Gov. Murphy held a roundtable discussion today with restaurant owners and other stakeholders to discuss details of his administration’s legislative proposal to increase the availability of Plenary Retail Consumption Licenses gradually over five years.
Here are the details of the proposed framework:
- Phase out the population cap: The existing population cap for plenary retail consumption licenses and seasonal retail consumption licenses would be reduced each year by 10% for five years until it is completely removed. This phase-out will gradually increase the number of new licenses available in municipalities over time – which will grow the market but not overwhelm it. After the phase-out, licenses will be issued as needed and without a cap, subject to local control.
- Local review: New licenses would continue to follow the same local review process that they do today, maintaining municipal control. New licenses would be issued by the local authority with supervision by the State Division of Alcohol Beverage Control (ABC) upon municipal application and approval. Each local authority will be able to determine and regulate the number and type of licenses to be issued upon reduction and removal of the existing population cap.
- Establish administrative prices and fees for new licenses: New licenses would be issued at progressive prices and associated fees based upon business size, which will be measured by number of employees. These prices will be reviewed and set by ABC annually. In addition, municipalities would maintain the right to assess local fees upon the issuance of a new license with a cap on the annual renewal fee – not to exceed $2,500 – in order to maintain affordability.
- Address breweries, distilleries, and wineries: This proposal would also expand the rights of holders of certain brewery, cidery and meadery, distillery, and winery licenses, many of which are restricted from serving food and non-alcoholic beverages, limited from participating in events, and required to host tours. Under the proposed legislation, these restrictions would be lifted, allowing for coordination with food vendors; attendance at unlimited off-premises events; and the hosting of unlimited events on premises. Restricted brewery licensees may convert to a limited brewery license, and receive these new benefits, upon payment of a fee to be established by the ABC.
- Repatriation of inactive licenses to boost availability: Under the proposal, licenses that have been purchased but not in use for more than two years can no longer be held in perpetuity by the license owner. Additionally, existing licenses that have not been active for five years preceding enactment of this legislation, will go to the municipality for reissuance at public sale. Any future issues with inactive licenses will be handled by the municipality, rather than the ABC.
- Provide a mechanism to support existing license holders: The proposed legislation would authorize the State to establish a means-tested tax credit for current plenary retail consumption license holders impacted by the expanded supply of licenses. The tax credit to be issued to the license holder will be determined based on the taxable sales within the preceding three calendar years.
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Our team of regulatory and government relations attorneys are monitoring this proposal and other liquor license reform proposals in Trenton and will update this blog from time to time as bills are introduced and advance through the legislative process.