BUDGET OPENS DOOR TO FURTHER ALCOHOL-RELATED REFORMS
Governor Hochul’s proposed executive budget for fiscal year 2025 (the “Budget”), released on January 16, 2024, includes a number of provisions which, while falling short of proposing sweeping change, should nonetheless have positive impacts on the liquor licensing and permitting process within the state.
In 2022, the Commission to Reform the Alcoholic Beverage Control Law (the “Commission”) was formed to vote on whether to recommend changes to state laws to among other things, assist the New York State Liquor Authority (the “SLA”) with faster, more efficient review and processing of applications, as well as general industry reform and modernization proposals. The Commission was first convened in August 2022 and issued its final report on May 1, 2023.
A number of the items discussed and voted on favorably by the Commission included sweeping reforms, such as allowing individuals to have an ownership interest in more than one package store, and loosening the current tied-house laws, as well as a number of smaller, less controversial measures. A number of the measures recommended by the Commission were included within proposed legislation that failed to pass last year.
One such item recommended by the Commission which also appears in the Budget is the removal of the 30-day advance notice requirement. Currently applicants for on-premises licenses (bars, restaurants, hotels, etc.) have to wait 30 days to submit their application to the SLA after first notifying the relevant municipality. The Commission voted in favor of removing this requirement and allowing applications to be submitted to the SLA simultaneously with delivery of the 30-Day Notice to the municipality. They reasoned that removal of this requirement would not only shorten the overly lengthy licensing process but would also not cause any harm to the municipalities. Licensing times are- unfortunately for applicants- far greater than 30 days, so applicants and municipalities would have ample time to discuss and resolve any issues during the pendency of the application. The inclusion of this item in the Budget appears to be an acknowledgment by Governor Hochul of her stated commitment to improving the licensing process.
Two of the other changes outlined in the Budget pertain to event permits. The first is a change to allow catering permits for purely outdoor events. Currently, caterers can obtain permits for events to be held off of their premises, however the event must have at least some indoor component/location. The removal of this, frankly unnecessary limitation would open up many more venues for catered events, again without a discernable negative consequence.
The second permit related change would expand the types of alcohol allowed under one-day special event permits to include liquor. Currently, an individual or entity - whether licensed or not - can apply for a 24-hour permit to serve beer, wine, and cider at an event, with one permit needed per point of sale. Many commercial landlords, for example, require that any tenants wishing to host an event at their premises first obtain such a permit, as it is technically required by the SLA for the consumption of alcohol at an unlicensed commercial premises of a certain size. In-house office holiday parties are a prime example of the use of these permits, along with weddings and charitable events. Under the existing permit structure, however, liquor would not be permitted to be served at such an event unless the event was catered by someone who had an on-premises liquor license and could obtain a catering permit for full liquor for the event and was contracted to provide both the food and alcohol.
The removal of this requirement would make it much easier and more affordable to put on an event, as it would remove the necessity of hiring and paying for a caterer in order to be able to serve liquor. This change would also benefit wholesalers, since all alcohol purchased pursuant to such permits is required to be purchased from wholesalers, rather than retail package stores.
While none of the measures outlined in the Budget constitute major changes, they do appear to indicate that Governor Hochul remains committed to improving the licensing process and making it easier for individuals who wish to obtain a license or permit to do business within the state. Hopefully this will be further supported by forthcoming proposed legislation to implement some of the more impactful measures evaluated by the Commission, but it is, in any event, a step in the right direction.
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If you have questions regarding the operation of your existing New York licensed business or are contemplating applying for a new license, don’t hesitate to get in touch with Alexandra Becker by e-mail (email@example.com) or phone (518.487.7725) to see how the Alcoholic Beverage Team at Whiteman Osterman & Hanna may be able to assist.