Assembly Bill Would Be First Major Change to Liquor License Laws since Prohibition

TRENTON – Municipalities would be able to expand access to liquor licenses and help local business meet marketplace needs with a bill proposed by Assembly members John Burzichelli (D-3rd) and Raj Mukherji (D-33rd) creating two new liquor licenses for small businesses. It was approved Oct. 22 by the Assembly Appropriations panel, 7-3-1.
According to a release, “Liquor licenses in our state are among the most expensive and restrictive in the nation,” stated Burzichelli. “New Jersey’s lack of differentiation in how and to whom we provide a liquor license is hurting us.  The current system is holding back small businesses or “mom- and-pop” restaurants who can’t afford to pay up to $1 million for a liquor license. The ability to serve their customers a glass of wine with dinner would make a noticeable difference in their profits.”
“Encouraging economic growth and development with every possible resource is our goal here. We have not taken this endeavor lightly, but something has to happen so that New Jersey can begin to meet the needs of today’s marketplace. Updating a system created nearly 70 years ago is a critical step to that end.”
Compared to the over 16,000 and 51,000 liquor licenses in Pennsylvania and New York respectively, New Jersey has only 9,000 liquor licenses in circulation. Nearly 2,000 of which are pocket licenses or a type of inactive license which does not have a site or licensed premises.
 “You can see the efforts cities have made throughout the state to transform themselves into places that will attract the millennial generation and the businesses that serve them. Jersey City over the last few years is a good example of these revitalization efforts,” stated Mukherji (D-33rd). “While being protective of existing liquor license holders’ interests, this legislation strikes a balance to allow consumers an opportunity to enjoy a glass of wine at the table in small restaurant settings and would help these small businesses succeed.”
The bill (A-3494) creates two new licenses which would allow restaurant owners to sell alcoholic beverages for on-premises consumption. The first permit is a restricted restaurant permit which allows the holder to sell beer, wine, and spirits.  The second permit is a restricted beer and wine permit which allows the holder to sell only beer and wine by the bottle or can.
It directs the municipality to adopt a zoning ordinance for the purpose of improvement, development, redevelopment, or revitalization and issue special restricted restaurant permit which would entitle the permit holder to sell alcoholic beverage for consumption. 
The permit expires after a 12 month period but can be renewed on an annual basis. The zoning ordinance would establish days and times during which the permit holder may sell alcoholic beverages.
Specifically, the bill provides that:
* The municipality may establish the number of licenses issued under an established ordinance;
* A “restaurant district” is defined as an enterprise zone; downtown business improvement zone; pedestrian mall or special improvement district; transit-oriented development; area determined to be in need of redevelopment or rehabilitation; or any area designated by statute following the bill’s enactment;
Permits would only be available for use by restaurants that occupy a gross square footage of between 800 and 4,500;
* A tax credit to existing consumption licensees for “the qualified loss in value” resulting from the creation of the new licenses.
* Alcohol beverages only may be sold in connection with the sale of food at the table by an employee of the restaurant;
* Restaurants would not be prohibited from providing an area where patrons can congregate and consume;
* Certain penalties are imposed on the holders of the restricted restaurant permit or restricted beer and wine permit who violate the law; and
The initial issuance and annual renewal fees for a restricted restaurant license would be $7,500 for a restaurant with a gross square footage of 800 to 2,000, and $10,000 for a restaurant between 2,001 and 4,500 square feet. The initial issuance and annual renewal fees for a restricted beer and wine permit would be $3,000 for a restaurant with a gross square footage of 800 to 2,000 and $5,000 for a restaurant between 2,001 and 4,500 square feet.
The measure will go to the Assembly Speaker for further consideration.