Senate restores increased production limits for breweries

Two days after a state legislative panel gutted a bill allowing breweries to ramp up beer production while still charging for drinks in their taprooms, the Senate restored the original proposal while making concessions to Montana’s tavern owners and distribution companies.

As originally written, House Bill 541 sought to raise that annual production cap from 10,000 barrels per year to 60,000 barrels per year. The bill easily passed the House, but the Senate business committee amended the legislation Tuesday to cut the cap down to 12,000 barrels.

Under current law, exceeding that cap means that breweries in Montana can’t sell beer on their premises. Missoula-based Big Sky Brewing Co., for instance, can only offer free samples in its taproom.

Speaking on the Senate floor during the chamber’s debate on the bill, Sen. Fred Thomas, R-Stevensville, offered an amendment to House Bill 541 to restore the original 60,000-barrel limit in the bill, while limiting breweries to three locations in the state and limiting annual on-premise consumption to 2,000 barrels per year.

Thomas said the compromise amendment was hashed out between representatives from the state’s brewery, tavern owners and distribution company trade groups earlier in the day. The bill had originally been opposed by the Montana Tavern Owners Association while the state’s breweries supported it.

One of two lawmakers to argue against the amendment, Sen. Dee Brown, R-Hungry Horse, criticized what she called a “back-room deal” to develop the new language. Brown was one of the committee members who pushed the removal of the 60,000-barrel cap.

“One-tenth of the committee was in the back-room deal today, and I resent that,” Brown said. “... If we are going to do anything, let’s have it out in the public eye.”

Sen. Ed Buttrey, R-Stevensville, also opposed the amendment, and noted that Montana’s breweries are already unlimited in the quantity of beer they can produce. The production cap only applies to the amount of beer they can produce while still being considered a “small brewery” under state law.

Those breweries are eligible for special alcohol permits allowing them to sell up to three pints of beer per customer, per day, with limited hours of operation.

Thomas’s amendment further limits those on-premise sales to 2,000 barrels each year — the equivalent of 453 customers drinking the three-pint maximum every day of the year.

The legislation, sponsored by Rep. Adam Hertz, R-Missoula, would also raise the per-barrel tax imposed on breweries that produce between 10,000 and 20,000 barrels per year, from $3.30 to $4.30 per barrel.

The Senate passed the committee, 31-19, before giving the legislation preliminary approval on a 42-8 vote. If the amended bill passes a final Senate vote Friday, it will head to a conference committee, where members of both chambers will need to agree on a final version.

Reporter Sam Wilson can be reached at 758-4407 or by email at swilson@dailyinterlake.com.