FRANKFORT, Ky. — In the world’s bourbon capital, an effort to eliminate a quota system limiting the number of liquor licenses is getting strong pushback from some Kentucky lawmakers.
A bill that won initial committee approval Tuesday aims to block Republican Gov. Matt Bevin’s administration from ending quotas on the number of licenses available for retail package liquor stores and by-the-drink liquor sales. That system determines how many of the licenses are granted based on the population of a county or community.
The measure would preserve those regulatory limits by putting them into state law. It cleared the Senate Licensing, Occupations and Administrative Regulations Committee on an 8-3 vote.
The issue divided two Republican members of Senate leadership. The bill’s main sponsor is Senate President Pro Tem Jimmy Higdon, whose district is in the heart of Kentucky bourbon country. Opponents include Senate Majority Floor Leader Damon Thayer.
The debate also created an unusual scenario: lawmakers trying to preserve an administrative regulation by putting it in state law, while an executive branch agency is trying to end it.
The Kentucky Alcoholic Beverage Control Board has proposed repealing the quota rules, which stirred Higdon to file his measure.
Carol Beth Martin, a state Alcoholic Beverage Control administrator, told lawmakers Tuesday that the current limits create “a monopoly to a select sector of the alcohol industry.” She said some valid applicants for liquor licenses are rejected simply because of the quota system.
The bill’s supporters say that ending the quotas would cause a glut of bars and liquor stores. Martin said the marketplace would prevent such a proliferation.
Colby Slusher, a liquor store owner in Pineville, said small, community retailers would struggle to compete with chain stores that would get licenses if the quotas ended.
Also, many communities voted to legalize alcohol sales with the understanding that quotas would limit local licenses, Slusher said. Those voters deserve “statutory assurances that the number of alcohol outlets in their community won’t exceed what they were told,” he said.
Martin said it’s not government’s role “to pick winners and losers in the marketplace.”
“A local community, via the free market, should decide which retail alcohol establishments should succeed or fail, as opposed to somebody sitting in Frankfort,” she said.
Thayer cited his free-market beliefs in opposing the bill. He said the Bevin administration’s efforts were meant to “remove artificial barriers to free enterprise.” Thayer signaled the bill could draw amendments seeking to change it by the time it reaches the full Senate.
The measure still has to clear several more hurdles before getting through the General Assembly. If that happens, it would go to Bevin, whose administration is trying to end the quotas.
Asked about his bill’s prospects, Higdon replied: “One step at a time.”
The legislation is Senate Bill 110.