75th OREGON LEGISLATIVE ASSEMBLY--2010 Special Session

                            Enrolled

                        Senate Bill 1039

Sponsored by Senator TELFER; Senators ATKINSON, FERRIOLI, KRUSE,
  WHITSETT, Representative WHISNANT (Presession filed.)

                     CHAPTER ................

                             AN ACT

Relating to alcoholic liquor licenses for private clubs; creating
  new provisions; amending ORS 461.300, 471.001, 471.175 and
  471.311; and declaring an emergency.

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

  SECTION 1. ORS 471.001 is amended to read:
  471.001. As used in this chapter and ORS 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. - }
   { +  (2) 'Commercial establishment' means a place of business:
  (a) Where food is cooked and served;
  (b) That has kitchen facilities adequate for the preparation
and serving of meals;
  (c) That has dining facilities adequate for the serving and
consumption of meals; and
  (d) That:
  (A) If not a for-profit private club, serves meals to the
general public; or
  (B) If a for-profit private club, serves meals to the club's
members and guests and complies with any minimum membership and
food service requirements established by Oregon Liquor Control
Commission rules. + }
  (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.
  (6)(a) 'Malt beverage' means an alcoholic beverage obtained by
the fermentation of grain that contains not more than 14 percent
alcohol by volume.
  (b) 'Malt beverage' includes:

Enrolled Senate Bill 1039 (SB 1039-INTRO)                  Page 1

  (A) Beer, ale, porter, stout and similar alcoholic beverages
containing not more than 14 percent alcohol by volume;
  (B) Malt beverages containing six percent or less alcohol by
volume and that contain at least 51 percent alcohol by volume
obtained by the fermentation of grain, as long as not more than
49 percent of the beverage's overall alcohol content is obtained
from flavors and other added nonbeverage ingredients containing
alcohol; and
  (C) Malt beverages containing more than six percent alcohol by
volume that derive not more than 1.5 percent of the beverage's
overall alcohol content by volume from flavors and other added
nonbeverage ingredients containing alcohol.
  (c) 'Malt beverage' does not include cider or an alcoholic
beverage obtained primarily by fermentation of rice, such as
sake.
  (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 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 2. ORS 471.175 is amended to read:
  471.175. (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 - }   { + A nonprofit private club,
 + }as described in subsection (8) of this section.
  (b)  { + A + } public passenger   { - carriers - }  { +
carrier + } as provided in ORS 471.182.
  (c)  { + A + } commercial   { - establishments - }  { +
establishment, + } as defined in ORS 471.001 (2).
  (d)   { - Public locations, other than those described in - }
 { +  A public location that does not qualify for licensing
under + } paragraphs (a) to (c) of this subsection  { - ,
where - }   { + if:
  (A)  + }Food is cooked and served  { - , and other food service
amenities are provided, as prescribed by rules of the Oregon
Liquor Control Commission - }  { +  at the location;
  (B) The predominant business activity at the location is other
than the preparation or serving of food or the serving of
alcohol; and

Enrolled Senate Bill 1039 (SB 1039-INTRO)                  Page 2

  (C) The location meets any minimum food service requirements
established by Oregon Liquor Control Commission rule + }.
  (e) A caterer, subject to the requirements of ORS 471.184.
  (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 any distilled liquor from an agent of the 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) The holder of a full on-premises sales license may sell
malt beverages for consumption off the licensed premises in
securely covered containers provided by the purchaser. Containers
that hold beverages sold under this subsection may not hold more
than two gallons.
  (8) A  { + nonprofit + } private club, including  { + but not
limited to a + } fraternal   { - and - }  { +  or + } veterans
 { - organizations - }  { +  organization + }, may qualify for a
full on-premises sales license under this section only if the
club meets  { + any  + }minimum membership,   { - charter
time - }  { +  nonprofit status + } and food service requirements
 { - set - }  { +  established + } 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

Enrolled Senate Bill 1039 (SB 1039-INTRO)                  Page 3

reasonable and proper compensation for the services of such
member, officer, agent or employee - } .
  SECTION 3. 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. Nothing in this
subsection is intended to 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. A
person under the age of 18 may not 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) Except when the director recommends, and the commission
concludes, that it is reasonable and prudent to waive disclosure
requirements under this section and that to do so will not
jeopardize the fairness, integrity, security and honesty of the
lottery, 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
 { +  nonprofit + } private club as described in ORS 471.175, the
officers, each director who owns or controls three percent or
more of the voting stock and each stockholder who owns 10 percent
or more of the outstanding stock in such corporation.
  (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
 { +  nonprofit + } private club as described in ORS 471.175, the
members, officers and directors.
  (D) If the lottery game retailer is a subsidiary but not a
 { +  nonprofit + } private club as described in ORS 471.175, the
officers, each director who owns or controls three percent or
more of the voting stock and each stockholder who owns 10 percent
or more of the outstanding stock of the parent corporation
thereof.
  (E) If the lottery game retailer is a partnership, joint
venture or limited liability company, all of the general
partners, limited partners, joint venturers, members of a limited
liability company whose investment commitment or membership
interest is 10 percent or more, and managers of a limited
liability company.
  (F) If the parent company, general partner, limited partner,
joint venturer, stockholder, member or manager of a limited
liability company is itself a corporation, trust, association,
subsidiary, partnership, joint venture or limited liability
company, then the director may require that all of the
information required by this paragraph 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.

