Category Archives: Laws & Rules

Multnomah County Tobacco Retailers License Applications Begin July 1

If your business is located in Multnomah County and sells tobacco or vaping products, you should be aware of a 2015 Multnomah County ordinance and the related Multnomah County Health Department rules that will become effective in July 2016.

Beginning on July 1, 2016, any retailer who sells tobacco, electronic cigarettes or vaping products in Multnomah County must obtain an annual license.  The license requirement applies to any person or business that sells those products, including but not limited to convenience stores, gas stations, bars, hotels, restaurants and music venues.

The Multnomah County Board of Commissioners passed the ordinance in November 2015 in an effort to reduce minors’ illegal access to tobacco and nicotine products.  The ordinance amends existing Multnomah County law that governs the licensing of tobacco retailers.  The new law includes tobacco, electronic cigarette and vaping retailers, and requires them to obtain an annual tobacco retail license in order to sell “tobacco products,” which are defined to include electronic cigarettes or vaping products that contain or deliver nicotine.  A retailer may only make tobacco products available to people who are the minimum age for tobacco sales and possession – that’s still 18 years old, in Oregon.  Retailers will continue to be required to examine a person’s ID if he or she appears to be under 27 years old.  Failure to check ID will result in sanctions.  Additionally, the ordinance provides that a violation of any tobacco control law – federal, state or local – is a violation of the tobacco retail licensing laws that may result in fines, civil penalties and license suspension.

In this era of food trucks, you should also know that the ordinance prohibits mobile tobacco product sales.  (Just in case you were thinking that a vape-truck was going to be the next big thing. Answer: No.)

A tobacco retail license is required for each address at which tobacco products are available from a retailer.  So, for example, if you have three gas stations, you’ll need a license for each location.  The license fee is $580 and each license will be valid for one year from the date that it is issued.  Like a liquor license, it must be displayed in a prominent and conspicuous place at the licensed premises and it can’t be transferred between people or premises.

Each business that has obtained a tobacco retailer license will be subject to at least one unannounced site-visit per year.  Enforcement is expected to begin in January 2017.  The fines and penalties increase progressively depending on the number of violations.  The first violation will result in a $500 fine and mandatory training.  Subsequent violations within a 60-month period will result in increased fines and license suspension of specified durations.

If your business also sells alcohol, be aware that violations of the tobacco retailer ordinance may be taken into account in liquor license enforcement.  The Multnomah County Department of Health, which will be administering the tobacco retail licensing program, intends to provide education and assistance to retailers to help them comply with the law.

You can find more information about the Multnomah County Tobacco Retail License, including the Tobacco Retail License Ordinance, the Multnomah County Health Department Tobacco Retail License Rules and the license application at  Businesses will be able to apply for a tobacco retail license beginning on July 1, 2016.

The OLCC Rulemaking Process

The OLCC Rulemaking Process

You can propose changes to the regulations that govern the OLCC.  The regulations that govern the OLCC are found here: OAR 845.  The process of developing or modifying regulations is called rulemaking.  Although rulemaking is often initiated by OLCC staff, individuals or groups may also petition the agency to develop, change, or rescind one of its rules.  In other words, you can potentially change OLCC regulations.  Here’s how … 

Rulemaking by state agencies (including petitions by individuals or groups) is governed by the Administrative Procedures Act (ORS Chapter 183) and the Attorney General’s administrative rules (OAR 137-001-0007 through OAR 137-001-0100).

1) Rulemaking petition filed with agency.
To be accepted, the petition must contain certain legally required sections.  See ORS 183.390 & OAR 137-001-0070. Some of these include the facts and arguments supporting the rule proposal, comments on the complexity of the rule, how technology and economic factors may have changed, and a draft of the proposed rule language.

2) The OLCC accepts and initiates rulemaking, or denies the petition.
Within 90 days of the OLCC’s receipt of the petition, the agency must either accept or deny it. This includes a public notice and comment period, with a report on the petition presented at an upcoming Commission meeting. If Commissioners vote to accept a rulemaking petition, then the normal rulemaking process begins.  The process typically takes six months. The Commission is not bound to the originally proposed language or to making any rule changes once the rulemaking process is complete.  In other words, your proposal could be changed during the rulemaking process.

3) Advisory Committee.
A group of stakeholders representing industry, public safety, and others meet to discuss the initial rule draft(s), give suggestions, and assist with writing a Fiscal Impact Statement.

4) Final rule proposal.
OLCC technical and executive staff take stakeholder input into account and decide on a “Final Staff Draft” of the proposed rule language.

5) Public notice and comment period. 

A notice of proposed rulemaking is filed with the Secretary of State (published in the Oregon Bulletin), a public notice is sent to the OLCC rulemaking notice list, a public hearing is held, and a written comment period is established.  Anyone can submit comments, but comments are typically submitted by various stakeholders.  You can also participate in the rulemaking process generally by submitting comments.

