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.
STATE OF NEW YORK
________________________________________________________________________
3397
2023-2024 Regular Sessions
IN ASSEMBLY
February 3, 2023
___________
Introduced by M. of A. FALL -- read once and referred to the Committee
on Economic Development
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
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. This act shall be known and may be cited as the "New York
2 wine & distilled spirits development act".
3 § 2. Subdivision 6 of section 63 of the alcoholic beverage control law
4 is REPEALED and subdivision 5 is amended to read as follows:
5 5. [Not] (a) Prior to January first, two thousand twenty-four, not
6 more than one license shall be granted to any person under this section.
7 Beginning on and after January first, two thousand twenty-four, a person
8 may be granted additional seven day licenses as follows, provided howev-
9 er, the issuance of such seven day licenses shall be in accordance with
10 paragraphs (b), (c) and (d) of this subdivision:
11 (i) On or after January first, two thousand twenty-four, not more than
12 two additional seven day licenses may be granted to any person under
13 this section, for a maximum of three seven day licenses any person may
14 hold.
15 (ii) On or after January first, two thousand twenty-six, not more than
16 four additional seven day licenses may be granted to any person under
17 this section, for a maximum of five seven day licenses any person may
18 hold.
19 (iii) On or after January first, two thousand twenty-eight, not more
20 than six additional seven day licenses may be granted to any person
21 under this section, for a maximum of seven seven day licenses any person
22 may hold.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD06841-01-3
A. 3397 2
1 (iv) On or after January first, two thousand thirty, not more than
2 eight additional seven day licenses may be granted to any person under
3 this section, for a maximum of nine seven day licenses any person may
4 hold.
5 (v) On or after January first, two thousand thirty-two, not more than
6 eleven additional seven day licenses may be granted to any person under
7 this section, for a maximum of twelve seven day licenses any person may
8 hold.
9 (b) Commencing on the effective date of this paragraph, and every five
10 years thereafter, the authority shall determine the ratio of active
11 seven day licenses in a county per adult residents over the age of twen-
12 ty-one years residing in such county, using the most current decennial
13 census as conducted by the United States Department of Commerce. Such
14 ratio shall be used by the authority when considering an application for
15 a seven day license within any county provided for in paragraphs (c) and
16 (d) of this subdivision.
17 (c) No additional seven day licenses shall be granted by the authority
18 in any county in which the ratio of active seven day licenses in such
19 county per adult residents over the age of twenty-one years residing in
20 such county is equal to or less than one active seven day license per
21 three thousand adult residents over the age of twenty-one years. The
22 provisions of this paragraph shall not apply to:
23 (i) the renewal, removal or continuance of a seven day license;
24 (ii) an application for a seven day license filed before the effective
25 date of this paragraph; or
26 (iii) an application by a purchaser of all or substantially all of the
27 assets of an existing licensee of a seven day license within the county.
28 A purchaser under this subparagraph shall make an application to the
29 authority, which the authority shall grant, provided that (A) such
30 purchaser is otherwise qualified to hold a seven day license, and (B)
31 the premises sought to be licensed under this section shall comply with
32 the requirements of this article and are not located in a different
33 county.
34 (d) The authority may, in its discretion, auction additional seven day
35 licenses to be used in any county whose ratio of active seven day
36 licenses in such county per adult residents over the age of twenty-one
37 years residing in the county is greater than one active seven day
38 license per three thousand adult residents over the age of twenty-one
39 years. No seven day license may be auctioned if such license would cause
40 the county's ratio of active seven day licenses per adult residents over
41 the age of twenty-one years residing in the county to be equal to or
42 less than three thousand adult residents over the age of twenty-one
43 years.
44 § 3. Subdivision 5 of section 66 of the alcoholic beverage control
45 law, as amended by section 3 of part Z of chapter 85 of the laws of
46 2002, is amended to read as follows:
47 5. The annual fee for [a] each license to sell liquor at retail not to
48 be consumed on the premises where sold shall be thirteen hundred sixty-
49 six dollars in the counties of New York, Kings, Bronx and Queens; eight
50 hundred fifty-four dollars in the county of Richmond and in cities
51 having a population of more than one hundred thousand and less than one
52 million; and elsewhere the sum of five hundred twelve dollars.
