Senate Bill #111, dealing primarily with wine taxation and labeling, is obviously dominating this year’s legislative conversation.
 
The Oregon Winegrowers Association is working with the Rogue Valley and Umpqua Valley Winegrowers Associations to host the first industry forums tomorrow, designed to allow discussion of SB 111 and other legislative priorities. As meetings in other locations are confirmed, we’ll announce them.
 
Here are responses to some frequently asked questions about SB 111:

1. What is the status of the bill?
It has passed out of the Senate Judiciary Committee to the Joint Committee on Ways and Means. It is now designated as SB 111A. No further votes are scheduled right now and the most likely next step is referral of the bill to a legislative subcommittee. That Ways and Means subcommittee will schedule a public hearing and work session before the bill is voted on by the full Committee and, if passed, sent on for Senate and House votes before June 30.

2. How does SB 111A relate to the Senate bills sponsored by the Willamette Valley Wineries Association?
Unlike 111A, the WVWA’s three Senate bills, numbered 829A, 830A and 831A, focus on conjunctive labeling, varietal content and exclusive sourcing respectively. Read here for more on the Willamette Valley proposals. OWA has not crafted, and is not actively lobbying for, the Willamette Valley Wineries Association’s proposals.

3. Why is collection of the grape tax from wineries outside Oregon important now?
Industry members have been puzzling since at least 2001 over ways to collect the grape tax fairly from wineries in adjacent states. It is time for action now that there is statewide survey data indicating an all-time high level of Oregon grapes, surpassing 18,000 tons, left the state in 2017. The clear majority of that volume went untaxed, and those tons represent an increase of approximately 60% versus tonnage exported during the prior year.

4. How does grape tax collection change under SB 111A?
The bill explicitly empowers OLCC to collect from out-of-state producers within the same tax structure that has applied to in-state winemakers since 1983. Oregon’s Attorney General’s office advises that statutory action is the preferred way to clarify OLCC’s authority. The $25 tax rate OLCC would collect is consistent with the $25 an Oregon winemaker owes OLCC today on any ton brought in from out of state.

5. What is meant by “reciprocity”?
Section 9 of SB 111A allows, but does not require, the OLCC to work in conjunction with Oregon’s Attorney General on agreements with other states to enforce the laws of Oregon and the other states.

6. Doesn’t SB 111A require wineries in other states to get new permits and add intrusive, bold lettering to front labels indicating where a wine was made?
Not anymore. The OWA lobbied to have those provisions edited out.

7. What happens when OLCC makes rules?
The rulemaking process includes advance written notices of any proposed rulemaking, followed by a series of open, public hearings at which industry members can ask to go on the record and address the Commission.

8. Why does SB 111A open the door to OLCC regulation of wine labels?
The Commission is already involved in labeling rules enforcement related to our state’s more stringent requirements, and has been for 42 years. Oregon’s distinctive and rigorous labeling rules are recognized across the country and support the state’s reputation for exceptional wine quality. In addition, 111A clarifies OLCC’s authority over other elements of wine packaging, marketing and advertising.  

9. Doesn’t TTB have the authority it needs already to enforce Oregon’s wine labeling rules?
TTB’s label review staff and its enforcement capabilities are insufficiently resourced according to the Bureau’s managing Administrator. TTB, dating back at least to 1984, has asserted that state laws and labeling regulations are enforced by the state involved.