6) Commissioners vote on final action.
The rules coordinator gathers oral and written comments and presents a report to the Commissioners. The Commissioners vote at a Commission meeting on whether or not to adopt the proposed rule amendments. If adopted, the changes are usually effective the first of the month following the meeting.

The rulemaking progress is a great opportunity for you to be involved with how the OLCC regulates licensed businesses in Oregon.

Liquor Liability Insurance: Proposed Rulemaking

Liquor Liability Insurance: Proposed Rulemaking

On April 25, 2014, The OLCC voted to initiate action to amend OAR 845-005-0400.  The rule governs the OLCC’s requirements for certain on-premises licensees to maintain liquor liability insurance.  The existing rule is excerpted below.

The primary changes proposed by the initial rulemaking include the following:

  1. Revised Penalty Schedule for Failing to Maintain Liquor Liability Insurance (“LLI”).  The biggest proposed change is a shift in the proposed sanctions for failing to maintain LLI.  Currently, failing to maintain LLI constitutes a category I violation.  The proposed change shifts this violation off of the existing OLCC penalty schedule entirely.  The current proposed penalty is license cancellation.  In its place, the rulemaking establishes an independent penalty schedule for this violation based on the length of the lapse in LLI.  The proposed penalty schedule is as follows:
    1. If the lapse in coverage is no more than 30 days, the sanction is $1,650 or a 10 day license suspension;
    2. If the lapse in coverage is 31 days, but no more than 60 days, the sanction is $4,950 or a 30 day license suspension;
    3. If the lapse in coverage is 61 days, but no more than 90 days, the sanction is $4,950 AND a 90 day license suspension;
    4. If the lapse in coverage is no more than 91 days, the sanction is license cancellation.
  2. Requirement that Proof of LLI is Posted or Otherwise Made Available for Immediate Inspection.  The proposed rulemaking would create a new affirmative requirement for licensees to post proof of their LLI or otherwise make the proof available for immediate inspection upon request by an OLCC employee.  Failure to do so would be a category V violation.  If verifying that this requirement was met became a regular part of OLCC premises visits, it’s likely that this would be a fairly common violation.  Posting the LLI would greatly reduce the probability of a violation.
  3. Affidavit Requirement for Manufacturers.  Currently, winery, brewery and distillery licensees are only required to provide verification of LLI if they have been approved to engage in on-premises sales.  The proposed change would require such manufacturing licensees to now affirmatively provide an affidavit stating that consumption of alcoholic beverages will not occur on the licensed premises.
  4. Bond Option.  The proposed changes highlight that applicants/licensees may fulfill this requirement by putting a corporate surety into place for the minimum amount.
  5. No Change to $300,000 Minimum.  This is probably the biggest surprise.  The rulemaking is not proposing to raise the $300,000 minimum, which has been in place for a considerable period of time.

845-005-0400  Liquor Liability Insurance or Bond Requirement

(1) ORS 471.313(4)(i) requires applicants for a liquor license to demonstrate financial responsibility sufficient to adequately meet the requirements of the business proposed to be licensed. ORS 471.313(2) requires applicants listed in 471.168 to maintain liquor liability insurance or bond. In addition to other requirements, the Commission has determined that licensees listed in 471.168 must demonstrate financial responsibility for licensees’ liability for damages to third parties caused by patrons off the licensed premises by meeting the requirements in section (1)(a) or (b) of this rule. ORS 471.168 requires certain licensees to provide coverage for injuries suffered because of the conduct of visibly intoxicated persons who were served in licensed premises by:

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

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

(2) The requirement applies to the covered licenses issued or renewed on or after March 15, 1998.

(3) ORS 471.168 also requires licensees subject to the requirement to supply proof of compliance at the time the license is issued or renewed. For insurance, licensees must provide proof by naming the Commission as Certificate Holder on the policy and giving the Commission a copy of the certificate. For a bond, proof may be satisfied by identifying the name of the surety and providing the bond identification number.

(4) Failure to maintain insurance or a bond as required is a Category I violation and the Commission may cancel the license.

Oregon Joins the Bandwagon Prohibiting Powdered Alcohol

Oregon Joins the Bandwagon Prohibiting Powdered Alcohol

The Oregon Legislature passed a pre-emptive ban on sales of powdered alcohol earlier this year.  They were worried that the substance could fall into the hands of unruly teenagers.

Powdered alcohol is a freeze-dried dust (think Crystal Light or Tang) that turns into a cocktail when water is added.  Palcohol, the company behind the idea, designed it as a way for campers, backpackers, and airline travelers to pack a lightweight cocktail for the journey, but creative teens were thought to have more creative uses in mind.

