Steve Breinholt, Deseret News
FILE - Walmart asks customers to weigh in on whether they want to get rid of 3.2 beer, pictured Wednesday, Dec. 12, 2018. The state alcohol commission denied beer licenses to two businesses Tuesday based on a change in Utah liquor law that has yet to take effect.

SALT LAKE CITY — The state alcohol commission denied beer licenses to two businesses Tuesday based on a change in Utah liquor law that has yet to take effect.

Owners of Heart & Seoul Karaoke and Social Axe walked away frustrated that the commission didn't decide under the current law.

"It was arbitrary and capricious," said Janelle Bauer, an attorney representing Heart & Seoul, a Provo business patterned after Korean singing rooms.

Heart & Seoul and Social Axe, an Ogden ax throwing venue, applied for licenses under a section of state law that allows beer sales for "recreational amenities."

The law defines a recreational amenity as a billiard parlor, bowling alley, golf course, miniature golf, golf driving range, tennis club, sports arena, concert venue or "substantially similar" activity.

But the Utah Legislature removed "substantially similar" from the law in a bill passed in March, leaving a list of 14 activities that does not include karaoke or axe throwing. It takes effect May 14.

"I guess I'll be the bad guy," Commissioner Thomas Jacobson said, explaining that the Legislature "really tied our hands behind our back."

"Though the law is not effective, the Legislature clearly has told us how they feel. … This is really not something that is open to any kind of interpretation because they have said this is what we want you to do," he said.

Rep. Tim Hawkes, R-Centerville, who sponsored HB453, said he doesn't remember how the specific change in the law came about but there's a broader policy direction at play with the Department of Alcoholic Beverage Control.

"Anytime that there's a lot of discretion built into the liquor code, it invites a lot of controversy and kind of puts them in a difficult position," he said. "It's best if things are spelled out in code instead of putting the DABC and the liquor commission in the awkward position of have to divine what the Legislature might mean."

The commission has been grappling for the past month with whether karaoke is recreation, and if Heart & Seoul would qualify for a beer license as a substantially similar activity to those listed in the law.

"We didn’t come into this trying to prove that karaoke was recreation. That's the approach we felt we needed to take to get a license," owner Brody Horton told the commission, adding that's the route DABC staff members advised him to take.

Horton argued that the commission should hinge its decision on the current law, not one that hasn't taken effect.

Commissioner Chairman John T. Nielsen told Horton and Floyd to "change your business model to fit one of these pegs" to qualify for a license or get state lawmakers to add karaoke and ax throwing to the list of recreational activities.

The commission deemed ax throwing as a recreational amenity and granted Social Axe a beer license last May. The change in the law puts liquor licenses for all ax throwing businesses in jeopardy.

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Commissioners told co-owner Mark Floyd the permit likely wouldn't be renewed when it expires next January. He was seeking a license for a new location in Ogden that is scheduled to open May 20.

"Luckily, this great state of ours doesn't have a whole lot to do with BYOB rules," he said after the meeting.

Floyd said he plans to put a group together to fight the new law, "and in the meantime, we're going to put in a couple of pool tables."

Hawkes said lawmakers would probably have to consider adding specific activities to the law on a case-by-case basis going forward.