Oregon Legislature Passes Comprehensive Winery Land Use Bill

After years of temporary measures, the Oregon Legislature has adopted a long term framework for regulating winery activities on farmland. Unanimously adopted by both the Senate and the House, Senate Bill 841 is the product of a hard-earned consensus among Oregon wineries and other key stakeholders. 

SB 841 applies to all wineries on Exclusive Farm Use (EFU) land, as well as wineries in mixed farm-forest zones. This is the first time that the Legislature has adopted statewide rules for wineries in farm-forest zones, which is significant because many wineries are located in foothill areas covered by these zones. 
 
Since 1989, Oregon law has allowed wineries on EFU land as a permitted use, subject to certain requirements. Wineries not meeting these requirements have often been sited under a more rigorous conditional use process. SB 841 retains both of these pathways and clarifies the limitations that apply under each type of permit.
 
Permitted use winery rules
SB 841 creates a clear distinction between wine marketing activities and other special events at permitted use wineries. The legislation guarantees wineries the right to conduct a broad array of wine marketing activities that have the primary purpose of promoting the winery’s wine. By contrast, the bill limits special events where wine marketing is secondary (e.g. weddings, facility rentals) to 18 days per year. 
 
In the Willamette Valley, special events are also subject to an additional permitting process. This streamlined process is designed to prevent impacts to neighboring lands without subjecting wineries to lengthy regulatory review.
 
SB 841 also allows permitted use wineries to have professional kitchen facilities and to pair food with wine. Full service restaurants, however, are prohibited at all but the very largest permitted use wineries. These rules should end the uncertainty and frustration that wineries have experienced over food service in recent years.
 
Conditional use wineries 
The legislation also addresses the conditional use pathway for wineries with properties or business models that do not meet the requirements of the permitted use winery statute. This pathway was established by the courts in the late 1980s and has been widely used across the state. These permits were challenged in recent litigation, but Oregon courts upheld the validity of the conditional use process. See Friends of Yamhill County v. Yamhill County, 255 Or App, 636 (2013). 
 
Under SB 841, the standards developed by the courts for conditional use permits will continue to apply. The new legislation does, however, require all conditional use wineries to adhere to the same 25 percent limit on non-wine income that has applied to permitted use wineries since 2010.
 
Grandfather rights
In accordance with Oregon “nonconforming use” law, SB 841 allows legally established, ongoing activities at existing wineries to continue despite the new rules. A winery’s specific grandfather rights depend on the winery’s land use permit, its historic practices, and county policies. 
 
Conclusion
SB 841 is a big victory for Oregon wineries and a testament to the careful and inclusive process that that produced the legislation. Although there is work to be done in implementing the new rules, SB 841 should provide wine businesses with the flexibility and certainty that they need to develop successful business plans.
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