Microbreweries to Benefit from Bill, Liquor License Quotas Preserved

Kentucky’s craft brewers would be allowed to sell more packaged beer to individual customers visiting their breweries under a bill headed to the governor’s desk.

House Bill 136 received final passage by a vote of 33-3 in the Senate. The bill would increase what breweries can sell onsite to three cases and two kegs per customer. A second provision would allow breweries to sell one case per customer at fairs and festivals in wet jurisdictions.

A third provision would allow craft brewers to start sending their wholesale tax payments directly to the Kentucky Department of Revenue. Craft brewers currently pay their wholesale taxes to their distributor who keeps 1 percent before forwarding the rest of the money to the revenue department.

Sen. John Schickel (R-Union) presented HB 136 on the Senate floor. He said the legislation would encourage the continued growth of Kentucky’s microbreweries. The burgeoning industry has invested close to $79 million into the state in recent years and currently employs more than 600 Kentuckians, according to previous testimony on the bill.

“There is just no question at all ... that one of the great success stories has been our craft breweries in the last 10 years,” Schickel said. “They are one of the most professional, hardworking entrepreneurs in our commonwealth.”

He said microbreweries locating in the urban core are leading a renaissance in cities across Kentucky.

Senate Moves to Keep Liquor License Quotas

The Senate passed a measure yesterday to preserve the status quo in determining how many package liquor licenses are issued in individual cities and counties by a 32-4 vote.

The measure, known as Senate Bill 110, would do that by codifying in law rules that limit the number of licenses available for retail package liquor stores. Currently, the number of licenses is limited based on the population of a given community. That number is generally capped at one license per 2,300 people for package stores.

President Pro Tempore Sen. Jimmy Higdon (R-Lebanon) said he filed SB 110 in response to proposed administrative regulations to change the current scheme.

He said voters who backed recent ballot measures allowing liquor sales in their communities did so knowing how many liquor stores would be permitted under the quota system. Those voters never anticipated that the state would later lift the caps on the number of alcohol licenses issued in any one city or county, Higdon said.

Out of Kentucky’s 120 counties, 89 are wet or have wet cities. Higdon said five of those counties and 28 cities have reached their quotas for retail package liquor stores.

An amendment filed by Sen. Wil Schroder (R-Wilder) would ensure quotas for retail drink licenses would not be codified into statute.

He said the Northern Kentucky counties of Campbell and Kenton need more retail drink licenses – partly because of their proximity to Cincinnati. Schroder said a waiting list for these specific types of licenses is impeding economic development in Northern Kentucky.

From the Legislative Research Commission

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