One of the interesting nuggets of info at the Montana Brewers Association’s 2012 Fall Conference came from Shauna Helfert, Administrator of the Liquor Control Division of the Montana Department of Revenue.

The Department of Revenue is working on a bill to create a new license for brew-on-premises operations, a business category that is not currently regulated. Apparently there are a couple of businesses operating in the state which allow people to rent equipment at the business to brew beer for the customer’s personal consumption.  If you’re getting old, like me, you might remember when Missoula’s Kettlehouse operated such a business at the Myrtle Street location.  A line of kettles sat where the mismatched bus-seat couches now hold beer drinking patrons.

While the federal government has a set of stringent guidelines for these operations, the feds don’t regulate brew-your-own facilities.  Thus, the feds leave it up to the states to decide whether – and how – to license them.

Getting a bill before the legislature begins with a bill drafting request.  The Department submitted such a request earlier this year and stated the purpose as:

To protect the public health and safety by providing statutory guidelines for Brew on Premise businesses within the state. Alcoholic beverages are regulated in the state to protect the public health and safety, however this type of business which allows consumers to manufacturer their own beer is not regulated to ensure they meet building health and fire code regulations, ensure alcoholic beverages are not provided to underage or intoxicated persons, or to ensure the owners are qualified to be good purveyors of alcoholic beverages. There is a clear need to clarify the law in this area in order to avoid problems as this business model grows.

I appreciate the desire to regulate the alcohol aspects of such businesses, but call b.s. on the building, health and fire code issues.  Those are not the purview of the Department of Revenue, and existing regulations for commercial businesses are already in place. (Yes, I know the Dept. already reviews and approves floor plans, etc. for establishments serving alcohol.)

However, the background in the Department’s request makes better sense:

Due to the fact that these types of businesses are not actually selling alcoholic beverages, they are not regulated by the federal Alcohol and Tobacco Tax and Trade Bureau (TTB). They are merely providing a facility and service for customers to make their own products, therefore TTB does not regulate the business. Persons interested in this type of business call our office to get the necessary paperwork to apply for a license and are shocked when we tell them there is no license required by law or application necessary.

A draft bill has already been prepared, but the link to the draft on the Department’s website leads to an error message. [Update: the link now works as of 10-29-12.] Just hearing the basic premise, the brewers and other attendees at the conference had good questions and suggestions for the Department to help avoid unintended consequences (and loopholes).

For example, the license would not permit any on-premise consumption of alcohol, but it is common for homebrewers to taste the beer when racking from primary to secondary fermentation. Would that violate the license? Fortunately, the Department is not attempting to make any changes in Montana’s homebrewing law which merely defaults to current Federal requirements.  

It was clear from the presentation and discussion that the Department has a very good relationship with the Montana Brewers Association.  Such positive relationship are essential in such a heavily regulated industry.  

For legislative savy readers who want to follow it’s progress, the Bill request is LC0400. The 2013 Montana Legislature gets going on January 7, 2013.