Stoel Rives Attorneys Speak at Wine Conference
This past week, Stoel Rives partners Chris Hermann and John McKinsey and associate Jake Storms all participated as panel speakers at the Best Practices for Owning and Operating a Winery conference, held at the Hyatt Vineyard Creek in Santa Rosa, CA. John also acted as co-host of the conference, which covered a wide variety of topics affecting wineries and vineyards, from siting and permitting and valuation to how to build a brand and protect trademarks.
Chris, Chair of Stoel’s Winery and Vineyard Management group, spoke on custom crush agreements and the pitfalls that can affect those who do not adequately protect themselves. John, California Co-Chair of Stoel’s Winery and Vineyard Management group, educated attendees on energy use and utilizing renewable electricity sources. Jake, an associate in the group, spoke on industry trends and California-specific legislative and project actions, including AB 605 and the California High-speed Rail.
The event was well attended, with over 40 stakeholders present at the two-day event. This marks the fifth year of the event, which was sponsored by Stoel Rives and Kennedy/Jenks Consultants, along with industry mainstay, Wines & Vines.
Napa County Farm Bureau Holds Water Forum
On March 9th, the Napa County Farm Bureau held its first water forum in five or six years in St. Helena, California. Kicked off by Bureau President Jim Lincoln, the event was well attended, with over 100 concerned stakeholders listening to the most recent updates in California water issues.
Phillip Miller, the Deputy Director of Napa County Public Works, discussed a recent study by Napa County designed to compile countywide data, establish a framework for reporting, and provide recommendations related to any future groundwater permitting and monitoring program.
Of most interest was the presentation by Paula Whealen, a principal at the engineering firm of Wagner & Bonsignore. Ms. Whealen gave a general overview of new requirements for surface water users from the California State Water Resources Control Board (“SWRCB”), including:
· All reports of licensees and progress reports by permittees and pre-1914 water right diverters are now due annually by July 1;
· Reports must provide the monthly amount taken from the source;
· They must state the monthly amount beneficially used; and
· They must be filed electronically as of this year.
o Filings will require high-speed internet access
Because all new reports must be filed electronically, the prior “fudge factor” regarding timelines for reporting will no longer exist. The SWRCB will be able to tell on July 2 who hasn’t filed the necessary reports. Failure to file all necessary reports constitutes non-compliance with the underlying water license/permit and can lead to fines and/or other administrative actions. It was also stated that, given the increase in the number of enforcement officers (25) and the establishment of a water rights enforcement office in Santa Rosa, California, there will be a significant increase in site inspections in the North Coast region.
A bit of sage advice given at the Forum is for all vineyard and winery owners operating under a license/permit to take it out, read it, and understand it. If you don’t understand your water rights permit, find someone who does, and most importantly, make sure you are in compliance. In addition, even for those sources that are not required to be reported (i.e., reclaimed water), it behooves vineyards and wineries to keep records of all water that is used on the property.
Sonoma Sets Fees, Program Schedule for Frost Protection Program
The Sonoma County Board of Supervisors has adopted the final measures for moving ahead with the County’s Frost Protection Program (the “Program”). This final act was merely a carry-over from the February 8 meeting where the Board adopted the fee structure for the Program and extended the time frame for implementation of the Program until 2012.
Under the new Section 11B of the County Code, the Program will be used to gather information on vineyard and orchard water usage in the Russian River Watershed. As previously blogged, creation of the program started after complaints were made by the U.S. Fish and Wildlife Service that frost protection measures that use water from the Russian River Watershed were causing the death of certain protected salmonid species. The federal agency threatened to take action under the Endangered Species Act if the County did nothing. The County moved to create the Program ahead of State action, which is expected to occur in the next 12-18 months.
Implementation of the Program was originally planned for the 2011 frost season. However, County staff informed the Board at the February 8 meeting that two hurdles had sprung up that would delay actual implementation until the frost season of 2012. The first was a seemingly 11th-hour move by certain vineyard stakeholders to not back the program due to concerns of the public nature of the information gathered. The second was the negotiations over the issue of indemnification between the County and the non-profit organization created to assist in the implementation and that would oversee the gages in the long-term.
While a delay in implementation to the 2012 frost season was acceptable to the U.S. Fish and Wildlife Service, it was stated that any further delay would require action on the part of the agency. One Board member suggested that, due to the delay, the Board consider scrapping the Program and creating a fully voluntary concept. This idea was not acceptable to the U.S. Fish and Wildlife Service and was quickly discarded.
Vineyards and orchards within the Program’s umbrella must register with the County Agricultural Commission annually between January 1 and March 1. This year’s registration must occur by June 1. The fee set for the Program is $64.00 per site. This fee will be assessed annually with the required registration. The County estimates there are some 360 sites within the Program’s boundaries.
The Program will have to conform to any future State action regarding the Russian River Watershed. However, the Board was confident that the Program would meet with acceptance at the State level.
Changes to Utah's Liquor Laws
The 2011 legislative session wrapped up last night with several changes being made to Utah’s liquor laws, including:
- Converting 40 tavern only licenses into 15 full restaurant licenses and 25 limited restaurant licenses (beer and wine only)
- Allowing a hotel guest to order one drink at a time through room service
- Permitting alcohol to be sold beginning at 11:30 a.m. (a change from noon for liquor and wine and 10:00 a.m. for beer)
- Increasing the fees for liquor licenses (for instance the initial and renewal fees for a limited restaurant license increased to $750 and $550 respectively)
- Banning the sale of mini-kegs
- Allowing existing licensees to sell liquor licenses, although not until after July 31, 2012, when that portion of the law goes into effect
- Creating a reception license for reception centers larger than 5,000 square feet that derive no more than 30% of gross sales from the sale of alcohol
- Eliminating any doubt that an establishment cannot allow drink specials
- Requiring dining club licenses to derive at least 60% of gross sales from food
- Increasing enforcement
The bill (S.B. 314) now awaits Governor Herbert’s signature, which is expected. While the new law will free up an additional 40 restaurant licenses, many observers doubt that this will alleviate demand for long. The state currently has issued 21 more licenses than allowed under current law because of an overestimation of census figures. This law preserves the licenses already granted, but it will take some time before population catches up with the number of licenses already granted let alone freeing up additional licenses.
Chris Hermann recipient of Industry Partner award by Oregon Wine Industry
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Stoel Rives partner and wine attorney Chris Hermann was one of two recipients of the Industry Partner award at the 2011 Oregon Wine Industry Symposium in Eugene, Oregon. This award is presented to a vendor or service provider to the industry who, in the course of doing business, has significantly assisted the growth and success of the wine industry and its members. Mark Freund of Silicon Valley Bank was the other award recipient.
