Oregon Liquor Control - Oregon State Legislature
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Background Brief on …
Oregon
September 2012 Liquor
Inside this Brief Control
Commission and
Agency
The Oregon Liquor Control Commission (OLCC)
regulates the sale, distribution, and use of alcoholic
Licensing beverages in order to protect Oregon's public health,
safety, and community livability. The OLCC was
Alcohol Server created in 1933 by a special session of the Oregon
Legislature following the end of national Prohibition.
Permits and
Oregon chose a "control" system, giving the state the
Education exclusive right to sell packaged distilled spirits through
retail liquor stores operated by contracted agents, and is
Liquor Agents and one of twelve states that sell distilled spirits through
Stores government-operated stores or designated outlets that the
state supervises a sales agency relationship.
Responsible Vendor Commission and Agency
Program The agency is overseen by five citizen commissioners,
who are appointed to four-year terms by the Governor
The Oregon Bottle and subject to Senate confirmation. Commissioners
Bill provide policy direction for the OLCC. Each
commissioner represents one of the state's congressional
districts, and one commissioner is from the food and
Revenue Sources and beverage industry. The commission appoints the OLCC
Distribution Executive Director, who oversees the agency's
headquarters, distilled liquor distribution center and two
Staff and Agency storage facilities in Portland, and regional offices in
Salem, Bend, Eugene, and Medford.
Contacts
Licensing
The OLCC issues various types of licenses for the
purposes of manufacturing, storing, and distributing
Legislative Committee Services
State Capitol Building
distilled spirits, wine and cider, and malt beverages, as
Salem, Oregon 97301 well as wholesale and retail sales, sales at special events,
(503) 986-1813 and serving alcoholic beverages.
Background Brief - Legislative Committee Services Page 1 of 5The type of license an individual or business related to the sale or service of alcohol by the
needs to obtain depends on the types of activities licensee).
they will perform and where the business is
physically located. For instance, out-of-state Alcohol Server Permits and Education
businesses who want to deliver beer, wine or Service permits are required for servers (i.e.
cider into Oregon must apply for a different waitstaff or bartenders) who work for a business
classification of a direct shipper permit than a that allows customers to drink alcoholic
similar business that is based in Oregon. beverages on the premises; managers who
Likewise, while a caterer or private club all directly supervise servers who mix, serve, or sell
receive the same privileges under a full on- alcohol to customers for drinking at their
premises sales license (the ability to serve premises; and owners who mix, serve, or sell
distilled spirits as well as beer and wine) as a bar alcohol or manages services at that business and
or restaurant, each business type must meet their name is not individually listed on the liquor
specific criteria to obtain the license. license.
Prior to issuing a liquor license related to the Applicants must be at least 18 years old, and
sale of alcoholic beverages, such as for take and pass an education class. Oregon was the
restaurants, upon submission of the application, first state in the country to require training for all
the OLCC posts public notices on the building of its alcohol servers. The purpose of the
or property that is to be licensed and delivers Alcohol Server Education course, which must be
notice to neighborhood associations, schools, completed every five years, is to enhance public
and other entities located within either 500 feet health and safety by developing the knowledge
or 1,500 feet of the proposed location, and skills that support responsible alcohol
depending on whether the location is in an urban service.
or rural area. Beyond allowing public comments,
the local governing body also makes a The OLCC administers the server course by
recommendation to the OLCC regarding certifying community colleges and private
licensure. The applicant(s) and the proposed trainers to teach the classes; and is also
location are also investigated by an OLCC responsible for designing, reviewing, and
investigator who in turn makes a updating model curriculum and test grading. The
recommendation based on law, case history, and course must cover a number of topics including
OLCC policy. the effects of alcohol on the body and mind,
including its interaction with other drugs;
OLCC staff and the executive director have the Oregon's alcohol sale and service and drunk
authority to grant or deny most liquor licenses, driving laws; intervention techniques for dealing
but the OLCC commissioners must review and with intoxicated and underage customers; and
deny or approve an application under responsible advertising, marketing, and
circumstances such as a negative local management procedures. Students must pass the
government recommendation, significant public test with at least a 70 percent score; more than
opposition, recent record of an applicant’s 98 percent of students pass the test the first time
alcohol or drug abuse, or a determination by the they take it. The test can be taken twice before
OLCC Executive Director of the potential for having to retake the class.
