved by Oregon Liquor Control Commission - } .
{ + Provides that all distilled spirits sold under full
on-premises license must be purchased from Oregon Liquor Control
Commission. + }
Eliminates limitation on types of distilled liquor that
distillery licensee may use in conducting tastings and that
licensee may sell by bottle as retail sales agent of commission.
{ + Removes certain restrictions on privileges of
brewery-public house licensees. + }
A BILL FOR AN ACT
Relating to distilleries; creating new provisions; and amending
ORS 471.200, 471.230 and 471.396.
Be It Enacted by the People of the State of Oregon:
SECTION 1. ORS 471.230 is amended to read:
471.230. (1) A distillery license shall allow the holder
thereof to import, manufacture, distill, rectify, blend, denature
and store spirits of an alcoholic content greater than 17 percent
alcohol by weight, to sell the same to the Oregon Liquor Control
Commission { - , - } and to transport the same out of this
state for sale outside this state. Distillery licensees shall be
permitted to purchase from and through the commission alcoholic
beverages for blending and manufacturing purposes upon such terms
and conditions as the commission may provide. No such licensee
shall sell any alcoholic beverage within this state except to the
commission or as provided in { - subsection (2) of - } this
section. However, any agricultural producer or association of
agricultural producers or legal agents thereof who manufacture
and convert agricultural surpluses, by-products and wastes into
denatured ethyl and industrial alcohol for use in the arts and
industry shall not be required to obtain a license from the
commission.
(2) A distillery licensee { - that distills brandy or pot
distilled liquor - } may:
(a) Permit tastings of { - such brandy or pot - }
{ + the + } distilled liquor { - by visitors on - }
{ + manufactured by the distillery. The tastings may be
conducted on + } the premises and on at least one other premises
owned or leased by the licensee. The licensee must purchase the
{ - brandy or pot - } distilled liquor from the commission.
(b) Apply for appointment as a retail sales agent of the
commission for purposes of retailing only { - brandy or pot - }
distilled liquor that the licensee distilled in Oregon at the two
locations at which tastings are permitted pursuant to paragraph
(a) of this subsection.
{ + (3) Notwithstanding ORS 471.392 to 471.400, a distillery
licensee may also hold a full on-premises sales license for a
location at the licensed premises of the distillery and a full
on-premises sales license for one other location. All distilled
spirits sold under the full on-premises sales license must be
purchased from the commission. + }
SECTION 2. 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, grower sales privilege
licenses, brewery-public house licenses { + , distillery
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 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 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 full or limited on-premises
sales licensee, and any officer, director or substantial
stockholder of any corporate 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.
(8) Notwithstanding ORS 471.394, a member of the board of
directors of a parent company of a corporation that is a
manufacturer may serve on the board of directors of a parent
company of a corporation that is a retail licensee if:
(a) The manufacturer or parent company of a manufacturer is
listed on a national security exchange;
(b) All purchases of alcoholic beverages by the retail licensee
are made from holders of wholesale malt beverage and wine
licenses, brewery licenses or winery licenses in this state;
(c) The interest of the member of the board of directors does
not result in the exclusion of any competitor's brand of
alcoholic beverages on the licensed premises of the retail
licensee; and
(d) The sale of goods and services other than alcoholic
beverages by the retail licensee exceeds 50 percent of the gross
receipts of the business conducted by the retail licensee on the
licensed premises.
SECTION 3. { + The amendments to ORS 471.230 and 471.396 by
sections 1 and 2 of this 2007 Act apply to all distillery
licenses, whether issued before, on or after the effective date
of this 2007 Act. + }
SECTION 4. ORS 471.200 is amended to read:
471.200. (1) A brewery-public house license allows the
licensee:
(a) To manufacture 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 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 1,000 barrels or less
of malt beverages in the immediately preceding calendar year.
(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.
(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.
(5) Notwithstanding subsection (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.
(6) Notwithstanding subsection (3) of this section, a
brewery-public house licensee is eligible for limited on-premises
sales licenses and temporary sales licenses.
(7)(a) Notwithstanding subsection (3) of this section, and
except as provided in this subsection, a brewery-public house
licensee, or any person having an interest in the licensee, may
also hold a full on-premises sales license. If a person holds
both a brewery-public house license and a 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 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 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. - }
(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.
(9) Notwithstanding subsection (3) of this section, the
commission by rule may authorize a brewery-public house licensee
to coproduce special events with other manufacturers.
(10)(a) Notwithstanding subsection (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 (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.
(11) For purposes of ORS chapter 473, a brewery-public house
licensee shall be considered to be a manufacturer.
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