All posts by nwallaw_admin

The Better Block Portland Project is This Weekend

City of Portland

The Better Block Portland Project is this weekend!  Old Town

The Better Block Portland project runs this Friday October 3rd to Sunday October 5th.  Better Block PDX is an all-volunteer group that seeks to provide low-cost, temporary treatments to public right of ways to foster creative thinking about how best to use such spaces.

The project will transform several blocks of Third Avenue north and south of West Burnside in Old Town.  The temporary demonstration will include more places for people walk, sit and gather and also a protected southbound bike lane on Third Avenue from NW Davis St. to SW Ash St.  The project is supported by the Old Town Hospitality Group and the Old Town Chinatown Community Association.  To see a depiction of the project, click here.

This weekend, the group is hoping that the temporary re-design will highlight potential alternatives to the current street closures on the weekends.  With the number and variety of bars and restaurants in the area, owners of such businesses need to pay close attention to potential changes in how people can access and move through the area.

For more information on the event, click here.

The TTB Reduces the Regulatory Burden on Small Brewers

TTB

The TTB reduces the regulatory burden on small brewers.  TTB

The TTB published a final rule entitled “Small Brewers Bond Reduction and Requirements to File Tax Returns, Remit Tax Payments and Submit Reports Quarterly” on September 30, 2014.  Despite the unwieldy title of the rule, it is intended to simplify the regulatory requirements for small brewers and the TTB and does so.  “Small brewers” are defined by the TTB as those which produce less than 7,200 barrels.  This definition captures a huge number of breweries.

The TTB’s rule institutes a flat $1,000 penal sum for the brewer’s bond for these small brewers if their excise tax liability is expected to be less than $50,000 in a given calendar year and who were liable for no more than $50,000 in such taxes during the preceding calendar year.  The rule also allows these small brewers to move from monthly reports on operations and taxes to a quarterly report. The goal of this rule change is to reduce administrative costs for small brewers and create greater efficiency for TTB.

The new rules will become effective on January 1, 2015 ti give small brewers time to adjust to quarterly filing and reporting. For more information, the TTB press release can be found here and the final rule can be found here.

The TTB Expands the Allowable Revisions to Approved Alcohol Beverage Labels

TTB

The TTB expands the allowable revisions to approved alcohol beverage labels.  Wine Glass

On Monday, September 29 2014, the TTB issued Industry Circular 2014-2.  The Circular expands the list of allowable revisions to approved alcohol beverage labels effective on the date of the circular.  These changes will be added to the COLA form when it is next revised.

Industry members may make certain changes to previously approved alcohol beverage labels without applying for a new COLA.  There are currently 28 allowable revisions which may be found on the COLA form.  Furthermore, TTB has announced in various rulings and guidance documents that specific changes to labels may be made without resubmitting labels for approval.  See Industry Circular 2014-1.

Industry Circular 2014-2 permits the following changes to already-approved malt beverage, wine and distilled spirits labels without the need for a new certificate of label approval (COLA):

  1. The deletion or revision of sponsorship themed graphics, logos, artwork, and/or sponsorship information.
  2. The addition, deletion, or revision of awards, ratings, or recognition, such as “Rated a Top Value Wine of 2014 by xyz Association.”
  3. The deletion of organic claims provided that all organic claims are removed from the label.  A new COLA would be required to delete individual “organic” references while maintaining other “organic” references.
  4. The revision of an approved sulfite statement according to the formats prescribed by the Industry Circulars.  The options are: “Contains Sulfites,” “Contains (a) Sulfiting Agent(s),” “Contains [the name of specific sulfating agent],” “Contains Naturally Occurring and Added Sulfites” or “Contains Naturally Occurring Sulfites”.
  5. The addition, deletion, or revision of information regarding the number of bottles made, produced, distilled, or brewed in a batch.
  6. The addition of certain instruction statements about how best to consume or serve a product.  Only the following statements may be added: “Refrigerate After Opening”, “Do Not Store In Direct Sunlight”, “Best If Frozen For ___ to ___ Hours”, “Shake Well”, “Pour Over Ice”, “Best When Chilled”, “Best Served Chilled”, “Serve Chilled”, or “Serve at Room Temperature”.

Please see the circular for additional information.