Enrolled Senate Bill 1039 (SB 1039-INTRO)                  Page 4

  (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 paragraph
shall be disclosed for such immediate family member as if the
family member were a video lottery game retailer.
  (H) If any immediate family member, 18 years of age or older,
of any lottery game retailer, other than a video lottery game
retailer, or of any person whose name is required to be disclosed
under this paragraph 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 if
requested by the director. Full disclosure of immediate family
members working in the business may be required only if the
director has just cause for believing the immediate family member
may be a threat to the fairness, integrity, security or honesty
of the lottery.
  (I) If the lottery game retailer is a  { + nonprofit + }
private club as described in ORS 471.175, the treasurer,
officers, directors and trustees who oversee or direct the
operation of the food, beverage, lottery or other
gambling-related activities of the  { +  nonprofit + } private
club and each manager in charge of the food, beverage, lottery or
other gambling-related activities of the  { +  nonprofit + }
private club.
  (J) Any other person required by rule of the commission.
  (c) Any person required to disclose information under paragraph
(b) of this subsection shall disclose additional information for
retail contract approval that the director determines to be
appropriate.
  (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) A person who is a lottery game retailer may not be 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 is not
assignable or transferable.
  (4) The director may terminate a contract with a lottery game
retailer based on the grounds for termination included in the
contract or commission rules governing the contract. The grounds
for termination must include, but are not limited to, the knowing
sale of lottery tickets or shares to any person under the age of

Enrolled Senate Bill 1039 (SB 1039-INTRO)                  Page 5

18 years or knowingly permitting a person under the age of 21
years to operate a video lottery game terminal.
  (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.
  (6) The commission shall adopt by rule an alternative dispute
resolution process for disputes arising from a contract with a
lottery game retailer that must be included in every contract
between the commission and lottery game retailers. The commission
shall develop the dispute resolution process required by this
section in conformity with ORS 183.502.
  SECTION 4. ORS 471.311 is amended to read:
  471.311. (1) Any person desiring a license or renewal of a
license under this chapter 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 that 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 this
chapter and the rules of the commission.
  (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 chapter
183.
  (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 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 does not apply to a
certificate of approval, a brewery-public house license or any
license that 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 license fee is nonrefundable and shall be paid by each
applicant upon the granting or committing of a license.  Subject
to ORS 471.155 and 473.065, the annual or daily license fee and

Enrolled Senate Bill 1039 (SB 1039-INTRO)                  Page 6

the minimum bond required of each class of license under this
chapter are as follows:
_________________________________________________________________

____NOTE_TO_WEB_CUSTOMERS:__________________________________
THE FOLLOWING TABULAR TEXT MAY BE IRREGULAR.
FOR COMPLETE INFORMATION PLEASE SEE THE PRINTED MEASURE.
_______________________________________________________________

                       Minimum
       License      Fee   Bond

____NOTE_TO_WEB_CUSTOMERS:__________________________________
THE FOLLOWING TABULAR TEXT MAY BE IRREGULAR.
FOR COMPLETE INFORMATION PLEASE SEE THE PRINTED MEASURE.
_______________________________________________________________

Brewery, including Certificate

____NOTE_TO_WEB_CUSTOMERS:__________________________________
THE FOLLOWING TABULAR TEXT MAY BE IRREGULAR.
FOR COMPLETE INFORMATION PLEASE SEE THE PRINTED MEASURE.
_______________________________________________________________

  of Approval      $ 500 1,000

____NOTE_TO_WEB_CUSTOMERS:__________________________________
THE FOLLOWING TABULAR TEXT MAY BE IRREGULAR.
FOR COMPLETE INFORMATION PLEASE SEE THE PRINTED MEASURE.
_______________________________________________________________

Winery               250 1,000
Distillery           100  None
Wholesale Malt Beverage

