Bill Description: Senate Bill 1169 would create city restaurant liquor licenses that bypass current population limits but are only available to facilities where food sales represent at least 60% of gross sales.

Rating: +1

Does it give government any new, additional, or expanded power to prohibit, restrict, or regulate activities in the free market? Conversely, does it eliminate or reduce government intervention in the market?

Idaho's liquor licensing laws are illogical and discriminatory, creating a significant impediment to market entry and unnecessarily limiting access to both providers and consumers. The current quota-based licensing system should be abolished and replaced with a simple, straightforward, and unlimited licensing system that is low-cost, free of population-based and geographical restrictions, and open to all applicants.

Rather than fix this broken system that creates artificial and economically harmful scarcity, the Legislature has passed numerous carve-outs, exempting various types of businesses from parts of this system. While businesses are not called out by name in Idaho statute, they are often described in enough detail to limit the carve-out to a small number of businesses, or sometimes even just one.

Senate Bill 1169 still takes this carve-out approach, albeit in a broader way that may benefit many businesses across the state. 

The bill would create Section 23-903d, Idaho Code, which would establish a new class of liquor license, the "city restaurant liquor license." The good thing about this license is that it would not be subject to the typical "population limitations set forth in section 23-903(1), Idaho Code." There would still be limits on the number issued, however; the bill would require no fewer than 3 but "no more than the number of licenses issued within a city pursuant to section 23-903(1), Idaho Code." This language appears to effectively double the total quantity of total liquor licenses that could be issued within a city (half traditional licenses and half city restaurant liquor licenses), but it does not eliminate these restrictive caps. 

Even if the cap wasn't reached, city restaurant liquor licenses would not necessarily be available to all applicants. Instead, the decision to approve a license application is left to the discretion of the mayor and city council. The bill says, "In the event the mayor and city council do not approve the proposed license, a license shall not be issued."

Numerous restrictions would be imposed on facilities that receive these licenses. The most notable is that "no less than sixty percent (60%) of gross sales from the preceding twelve (12) month operation of a licensed restaurant be derived from food services."

Restaurants would also be required to limit alcohol consumption only to "areas approved by the local licensing authority" and to cease all liquor sales "at the time food sales and services cease." The bill also says, "The local licensing authority may impose additional date and time restrictions on liquor sales."

The bill also says, "No city restaurant licensed pursuant to this section shall promote or operate the restaurant as a bar and lounge." 

The sale, lease, or transfer of these licenses would be prohibited. The bill says, "A city restaurant liquor license may not be sold or leased and shall not be transferable to any other location, facility, or premises."

Allowing these city restaurant liquor licenses could benefit certain restaurants within city limits if the mayor and city council are willing to issue the licenses. But the restrictions on the licenses also constitute significant government meddling in the market. 

The popularity of a restaurant or shifts in clientele could easily change the balance of gross sales between food and alcohol, yet under this law, such a natural market shift would imperil the restaurant's ability to operate. Likewise, a restaurant that relied on such a license could not relocate because the license can't be transferred to a new location. 

None of these problems are necessary. They are all the result of the artificial scarcity coercively imposed on the market by government regulation and licensing mandates.

(+1)