OLCC Privatization Initiative Withdrawn

OLCC, Privatization

OLCC Privatization Initiative Withdrawn

Problems with the drafting of the initiative led to delays in obtaining a final ballot title for the preferred version of the measure.   The primary problem related to references to the word “tax.”  The Oregonians for Competition, proponents of the initiative, wanted the word “tax” replaced with the phrase “revenue replacement fee.”  The issue ended up at the Oregon Supreme Court where supporters and opponents of the measure made their arguments.  On May 30th, the Court ruled to require a rewrite.

Ultimately, proponents of the measure would not have enough time to gather the 87,213 signatures needed to qualify an initiative for the November ballot by the July 3rd deadline.  After the ruling, it would have likely taken another week or two for the Court to approve a revised ballot title.

Oregonians for Competition indicated that they plan to push for privatization in the 2015 Legislative session or on the 2016 ballot.

 

New OLCC Rules: What is “Amplified Entertainment”?

Laws & Rules, OLCC

New OLCC Rules: What is “Amplified Entertainment”?

Amplifier2

The OLCC recently enacted two new rules and amended a third applicable to licensed outdoor areas.  The effective date for these changes is June 1, 2014.

  1. OAR 845-005-0329.  Licensing Outdoor Areas Not Abutting a Licensed Building.
  2. OAR 845-005-0331.  Licensing Outdoor Areas Abutting a Licensed Building.
  3. OAR 845-006-0309.  Requirements for Outdoor Areas Not Abutting a Licensed Building

All licensees with outdoor licensed areas should review these changes to ensure that they are in compliance by June 1, 2014.  

Food cart licensees should pay particular attention to the new operational requirements set out in OAR 845-006-0309.  The reference to “areas not abutting a licensed building” is primarily code for “food carts.”

One issue that may be of particular concern to both brick and mortar and food cart licensees relates to when “amplified entertainment” will be allowed.  For brick and mortar licensees, the OLCC will be able to cancel the license for an outdoor area effective June 1st if “the applicant or licensee will allow amplified entertainment in the outdoor area between 12:00am and 7:00am.”  For food cart licensees, it will be a category III violation if there is “amplified entertainment” from 10:00pm to 7:00am effective June 1, 2014.

Interestingly, the requirement regarding amplified entertainment is respectively a licensing requirement for brick and mortar licensees and a violation for food cart licensees.  It is not a licensing requirement for food cart licensees and it is not a violation for brick and mortar licensees.  This could lead to very different outcomes for non-compliance for this two categories of licensees.

Much will depend on the OLCC’s definition of “amplified entertainment.”  Would it include playing recorded music over a speaker?  Only live entertainment, such as DJ’s, bands, etc.?  If the former, we can all anticipate some very quiet outdoor seating areas after midnight in Oregon.

 

The WSLCB will be revisiting its barrier requirement for outdoor patios

Laws & Rules, WSLCB

The WSLCB will be revisiting its barrier requirement for outdoor patios.  Your initial comments are due by July 4, 2014.

Patio

The Washington State Liquor Control Board (the “WSLCB”) has entered into the initial stage of rule making to revise WAC 314-02-130 regarding outside service area requirements.

The rulemaking is a result of a petition for rulemaking submitted by the cities of Seattle and Spokane on May 6, 2014 and signed by the respective mayors of each city.  The mayors cite both public safety and business reasons for the changes.

WAC 314-02-130 requires all outdoor alcohol service areas be enclosed by a 42 inch high barrier.  Both Seattle and Spokane have active sidewalk café permitting programs in which businesses must apply for and obtain approval to provide table service for their guests on public sidewalks.  Many jurisdictions do not have such barrier requirements and have found ways to maintain a safe and responsible food and alcohol service on sidewalks, including nearby Oregon.

WAC 314-02-130 sets out the requirement as follows:

extending the location of alcohol service, such as a beer garden or patio/deck service (areas must be enclosed with a barrier a minimum of forty-two inches in height)

The cities have found the mandatory 42 inch barrier requirement for outdoor areas to undesirable under certain circumstances.  The cities have cited two primary concerns.

First, because there is limited walkable space on some sidewalks, the barrier requirement further encroaches on the remaining walkable space when a sidewalk permit is granted.  As a result, particularly when sidewalk permits are granted for narrow thoroughfares, pedestrian access and flow are unnecessarily impeded.

