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Restaurant operators who have gone away empty-handed because the state has run out of liquor permits may get some relief next year.
Legislative leaders are poised to endorse changes to Utah's liquor laws that would free up permits, allowing more restaurants to serve alcohol with meals. But the changes will be piecemeal.
In January, Sen. John Valentine, R-Orem, will introduce a bill allowing restaurants to sell existing permits to the highest bidder, theoretically to nudge struggling eateries to go out of business or stop serving alcohol in return for extra cash.
The legislation would also free up about 25 more restaurant permits, which would be created by converting a pool of unused tavern licenses that allow the serving of 3.2 beer. The state has 50 surplus beer permits, twice the number called for in Valentine's proposed legislation.
The state has also run out of club licenses that allow bars to serve all types of alcohol. But Valentine has no plans to tinker with population quotas that set the number of those.
"I'm a conservative a red kind of guy," Valentine said Tuesday. "I do take things a little slower in a methodical way that makes sense."
Valentine said that, for months, he has been working with many stakeholders on the proposed legislation. Among them is The Church of Jesus Christ of Latter-day Saints, a key shaper of policy in the state-controlled liquor monopoly. He said midlevel employees of the LDS Church, which urges its members to eschew alcohol, have given some early, positive comments on the proposed changes.
"The church meets with people on a variety of issues," spokesman Scott Trotter said Tuesday. "While we have not taken a position on any possible upcoming legislation, our interest in alcohol-related legislation is clear. We are concerned with overconsumption, impaired driving and underage drinking."
On July 1, 2009, Utah did away with a law requiring any patron ordering a drink at a bar to buy a private club membership. Despite concerns that the new law would lead to increased consumption and more DUIs, in the year after it took effect, liquor sales in bars increased only 1 percent, according to Utah Department of Alcoholic Beverage Control data. The Utah Commission on Criminal and Juvenile Justice has said the number of DUI arrests decreased by nearly 400.
The hospitality industry, which has implored the state to free up more licenses because of the adverse effect a shortage was having on economic development, welcomed the legislative proposals.
"It's great to see Senator Valentine's and the Legislature's willingness to address theses issues in a proactive way," said lobbyist Steve Barth. "This is a great start in freeing up more restaurant licenses."
Valentine said even more licenses could become available if restaurant operators were allowed to sell their licenses for, say, thousands of dollars. He acknowledged that selling licenses on the open market would favor the deep pockets of corporations. To help out mom-and-pop operations, some state permits could be earmarked for smaller restaurants, he said.
Senate President Michael Waddoups said the state could also maintain control in that scenario because when a new operator buys the license, the permit would be activated only with the approval of the state liquor-control board.
Because of demand, only two licenses are available that allow restaurants to serve all types of alcohol, while all permits to serve beer and wine have been issued.
All liquor licenses are based on state population quotas. A few more licenses may be become available in November, based on higher population estimates.
Still more licenses are freed up each fall when establishments renew their permits. So far, however, 854 restaurants have paid fees to renew their permits, while only five have relinquished their licenses, usually because they've gone out of business.
Proposed liquor changes
Some tavern permits would be converted to restaurant licenses that allow alcohol to be served.
Some liquor licenses could be sold to the highest bidder.
Utah's liquor quota system
The number of permits are based on state population estimates. Here's the breakdown:
» Restaurant permits allowing all types of alcohol to be served are one per 5,200 population; 547 restaurants have these licenses, while two remain.
» The restaurant cap to serve beer and wine is one permit per 9,300 population; 307 eateries have these permits. All have been issued.
» Bar license quotas are one per 7,850 population; 364 clubs have these licenses. All have been issued.
Source: Utah Department of Alcoholic Beverage Control