Rpld §63 sub 6, amd §§63, 66 & 105, ABC L; add §97-bbbbb, St Fin L
Relates to enacting the "New York wine & distilled spirits development act"; allows individuals to hold more than one seven day license to sell liquor at retail for off-premises consumption; establishes the New York distilled spirits and wine industry marketing and promotion fund.
NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A3397
SPONSOR: Fall TITLE OF BILL:
An act to amend the alcoholic beverage control law and the state finance
law, in relation to enacting the "New York wine & distilled spirits
development act"; and to repeal certain provisions of the alcoholic
beverage control law relating thereto
PURPOSE OR GENERAL IDEA OF THE BILL:
This legislation updates the antiquated section of New York State's
liquor licensing laws that precludes retailers of wine and spirits from
operating more than one outlet in the state. It will phase in multiple
licenses over an 8-year period, will cap the total number of retail
liquor licenses to 12 per entity and limits the overall number of
licenses issued per county. Additionally, it would create a New York
State Distilled Spirits and Wine Industry Marketing Fund to assist in
the promotion and marketing of New York's award-winning distilled spir-
its and wines. The Fund will focus on the promotion and marketing of
these products to consumers both outside of and within New York. This
legislation will unlock economic growth, increase consumer choice and
ensure that New York is no longer an outlier among surrounding states
with this archaic prohibition.
SUMMARY OF PROVISIONS:
Section 1 of the bill defines the act as the "New York Wine and
Distilled Spirits Marketing Fund."
Section 2 of the bill amends subdivision 5 and 6 of section 63 of the
alcoholic beverage control law and adds new subdivisions 5a, 5b and 5c.
As it relates to the number of off-premise locations a person may be
granted by the New York State Liquor Authority to operate and the proc-
ess by which such licenses may be issued in certain counties.
Section 3 of the bill amends subdivision 16 of section 105 of the alco-
holic beverage control to clarify that a person may hold an interest in
more than one package store.
Section 4 of the bill amends subdivision .5 of section 66 of the alco-
holic beverage control law to establish the license fee for each license
issued by the New York State Liquor Authority to a person granted addi-
tional licenses under section 63 of the alcoholic beverage control law.
Section 5 of the bill amend section 97 of the State Finance Law by
adding a new section 97-BBBBB to create the New York Distilled Spirits
and Wine Industry Marketing Fund.
JUSTIFICATION:
Numerous aspects of New York's ABC laws have not been updated since
Prohibition, including precluding retailers of wine and spirits from
operating more than one outlet in the state. This has made New York an
outlier, has limited consumer choice and has negatively impacted the
growth of the New York wine and distilled spirits industries. It simply
makes no sense that liquor stores are the only type of business limited
to one location in the entire state, while other licensed business from
restaurants and drug stores to even marijuana dispensaries - have no
similar limits.
The proposed legislation addresses this in a comprehensive manner that
would still limit the overall number of licenses one entity could hold;
phases in this expansion over several years; provides for county-level
limits on licenses as a means to protect, and even benefit, smaller
retailers; and ensures that alcohol availability remains subject to
reasonable limits.
A recently undertaken economic impact study on multiple licenses
projected increases in NYS revenue, including $54 million from license
auctions and additional tax revenues of more than $43 million; as many
as 4,430 new jobs, generating $203.3 million in wages and benefits and
$500 million in new economic activity in the state; and as many as 1.9
million additional bottles sold by New York State wine and distilled
spirits producers each year. The study also looked at other states which
allow multiple licenses, such as Massachusetts, which updated its law in
2011 to allow up to 9 licenses and which has seen positive economic
impacts and no domination of the market by large chain retailers.
This legislation would allow current licensees to grow and diversify by
opening additional stores if wanted, while providing owners who do not
wish to expand with the ability to capitalize on the increased value of
their licenses (created by the restrictions on the number of licenses
allowed in each county) by selling them to other owners who could now
expand in the state.
Finally, the bill will provide direct assistance to the wine and
distilled spirits industries in New York State through the creation of
the New York Distilled Spirits and Wine Industry Marketing Fund. This
fund would commit a portion of revenue generated by the sale of new
licenses to a dedicated support fund that would seek to grow small busi-
ness, agricultural, and manufacturing jobs across the state.
PRIOR LEGISLATIVE HISTORY:
This is new legislation.
FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS:
It is estimated that this would generate between $13.8 million and $54.5
million in new license auction revenue for New York State. In addition,
the additional beverage alcohol sales brought on by the addition of new
stores would increase excise and sales tax revenues by as much as $46.2
million.
EFFECTIVE DATE:
Immediate.