Second, the barrier requirements sometimes results in there simply not being enough room for an outdoor seating area and a pedestrian thoroughfare.  As a consequence, some businesses are having their application for a sidewalk café permit denied.  This can result in a material hardship to the business and reduce activity on the street.

The cities of Seattle and Spokane are requesting the WSLCB to allow local jurisdictions to decide when and where barriers are appropriate.  In short, the cities want the discretion to determine how best to license and permit these outdoor areas.  Sidewalk cafes are good for the public, cities and businesses.  They are thought to increase activity, decrease crime and result in more business and pedestrian traffic generally.  While nothing concrete has been proposed, the time has come for the relaxation (or elimination?) of the barrier requirement for outdoor areas.  Please take the time to comment in support of this concept.

This notice can be found here under Proposed Rules.

OSU’s Craft Brewery Startup Workshop II: Great to Meet Aspiring Craft Brewers

Craft Brewing

OSU’s Craft Brewery Startup Workshop II: Great to Meet Aspiring Craft Brewers.  Hops

Oregon State University hosted a Craft Brewery Startup Workshop in Portland, Oregon from May 10-13, 2014.  This workshop focused on moving forward with brewery logistics including beer brewing equipment needs and planning for brewery supplies, sourcing, legalities, distribution and marketing strategies for a small business. Instructors will give one-on-one feedback for your developed craft brewery business plan and leave you with a functional strategy for opening a business and operating your craft brewery.

I led the section on the regulatory and legal aspects of starting and operating a craft brewery and enjoyed the enthusiasm and energy of the attendees.  Very exciting to share my knowledge with the next generation of craft brewers.

OLCC Names William Higlin as New Licensing Director

OLCC

OLCC Names William Higlin as New Licensing Director.

William Higlin starts as the OLCC Director of Licensing on May 12, 2014.  Higlin replaces Farshad Allahdadi who left the OLCC in February and is now the Retail Contracts Manager at the Oregon State Lottery.

Higlin has substantial state government and private industry experience.  He spent 15 years working at the Oregon State Lottery in a number of positions.  After leaving the Lottery, Higlin became the Director of Regional Marketing at GTECH Corporation before being promoted to Senior Director of Sales for the startup, GTECH Printing Corporation.  This experience should serve him well in his new position at the OLCC.

Steve Marks, OLCC Executive Director had the following to say about Higlin:

Will understands that the economic success of each of our partners begins with solid licensing decisions.  The knowledge he brings to building and maintaining business relationships will aid in building a supportive environment that ensures licensees and their employees are ready and able to responsibly manufacture, sell, and serve alcohol.

 

The OLCC’s announcement can be found here.

OLCC Case Summary: Lotsa Luck Bar & Grill

Case Studies, OLCC

OLCC Case Summary: Lotsa Luck Bar & Grill

“Learn from the mistakes of others. You can’t live long enough to make them all yourself. ”                                                                                                                  –Eleanor Roosevelt

Licensees can learn a lot by reviewing OLCC case decisions.  What mistakes are other licensees making?  What mistakes are the OLCC making?  What lessons can be learned to improve the safety, compliance and success of your business?  Here, I am summarizing one lesson that can be learned from a recent OLCC decision.

The Issue. Is an argument between patrons “disorderly activity” under Oregon law?  The OLCC argued that an argument between a male and female patron of Lotsa Luck Bar & Grill was disorderly activity.

The Law.  OAR 845-006-0347 prohibits licensees from permitting disorderly activities on the licensed premises or in areas that the licensee controls that are adjacent to or outside the licensed premises, such as a parking lot, outdoor seating area, smoking area, area in which patrons wait to enter the premises, etc.  Disorderly activities are defined as those that harass, threaten or physically harm another person.

The Facts.  A male and a female patron drove to the premises.  Video shows that they were arguing from the moment that they exited their vehicle, throughout the time that they were in the premises, and until they exited the premises.  They were in the premises for approximately 15 minutes.  Neither of them had an alcoholic beverage while at the premises and there is no indication that they were intoxicated.  They were arguing in normal voices about everyday issues.  At one point, the man told the woman to “get your shit out of my car.”  Just prior to leaving the premises, the man told the woman that he was going to “beat your ass.”