____NOTE_TO_WEB_CUSTOMERS:__________________________________
THE FOLLOWING TABULAR TEXT MAY BE IRREGULAR.
FOR COMPLETE INFORMATION PLEASE SEE THE PRINTED MEASURE.
_______________________________________________________________

  and Wine           275 1,000

____NOTE_TO_WEB_CUSTOMERS:__________________________________
THE FOLLOWING TABULAR TEXT MAY BE IRREGULAR.
FOR COMPLETE INFORMATION PLEASE SEE THE PRINTED MEASURE.
_______________________________________________________________

Warehouse            100 1,000

____NOTE_TO_WEB_CUSTOMERS:__________________________________
THE FOLLOWING TABULAR TEXT MAY BE IRREGULAR.
FOR COMPLETE INFORMATION PLEASE SEE THE PRINTED MEASURE.
_______________________________________________________________

Special events winery
  license          $ 10 per day
Brewery-Public House,

____NOTE_TO_WEB_CUSTOMERS:__________________________________

Enrolled Senate Bill 1039 (SB 1039-INTRO)                  Page 7

THE FOLLOWING TABULAR TEXT MAY BE IRREGULAR.
FOR COMPLETE INFORMATION PLEASE SEE THE PRINTED MEASURE.
_______________________________________________________________

  including Certificate
  of Approval      $ 250 1,000
Limited On-Premises$S200s None
Off-Premises Sales $ 100  None

____NOTE_TO_WEB_CUSTOMERS:__________________________________
THE FOLLOWING TABULAR TEXT MAY BE IRREGULAR.
FOR COMPLETE INFORMATION PLEASE SEE THE PRINTED MEASURE.
_______________________________________________________________

Temporary Sales    $ 50 per day

____NOTE_TO_WEB_CUSTOMERS:__________________________________
THE FOLLOWING TABULAR TEXT MAY BE IRREGULAR.
FOR COMPLETE INFORMATION PLEASE SEE THE PRINTED MEASURE.
_______________________________________________________________

Grower sales privilege
  license          $ 250 1,000

____NOTE_TO_WEB_CUSTOMERS:__________________________________
THE FOLLOWING TABULAR TEXT MAY BE IRREGULAR.
FOR COMPLETE INFORMATION PLEASE SEE THE PRINTED MEASURE.
_______________________________________________________________

Special events grower
  sales privilege
  license          $ 10 per day

____NOTE_TO_WEB_CUSTOMERS:__________________________________
THE FOLLOWING TABULAR TEXT MAY BE IRREGULAR.
FOR COMPLETE INFORMATION PLEASE SEE THE PRINTED MEASURE.
_______________________________________________________________

Special events
  brewery-public house
  license          $ 10 per day
____________________________________________________________
END OF POSSIBLE IRREGULAR TABULAR TEXT
____________________________________________________________

____NOTE_TO_WEB_CUSTOMERS:__________________________________
THE FOLLOWING TABULAR TEXT MAY BE IRREGULAR.
FOR COMPLETE INFORMATION PLEASE SEE THE PRINTED MEASURE.
_______________________________________________________________

Special events
  distillery
  license          $ 10 per day
____________________________________________________________
END OF POSSIBLE IRREGULAR TABULAR TEXT
____________________________________________________________
_________________________________________________________________

  (6) The fee for a certificate of approval or special
certificate of approval granted under ORS 471.244 is

Enrolled Senate Bill 1039 (SB 1039-INTRO)                  Page 8

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.
  (7) Except as provided in subsection (8) of this section, the
annual license fee for a full on-premises sales license is $400.
No bond is required for any full on-premises sales license.
  (8) The annual license fee for a full on-premises sales license
held by a  { + nonprofit + } private club as described in ORS
471.175 (8), or held by a nonprofit or charitable organization
that is registered with the state, is $200.
  (9) The annual fee for a wine self-distribution permit is $100,
and the minimum bond is $1,000.
  SECTION 5.  { + The amendments to ORS 471.001 and 471.175 by
sections 1 and 2 of this 2010 Act apply to licenses issued or
renewed on or after 90 days following the effective date of this
2010 Act. + }
  SECTION 6.  { + This 2010 Act being necessary for the immediate
preservation of the public peace, health and safety, an emergency
is declared to exist, and this 2010 Act takes effect on its
passage. + }
                         ----------

Passed by Senate February 10, 2010

      ...........................................................
                                              Secretary of Senate

      ...........................................................
                                              President of Senate

Passed by House February 19, 2010

      ...........................................................
                                                 Speaker of House

Enrolled Senate Bill 1039 (SB 1039-INTRO)                  Page 9

Received by Governor:

......M.,............., 2010

Approved:

......M.,............., 2010

      ...........................................................
                                                         Governor

Filed in Office of Secretary of State:

......M.,............., 2010

      ...........................................................
                                               Secretary of State

Enrolled Senate Bill 1039 (SB 1039-INTRO)                 Page 10