Bill amending prohibitive liquor licensing law goes to governor’s desk

The measure would relax statewide restrictions on liquor licensure and encourage local control.

Members of the Illinois General Assembly voted May 30 to repeal an outdated regulation included in the state’s 84-year old liquor law.

Lawmakers passed Senate Bill 2436 with a unanimous vote in the Senate and strong bipartisan support in the House. The bill will now advance to Gov. Bruce Rauner’s desk.

The bill would relax a statewide restriction that bars certain businesses from attaining liquor licensure. SB 2436 would increase economic freedom by making decisions concerning liquor licensure a matter of local control.

Passed after the ratification of the 21st Amendment, the Liquor Control Act of 1934 ushered in a burdensome regulatory system that still governs the production, distribution and sale of alcohol in Illinois. The act prohibits the issuance of liquor licenses to retail businesses that are located within 100 feet of places such as churches, schools and hospitals. The only way for businesses to avoid this restriction is through the passage of a bill in the General Assembly specifically granting them an exemption, followed by the governor’s signature. This system has allowed Springfield to pick winners and losers, providing an advantage to politically connected businesses that can afford to go through the process.

In January, Rauner vetoed a bill that would have granted an exemption to a single Chicago business. In a letter to the General Assembly, Rauner vowed to veto any future carveouts, but urged legislators to instead pass reform that places these decisions into the hands of local leaders. Although lawmakers overrode the governor’s veto, SB 2436 would deliver that reform.

Spearheaded by the Small Business Advocacy Council, SB ­­2436 would amend the Liquor Control Act by giving local liquor commissioners the authority to exempt businesses in their communities from the state’s blanket ban.

Illinois is no stranger to burdensome restrictions imposed on the alcohol industry, many of which stifle competition between businesses while straining the pockets of consumers. Due to the state’s high alcohol taxes, store owners in border towns have seen Illinoisans opt for the other side of the border in making their liquor purchases. According to at least one estimate, Illinois could be losing between $15 million and $30 million per year in cross-border alcohol sales.

Lawmakers should build on the momentum of SB 2436 and continue to target antiquated restrictions on small businesses.