It comes in powdered rum, vodka, “Powderita,” and cosmopolitan mixes.  Sales in the U.S. will begin sometime this summer, according to the company’s website.  Despite its ambiguous potential, lawmakers worry the product could make it easier for teenagers to sneak adult beverages or to snort the alcoholic powder. Six states have already banned it (and that number will likely go up), and lawmakers in 28 others are considering similar bills (very likely to go up).

Change your camping plans accordingly.

The Oregon Distillery License Privileges Have Been Changed

The Oregon Distillery License Privileges Have Been Changed

House Bill 2567 passed the Oregon Legislature earlier this year and became effective June 25, 2015.

Inter-distillery Sales Allowed.  Oregon distillery licensees may purchase from, and sell distilled liquor to, another distillery licensee in containers having a capacity greater than one gallon for blending and manufacturing purposes. The provision that allowed distillery licensees to purchase alcoholic beverages for blending and manufacturing purposes from the Liquor Control Commission is removed. A distillery licensee must hold a valid distilled spirits basic permit from the Federal Alcohol and Tobacco Tax and Trade Bureau for the licensed premises.

Tasting Privileges Clarified and Expanded.  Tastings may be of the distilled liquor alone or with a mix of other liquids. If any of the other liquids are distilled liquors, they must be distilled liquors on the list of products approved by the commission for retail sale in Oregon and must be purchased by the licensee at the retail price established by the commission.  Oregon distilleries can now offer tastings of spirits manufactured in Oregon by another distillery. Sales by the drink are not authorized by Oregon’s distillery license.  More than one distillery licensee may use the same premises at the same time for conducting tastings if the premises are a primary production location shared by the licensees (i.e. “alternating proprietors”) or the licenses are owned by the same entity. A distillery retail outlet agent may make sales of approved distilled liquor at locations where tasting is allowed as specified.

Special Event Privileges Clarified and Expanded.  Oregon distillery licensees may obtain special events distillery licenses for events for a period of up to five days.  Special event distillery licensees are limited to hosting such events at the same location to not more than 6 days during a calendar year.  Such licensees may offer tastings or make sales by the drink of distilled liquor that the licensee manufactured in Oregon provided that the spirit is on the list of products approved by the OLCC for retail sale in Oregon.  If the distillery licensee has been appointed as a distillery retail outlet agent, the special event distillery licensee may sell distilled spirits in factory-sealed containers to go at the retail price set by the OLCC for the month of sale.

Brewery-Public House License Privileges Expanded

Brewery-Public House License Privileges Expanded

Senate Bill 138 passed the Oregon Legislature earlier this year.

Effective January 1, 2016, an Oregon brewery-public house licensee (a “BPH”) is allowed to: (1) distribute malt beverages manufactured at the licensed premises to any other premises licensed to the same licensee, whether a manufacturer, wholesaler, or retail premises, and (2) distribute for export any amount of malt beverages manufactured at the licensed premises.

In any calendar year, a BPH may sell at wholesale and distribute to licensees no more than 7,500 barrels of malt beverages produced by the licensee. Currently, in any calendar year, a BPH may sell at wholesale to licensees malt beverages produced by the licensee if the licensee produced 5,000 barrels or less of malt beverages in the immediately preceding calendar year.


New OLCC Rules: What is “Amplified Entertainment”?

New OLCC Rules: What is “Amplified Entertainment”?


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

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


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.

OLCC Rulemaking: Requirement for Liquor Liability Insurance

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.


Washington Distilleries Will Likely Be Able to Offer Samples This Summer!

Washington Distilleries Will Likely Be Able to Offer Samples This Summer!

Senate Bill 6226 went to the governor for signature on March 12th.  The governor has not yet taken any action on the bill.  If no action is taken, it is considered approved and moves forward.  The governor has until April 5th to take action.  Given the large amount of support for this bill on both sides of the aisle, it is not anticipated that it will be vetoed.  Assuming no veto, the bill would become law on June 12th.

The key elements of the bill are as follows:

  • Increases the annual spirits production limit for craft distillers from 60,000 gallons to 150,000 gallons.
  • Eliminates the three liter per day per person limit on the sale of spirits by a craft distiller for off-premises consumption.
  • Authorizes a craft distillery to charge customers a fee for spirits samples of 1/2 ounce or less served to them on premises, but does not require such a charge.
  • Authorizes any licensed distillery to:
    • sell spirits of its own production for consumption off the premises;
    • contract with, and sell spirits to other licensed distillers and manufacturers; and
    • provide for free, or for a charge, spirits samples of 1/2 ounce or less to customers on the premises, subject to a daily maximum of two ounces per person per day.
      • Samples will likely be restricted to unaltered samples by rule–no mixed samples.
      • Samples must be provided by someone with a current, valid MAST permit.
  • Authorizes special occasion licensees to pay for spirits immediately following a special occasion event.
  • Authorizes a special occasion licensee to charge reasonable booth fees to a distillery participating in the event.

You can monitor the progress of the bill here.