Provides for transfer and sale of inactive liquor licenses for use in qualifying smart growth municipalities.

S4038

SENATE, No. 4038

STATE OF NEW JERSEY

222nd LEGISLATURE

�

INTRODUCED MARCH 19, 2026

Sponsored by:

Senator� JOSEPH F. VITALE

District 19 (Middlesex)

SYNOPSIS

���� Provides for transfer and sale of inactive liquor
licenses for use in qualifying smart growth municipalities.

CURRENT VERSION OF TEXT

���� As introduced.

��

An Act

concerning the transfer of alcoholic beverage
licenses to qualifying smart growth municipalities, supplementing Title 33 of
the Revised Statues, and amending and repealing parts of P.L.2007, c.351.

����
Be It
Enacted
by the Senate and General Assembly of
the State of New Jersey:

���� 1.��� (New section)� The
Legislature finds and declares that:

���� a.���� Smart growth is an
innovative approach to land use planning that directs the State�s resources and
funding to projects that enhance the quality of life for New Jersey residents;

���� b.��� Smart growth encourages
the development of distinctive, attractive communities with mixed use
development, walkable town centers and neighborhoods, a range of housing
options, and a variety of transportation modes;

���� c.���� Small businesses,
including restaurants and other establishments that serve alcoholic beverages,
enhance the economic viability of a smart growth community and the quality of
life for residents and visitors;

���� d.��� Under current law, a
municipality may not issue a new plenary retail consumption license unless and
until the combined total number of such licenses existing in the municipality
is fewer than one for each 3,000 of its population according to the most recent
estimates issued by the U.S. Bureau of the Census, and liquor licenses issued
in one municipality may not be transferred to another municipality;

���� e.���� As a result of these
restrictions, there is an insufficient number or complete lack of available
plenary retail consumption licenses in many smart growth communities where real
estate development projects including restaurants have been proposed; at the same
time, there are numerous other municipalities that have a surplus of inactive
plenary retail consumption licenses in excess of any foreseeable demand for
those licenses; and

���� f.���� In order to foster and
encourage development in smart growth communities in which there is an
insufficient number or complete lack of available plenary retail consumption
licenses, it is appropriate to create a method for the sale and transfer of
inactive plenary retail consumption licenses existing in those communities
having a surplus of inactive licenses to purchasers who will activate and
utilize such licenses in smart growth communities, and to provide financial
compensation to the municipalities from which such licenses are transferred.

���� 2.��� (New section)� a.� As
used in this act:

���� �Green building conversion
redevelopment project� means any redevelopment project that includes the
conversion of not less than 150,000 square feet of existing office or other
commercial premises, that is vacant or functionally obsolete and at least 35 years
old, into Class A office or other commercial premises satisfying the
requirements for the Leadership in Energy and Environmental Design Green
Building Rating System as adopted by the United States Green Building Council.

���� �Inactive license� means a
plenary retail consumption license that has been renewed as authorized by the
provisions of R.S.33:1-12.39 for more than three license terms and for which
the holder of the license certifies that he has not received any viable,
reasonable, or acceptable offers to purchase and no location at which to
activate the license within the issuing municipality.

���� �Qualifying smart growth
municipality� means a municipality that:

���� (1)�� is located in a smart
growth area; and

���� (2)�� is not authorized to
issue any new plenary retail consumption licenses because of the limitation on
the number of plenary retail consumption licenses in section 2 of P.L.1947,
c.94 (C33:1-12.14), excluding plenary retail consumption licenses transferred pursuant
to this act; or

���� (3)�� is unable to issue a
sufficient number of new plenary retail consumption licenses to satisfy the
anticipated demand for plenary retail consumption licenses to be utilized
within a real estate development project, as determined by the director
pursuant to subsection c. of this section.

���� �Real estate development
project� means any building or complex of buildings, whether or not under
common ownership or control, which is the subject of a common redevelopment
plan, site plan, general development plan or other land use plan approved by the
qualifying smart growth municipality in which it is located.

���� �Sending municipality� means a
municipality that has one or more inactive plenary retail consumption licenses.

���� �Smart growth area� means a
Planning Area 1 (Metropolitan), Planning Area 2 (Suburban), or a designated
center or designated growth center in an endorsed plan; a smart growth area and
planning area designated in a master plan adopted by the New Jersey Meadowlands
Commission pursuant to subsection (i) of section 6 of P.L.1968, c.404
(C.13:17-6); a growth area designated in the comprehensive management plan
adopted pursuant to section 7 of the �Pinelands Protection Act,� P.L.1979,
c.111 (C.13:18A-8); any area designated for growth in the Highlands regional
master plan adopted by the Highlands Water Protection and Planning Council
pursuant to P.L.2004, c.120 (C.13:20-1 et al.); a transit village; an urban
enterprise zone designated pursuant to P.L.1983, c.303 (C.52:27H-60 et seq.) or
P.L.2001, c.347 (C.52:27H-66.2 et al.); an area determined to be in need of
redevelopment or rehabilitation pursuant to P.L.1992, c.79 (C.40A:12A-1 et al.)
and as approved by the Department of Community Affairs; any area on which a
green building conversion redevelopment project is located; and federally owned
land approved for closure under a federal Base Realignment Closing Commission
action.