53 § 4. Subdivision 16 of section 105 of the alcoholic beverage control
54 law, as amended by chapter 621 of the laws of 1944, is amended to read
55 as follows:
A. 3397 3
1 16. No retail licensee to sell liquors and/or wines for off-premises
2 consumption shall be interested, directly or indirectly, in any premises
3 where liquors, wines or beer are manufactured or sold at wholesale or,
4 expect as set forth in section sixty-three of this chapter, any other
5 premises where liquor or wine is sold at retail for off-premises
6 consumption, by stock ownership, interlocking directors, mortgage or
7 lien on any personal or real property or by any other means. Any lien,
8 mortgage or other interest or estate, however, now held by such retailer
9 on or in the personal or real property of such manufacturer or whole-
10 saler, which mortgage, lien, interest or estate was acquired on or
11 before December thirty-first, nineteen hundred thirty-two, shall not be
12 included within the provisions of this subdivision; provided, however,
13 the burden of establishing the time of the accrual of the interest
14 comprehended by this subdivision, shall be upon the person who claims to
15 be entitled to the protection and exemption afforded hereby.
16 § 5. The state finance law is amended by adding a new section 97-bbbbb
17 to read as follows:
18 § 97-bbbbb. New York distilled spirits and wine industry marketing and
19 promotion fund. 1. There is hereby established in the joint custody of
20 the commissioner of taxation and finance and the state comptroller a
21 special fund to be known as the "New York distilled spirits and wine
22 industry marketing fund". As used in this section, the term "the fund"
23 shall mean the New York distilled spirits and wine industry marketing
24 fund established pursuant to this section.
25 2. (a) The fund shall consist of twenty-five percent of all revenues
26 received pursuant to subdivision five of section sixty-six of the alco-
27 holic beverage control law, and all other money appropriated, credited
28 or transferred thereto from any other fund or source pursuant to law.
29 Nothing contained in this section shall prevent the state from receiving
30 grants, gifts or bequests for the purposes of the fund and depositing
31 them into the fund according to law.
32 (b) On or before the first day of February each year, the comptroller
33 shall certify to the governor, temporary president of the senate, speak-
34 er of the assembly, chair of the senate finance committee, and chair of
35 the assembly ways and means committee, the amount of money deposited
36 into the fund during the preceding calendar year as the result of reven-
37 ue derived pursuant to subdivision five of section sixty-six of the
38 alcoholic beverage control law and from grants, gifts and bequests.
39 (c) On or before the first day of February each year, the commissioner
40 of economic development shall provide a written report to the temporary
41 president of the senate, speaker of the assembly, chair of the senate
42 finance committee, chair of the assembly ways and means committee, chair
43 of the senate investigations and government operations committee, chair
44 of the senate agriculture committee, chair of the senate commerce,
45 economic development and small business committee, chair of the assembly
46 economic development, job creation, commerce and industry committee,
47 chair of the assembly agriculture committee, the state comptroller, and
48 the public. Such report shall include how the moneys of the fund were
49 utilized during the preceding calendar year including expenditures for
50 all promotional and marketing activity.
51 3. Moneys for the fund shall be expended only for the marketing and
52 promotional campaigns and education projects on behalf of New York
53 produced distilled spirits and wine that are approved by the commission-
54 er of economic development.
A. 3397 4
1 4. Moneys shall be payable from the fund on the audit and warrant of
2 the comptroller on vouchers approved and certified by the commissioner
3 of economic development.
4 5. To the extent practicable, the commissioner of economic development
5 shall ensure that all moneys received by the fund during a fiscal year
6 are expended prior to the end of the fiscal year.
7 § 6. This act shall take effect January 1, 2024.