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House Bill 72 Updates Montana Restaurant And Beer Wine Licenses

Posted on June 15th, 2023

On April 25, 2023, Governor Gianforte signed House Bill 72 (HB 72), which amends Montana statute 16-4-420 of the Montana Code Annotated relating to Restaurant and Beer Wine (RBW) licenses. 

An RBW license is intended to allow restaurants to serve beer and wine to customers who order food. It is a type of liquor license that comes with restrictions that make the license only suitable for a restaurant environment. 

  • The establishment must generate at least 65% of its annual gross income from the sale of food. 
  • The premises must include a dining room and kitchen.
  • There must be a sufficient number and variety of employees needed to prepare, cook and serve meals and to satisfy the department that the space is intended as a full-service restaurant.
  • Dinner must be served at least four (4) days a week, for at least two hours between 5:00pm and 11:00pm.

A fast-food restaurant is defined by MDOR as an establishment that serves a majority of its food and drink in throw-away containers and does not qualify as a restaurant for the purposes of an RBW license.

Important for our RBW licensee clients, or those interested in acquiring an RBW is that HB 72 added to the statute that the Montana Department of Revenue (MDOR) can audit a competitive bid licensee who has been issued an RBW license at any time in the first year of ownership to verify that the restaurant’s gross income is at least 65% food. 

Here are some items that were REMOVED from the statute:

  • A restaurant that has an existing retail license for the sale of beer, wine, or all-Bev, may not be considered for an RBW at the same location.
  • An on-premises retail licensee who sells the licensee’s existing retail license may not apply for a competitive bid RBW license for a period of 1 year from the date that license is transferred to the new purchaser.
  • A person, including an individual, with an ownership interest in an existing on-premises retail license that is being transferred to a new purchaser may not attain an ownership interest in a license applied for under the competitive bid RBW for a period of 1 year from the date that the existing on-premises retail license is transferred to a new purchaser.
  • If a premise proposed for licensing under a competitive bid RBW is a new or remodeled structure, then MDOR may issue a license prior to completion of the premises based on reasonable evidence that the premises will be suitable for carrying on the business as a bona fide restaurant. If a license is issued without a premise, the license will immediately be placed on non-use status until the premises are approved.
  • An RBW not issued through a competitive bid process may be transferred, on approval by MDOR, from the original applicant to a new owner of the restaurant only after 1 year of use by the original owner, unless that transfer is due to the death of an owner.
  • An RBW issued through a competitive bid process may be jointly owned, and the license may pass to the surviving joint tenant upon the death of the other tenant. However, the license may not be transferred to any other person or entity by operation of the laws of inheritance or succession or any other laws allowing the transfer of property upon the death of the owner in this state or in another state.
  • An estate may, upon the sale of a restaurant that is property of the estate and with the approval of the department, transfer a RBW license to a new owner.
  • An application fee for a RBW license must be accompanied by a fee equal to 20% of the initial licensing fee. Upon the issuance of a license, the licensee shall pay the balance of the initial licensing fee.

The below items were ADDED to the statute:

  • 65% of the restaurant’s annual gross income from the operation must be from the sale of food prepared on the premises and not from the sale of alcoholic beverages. 
  • The dining room for the restaurant must contain at least half of the total available seats.
  • The provisions that require an RBW licensee to serve an evening meal at least 4 days per week for at least 2 hours any day between the hours of 5:00 PM and 11:00 PM are not required for RBW licensees whose license was in effect as of April 9, 2009, or to subsequent renewals of that license.
  • The number of RBW licenses issued under competitive bid to restaurants with a stated seating capacity of 101 persons or more may not exceed 25% of the number of RBW licenses allowed in the quota area.

Staying on top of regulatory and compliance updates are critical to your liquor and gaming licenses, as well as your business success. Whether you are a seasoned RBW licensee or hoping to venture into the business by buying a bar in Montana, contact our office. Silverman Law Office, PLLC can be reached at 406-449-4829 to schedule a meeting to discuss your current or future liquor license needs, or explore our website to learn more about our firm

Jill Russell, Attorney

Silverman Law Office

attorney jill russell



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