Oshkosh staff brief council on Act 73 changes, recommend ordinance updates for liquor licensing

Oshkosh City staff on Thursday walked the City Council through statewide changes from Wisconsin’s Act 73 and outlined recommended updates to local licensing rules, including how full-service retail (FSR) outlets and quota licenses will be handled during the upcoming renewal cycle.

City Manager Rebecca Grill told council members the presentation was intended to summarize Act 73 changes, explain how full-service retail outlets work and to propose next steps for renewals, surrenders and ordinance revisions. “The state has established a division of alcohol beverages,” Grill said, adding that municipalities will see new application forms and longer notice windows for license changes.

The briefing matters because Act 73 alters definitions and allowances that affect bars, breweries, distilleries and event organizers — and because Oshkosh holds a limited number of quota (Class B tavern) licenses. Staff recommended codifying parts of the application and review process, clarifying where community development, police, fire and health reviews fit in, and updating local code language that relied on conditional approvals now undercut by a federal court decision.

Among the state changes staff reviewed, Grill said fermented malt beverages now explicitly include seltzers and similar products and that Class C wine licenses no longer must operate as restaurants — moves that could let some businesses operate under less-expensive licenses. She also noted a new statewide bartender credential and expanded ability to transfer quota licenses within a county rather than only between contiguous municipalities. “Before, if there were any changes in applications, licensees were supposed to let the municipalities know within 10 days. Now they have 30 days to let them know,” Grill said.

The presentation described the new full-service retail (FSR) classification for producers (breweries, distilleries, wineries). If a producer meets the statutory production-volume thresholds, it may serve and sell alcohol types beyond what it produces without obtaining a separate municipal liquor license, subject to the same local class fee and regulatory standards as other retailers. Staff explained there are three FSR configurations: on-site (at the production location), a second brick-and-mortar site, or an unlimited-transfer option allowing producers to sell at events. Municipal approval is required for the second-site and unlimited-transfer configurations.

Staff described the city’s current application workflow: the clerk’s office checks completeness, then packages applications for community development (zoning, 300-foot school-distance checks), police (background and operational history), fire (life- and fire-safety inspections) and health. Grill said staff will add explicit references to the local code sections each reviewing department enforces so applicants and council members see the legal basis for reviews without duplicating the same language in multiple places.

Council members and staff discussed local quota mechanics in detail. Grill reported Oshkosh currently has 32 issued quota licenses, 10 reserve licenses authorized by state law, and only one of those reserves has been issued. Staff said reserve licenses carry a one-time issuance fee that is higher than standard license fees; staff cited $10,000 as the reserve fee versus about $600 for a typical first-year fee. City staff also noted municipal code requires license holders to operate for 30 consecutive days within a 12-month period to avoid nonuse rules; several council members proposed longer usage thresholds (for example, 180 days/12 months), but no change to that requirement was adopted at the workshop.

Members raised how the city has handled conditional approvals in the past. Staff referenced a 2020 federal circuit court case that, according to the city’s attorney review, precludes issuing licenses that are effectively conditional on later approvals. As a result, staff recommended the city remove conditional-grant language from its draft ordinance and instead route incomplete or unresolved matters to council for deliberation. “We can’t do that anymore,” one staff member said of the conditional-approval practice.

Staff also previewed a renewal and surrender process for this year: license-renewal materials will be mailed in mid-April, and the deputy clerk will meet with holders to review eligibility under the new state rules and local code. Staff said they will encourage businesses that only need a wine or malt license, rather than a full Class B tavern license, to switch where eligible so quota licenses are freed for other uses. For license surrenders tied to business sales, staff reminded the council that a license cannot be sold outright; a surrender can be conditioned on the buyer receiving a new license only through the city’s discretionary approval process.

Council direction and next steps were procedural: members broadly supported having staff return with ordinance language that (1) codifies FSRs in a way that treats them consistently with similar license types, (2) removes conditional-approval language to align with the court ruling, (3) references the specific code sections and departmental review criteria rather than duplicating text, and (4) aims to make short-term event FSR transfers administratively issuable where state law permits. Council did not approve changes to the local use/renewal threshold at this meeting and asked staff to continue outreach to license holders during the renewal period to collect usage data.

Staff said they would bring a revised draft ordinance back to the council for review and will include clearer guidance for applicants and an infographic outlining the review steps. Grill closed the presentation by asking whether staff had sufficient direction to proceed; staff reported they would not move forward on changing the 30-day usage rule now but will prepare the other code revisions and bring them back for council consideration.

Looking ahead, council members requested that staff notify license-holders about any possible future changes to the usage requirement during the 2025 renewal cycle so businesses have advance warning if the council later adopts a new minimum-use standard.