���� b.��� An inactive license
which has been issued by a sending municipality may, in accordance with the
procedures established in this act, be purchased by:

���� (1)�� a corporation or other
legal entity operating or intending to operate a restaurant or other
establishment that serves alcoholic beverages in a qualifying smart growth
municipality; or

���� (2)�� the owner of a real
estate development project in a qualifying smart growth municipality, provided
that such inactive license shall subsequently be transferred to an entity
operating or intending to operate a restaurant or other establishment that
serves alcoholic beverages in the real estate development project.�

���� c.���� The director shall
determine whether an inactive license may be transferred pursuant to the
provisions of this act to a qualifying smart growth municipality.� The director
shall approve the transfer if the director determines that a municipality is
unable to issue a sufficient number of new plenary retail consumption licenses
to satisfy the anticipated demand for licenses to be utilized within a real
estate development project because of the limitation on the number of plenary
retail consumption licenses in section 2 of P.L.1947, c.94 (C.33:1-12.14),
excluding plenary retail consumption licenses transferred pursuant to this act.

���� d.��� The purchaser and the
holder of the inactive license shall enter into a contract for the sale of the
license, which shall be a private transaction.� Upon the signing of a contract
to purchase an inactive license and utilize the license as authorized under the
provisions of this act, the seller of the inactive license shall obtain
resolutions adopted by the issuing authorities of the sending municipality and
the qualifying smart growth municipality.� The resolution adopted by the
sending municipality shall consent to the transfer of the license to the
qualifying smart growth municipality.� The resolution adopted by the issuing
authority of the qualifying smart growth municipality shall state that the
municipality wishes to acquire the license and that the municipality resolves
to administer the license in the same manner as a plenary retail consumption
license issued by the qualifying smart growth municipality and in accordance
with all applicable ordinances of that municipality.

���� e.���� Prior to the transfer
of a license pursuant to the provisions of this act, the purchaser of the
inactive license shall pay to the sending municipality a fee in an amount equal
to 20 times the annual renewal fee for a plenary retail consumption license as
established by the sending municipality pursuant to R.S.33:1-12, which shall be
distributed by the sending municipality in accordance with the provisions of
subsection j. of this section.� The purchaser shall pay to the qualifying smart
growth municipality the fee or fees required for the transfer of a plenary
retail consumption license and the annual renewal fee established by the
municipality which shall be prorated to the following June 30th.

���� f.���� The transfer of an
inactive license pursuant to this section shall be approved by the qualifying
smart growth municipality in accordance with all applicable requirements for
person-to-person and place-to-place transfers of plenary retail consumption
licenses.

���� g.��� No person who would fail
to qualify as a licensee under Title 33 of the Revised Statutes shall be
permitted to hold an interest in a license transferred under the provisions of
this section.

���� h.��� Licenses transferred
pursuant to the provisions of this section shall be subject to all the
provisions of Title 33 of the Revised Statutes, rules and regulations
promulgated by the director and municipal ordinances.

���� i.���� No license transferred
pursuant to this section shall thereafter be transferred to any premises other
than a premises located within the same real estate development project.� A
license may be transferred to a corporation or other legal entity operating or
intending to operate a restaurant or other establishment that serves alcoholic
beverages in the same real estate development project or to the owner of the
real estate development project.� The director shall, after the initial
transfer of a license pursuant to this section, assign a distinctive
designation for the license number in order to identify the license as being
subject to the provisions of this subsection.

���� j.���� The transfer fee shall
be distributed in the following manner:

���� (1)�� twenty-five percent
shall be paid to the sending municipality;

���� (2)�� twenty-five percent
shall be paid to the director; and

���� (3)�� fifty percent shall be
divided equally among and paid to the holders of plenary retail consumption
licenses in the qualifying smart growth municipality on the date of the
transfer.

���� k.��� Notwithstanding the
provisions of R.S.33:1-42, the director shall not issue a special
concessionaire permit for any location or premises which is eligible to obtain
a license to serve alcoholic beverages under the provisions of this act.

���� l.���� Pursuant to the
�Administrative Procedure Act,� P.L.1968, c.410 (C.52:14B-1 et seq.), the
director may adopt rules and regulations to effectuate the purposes of this
act.

