Liquor Permit Morass Stymies Lawmakers Special Permits, Open Market Value Complicate Attempt To Fix System That Dates To 1939

The Idaho Legislature needs some help.

It can’t get a handle on what one lawmaker calls the “mess” created by the liquor license system, and could use some suggestions on what to do about it.

Here’s the problem:

The state in 1939 started a permit system for businesses serving liquor by the drink. Only incorporated areas could have the permits, and only at a rate of one for each 1,500 residents. As their populations grew, communities were allowed more permits.

But that has created an artificial market. Since the permits are limited they are very valuable. There have been reports of liquor permits going for $100,000 and more on the open market.

The Legislature has aggravated the situation by granting a wide range of special permits to businesses that don’t meet the requirements.

The result, any lawmaker will acknowledge, is that any company wanting a special liquor license has only to hire a lobbyist to get one.

Legislators know the system is skewed, but they can’t come up with a way to fix it.

“This is a very, very poor way of doing business,” freshman Republican Rep. Kent Kunz of Pocatello said.

This year the House is working on special-interest legislation to grant a liquor permit for the Clark House near Hayden Lake. The 10-room bed and breakfast serves beer and wine, but lobbyist Gary Gould told lawmakers it needs a liquor permit to compete in the market.

It’s difficult for lawmakers to say no since they have granted so many special exemptions in the past.

Because state laws aren’t supposed to be made just for one company or situation, the special permits are couched in very specific language. For instance, the law contains one exception for “the owner, operator or lessee of the lodging, dining and entertainment facilities owned by a gondola resort complex.” That applies only to Silver Mountain at Kellogg.

Another section allows a license to the operator of “a winery also operating a golf course on the premises.” The beneficiary is Carmela Vineyards at Glenns Ferry.

There are various exceptions for golf courses, ski resorts, horse tracks, airports, clubs and convention centers.

Sometimes groups go to great lengths to get a license.

More than 35 years ago the Bannock County Commission was approached with plans to create the community of “Sundown,” which would have qualified for a liquor license. Commissioners frowned on the idea of an incorporated area that including nothing more than a narrow finger of land extending hundreds of feet north of Chubbuck to the site of a proposed bar.

It never got off the ground.

Lawmakers appointed a special study committee in 1989 but wound up doing nothing after bar operators and others complained that changing the system would cost them their substantial investments in liquor permits.

The Legislature could simply abolish the current system and start over, but that isn’t likely. Some members say eliminating permits that have cost $100,000 or more would be an illegal “taking” of private property by the state and could generate countless lawsuits.

Lawmaker was misunderstood

House Speaker Michael Simpson won praise during the past week from a group on one end of the political spectrum and apparently misplaced recognition from another group on the other end over his stand on the same issue.

Even though Simpson voted against the landmark 1990 anti-abortion bill, the Idaho Family Forum praised him for his leadership during a dinner attended by about 450 people. Some of the speakers mentioned his sponsorship of a 1996 bill that made it clear Idaho does not recognize same-sex marriages.

Idaho Family Forum Director Dennis Mansfield admits Simpson is on the other side on the abortion issue. However, “He’s a moral man, and he’s a strong leader.”

Meanwhile, the gay and lesbian group Idaho for Basic Rights said in a recent newsletter that Simpson apparently had come around on the same-sex marriage issue.

The newsletter said Simpson had “indicated his sponsorship last year of the anti-same-sex marriage bill may have been a knee-jerk reaction that was not well-thought-through. He indicated he would not support a similar bill if it were before the House today.”

Not so, Simpson says. His remarks apparently were misunderstood.

He calls the same-sex marriage bill something that was necessary.

“If that bill were before us today, I would vote for it again.”