Otter to end quotas 

New liquor license regime will rest with cities, counties

Big changes to Idaho's liquor licensing system are on the horizon if a group of lawmakers, liquor license holders, city and county representatives, and law enforcement marshaled by Gov. C.L. "Butch" Otter gets its way.

Otter's alcohol task force met Friday, Jan. 30, to finalize a draft of a bill that would freeze the state's liquor licensing system and allow cities and counties to issue a new type of license, essentially ending the half-century-old quota system.

The bill gets the state out of the business of issuing liquor-by-the-drink licenses, essentially freezing them at almost 1,300 license holders. Any new establishment serving liquor would have to apply for a new city or county license and will be required to provide food or overnight lodging. The arrangement preserves some uniqueness for state licenses—for watering holes or nightclubs, for instance—while allowing for new establishments in high growth areas.

"It will ensure some level of uniqueness and some value," for state license holders, said Ken Burgess, a lobbyist for a group of license holders. "If you want to open up a pure bar, that's the only way you can do it."

This time last year, the task force stirred up a ruckus among liquor licensees who were afraid the state's meddling would deflate the value of licenses already in use. Under current Idaho law, the state's Alcohol Beverage Control, an arm of the Idaho State Police, issues liquor licenses based on the population in incorporated cities. The system allows for one license for every 1,500 people.

It's a system that has been widely criticized for bottlenecking the licensing process and creating a lengthy waiting list. Potential entrepreneurs who want a liquor license may have to wait years until the population increases enough to obtain one.

Bar owners who've paid premium money for their licenses—up to $150,000 in Boise—and speculators take issue with any change in the system that would devalue their investments. But some owners will support the new regime because of new benefits offered to state license holders.

The state began reassessing the licensing process in the summer of 2007 when the governor set up the task force after the state and some bar owners clashed over enforcement issues, the most high-profile of which was the former Big Easy.

In the bill that Otter is likely to introduce soon to the Legislature, regulation of licenses is diverted to a new state bureaucracy, separating the licensing and law enforcement duties of the ISP that many bar owners have come to resent.

Other major changes include mandatory training for servers, a move that the city of Boise recently made, and more warnings for liquor law violations if establishments follow the training guidelines. State license holders will also get 10 percent off bottles of liquor purchased from the state.

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