Changes proposed to Montana's alcohol licensing laws

Getting a bloody Mary or Montana microbrew before your next flight out of the Treasure State could get easier if one of several proposed bills heard Tuesday moves forward.

The House Business and Labor Committee heard testimony Tuesday morning on proposed amendments to Montana law that involve alcohol:

• Expanding opportunities for bars within Montana’s airports.

• What happens to an alcoholic beverage license once its owner dies.

• Expanding a temporary operating period during transfers of a license.

• Clarifying or modifying the statute concerning curbside wine and beer pickup (It was signed into law in 2021).

The state’s Alcoholic Beverage Control Division (ABC) is now doing $203 million in business and growing, said Becky Schlauch, the division administrator for the Department of Revenue.

It is asking lawmakers to provide funding for two more full-time employees and several million more dollars to put in an automated storage and retrieval system so its growing warehouse can fit more product on its shelves.

Schlauch testified on behalf of the division on all four bills and walked lawmakers through the current laws and those that went onto the books after the 2021 session — some of which the new proposals would tweak.

“The handout you have in front of you is everything you need to know about alcohol in Montana — super simple,” she joked with lawmakers about the notoriously complex subject.

“Any questions?”

Alcohol at airports

House Bill 98, sponsored by committee chairman Rep. Ed Buttrey, R-Great Falls, would allow the larger public airport all-beverage licensees and the Yellowstone Airport in West Yellowstone, which has a beer and wine license only, to serve alcohol without needing floor-to-ceiling separation from other businesses, as is currently the case.

The Department of Revenue requested the bill, Buttrey said. Schlauch testified that the current requirements do not work at airports, where many other businesses operate.

As introduced, the measure would allow alcohol to be consumed within the licensed business if the business can show it has safeguards, like a locking front door, locking cabinets, rolling gates, or key card access, to prevent the public from getting access to the alcohol after hours.

The bill says the airports “may use the airport terminal or part of the terminal as premises licensed for the on-premises consumption of alcoholic beverages without regard to other businesses or uses in the terminal.”

The bill would allow airports to effectively operate their own licenses, Schlauch said. The establishments would be able to operate both before and after TSA checkpoints, she added.

Most of Montana’s largest airports already have restaurants that serve alcoholic beverages of various kinds, including those in Billings, Missoula, Bozeman, Great Falls and Glacier Park.

Smokejumper Station in the Helena airport closed in 2022.

John Iverson of the Montana Tavern Association told lawmakers at the hearing that passage of the measure would give airports and businesses needed flexibility to serve airline passengers. The measure also received support from the Hospitality and Development Association of Montana, the Montana Restaurant Association and Montana Department of Transportation.

License transfers in event of death

Two other bills the committee heard involved license transfers.

House Bill 43, sponsored by Rep. Ron Marshall, R-Hamilton, would add a new requirement that the Department of Revenue be notified within 180 days if a license holder dies or is found by a judge to be incapacitated.

The notification would have to come from a conservator, guardian, personal representative, executor, or administrator, according to the legislation as introduced.

The department would then be able to give that person approval to continue operating the business and to renew the license when it comes up for expiration. If that person does not qualify, per state rules, the department would be able to deny approval and the license would be put on “nonuse status.”

Currently, there is no required timeframe to report to the Department of Revenue when a license holder dies or becomes incapacitated. Schlauch said the department recently discovered there was a license holder who had been dead for 20 years and the division had been unaware.

And though she said the mechanism is rarely used, she and others who testified on behalf of the Tavern Association, the gaming and coin machine industries and the Montana Brewers Association said they were “lightly” opposed to the bill as introduced because they would like to give families and executors more time to notify the department while working through an estate.

Jen Hensley testified about her license-holding sister passing away and asked the bill be amended to have at least 90 days to report to the department, saying the estate planning and management “happens quickly.” Iverson agreed the timelines, as written, were “rigid” and said some people might inadvertently violate the rules because of a lack of knowledge.

“We’d like to work with the other parties and see if we can’t just soften this up a little and get people that grace,” he said.

Temporary operating authority extension

The committee also heard House Bill 71, sponsored by Rep. Denley Loge, R-St. Regis, which, as introduced, would give the Department of Revenue the ability to grant a license applicant a temporary operating authority for as many as 180 days, double the current length, if they already are licensed or if the license application still applies to the same unaltered proposed location.

If a business was selling its license to another owner, the new owner would be able to operate with the seller’s existing inventory under the temporary operating authority if that was granted by the department or if the department has already approved the license transfer, according to the legislation.

Schlauch proposed some amendments that would expand both the temporary operating authority and shore up inventory transfer language. But she said she was in favor of the bill as introduced as well.

“We want to be able to let them sell that license to another licensee rather than having a big going-out-of-business party,” she said.

Iverson agreed and said it was unreasonable the businesses shut themselves down for 90 days waiting for the license to be transferred while the buyer’s background and finances are checked.

“So, it’s a process and it takes time, and this allows that business to continue to serve the community … while that process is occurring,” Iverson said.

Jessie Luther, on behalf of the Hospitality and Development Association of Montana, said she believed the proposed amendments would be “good changes” for different license-transfer scenarios, which representatives for the Gaming Industry Association and Montana Restaurant Association agreed with.

Loge called HB 71 a “pro-business bill” and said he would entertain amendments Schlauch and the others discussed.

“We’ve seen in the past few years, some of the businesses have had to close down for a short time for different reasons, and some of them weren’t able to start up again,” he said.

ABC asks for money for more employees, automated system

The fourth bill brought up in committee was House Bill 50, sponsored by Rep. Tony Brockman, R-Kalispell, which strikes language left on the lawbooks after passage of House Bill 226 in 2021, which allowed for restaurant beer and wine curbside pickup. The bill received no opposition in committee and no further discussion.

“Good gosh, thank you. That was a nice icebreaker bill,” Brockman said.

Buttrey considered moving to executive action on the bills that had no proposed amendments or opposition, but the committee members agreed to wait to move on those until Wednesday.