Omnibus liquor law bill amended, advanced

A bill that would make numerous changes to the state Liquor Control Act advanced from general file April 21.

O’Neill Sen. Tyson Larson, sponsor of LB330, said the bill would make necessary updates to the act and assist the state’s Liquor Control Commission (LCC) in its regulatory capacity.

Debate focused on a provision of the bill that would include powder as one of the forms of alcoholic liquor that the LCC has jurisdiction over. Larson said powdered alcohol recently was approved at the federal level and should be defined in state law so that the LCC can consider how best to regulate it in Nebraska.

Seward Sen. Mark Kolterman offered an amendment that would prohibit the possession or sale of alcohol in powdered form in Nebraska. The amendment would provide an exception for research hospitals and other facilities and includes a Class I misdemeanor penalty for the sale of powdered alcohol.

Kolterman said alcohol in powdered form poses a particular danger for children because it would be easier to procure and transport into school events than traditional alcohol.

“I see powdered alcohol as a real challenge to our state,” he said.

Sen. Lydia Brasch of Bancroft supported the amendment, saying powdered alcohol raises significant health and safety concerns and that the Legislature should study the issue rather than handing it over to a state agency. She said only 13 states permit powdered alcohol and that Nebraska should proceed with caution.

Omaha Sen. Ernie Chambers also supported the amendment, saying senators would be abdicating their duty as policy makers by leaving all decisions regarding powdered alcohol to the LCC.

“We’re talking about policy,” he said. “This is something that currently is not legal [and] a policy decision has to be made—that should not be left to a commission.”

Larson opposed the amendment, saying the LCC would study powdered alcohol and make recommendations on whether and how it should be sold in the state. An outright ban on the substance would be both “short-sighted” and “heavy-handed” on the part of the Legislature, he said, and would leave the state without a regulatory framework for dealing with powdered alcohol.

“To take that step of banning something, we start getting into the remnants of Prohibition,” Larson said.

The Kolterman amendment was adopted on a 27-8 vote.

Other provisions of the bill would make a number of changes to the state’s liquor control laws, including:
defining hard cider as beer instead of wine;
allowing liquor licensees 30 days for a late renewal;
authorizing the LCC to dispose of confiscated alcohol; and
applying laws relating to beer kegs to all kegs containing alcoholic liquor.

The bill would limit a trigger in the law requiring a public hearing if an establishment located within 150 feet of a church applies for a liquor license. Under the bill, a hearing would be required only upon receipt of a written request by the church.

LB330 also would state legislative intent to appropriate $102,000 for personnel expenses to the LCC and remove a prohibition on issuing liquor licenses within 150 feet of a home for the aged.

A General Affairs Committee amendment, adopted 27-1, eliminated a provision that would have repealed the state’s mandatory closing time statute. Larson said the provision simply proved to be too controversial.

The committee amendment also incorporated provisions of two bills originally introduced by Ogallala Sen. Ken Schilz.

Provisions of LB486 would allow an establishment holding a Class C liquor license to apply for a limited bottling endorsement.

The endorsement would allow the holder to fill a container, commonly referred to as a growler, with up to 32 ounces for consumption off the licensed premises. These containers would be sealed, sanitary and display the endorsement holder’s trade name or logo. The application fee would be $300.

Provisions of LB204 would provide tax credits to beer manufacturers who utilize local crops.

The tax credits would be nonrefundable and require at least 10 percent of local beer- related crops, which would generate a credit equal to that percentage for the first 20,000 barrels sold by the manufacturer.

The tax credit would be based on the percentage of local beer-related crops as follows:
10 to 39 percent would result in a 15 percent tax credit;
40 to 69 percent would result a 25 percent tax credit; and
70 percent or more would result in a 35 percent tax credit.

Larson offered an amendment to the committee amendment, adopted 25-1, which limited the crops that would qualify for the tax credit to barley and hops.

He said some large national manufacturers use Nebraska corn and wheat in their beer and including them in the bill’s tax credit provisions would not be fiscally prudent for the state.

A second Larson amendment, adopted 28-1, clarified the bill’s provisions defining hard cider as beer instead of wine.

Under the amendment, a farm winery could manufacture and sell hard cider on its licensed premises but could not distribute the hard cider it manufactures except by sale to a wholesaler licensed under the Nebraska Liquor Control Act.

Larson said craft beer manufacturers cannot distribute their products under current Nebraska law.

“When we change hard cider from a wine to a beer it needs to be treated like every other product that it is like,” he said.

Omaha Sen. Jeremy Nordquist brought an amendment based on provisions of his LB460 that would require licensure of pedal pubs, which are defined as multi-passenger human powered vehicles.

The amendment would require that:
a licensee’s liquor license be prominently displayed on the pedal pub;
alcohol be consumed in opaque plastic containers that prominently display the licensee’s trade name or logo;
alcohol be consumed only on or in the pedal pub and open containers could not leave the pedal pub;
the licensee may allow passengers to bring their own alcohol; and
the licensee would be responsible for any litter coming from the pedal pub.

Nordquist said there have been no negative incidents since pedal pubs have been in operation in Omaha and Lincoln and that clear regulation would ensure that they continue to be responsible entertainment providers.

Larson supported the amendment, saying the provisions would assist law enforcement in tracing the origin of any problems regarding littering, minor consumption or over-serving.

The amendment was adopted 27-1 and LB330 advanced to select file on a 32-3 vote.