House bill changes alcohol permit licensing rules

A bill which will soon be under consideration by the General Assembly's House Rules Committee would allow local Arkansas cities and counties to have more influence in the decision-making process when businesses apply for private club licenses, which allow businesses to serve alcohol by the drink in dry communities.

Rep. John Payton, R-Wilburn, is the primary sponsor of HB 1387 and he says the purpose of his bill is very simple and straightforward.

"I decided to draft a bill to put control in local hands," he said. "It doesn't stop the issuance of a license, but it allows local officials to determine if it serves the public good or not."

The bill says that any business seeking a private club license must first obtain "a resolution from the city governing body authorizing the applicant to apply for a permit" when the business lies within a dry "territory."

In order to apply for the license, the applicant would have to have applied for the resolution and the city council (in a city smaller than 23,000 residents) or quorum court, whichever had jurisdiction over the potential club's location, would have to approve the resolution within 60 days, the bill states.

Payton said having such a process in place would allow local governments, not the Alcohol Beverage Control Board, to decide the best course of action regarding private clubs.

"City councils and quorum courts are best able to determine what economic development is needed in an area," he said. "The general public can then lobby elected officials instead of a board of five in Little Rock."

The city of Farmington, in Washington County, voted to become a dry city in 2004.

City Attorney Steven Tennant said while he was in favor of his city having ABC-permitted private clubs, he was against HB 1387.

"The way this is drafted, the business has to obtain the approval of the city governing body," he said. "So it says you come to the city and the city gives you a resolution authorizing the applicant to apply for a permit or if you don't provide that resolution, then the applicant has his own affidavit that the city has not made a finding of fact."

Tennant said according to his understanding of the bill, if the city refused to issue a resolution to the applicant, the city was at risk of running afoul of the law.

"It reads that the applicant is going to sue the city of Farmington in circuit court if we refuse to issue a resolution," he said.

The work of the ABC Board would also be circumvented to the city, Tennant said.

"It's putting the onus on the city council to do the work of the ABC," he said. "They are putting into the hands of the city council to make a finding of fact in the very same matters that the ABC does by requiring the city to go through this process ahead of time."

Crawford County is a dry county that has seen private clubs become common place in recent years.

Crawford County Judge John Hall would not say whether he was in favor of the bill. But he expressed some limited excitement at the prospect of having some local control in the permitting process.

"As far as I'm concerned, what they're doing is taking away the responsibility, the decision making authority, away from the state ABC Board and giving the decision making back down to the quorum court and city council," he said.

He said many times, the fights around the permit issuance boiled down to two issues.

"To me, there's an economic and a moral issue," he said. "Both have a following."

Hall said a big motivator for local governments to potentially be in favor of approving ordinances in support of private clubs would likely be purely economic.

"If we have a big convention or a ball game, people would go over to Fort Smith (for dinner and entertainment)," he said.

Now that private clubs have slowly crept into the mainstream in Van Buren, economic development and increased sales tax collections have followed, Hall said.

"Private clubs have had an economic impact — Chili's, Big Jake's (Cattle Company), Sister's (Bistro), they all do have (alcohol sales) now."

But giving limited local control in the permitting process could have prevented such growth, according to Hall.

"Without the state making a decision, it would have never happened," he said.

Regardless of his whether he believes local officials would approve permitting businesses to sell alcohol, and therefore potentially spurring economic development in small, rural areas such as Crawford County, Hall said giving some control to the local government is always a good thing.

"Overall, it wouldn't be a bad thing for more local control of it and more control of other things," he said. "I don't think people somewhere else should be telling us what to do. I'm for local control."

Payton said that was the entire purpose of his bill — local control.

"Currently the ABC can unfairly impact what the city wants to do," he said. "(Putting control in the hands of local governments means) these people can be voted out (if they go against the will of constituents). That's the power of the people to lobby their government. I'm trying to return power to the people."

Currently, Crawford, Johnson, Logan, Scott and Sebastian Counties (excluding Fort Smith) are the only dry counties in all of the Fort Smith and northwest Arkansas areas.

Calls seeking comment from the bill's co-sponsor, Rep. Gary Deffenbaugh, R-Van Buren, were not returned Thursday (March 14).