Hartford - A tactical decision by the state's package store lobby yielded early results Tuesday when a legislative committee made key changes to Gov. Dannel P. Malloy's proposed overhaul to state liquor laws that would still allow Sunday sales, but would scale back his plans to deregulate the ownership and pricing systems.

Store owners and their representatives faced a high-stakes dilemma early this year when Malloy came out with his sweeping package of legislation. They could concentrate on fending off this latest attempt to end the ban on Sunday alcohol sales, the type of legislative battle they have won for decades, or they could focus on defeating the parts of the bill that would relax price controls and ownership restrictions. Store owners feared those provisions would devastate family-owned shops to a far greater degree than being compelled to open on Sundays and competing with grocers for beer sales.

"We probably could have held on to it," Carroll Hughes, chief lobbyist of the Connecticut Package Stores Association, said Tuesday of the Sunday sales restriction. "Our votes were not eroding. However, we probably would have lost some additional items that were in the package. And losing those items to the extent that we lost them would have been a pyrrhic victory on Sunday sales and a disaster for the package stores overall."

So far, the strategy is achieving their goals. The legislature's General Law Committee voted 15-3 Tuesday to move forward a revised version of the bill, absent many of the changes package store owners considered most damaging.

Committee members said their bill strikes a middle ground between those who sought full deregulation of the state's liquor controls, and others who prefer the status quo.

"We have put a bill before you that is pro consumer and pro small business without engaging in guesswork with people's jobs and livelihoods," State Rep. Joseph Taborsak, D-Danbury, committee co-chairman, said. "None of us want to get this wrong and do something to put people out of business."

A longtime proponent of Sunday sales, state Sen. John Kissel, R-Enfield, also praised the compromises. "There's probably going to be some folks that feel that this bill doesn't go far enough, and there's probably going to be some folks that feel it goes too far," he said.

The bill still requires approval from both chambers of the General Assembly and possibly more committees. If it passes, it would bring an immediate end to Connecticut's 1933 prohibition on Sunday sales.

But while the governor's proposal would have permitted alcohol sales from 8 a.m. to 10 p.m. seven days a week, this revised version would limit Sunday sales to 10 a.m. to 5 p.m.

The committee's bill also keeps the existing 9 p.m. weekday closing for package stores and the grocery beer aisle. It does the same for restaurants and bars, which must still close by 1 a.m. on weeknights and 2 a.m. on Friday and Saturday evenings; Malloy sought to allow those establishments to stay open and serve drinks until 2 a.m. every day.

The other co-chairman, state Sen. Paul Doyle, D-Wethersfield, noted that their version of the bills would still give the state a two-hour regional "monopoly" on Sunday sales, as neither Rhode Island, Massachusetts or New York stores may sell alcohol before noon.

"I happen to think the 10 o'clock to noon monopoly for the state of Connecticut package store owners who decide to open is a good thing," Doyle said. "That's an opportunity for extra revenue that parallel hours won't have."

On the pricing side, the committee's bill would give stores permission to sell alcohol below cost for the first time, but only one item per month, and at no more than 10 percent below cost.

Malloy's initial proposal, which package stores strongly opposed, would have eliminated minimal retail prices. His compromise plan, released last month on the eve of a day-long public hearing on the bill, would have allowed up to five items per month at 10 percent below cost.

The committee's version also eliminates Malloy's plan to offer "beer only" sales permits to convenience stores and large gas stations.

It increases from two to three the number of package stores that a single person or corporation can operate. But that too is a step back for Malloy, who first sought to raise the ownership limit to nine and to remove the one-store-per-2,500 population zoning restriction. (He later comprised down to six and reinstated the population restriction.)

The Office of Fiscal Analysis estimates that the latest version of the bill would generate $5.3 million in additional revenue for the state. Malloy's initial proposal was expected to produce $8.7 million through deeper changes.

Brian Durand, a spokesman for the Malloy administration, said the revisions made to the governor's bill are not a disappointment. He pointed out how previous Sunday sales bills languished in the legislature.

"That's something that had never even come to a vote in this committee," Durand said. "So the fact that it didn't just come to a vote, but got voted out - and most people seem to think it's headed in the right direction - that's a pretty enormous success."

The latest bill also would remove the longstanding ban on first selectmen who act as their town's police chief from holding a liquor license. The ban currently affects East Lyme First Selectman Paul Formica, who started Flanders Fish Market With his wife, Donna, in 1983 before he ran for office.

The corporation that owns the business was in her name. But she died two years ago of a heart attack, and he became the executor of her estate.

"We're very appreciative to the committee for their consideration and hope that it continues on its path through the House and the Senate," Formica said Tuesday. "It's encouraging that they recognized that the restriction shouldn't be in place, as it's not in place for any other elected or appointed position other than judges or police chiefs. Just an old law that needs to be modernized and cleaned up."

The bill also adds a restriction to a proposal that would allow casino-goers to keep their drinks in casino gambling areas after the bars close at 2 a.m. The amendment states that the privilege won't apply to whole bottles of liquor or wine.

"It just allows someone to finish a drink," Doyle said. "You can't at 1:59 a.m. order a full bottle of whiskey and then drink it all night."

j.reindl@theday.com

SOME HIGHLIGHTS OF THE BILL:

• Allows Sunday alcohol sales from 10 a.m. to 5 p.m.

• Eliminates some holiday closings and "Monday after Sunday holiday" closings. Christmas is still a day off.

• Allows breweries to offer beer tastings to visitors who haven't taken an official tour of the premise.

• Allows package stores to offer fee-based wine education and tasting classes.

• Lets package stores sell fresh fruits, cheese, crackers and snack foods such as chips, nuts and candy.

• Lowers the annual fee that bowling alleys and racquetball clubs must pay for a beer and wine permit from $2,000 to $1,000.

• Allows colleges to make and dispense wine for academic courses.

• Increases to $1,500 from $175 the annual fee groceries must pay for a beer permit.

• Creates a legislative task force to study the state's liquor laws in relation to other states' laws to report back in January.