Dem and GOP Lawmakers Agree: Liquor Rules Make Utah a “Laughing Stock”

800px-Beer_tapsThere are few issues that conservative Senator Mark Madsen (Republican – Saratoga Springs) and liberal Senator Jim Dabakis (Democrat – Salt Lake City) agree on, but reforms of the Department of Alcoholic Beverage Control (DABC) appears to be a place the two can come together.

Representatives from the DABC appeared before the legislature’s Administrative Rules Review Committee on Monday to answer questions about the highly publicized possible denial of a special event alcohol permit for Snowbird Ski Resort’s extremely popular annual Oktoberfest celebration.

The potential denial caught national and international attention, and in a press release published on Dabakis’ Facebook page, the senator said that the story has generated 7.5 million page views across several news websites.

Dabakis, who brought the DABC before [pullquote][The DABC] seems to not understand the implications of their actions from a public relations point of view – Senator Jim Dabakis [/pullquote]the committee to explain their actions, didn’t pull any punches. He says the department “seems to not understand the implications of their actions from a public relations point of view,” adding that policy implementation damages Utah’s image both nationally and internationally—which could lead to drops in tourism, which local businesses and jobs depend on economically and the state relies on for budget revenue.

“I am proud that we are very low in the ranking of states for underage drinking… but the [DABC] seems to bore in on issues that are not particularly law enforcement related, and seems to turn Utah into the laughing stock of the world,” added Dabakis, who says that he feels the DABC is unable to tell the difference between crafting rules that assist law enforcement and creating arbitrary rules that will cause embarrassment for our state.

Dabakis summarized his opening remarks by warning that “there was a price to be paid by not understanding the broader implications of what they do,” noting that the state has limited funds for tourist promotion and that the DABC is harming the state’s PR efforts.

[pullquote]”I think that, perhaps we succeed, and sometimes we fail—sometimes rules create more confusion than help,” – John T. Nielsen, DABC Director[/pullquote] “I think that, perhaps we succeed, and sometimes we fail—sometimes rules create more confusion than help,” said John T. Nielsen, Director of the DABC, “with respect to [the Oktoberfest issue], this may be the case. Nielsen later added that he feels too much emphasis has been placed on Oktoberfest’s for-profit status in regards to the potential decision by the DABC to yank the short-term licence that has traditionally been granted for the event.

Several other lawmakers expressed dismay with the DABC rule-making process in relation to the temporary licences and potential abuses of power, but it was Senator Mark Madsen who appeared to be as visibly angry as Dabakis. “The process [of granting the licenses] is amorphous and subjective,” said Madsen. “It is dangerous to the commission and opens it up to lawsuits.”  Frustrated by what he perceives as bureaucratic overreach, Madsen said he wondered if the state should be in the business of regulating alcohol—giving an apparent nod towards privatization, which is supported by many private businesses in the state.

The controversy behind the issue is related to the DABC’s apparent confusion of the implementation of Rule R81-7. The rule stipulates that single event permits, such as the one that would be granted to Snowbird for Oktoberfest, must be submitted by “a social, business, religious, political, governmental, educational, recreational, cultural, charitable, athletic, theatrical, scholastic, artistic, or scientific event.” Other sections of the rule note that the event must be temporary in nature and promote public good in some way.

Despite clear wording that businesses would be allowed to make profits off of an event, Nielsen acknowledged that DABC officials seemed to interpret the overall rule to state that “if you are a not-for-profit entity you are likely to get a permit; if you are a for-profit entity you are probably not going to get a permit.” Nielsen quickly added that he personally disagrees with such a philosophy.

Senator Howard Stephenson (Republican – Draper), asked Sal Petilos, another DABC Director, what, if any, change in the law prompted this philosophy shift.

“None,” Petilos replied.

Petilos then admitted that the policy shift came from a sense on his part that “the [DABC] needed to make sure that when it issued single event licences, they were vetted in accordance with statutes and rule.” Stephenson, sounding somewhat surprised by the response, asked Petilos if this had not been the situation in the past. “I know that I had approved some events simply because that was the way they were done, but for my part I wanted to make sure we went back on track as quickly as possible.”

Stephenson then wondered aloud if the controversy had been caused by previous DABC officials being out of compliance with DABC rules, but in compliance Utah state law. He added the DABC rules could have been altered to avoid the Oktoberfest issue in the first place, and made the recommendation that DABC officials do a better job of consulting with the legislature to better understand legislative intent prior to making changes in alcohol policy.

Stephenson described the problem of compliance differing from state statute on such a high profile topic “a perfect storm.”

Senator Gene Davis (Democrat – Salt Lake City) asked the DABC to consider policies that are more focused on hospitality, rather than hostility towards those who consume alcohol. “There is a happy medium that we need to find,” Davis added, saying that there are different ways of controlling alcohol in the state, and implying that the commission needs to update its views on consumption.

After receiving an earful from lawmakers, DABC officials vowed that they would reevaluate the language around temporary licences to better reflect legislative intent. “We start tomorrow,” Nielsen told the committee.

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