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Banks, hospitality groups back bill to clarify loans secured by liquor and gambling licenses
Summary
House Bill 150, heard by the Senate committee, clarifies when alcoholic beverage or gambling licenses can be used to secure institutional loans and aims to reduce inconsistent vetting by the Department of Revenue; lenders and hospitality groups supported the bill.
Representative Patrick Fitzpatrick, sponsor of House Bill 150, told the committee the bill clarifies ownership and collateral rules when real estate, businesses and alcoholic beverage or gambling licenses are owned by different entities in complex ownership structures. “The first thing it does is it clarifies that, just because you have, some type of relationship with somebody … the person who owns the real estate does not have an interest in [the] liquor license,” Fitzpatrick said.
Andrew Morris and an attorney from Crowley Fleck represented the Montana Bankers Association and told the committee HB 150 aims to make institutional lending for licensed hospitality operations more consistent while preserving the department's authority to examine undisclosed ownership interests. Stockman Bank and other lenders testified that the change would make it easier to collateralize loans for resorts and small main-street taverns with complex ownership arrangements.
Hospitality and development stakeholders said the bill addressed unintended consequences from an earlier draft and that the amended language now accomplishes the goal of allowing cross-collateralization without requiring invasive vetting of parties who do not meet the statutory ownership threshold.
Alcoholic Beverage Control Administrator Becky Schlauch appeared as an informational witness and said the department stands ready to implement statutory changes. Committee members asked whether the rule would change liability for property owners; department and legal counsel said the bill does not alter civil liability rules for negligent service, and that liquor-license vetting thresholds (for ownership-reporting and fingerprinting) remain keyed to the statutory ownership percentage.
The committee moved to concur on House Bill 150 during executive action. Supporters said the bill protects lenders and licensees while preserving the department's ability to vet owners whose stake reaches the statutory threshold for licensing scrutiny.
