LEGISLATIVE FISCAL ESTIMATE
ASSEMBLY COMMITTEE SUBSTITUTE FOR
ASSEMBLY, No. 3609
STATE OF NEW JERSEY
218th LEGISLATURE
DATED: OCTOBER 1, 2018
SUMMARY
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Synopsis: |
Establishes permit to allow seasonal retail consumption license holders to sell alcoholic beverages during certain off-season dates. |
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Type of Impact: |
Annual State and Revenue and Expenditure Increase. Annual Local Expenditure Increase. |
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Agencies Affected: |
Department of Law and Public Safety; Municipal Government. |
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Office of Legislative Services Estimate |
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Fiscal Impact |
Year 1 |
Year 2 |
Year 3 |
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Annual State and Local Cost Increase |
Indeterminate |
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Annual State and Local Revenue Increase |
Indeterminate |
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· The Office of Legislative Services (OLS) finds that the bill will result in indeterminate increases in annual State revenues and State and municipal expenditures. The OLS, however, cannot assess the direction of the net effect of the increases given the absence of information on the potential revenue collected from the total number of permits issued annually and sales tax on products sold. It is unknown if there will be additional revenues from penalty collections which would be offset by expenditures for increased regulation and enforcement during the additional periods in which the licensee could sell alcoholic beverages and additional costs for the division’s and municipalities’ increased workload.
· The bill authorizes the Division of Alcoholic Beverage Control, in the Department of Law and Public Safety, to issue up to 14 one-day permits per calendar year to seasonal retail consumption licensees, which have a fee of $500 per permit. The bill may increase or decrease the division’s workload depending on the number of one-day permits issued to seasonal retail consumption licensees. Depending on the board’s resource allocation policies, the added workload may or may not augment State administrative expenditures.
· The bill may increase the municipal expenditures due to increased costs to municipalities for regulation and enforcement during the additional days the licensees may operate.
BILL DESCRIPTION
This bill allows a seasonal retail consumption license holder to obtain one-day permits to sell alcoholic beverages on off-season dates.
Under current law, the holder of a seasonal retail consumption license is allowed to sell alcoholic beverages for consumption on the licensed premises by the glass or other open receptacle similar to the holder of a plenary retail consumption license, but only during a summer or winter season. The summer seasonal license allows for the sale of alcoholic beverages from May 1 through November 14; the winter seasonal license allows for the sale of alcoholic beverages from November 15 until April 30.
This bill allows a seasonal retail consumption license holder to receive a one-day permit to sell alcoholic beverages on an off-season date. Under the bill, a licensee would be allowed to obtain a maximum of 14 one-day permits during a calendar year. The one-day permit would be valid for 24 consecutive hours. The bill establishes a fee of $500 for each permit.
The bill allows the governing body of a municipality to place reasonable conditions on a one-day permit for the purpose of maintaining public safety on the licensed premises and immediately surrounding area. The costs associated with the reasonable conditions placed on the one-day permit would be assumed by the seasonal retail consumption license holder.
FISCAL ANALYSIS
EXECUTIVE BRANCH
None received.
OFFICE OF LEGISLATIVE SERVICES
The OLS finds that the bill will result in indeterminate increases in annual State revenues and State and municipal expenditures. The OLS, however, cannot assess the direction of the net effect of the increases given the absence of information on the potential revenue collected from the total number of permits issued annually and sales tax on products sold. It is unknown if there will be additional revenues from penalty collections which would be offset by expenditures for increased regulation and enforcement during the additional periods in which the licensee could sell alcoholic beverages and additional costs for the division’s and municipalities’ increased workload.
State Revenue Impacts: The bill will increase annual State revenue collections from the sale of the one-day permits to seasonal retail consumption licensees. These one-day permits are issued at a fee of $500 per permit for up to 14 times per year only to seasonal retail consumption licensees. As of May 2015, it was reported that there were seven establishments holding seasonal retail consumption licenses. Although the statute also authorizes a winter season license from November 15 to April 30, no such license has been issued in the State. If each of the seasonal retail consumption licensees applies for the maximum number of one-day permits under this bill, it would mean an estimated maximum annual revenue increase of $49,000, or $7,000 per seasonal retail consumption licensee.
The OLS anticipates that sales by plenary retail consumption licensees may increase with an additional 14 days to sell their products, thus increasing the amount of State sales tax collected.
State Expenditure Impacts: The bill may increase or decrease the division’s workload depending on the number of permits issued.
Municipal Expenditure Impacts: The bill may increase the municipal expenditures due to increased costs to municipalities for regulation and enforcement of the additional one-day permits.
Additionally, it appears that the establishments holding seasonal retail consumption licenses are located in shore towns. The OLS notes that many of these municipalities may employ additional seasonal law enforcement. The additional sale of one-day permits may increase the cost of public safety as there may be increased need for enforcement of alcoholic beverage statutes and ordinances.
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Section: |
Law and Public Safety |
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Analyst: |
Senior Fiscal Analyst |
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Approved: |
Frank W. Haines III Legislative Budget and Finance Officer |
This fiscal estimate has been prepared pursuant to P.L.1980, c.67 (C.52:13B-6 et seq.).