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News >  Idaho

House kills reforms to liquor licensing

Otter-backed bill sought to change quota system

Betsy Z. Russell Staff writer

BOISE – Idaho House members decried the evils of liquor in a two-hour debate Wednesday, then killed Gov. Butch Otter’s major legislation to revamp the state’s liquor license system.

“I would urge you to vote no against this bill because I do think it will change Idaho as we know it,” Rep. Mack Shirley, R-Rexburg, told the House, noting proudly that he lives in a dry county.

Rep. Russ Mathews, R-Idaho Falls, speculated that the bill could lead to such proliferation of liquor licenses that counties would allow liquor to be sold with Happy Meals at McDonald’s. “I’m voting no for highway safety, I’m voting no for families, I’m voting no to preserve Idaho values,” he told the House.

Nearly two-thirds of North Idaho representatives joined the majority in the 42-28 vote against Otter’s liquor legislation, which sought to end the state’s longstanding population-based quota system and let cities and counties approve new nontransferable liquor licenses, but only for restaurants or hotels. Current bars would keep their transferable licenses.

The bill grandfathered in current liquor license holders, who would receive new discounts on state liquor purchases and who could transfer their licenses anywhere in the state. It also set new standards for training and enforcement.

Under the current system, liquor licenses issued under city quotas are transferable within the cities, and sell on the open market for $100,000-plus. However, anyone who hires a lobbyist and gets a special bill through the Legislature can get a special exception; that’s the only way to get a liquor license outside city limits. Hundreds of licenses have been issued under those special exceptions.

Rep. Jim Clark, R-Hayden Lake, the bill’s House sponsor, said the current system doesn’t work. “I do not believe that this (bill) is going to increase liquor consumption. I believe it’s going to lessen it,” he said.

Numerous House members disagreed, however, with several warning that alcohol consumption violates the state constitution’s goals of temperance and morality.

Rep. Phil Hart, R-Athol, speculated the bill would lead to thousands of new drinking establishments across the state. “In the last few decades we’ve shut down most of our mining in this state, we’ve shut down most of our timber, and now we’re going to resort to loosening up our alcohol regulations so we can promote economic activity? If that’s what we have to do, I think we’ve lost our way.”

Rep. Eric Anderson, R-Priest Lake, was one of the few House members to debate in favor of the bill. He said Idaho’s original liquor license quota system was imposed in 1959 to protect existing businesses from competition. The existing law “has caused restrictive business practices,” Anderson told the House. Several North Idaho lawmakers said they heard from constituents opposed to the bill, including Coeur d’Alene Resort owner Duane Hagadone. Hagadone’s lobbyist, Russ Westerberg, sent a letter to lawmakers saying the bill was unnecessary and would mean lost value for current liquor license-holders.

“I just didn’t hear from anyone in my legislative district to support it, but I had a handful to oppose it,” said Rep. Bob Nonini, R-Coeur d’Alene. “No one thinks the current system is perfect, but I didn’t think this was a good enough bill to change the current system.”

Rep. Frank Henderson, R-Post Falls, said he heard from constituents concerned about lost value, but he was more concerned about safety. “One of my best friends lost his wife to a drunk driver,” Henderson said. “I just think the new bill could’ve been more stringent on training and on the penalties.”

After the bill’s defeat, Clark said, “I was surprised that the majority of the vote was on temperance issues. I was expecting more on the lost value.”

Otter convened a task force that worked with the bar and restaurant industry, the state police and others for the past two years to craft the legislation.

The bill earlier passed the Senate on a 23-12 vote.

Otter’s press secretary, Jon Hanian, said, the governor is disappointed, but that his next move on the issue remains “to be determined.”

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