future law violations. A license can be
suspended or revoked for actions such as Servers who have passed a server education
knowingly selling alcohol to minors or visibly class in Oregon, and have to renew their permit
intoxicated patrons; or for a history of serious and/or the server education requirement, have
and persistent problems involving disturbances, the option to either repeat the initial class or take
lewd, or unlawful activities or noise either in the a shorter renewal class if they passed the initial
premises or involving patrons in the immediate class within the past seven years. This does not
vicinity of the premises (and the problems are exempt the server from the five-year renewal
Background Brief - Legislative Committee Services Page 2 of 5requirement, but applies only to the qualification They cannot open before 7:00 a.m. or close later
of taking a renewal class. than 10:00 p.m. and must be open between noon
to 6 p.m. Liquor store operations have the option
The OLCC can deny service permits to of being open on holidays and Sundays, with
individuals who have felony drug convictions, hours of operation varying from store to store.
certain types of felony crime of violence
convictions, diversions or convictions for New locations for liquor stores are selected by
driving under the influence of intoxicants (DUII) the OLCC. Criteria for determining a potential
or furnishing alcohol to minors, or felony area for a store include population,
driving while suspended (DWS) or revoked demographics, zoning and land-use changes, and
(DWR) convictions. A server permit can be distance to existing liquor stores. The majority
issued to someone otherwise denied if they have of OLCC agents run exclusive liquor stores, in
been clinically diagnosed with an alcohol or which their primary function is to sell liquor but
drug addiction; have completed treatment; have are able to sell some related items such as
not taken alcohol or drugs (whichever applies) in glassware, mixers, and garnishments. There are
the last two years, and have completed all parole currently 93 non-exclusive liquor stores which
or probation requirements. are operated in conjunction with other
businesses like hardware and drug stores, and
Liquor Agents and Stores usually serve smaller communities.
The OLCC sells distilled spirits through 246
retail liquor stores that are independently owned Under a pilot program to establish a few state
and operated. Agents are selected by the OLCC liquor stores within existing grocery stores, the
through a competitive application process, with OLCC opened its first “store in a store” in
openings occurring when an operator resigns or August 2004 in a Thriftway supermarket in
retires, or if a contract is terminated. Applicants Garden Home in Southwest Portland. First year
are evaluated by a number of criteria, such as sales at the pilot store exceeded projections by
their level of retail business experience, ability 8.25 percent and the addition of the liquor store
to operate the store on a full-time basis, and is credited with increasing foot traffic to the
adequate finances to manage and operate the grocery store as well as beer and wine sales
store. They also are evaluated for their criminal there. The two other stores in the pilot opened in
history, particularly if they have been convicted October 2004, in Bend (Ray’s Food Place) and
of a felony or a crime related to money in the Bethany area of Portland (Quality Food
management fraud or crimes related to abuse of Center). In April 2006, the OLCC declared the
alcohol and/or a controlled substance. A person first pilot successful and voted to make the store
is prohibited from being a liquor store operator permanent; the other two stores were converted
if they or anyone in their household or to permanent status in June 2006.
immediate family has a financial interest or
business connection with the distilled spirits In 2011, another pilot program established four
industry; or, in general, if they are a licensee or a retail liquor stores to convert from exclusive
director, officer, or substantial stock holder in a liquor stores to non-exclusive liquor stores
business licensed by the OLCC. (selling beer and wine in addition to distilled
spirits), and for up to four corporations to apply
Agents are independent contractors and are not to be liquor agents.
considered as state employees. Compensation is
set through the budget process by the Legislature Responsible Vendor Program
and is distributed from revenues by the OLCC. OLCC retail licensees have an option of joining
From their compensation, agents pay most store the Responsible Vendor Program (RVP), whose
operating expenses, including rent, staffing, and purpose is to reduce underage drinking and
their own salaries and benefits. Agents are to encourage participants to utilize specific
keep their store open a minimum of eight hours practices in preventing sales to minors, and
per day, except for Sundays and legal holidays. provide incentive to give employees on-going
Background Brief - Legislative Committee Services Page 3 of 5training in responsible alcohol sales and service. distributor. In turn, consumers pay the five cent
Benefits for program participants include being container deposit to the retailer when purchasing
eligible for reduced fines if an employee sells these items, and redeem the deposit when
alcohol to a minor or fails to properly check returning the containers to retail stores in
identification, an increased protection against Oregon. Upon returning containers to the
civil actions in liability lawsuits involving distributor for recycling, the retailer is
minors, and protection from having a liquor reimbursed for redeemed containers. Deposits
license cancelled or denied if an employee sells on containers not returned for refund are kept by
alcohol to a minor or fails to properly check for the distributors.
identification.
