MacIver News Service | Nov. 29, 2018
By M.D. Kittle
MADISON – Washing his hands of a prickly bit of business, the chairman of the Legislature’s Alcohol Beverages Enforcement Study Committee on Wednesday ended discussion — and potential legislation — on regulating so-called wedding barns and other emerging players in the state’s hospitality industry.
Instead, state Rep. Rob Swearingen (R-Rhinelander) deferred to Attorney General Brad Schimel, insisting the AG has spoken and there is no need for the study committee to burden itself a minute longer with the tussle over whether wedding barns need to obtain liquor licenses for alcohol consumed on their premises.
Schimel recently released a long-anticipated — and controversial — informal opinion, declaring that the private rental venues are subject to alcohol retail permitting under state law. The outgoing Republican AG’s interpretation won the appreciation of the state’s powerful tavern lobby and the castigation of the agricultural tourism industry and free-market conservative groups.
“In light of Attorney General Brad Schimel’s opinion, my thought is we continue to operate by what he would say is current law, that wedding barns need to be licensed,” Swearingen told committee members. “I don’t see any reason to move on any legislation because it’s already current law, according to the attorney general.”
Swearingen said he plans on following up with the state Department of Revenue, charged with enforcing the state’s alcohol laws, to see if the agency will be moving forward on any changes in their policies. He said it will be “interesting” to see how incoming state Attorney General Josh Kaul and Gov.-elect Tony Evers’ administration interpret and enforce the law.
Such deference to the AG felt like political punting to critics of the move to strap the small businesses with more regulation.
To Steve Nagy, operator of Homestead Meadows, a popular rural Outagamie County wedding barn, the decision is alarming and smacks of political “payback” to the Tavern League of Wisconsin, a generous campaign supporter of Schimel and like-minded lawmakers. Swearingen, who owns a Rhineland restaurant, previously served as Tavern League president.
“They really wanted to come out forcefully and spank the wedding barns,” Nagy said.
The Wisconsin Institute for Law & Liberty (WILL) asserts the attorney general’s interpretation of state statute is dead wrong, that it effectively turns private establishments like wedding barns into public places. Traditionally, the statute has been applied to restaurants or other places where people flow in and out, according to WILL. The Department of Revenue certainly seems to have interpreted the law that way.
Many of the venues host wedding receptions and other events but do not directly sell or serve alcohol, leaving that task to their patrons.
“It is very concerning that there is now significant confusion over the regulation of wedding barns,” CJ Szafir, WILL’s executive vice president, wrote in an email following the committee meeting. He said the organization is prepared to take the state to court to protect the rights of wedding barns and other venues.
The Tavern League and its former president have argued that requiring private event venues like wedding barns to be licensed is a matter of fairness.
“Nobody supports a system which unfairly gives one side an advantage over the other – government should not be in the business of picking winners and losers. Yet that is what has happened when the Department of Revenue failed to require so called wedding barns to obtain a liquor/beer license for events they contract for at their establishments,” the organization asserts in a recent position paper.
But Nagy and the Wisconsin Agricultural Tourism Association counter that licensing and more regulation on their small, private venues will make winners out of the powerful Tavern League and its members and losers out of wedding barns and their patrons.
In many municipalities, new alcohol licenses are hard to come by. Certain Class B liquor licenses considered “reserve licenses” can cost $10,000 or more, according to the Department of Revenue.
Nagy predicted wedding barns will go out of business if bureaucrats enforce the law as Schimel has interpreted it.
“People read the news. They are concerned what will happen at their wedding, a year or two years from now,” the entrepreneur said. “It will cause some of them to turn toward the more traditional wedding venues that are not threatened by this potential issue rearing its head several months from now.”
The Tavern League endorsed Kaul, the Democrat who narrowly defeated Schimel in this month’s general election.
“He was at the convention and if elected, he plans to enforce the law,” a Tavern League pre-election newsletter noted.
But the special interest group has donated generously to Schimel’s campaign, including thousands of dollars not long before this month’s elections, according to multiple sources with knowledge of the league’s contributions.
The 15-member study committee at its meeting in September had agreed to pursue the creation of a new “consumption license or permit” for operators of wedding barns and similar businesses that have grown in popularity across the state.
“It’s not a sales license, it’s a consumption license,” committee member Roger Johnson, who worked as the state’s top liquor law regulator for more than 30 years until his retirement in 2014, said during the nearly five-hour meeting. “This is a whole new license. It isn’t for selling, it’s for hosting events where alcohol is consumed.”
After Schimel issued his opinion, Swearingen said there was no need to take up Johnson’s recommendations. He was met with silence from committee members when seeking comment. Nagy said he did not find the silence surprising, noting that there is not one representative from the wedding barn or agricultural tourism industry on the committee.
Still, Swearingen noted a lack of consensus from the study committee on regulatory issues. Nagy believes that’s a good sign for the free market.
“I’m still hopeful that reasonable people would approach legislation with an eye toward making it easier for businesspeople to prosper and not interfering with the competitive forces and the evolution of consumer preferences and not just sponsor the interests of a powerful group of competitors,” the wedding barn owner said.