Discussion.  OLCC staff argued that the “beat your ass” comment constituted disorderly activity.  Such a comment could constitute disorderly activity if interpreted as a threat.  That being said, the testimony and evidence indicated that the comment was made in a normal voice with no suggestion of physical violence or accompanying physical violence.  If the comment would have been followed by physical violence, the statement along with the violence would very likely have been considered disorderly activity.  If the comment was made in a threatening manner, but without the physical violence, it would have been a closer call.

If a comment was determined to be “disorderly activity,” the OLCC would still need to show that the licensee “permitted” the activity.  I’ve previously highlighted what is required for a “permitting” violation.  While that is an issue here, it is not the issue of note.

The Take-Away.  Two patrons arguing with normal voice levels and no physical violence does not constitute “disorderly activity” under current Oregon law.  That being said, licensees should pay careful attention to patrons that are arguing and if there is any indication that the arguing may escalate to include suggestions of physical threat or violence.  While arguing alone will typically not rise to the level of “disorderly activity,” it may be a red flag that things are headed that way.  Intervening early may ensure that the argument remains just that.  As with many things, licensees and their staff must use sound judgment in light of all of the facts in determining what, if any, action is appropriate.  The devil is in the details.  Having well written house policies and regular trainings on how to handle such issues will help ensure that such issues do not escalate to the level of an OLCC violation.

OLCC Rulemaking: Requirement for Liquor Liability Insurance

Laws & Rules, OLCC

OLCC Rulemaking: Requirement for Liquor Liability Insurance

On April 25, the OLCC initiated the rulemaking process to cleanup the existing rule that requires that retail licensees that sell or serve alcohol for on-premises consumption to maintain a minimum level of liquor liability insurance.  It is important to note that the $300,000 minimum required by this rule is not being raised and thus continues to be lower than most (if not all) licensed businesses should carry.  Talk to your insurer to make sure that you have sufficient coverage.

Many of the changes are purely house keeping.  The proposed changes more clearly outline what is required, who is required to do it, and how the OLCC can verify that it is being done.  No problem.

The big change is in the sanctions.  From the perspective of a licensee, there is good news and bad news.  Let’s start with the bad news.

Bad News.  If a licensee fails to provide timely proof of coverage (at renewals or within 10 days of receiving a request from the OLCC), the OLCC may immediately suspend or refuse to renew the liquor license without a hearing.   Presumably, the suspension would only last until such time that the OLCC was provided with proof of coverage.  This may need to be clarified as the rulemaking progresses.  But, in any case, this would certainly catch the attention of any licensed business and provide extra incentive to maintain the required coverage.  An unintended consequence of this sanction would impact licensed businesses that also had retail contracts with the Oregon State Lottery.  Such businesses would be required to notify the Lottery of the suspension.  As a result, the Lottery would turn off the business’s video lottery machines and conduct an investigation into the underlying basis for the suspension.

Good News.  The OLCC has dramatically revised the sanctions for failing to maintain liquor liability insurance.  Previously, failure to maintain coverage resulted in a category I violation (the most serious).  The proposed sanction for a first category I violation within two years is cancellation.  Regardless of how long the lapse was, the proposed sanction was the same.  Tough love.

The OLCC is proposing a penalty schedule for this violation in which the proposed sanction will largely be a function of the length of the lapse in coverage.  This makes sense because the proposed sanction would be in direct proportion to the “threat to public health and safety” posed by the lapse in coverage.  The penalty schedule would be as follows:

  1. A lapse in coverage of no more than 30 days will result in a warning. However, the second lapse in coverage of this duration within a two-year period is a Category IV violation;
  2. A lapse in coverage of 31 days to no more than 60 days is a Category III violation;
  3. A lapse in coverage of 61 days to no more than 90 days is a Category II violation; and
  4. A lapse in coverage of 91 days or more is a Category I violation.

Recall that category I violations are the most serious and each subsequent category is less serious in terms of public safety, sanctions, etc.  For more on priority violations, view my earlier post.

Also note that these sanctions would be in addition to the immediate suspension in cases where the OLCC discovered the lapse in coverage at a time that the insurance was lapsed (as opposed to discovering a historic lapse after coverage had been subsequently put back into place).

You can view and follow the rulemaking here.