On Wednesday, May 24, the Assembly Oversight, Reform, and Federal Relations Committee considered various liquor license reform bills and held a hearing regarding the State’s regulations on liquor licenses for bars and restaurants. The discussions centered around how to reform the State’s Liquor License laws, including the prohibition-era laws that restrict the number of licenses municipalities can award.
The Assembly’s Oversight and Reform Committee considered several bills that proposed changes to these rules. The package of bills included measures such as allowing municipalities to auction off excess retail licenses to neighboring towns, creating a new license category for food courts in shopping malls to serve alcohol, and lifting restrictions on craft alcohol manufacturers regarding events and food. Additionally, there were proposals to raise taxes on hard seltzers, lemonades, and similar products significantly, as well as giving towns the ability to reduce the population limit for retail licenses through local ordinances.
The committee considered for discussion only:
- A-5509 would permit municipalities to adopt an ordinance to reduce the population limit for retail consumption licenses. Over a five-year period, the population cap would be reduced from 3,000 to 2,000. The League is supportive of the concept, however, raised concerns that 81 municipalities would not be afforded an opportunity to increase the number of retail consumption licenses as their population is below 2,000. Opponents raised concerns that the value of existing license holders could decrease with a flood of new licenses. Governor Murphy’s proposal is aligned more closely with A-5509, however, the Governor’s proposal offers tax credits to compensate for the devaluation of existing licenses. The Assembly sponsor, Assemblyman Danielsen, expressed an interest in addressing the League’s concerns.
- A-5496 creates a new taxable category of alcoholic beverages called flavored malt beverages, imposes a separate rate of taxation on flavored malt beverages pursuant to the alcoholic beverages tax, and allocates the associated revenue evenly between the Alcohol Education, Rehabilitation and Enforcement Fund and the General Fund. The new flavored malt beverage tax would be at a rate of $4.40 per gallon.
The committee considered for amendment purposes only:
- A-1283, which increases the number of retail distribution licenses that one person may acquire that are used in connection with a retail food store. The amendments are not yet publicly available.
The committee took testimony and released from the committee:
- A-4251, which establishes a special permit that may be issued in connection with food and beverage establishments located within shopping malls. A shopping mall is defined as a standalone, enclosed publicly accessible building with gross square footage of not less than 500,000 and a fully enclosed walkway or hall area that serves to connect retail, entertainment, and food and beverage establishments, and office space.
- A-4630 which allows the holder of a limited brewery license to hold events on the licensed premises and coordinate with food vendors.
- A-5461 which allows municipalities to transfer inactive alcoholic beverage retail licenses for use in redevelopment areas under certain circumstances and allows retail distribution and seasonal consumption licenses to be converted into consumption licenses. League Past President and Clinton Town Mayor Janice Kovach testified before the committee, thanking them for maintaining local control but raising concerns about the implementation of the bill and if all municipalities will be able to access liquor licenses for their community. A-5461 aimed to enable municipalities to obtain liquor licenses from their neighboring municipalities for use in redevelopment areas. The transfer of inactive “pocket licenses” was seen as a way to facilitate a smoother transition without negatively affecting existing license holders. However, opponents of expanding the number of available licenses argued that it would devalue their current licenses s. Suggestions were made to amend the bill to allow license transfers within a county.
Contact: Andrew LaFevre, Legislative Analyst, email@example.com, 609-695-3481, x116.