Bill broadened to include to-go alcohol sales, advanced

Lawmakers amended a bill to create a package of changes to Nebraska’s liquor laws before advancing it from general file March 9.

LB274, as introduced by Sen. John Lowe of Kearney, would create a new promotional farmers market special designated license. Under the bill, farm wineries, craft breweries and micro-distilleries that currently are licensed to manufacture alcoholic beverages could apply for the SDL, which would allow sales at any farmers market for one year, subject to local approval.

Currently, such entities must apply for an SDL for each event at which they sell alcohol. Lowe said some farm wineries apply for 100 SDLs a year and virtually all of them are approved.

“This is a waste of time for small business and for the [Nebraska] Liquor Control Commission,” he said.

A General Affairs Committee amendment, adopted 30-1, added provisions of two additional bills.

LB72, introduced by Sen. Suzanne Geist of Lincoln, would allow the holder of a Class C liquor license to sell alcohol not in the original package — such as a mixed drink or cocktail — for consumption off the premises. The holder of a Class I liquor license could do the same if the alcohol is not partially consumed and is purchased with food.

Farm winery license holders would be allowed to sell products such as sangria or wine slushies for consumption off premises under the amendment. All alcohol sold would be in a sealed, labeled container with a tamper-evident lid, cap or seal and, if placed into a car, be out of reach of the driver or passengers.

Geist said the provisions would make permanent an executive order signed by the governor during the pandemic that helped bars and restaurants survive.

“The whole intention of bringing the bill was to help recoup the revenue stream that was lost by these establishments because of the [pandemic-related] shutdown,” Geist said.

Also included in the amendment were provisions of LB578, introduced by Omaha Sen. Tony Vargas. The provisions would create a new category of alcoholic beverage and set the excise tax at 95 cents per gallon. Ready-to-drink cocktails would be charged $3.75 per gallon without creation of the new category, which defines a ready-to-drink cocktail as spirits in an original container with up to 12.5 percent alcohol by volume.

“We are overtaxing this specific product and it is making it cost prohibitive for [manufacturers] to be able to enter into the market,” Vargas said.

Sen. Mike Groene of North Platte said he supported the underlying bill and the amended provisions. He said LB274 would allow small businesses to expand their customer base while LB72 would help restaurants recover from the ongoing COVID-19 pandemic. Lowering the excise tax on ready-to-drink cocktails is a matter of fairness, he said.

Sen. Robert Hilkemann of Omaha said lowering the tax on ready-to-drink cocktails would lead to alcohol abuse and drunk driving and would cost the state an estimated $5 million annually in lost tax revenue. He offered an amendment to strip those provisions from the bill, which failed on a vote of 2-17.

Following a failed motion by Hilkemann to recommit LB274 to committee, the bill advanced to select file on a vote of 33-0.