The five cent value has not changed since the
Licensees can apply for the program if they have bill was first enacted in 1972. Legislation from
not personally committed a major liquor law 2011 increases the deposit/refund value to ten
violation within the last five years, such as cents after January 2016 if the redemption rate
felony convictions, making false statements to for malt and carbonated beverage containers fall
the Commission, or personally selling alcohol to below 80% for two consecutive years; or if the
a minor that included “significant aggravating rate for all types of redeemable containers fall
circumstances,” i.e., an intentional sale to a below that same rate after 2021. No later than
minor or a sale to a minor which resulted in January 1, 2018, all beverages except wine,
death or personal injury. liquor, dairy, or milk substitutes are added to the
Bottle Bill container parameters. While beer,
The basic requirements for the participant soft drinks, and water containers of up to three
include providing responsible alcohol sales liters will still be recyclable, the new beverages
training and quarterly refresher training sessions will be covered only if they are in bottles or cans
to employees, adopting house policies on from between four ounces to 1.5 liters.
alcohol sales and checking identification and
what will happen if they sell alcohol to a minor, Retailers whose facility is less than 5,000 square
accepting only the allowable forms of feet are required to accept back only the brands
identification for alcohol sales as stated in and sizes that they sell, and can limit the number
Oregon statute, and posting signs that list the of redeemed containers to a maximum of 50 per
valid types of identification accepted at the person per day. Larger retailers are required to
business and the requirement for any customer accept bottle and can returns of all brands and
who looks younger than 26 (or older, if that is sizes of beverage containers for each type they
the established house policy) to show valid sell, and can limit the amount of redeemed
identification. containers to 144 containers per person per day.
The Oregon Bottle Bill Revisions to the Bottle Bill allow distributors to
The OLCC is also responsible for the majority form cooperatives to simplify the process of
of the administration and enforcement of the collecting containers and issuing refunds. House
Oregon Bottle Bill (ORS 459A.700 to Bill 3145 (2011) created a pilot program to
459A.740), which was the very first legislated establish redemption centers in cities with less
beverage container deposit system enacted in the than 300,000 in population. The newest pilot
United States. Today, ten other states operate project redemption center is in Salem, and
similar programs. establishes two convenience zones around the
center. Participating stores within the first zone,
Under this law, Oregon retail stores pay a five a 1.5 mile radius around the center, are no longer
cent deposit on bottled water, and malt and required to accept containers for redemption;
carbonated beverage containers (up to 3 fluid and stores from a 1.5 to 3 mile radius around the
liters, with the container labeled so the five-cent center are required to accept up to 24 bottles and
refund value is clearly visible) to the beverage cans for redemption daily per person.
Nonparticipating stores are required to accept
Background Brief - Legislative Committee Services Page 4 of 5containers for redemption at levels depending Distilled Spirits/50 percent Allocation from Beer
upon their square footage (up to 24 containers and Wine Sales/Miscellaneous Revenues:
daily for stores less than 5000 square feet and up General Fund – 56 percent
to 500 containers for stores over 5000 square Cities – 20 percent
feet). This is in addition to two other redemption Counties – 10 percent
centers in Wood Village and Oregon City, which City revenue sharing – 14 percent
are also pilot projects.
Also, $0.02 per gallon of wine tax is distributed
The Department of Agriculture is responsible for to the Oregon Wine Board for purposes of
enforcing the cleanliness of retailer recycling promoting the development and marketing of
areas, while the Department of Environmental Oregon wines.
Quality is responsible for collecting data
associated with solid waste and container return
rates. Although there are three state agencies Staff and Agency Contacts
that administer components of the Bottle Bill, Theresa Van Winkle
the government does not receive any income, Legislative Committee Services
tax, or fee for services associated with the law. 503-986-1496
Revenue Sources and Distribution Tom Erwin
The OLCC is financed entirely from several Oregon Liquor Control Commission
sources: gross sales on distilled spirits, a Government Affairs/ Community Outreach
privilege tax on beer and wine, a tax on the sale Director
or use of all agricultural products used in a 503-872-5044
winery to make wine as well as specific types of
grapes or grape products exported out of
Oregon, license fees, and other miscellaneous
revenues including civil penalties and fines. A
50-cent surcharge per bottle on distilled spirit Committee Services provides centralized, non-
partisan research and issue analysis for the
products was imposed in April 2009 to generate
Legislative Branch. Committee Services does not
funds to offset compensation cuts to liquor provide legal advice. Background Briefs are intended
agents as a result of rebalancing the state’s to give the reader a general understanding of a
2007-2009 biennium budget. The surcharge is subject, and are based on information which is
continued through the 2011-2013 biennium, and current as of the date of publication. Legislative,
is projected to generate $29 million in additional executive, and judicial actions subsequent to
gross revenue. publication may affect the timeliness of the
information.
After subtracting the cost of purchasing liquor
from distilleries, freight, liquor agent
compensation, and other expenditures related to
OLCC operations, remaining revenues are
allocated as follows:
Beer and Wine Sales:
50 percent - Mental Health, Alcoholism, and
Drug Services account for
treatment services provided
through counties
50 percent - Distributed with the other
revenues
Background Brief - Legislative Committee Services Page 5 of 5You can also read
