Utah is a step closer to alleviating its shortage of liquor licenses for bars and restaurants. It’s also raising the cost consumers pay for alcohol.
The annual omnibus liquor bill, HB548, in which the Utah Legislature collects all changes to the state’s liquor laws, got its first hearing Friday — and passed the House Business and Labor Committee on a unanimous vote.
On Monday, the House voted unanimously in favor of the bill. It now goes to the Senate, where it must be approved by the end of the legislative session on Friday and be signed by Gov. Spencer Cox to become law.
“It’s difficult to balance freedom of choice with responsibility, but that’s what we try to do here,” said Rep. Jefferson Burton, R-Salem, the bill’s sponsor.
The bill would raise the markup the state charges for spirits, wine and beer, from 88% to 88.5%.
How much is that? If the state buys a bottle of whiskey for $10 from a wholesaler, for example, a state-run liquor store would now charge $18.80 to customers for that bottle. With the increase, the price of that bottle would go up a nickel, to $18.85.
That difference may not mean much for the average consumer, but for bars and restaurants that serve a lot of alcohol, those nickels can add up. According to the fiscal note legislative analysts prepared for the bill, the increase would add $2.2 million in state funding in a year.
The bill also would raise the tax on beer kegs, by a dollar over four years, from $13.10 for a 31-gallon barrel to $14.10. Kate Bradshaw, executive director of the Utah Beer Wholesalers Association, told lawmakers that the increase would put Utah in the top 10 nationally for its keg tax.
More liquor licenses
The bill also sets out a plan to lower, over seven years, the population quota used to determine how many bar and restaurant licenses the state’s Department of Alcoholic Beverage Services’ commission can grant.
Today DABS can issue one bar license for every 10,200 Utah residents, and one restaurant license for every 4,467 residents. The bill would taper down those quotas, starting in July, to eventually get to one bar for every 7,246 residents and one restaurant for every 3,167 residents by July 2031.
Under this plan, Burton said, Utah could add another 136 bars to the 350 now in operation, according to the state’s database, and another 312 full-service restaurant licenses to the 732 restaurant licenses now issued.
“It’s such a hard issue to balance public safety with business needs,” Tara Thue, the DABS commission’s chair, told lawmakers Friday. “We see businesses, month after month, talking about their life savings, talking about how much money and heart they have on the line.”
Liquor commissioners have blamed the high population quotas, in place since 2018, for a scarcity that left businesses waiting for months to get a license. Some months, the commission issued no licenses. In last year’s liquor bill, the legislature approved an extra 15 bar licenses and 30 restaurant licenses to help reduce the scarcity, a move commissioners called “basically a Band-Aid.”
By taking seven years to raise the quota, Burton said lawmakers can make changes as the number of licenses increases. “The good news about this model is we can adjust it if it isn’t working, if it’s too many or not enough,” he said.
Thue said the quota change is “a step in the right direction,” but that the state will still face scarcity problems.
“I don’t think it will happen immediately, but I think it will happen,” Thue said, adding that she would prefer to see the quotas lowered within three years instead of seven.
Art Brown, president of the Utah chapter of Mothers Against Drunk Driving, told lawmakers the quotas — and the number of bars — should stay where they are. If there are more bars, Brown said, “you will see more DUIs, you’ll see more injuries, you’ll see more deaths, and you’ll see more wrong-way drivers.”
Enforcement, a ‘roundup’ and more
The bill also would create three more full-time compliance positions in the State Bureau of Investigation — at a cost, according to the fiscal note, of $518,200 a year.
The new officers would join a team assigned to visit grocery and convenience stores where alcohol is sold to make sure it is displayed properly. The team also would check that there are not any products such as alcoholic versions of soda brands, which were made illegal in Utah in last year’s omnibus bill.
At Friday’s meeting, Burton presented — and the committee approved — an amended version of the bill he first introduced on Valentine’s Day.
The new version of the bill nixes a proposal that would have allowed mobile beer dispensing on golf courses. It also removes language that would have transferred much of the DABS commission’s power to the agency’s director, who is appointed by the governor. Instead lawmakers will study the agency’s governance structure before next year’s legislative session.
The legislation also would allow state liquor stores to offer a “roundup” to customers, who could round their liquor purchase up to the nearest dollar — with proceeds going to the Pamela Atkinson Homeless Trust Fund to pay for substance-abuse treatment.
The bill, if it becomes law, also would make it legal for hotel guests to carry their drink from the hotel bar to their rooms and other designated areas, in an unmarked opaque cup. The amended bill more clearly spells out the restrictions over the hotel areas — such as pools, recreation areas and business centers — one cannot enter with a drink.
The bill also would implement a “place of last drink” program, which Burton recently told The Tribune has been implemented in other states as a way to discourage bars from overserving. Under this proposal, when a person is arrested for a violation such as a DUI, or has been in a crash and hurt someone, the place where they were drinking that night would be entered into a database. Businesses that show up in the database repeatedly would receive more scrutiny, Burton said.
Other provisions of the liquor bill include:
• Bans on the sale of frozen alcoholic products, vaporized alcohol and any beverage that is more than 80% alcohol — such as Everclear, which at 190 proof is 95% alcohol, and certain 160-proof rums.
• A requirement that the director form a workgroup to improve the efficacy of alcohol training and education.
• The launch a study before next year’s legislative session to examine how to track cash purchases at bars, in case a cash-paying patron gets drunk and then becomes involved in a “catastrophic incident,” Burton said.
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