SALT LAKE CITY — Lawmakers were told Wednesday that no one has yet applied to buy a liquor license along with a restaurant or bar, an option available under a law that took effect July 1.
But members of the Legislature's Business and Labor Interim Committee still raised questions about the change from requiring owners of establishments serving alcohol to return their licenses to the Department of Alcoholic Beverage Control.
The committee chairman, Rep. Jim Dunnigan, R-Taylorsville, wanted to know whether the ability to transfer retail liquor licenses would artificially increase their value beyond what it should be.
Nina McDermott, the department's director of compliance and licensing enforcement, said new owners can always apply directly to the state for a license if the price tag for a transferred one is too high.
Right now, McDermott said, there are 37 liquor licenses available for restaurants. What might make a transferred license more valuable is if it were issued before restaurants were required to shield patrons from alcohol preparation, she said.
Transferred licenses for bars may also be in demand because they are usually in short supply.
The sponsor of the legislation allowing the transfer, Sen. John Valentine, R-Orem, said the value of so-called "grandfathered" liquor licenses for a restaurant would depend on the new owner's plans.
An owner who wants what Valentine called a "bar-like concept" would need the grandfathered license or face having to remodel. But he said an owner who wanted a more family-friendly restaurant may not need the transferred license.
Rep. Gage Froerer, R-Huntsville, said he is concerned the costs of transferred licenses will be extremely high as demand exceeds the number of licenses available under a state formula using population.
"The reports I'm getting back from a number of entrepreneurs, they're really saying we've created a black market," Froerer said.
Now, he said, current licensees will hold out "for the highest bidder" rather than turn back their licenses.
Valentine said there has been no indication that's happening and recommended the committee take another look at the issue in November to see if any problems have materialized.
"This is a long time coming," Valentine said of the change, originally part of a package of liquor law revisions approved three years ago.
He said it was made in response to people transferring licenses "under the table."
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