License Bill clears Senate, heads for House
Pub Date: 3/1/2007
A bill moving forward to adjust the state's cabaret alcohol licensing system received an 11-0 stamp of approval from the House Business, Labor and Economic Affairs Committee January 30, then got a 43-3 nod from the full Senate February 5. It will now be considered in the House.
The bill, SB 296 sponsored by Sen. Dan Weinberg, (D) Whitefish, had its hearing the morning of January 30 and a vote later in the day. All testimony, with one exception, was supportive.
Sen. Weinberg testified he brought the bill in response to northwest Montana constituents who believed more restaurants should be able to acquire beer and wine licenses. Yet, Sen. Weinberg said, such a bill needed to be carefully crafted so as not to harm business owners who have invested in good faith in the current license system.
Mark Staples, representing the Montana Tavern Association (MTA), noted the current licensing quota system is based on populations and justified by historical experience.
Montana has always believed license and liquor availability should be limited and linked to community populations, Staples said. However, he noted there are some advocacy groups mounting public campaigns to further restrict access to alcohol while other factions are working to make it more available.
Staples said MTA is aware that "some pressure needs to be released" from the quota system due to booming economic development and heightened license demand and valuations in some locales.
A delicate balance needs to achieved, Staples said, between numerous competing interests, among them those who are heavily invested in the current system, public health policy objectives, economic development, consumers who want beer and wine more available with restaurant dining, and a state that wants to at the same time limit public access to alcohol.
He pointed out that it was eight years ago that the so-called "cabaret" restaurant beer and wine licenses were introduced and that they have in large part successfully addressed the problem, but that it is now time to make an adjustment.
The "cabaret" licenses are restricted to allow restaurants to serve beer and wine at tables with meals only between 11 a.m. and 11 p.m. and allow no gambling. The holder of a current beer and wine license cannot apply for a "cabaret" license until one year after having sold the conventional license.
While the initial quantity of "cabaret" licenses, which were issued based on the then current number of conventional quota beer and wine licenses, fulfilled the demand in most communities, a few with particularly robust growth such as Billings, Missoula, Kalispell and Bozeman have developed an unmet demand. Many communities such as Great Falls still have "cabaret" licenses on the shelf available from the initial issuance.
Staples said some businesses had exploited loopholes in the original law that would be closed under SB 296, such as simply changing corporate identities to skirt restrictions on sale and movement of licenses.
MTA President Jupe Compton and Yellowstone County Tavern Association President Neal LaFever seconded Staples' support for the bill. Bob Miller, a member from McAllister, testified that the bill could help tourism communities like nearby Ennis deal with restaurant customers' desire for adult beverages with meals.
Sen. Greg Lind, (D) Missoula, testified that the bill would help the restaurant business in his community. Stewart Dogget of the Montana Innkeepers Association and Brad Griffin of the Montana Restaurant Association also asked the committee to give the bill a thumbs up.
Walter Nickerson, a restaurateur from Whitefish, testified in opposition to the bill, saying he feared the new licenses would drive down the value of his current license, which he said was heavily collateralized with bank debt and represented his retirement nest egg.
Sen. Weinberg responded that the bill was very carefully crafted to be fair to current license holders while allowing for commercial expansion. "This is about as fair as you can get," he said.
Staples added, "There are always some who think it is too much, and those who think it is too little. I understand Mr. Nickerson's arguments: that was my testimony eight years ago. But his license has appreciated substantially" since the "cabaret" licenses were introduced in 1999. "This takes the pressure off while controlling access to alcohol and preventing financial damage to current licensees. This does it."
When Sen. Weinberg spoke in favor of the bill from the Senate floor, he said, "On premise alcohol licensing in Montana is tied to population and it has been for 70 years. We only get more licenses when we get more people.
"The continued introduction of measures to curb both access to alcohol and the use of it supports that having limits on licenses is still a rational public policy.
"However, we also have changing tastes and demographics as more and more adults want to have beer and wine with a good meal.
"So we have a public policy of controlling the number of alcohol outlets, yet in some of our most quickly growing areas there is a demand for beer and wine with meals that exceeds supply."
Sen. Weinberg pointed out that current license holders meanwhile have investments in their licenses totalling billions of dollars and "justifiably do not want them devalued."
How do you strike a balance between these competing considerations? he asked.
The Senator then recited a brief history of the introduction of the specialty restaurant beer and wine licenses back in 1999 that were relatively inexpensive but did not allow a full bar, gambling, hard liquor and were used during restricted dining hours.
These "cabaret" licenses, in line with Montana public policy and those who advocate restricting access to adult beverages, were also issued based on populations.
"I'm advised by those who were involved (with the creation of the "cabaret" licenses) that if these new licenses worked as intended" and did not devalue the investments of those with conventional licenses, that "at some time the numbers could be increased."
Weinberg said he met with members of the Montana Tavern Association while contemplating his bill and found their thinking paralleled his own
SB 296 "does not reinvent the wheel," Sen. Weinberg said. "It just adds to the number of wheels.
"This bill retains the original limited parameters of the cabaret licenses which, because of those parameters, have not devalued other full licenses."
Sen. Weinberg said the small restaurants in growing cities support the bill, as does the Montana Innkeepers Association. He said tavern owners have watched the impacts of cabaret licenses closer than anyone else since their life's investments were at stake.
"Tavern owners say if cabaret licensing is applied as intended, it works, and so they support this bill. I ask you to as well," Sen. Weinberg concluded.
All but three members of the Senate ultimately agreed with Sen. Weinberg and cast their votes accordingly.
Source: The Montana Tavern Times, March. 2007, published monthly by Continental Communications, 125 W. Granite St., Suite 102, Butte, MT 59701.