Montana Legislature Proposes Study to Study Whether To Study Alcohol Laws

I wish I was kidding, but this is the current state of alcohol related legislation in Montana.

When HB 326 and HB 336 died in Committee in February, it may have seemed like the end of significant alcohol related legislation for 2015. But two other bills quietly percolated beneath the surface.


House Bill 619, sponsored by Rep. Jennifer Eck, sought to create a mechanism for removing Restaurant Beer and Wine licenses from the quota system.  You might know such licenses by their colloquial name, the “cabaret” license.

House Bill 618, sponsored by Rep. Christopher Pope, intended to have the Economic Affairs Interim Committee undertake a study of Montana’s alcohol laws aimed at determining whether there are better ways to be regulating alcohol (to paraphrase).

Eck’s bill was relatively simple and practical.  For those areas where licenses are available from the state (i.e. the quota had not been met) the quota would be removed immediately.  In areas where licenses have all been distributed, the bill would add two licenses per year until they stopped being snatched up.  At that point, the quota would be removed for that area.

Among other topics, Pope’s bill was designed to have the interim committee consider such issues as “whether problems and benefits associated with the quota system can be identified and whether, specifically, the state should eliminate the quota system and, if so, ensure that license owners are recompensed for the real market value of their license assets and over what time period.”   We all know this needs to be studied and most understand the system cannot just be pulled out from under those who have paid significant sums to play by the existing rules.

The two bills were heard back to back by the House of Representatives’ Business and Labor Committee in a hearing held last week.

The Montana Tavern Association strenuously objected to both.

Calling Pope’s interim study bill a “preordained outcome,” John Iverson, the Tavern Association’s Government Affairs Director and lobbyist, said the Tavern owners would not participate. Instead, Iverson said it was time for industry members to “put on their big boy pants” and participate in the MTA/MBA led coalition process.  That coalition would have a far better chance of finding common ground than a government led interim study, Iverson suggested.

In case you haven’t been following along, that “coalition” is 0-1 in legislative endeavors.  Worse, it fractured relationships, frustrated the legislature, and generally created hard feelings even among members within their respective organizations.

Testimony on Eck’s bill fell along predictable lines. Supporters argued the bill would help remove barriers to opening and operating restaurants that do not wish to act as bars.  Opponents argued the bill would infringe on private property rights by severely reducing the value already established in existing licenses.

Except Montana has already done that twice, both times with the Tavern Association’s “blessing.” First when the legislature created the restaurant beer and wine license. Second when they doubled the number available. (Side note on the “private property rights” issue:  See § 16-4-401, MCA. License as privilege — criteria for decision on application. (1) A license under this code is a privilege that the state may grant to an applicant and is not a right to which any applicant is entitled.)

Speaking of per-ordained outcomes, while testifying on Eck’s quota reduction bill, one got the impression MTA President Mike Hope was desperately trying not to default to the old “pry it from my cold dead hand” cliché. While chastising an earlier speaker whom Hope characterized as wanting to be “given” a restaurant when others have had to invest heavily, Hope made it clear that any bill seeking to devalue existing alcohol licenses would be met with fierce opposition.

Eck’s bill was tabled the following day during executive action on a 9-10 vote, certainly closer than most would have expected.

Pope’s interim study bill lasted a day longer before being gutted by a massive amendment.  What remains of the original bill is this:

(1) The economic affairs interim committee provided for in 5-5-223 shall study and make recommendations on whether a state alcoholic beverage council is appropriate to help identify future issues and opportunities in the alcoholic beverage industry and to improve coordination among regulated sectors of the industry and state government.  The recommendations must address but are not limited to the composition, goals duties, responsibilities, and budget of an alcoholic beverage council.

That’s right.  Instead of spending the next two years studying the actual alcohol licensing system and making suggestions for change, this committee will spend the next two years studying whether or not to create a council which might then “identify future issues and opportunities in the alcoholic beverage industry.”

Naturally, it passed out of committee on a 17-1 vote.  The full House of Representatives passed the bill on a 78-21 vote and forwarded it on to the Senate for further consideration. [UPDATE:  The Senate Business, Labor and Economic Affairs Committee will hold a hearing on the HB 618 on April 8.]

The bill provides for an appropriation of $2,000 to conduct the interim study.  Consumers are not among the list of industry participants invited to take part in the process.

Industry stakeholders are invited to these processes because they know their respective industries and the effect any particular change might bring.  Yet, whether the result of still-simmering hard feelings over HB 326/336, or long held positions staked in concrete, participants in the recent hearing showed little capacity for compromise.

Regardless of who utters the words, so long as “put on your big boy pants” is code for “get aligned with our line in the sand,” no amount of study will result in moving the industry forward.

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Extra points if you got the movie reference.

One thought on “Montana Legislature Proposes Study to Study Whether To Study Alcohol Laws

  1. This is exactly why I took my business to another state. MT is too much of a hassle in an already complicated industry.

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