Alcohol commission recommends changes to state’s permit quota system

The Indiana Alcohol Code Revision Commission voted unanimously Friday to recommend legislation for the 2019 session that would change the alcohol permit quota system for cities and towns.

In Indiana, communities are limited on the number of alcohol licenses based on U.S. Census-certified population figures. When cities reach their limits for licenses, businesses typically turn to the open market to purchase one, but those licenses are sold at a much higher cost.

The system has caused problems for years in growing communities where officials argue they struggle to attract new restaurant and entertainment options because of the lack of available permits.

The proposed change would allow communities to create an “entertainment district,” similar to the riverfront districts already allowed in state law, and increase their permit quota by 25 percent in that area.

But before doing anything, the community would have to put a measure on ballots asking residents if they wanted to increase the permits and create the district. The public question would apply to all voters—not just those in the proposed district. Passage of the ballot measure would require a simple majority of 51 percent.

Rep. Ben Smaltz, R-Auburn, said he thinks this is a way for communities to address the need for more permits without having to come to the General Assembly every year for special permission.

In 2016, for example, lawmakers approved a measure that gave additional permits to communities in Hamilton and Boone counties, but a bill failed to pass in 2018 that would have helped Greenwood, Bargersville, Martinsville and Munster.

Other commission members agreed this could help solve the ongoing problem.

“I like the idea of putting it to a public question,” Rep. Matt Lehman, R-Berne, said.

The commission also voted to recommend legislation that would make all alcohol permit transfers public and require a sales disclosure. The sale would also be subject to a transfer fee that would be a percentage of the sale price.

Smaltz said that new revenue stream for the state could go toward supporting the Indiana Alcohol and Tobacco Commission, which needs more funding to hire more officers and update its technology.

“That permit belongs to the taxpayers of Indiana,” Smaltz said. “The taxpayers are due some funding as well.”

Please enable JavaScript to view this content.

Story Continues Below

Editor's note: IBJ is now using a new comment system. Your Disqus account will no longer work on the IBJ site. Instead, you can leave a comment on stories by signing in to your IBJ account. If you have not registered, please sign up for a free account now. Past comments are not currently showing up on stories, but they will be added in the coming weeks. Please note our updated comment policy that will govern how comments are moderated.