���� 3.��� Section 3 of P.L.2007,
c.351 (C.33:1-24.3) is amended to read as follows:

���� 3.��� a.� Notwithstanding the
provisions of section 1 of P.L.1977, c.246 (C.33:1-12.39), a municipality in
which is located an urban enterprise zone as designated pursuant to P.L.1983,
c.303 (C.52:27H-60 et al.) or any supplement thereto, and a Planning Area 1
(Metropolitan), as designated pursuant to the "State Planning Act,"
sections 1 through 12 of P.L.1985, c.398 (C.52:18A-196 et seq.), may acquire
by
purchase
any existing plenary retail consumption licenses within the
municipality that are inactive
for more than three years
and retain any
such licenses in an inactive status for a period of up to five years
notwithstanding
that the director has not issued a special ruling pursuant to R.S.33:1-12.39 and
the license holder has not paid the annual renewal fees for the license
.

���� b.��� A municipality subject
to the provisions of subsection a. of this section may issue at public sale one
or more of any such inactive plenary retail consumption licenses in a manner
consistent with the provisions of P.L.1975, c.275 (C.33:1-19.1 et seq.), to no
more than one corporation or legal entity for each such plenary retail
consumption license for use only at a licensed premises that shall be located
in a
real estate
development project within a smart growth area, as
defined in section 1 of P.L.2004, c.89 (C.52:27D-10.2), in the municipality
or
that shall be located in a qualifying smart growth municipality pursuant to
P.L.��� , c.��� (C.������� ) (pending before Legislature as this bill)
.�
The use of any such plenary retail consumption license shall be in a manner
consistent with the provisions of Title 33 of the Revised Statutes and any
regulations promulgated thereunder by the director.

(cf: P.L.2007, c.351, s.3)

���� 4.��� Sections 1 and 2 of
P.L.2007, c.351 (C.33:1-24.1 and 33:1-24.2) are hereby repealed.

���� 5.��� This act shall take
effect on the first day of the third month after enactment; provided however,
the director may take such anticipatory action in advance thereof as needed for
the act�s timely implementation.

STATEMENT

���� Under the provisions of this
bill, an inactive plenary retail consumption license may be purchased by (1) a
corporation or other legal entity operating or intending to operate a
restaurant or bar in a qualifying smart growth municipality; or (2) the owner
of a real estate development project in a qualifying smart growth municipality,
provided that the inactive license would be transferred to a restaurant or bar
in the real estate development project.� The bill repeals sections 1 and 2 of
P.L.2007, c.351 (C.33:1-24.1 and 33:1-24.2) which permit the Director of the
Division of Alcoholic Beverage Control (ABC) to issue special permits for the
service of alcoholic beverages in smart growth development projects.

���� The bill first requires the
Director of the ABC to determine whether an inactive license may be transferred
to a qualifying smart growth municipality.� The director is required to approve
the transfer if the municipality is unable to issue a sufficient number of new
plenary retail consumption licenses to satisfy the anticipated demand for such
licenses in a real estate development project because of the statutory
limitation on the number of plenary retail consumption licenses (currently one
for each 3,000 of the population).

���� After a contract for the sale
of a license has been signed, the seller is required to obtain resolutions
adopted by the issuing authorities of the sending municipality and the
qualifying smart growth municipality.� The resolution adopted by the sending municipality
must consent to the transfer of the license to the qualifying smart growth
municipality.� The resolution adopted by the issuing authority of the
qualifying smart growth municipality must state that the municipality wishes to
acquire the license and that it will be administered in the same manner as
other plenary retail consumption licenses and in accordance with all applicable
municipal ordinances.

���� The bill requires the
purchaser to pay to the sending municipality prior to the transfer of the
license a fee equal to 20 times the annual renewal fee for a plenary retail
consumption license in the sending municipality.� The fee is to be distributed
in the following manner: (1) twenty-five percent is to be paid to the sending
municipality; (2)� twenty-five percent is to be paid to the director; and (3)
fifty percent is to be divided equally among and paid to the holders of plenary
retail consumption licensees in the qualifying smart growth municipality.� The
bill requires the purchaser to pay the qualifying smart growth municipality any
fees required for the transfer of a plenary retail consumption license as well
as the annual renewal fee, prorated to the next June 30, the annual date of
renewal for all retail licenses.

���� A license purchased pursuant
to the provisions of the bill may only be transferred to a premises located
within the same real estate development project.� A license may be transferred
to a corporation or other legal entity that operates a bar or restaurant in the
same real estate development project or to the owner of the real estate
development project.� The bill requires the Director of the ABC
to assign a distinctive designation for the license number, after the initial
transfer of the license, in order to identify the license as being restricted
and subject to the provisions of this bill.

���� The bill prohibits the
director from issuing a special concessionaire permit for any location or
premises which is eligible to obtain a license to serve alcoholic beverages
under this bill.

���� Finally, the bill amends
section 3 of P.L.2007, c.351 (C.33:1-24.3) which provides that a municipality
containing an urban enterprise zone or a Planning Area 1 (Metropolitan) may
acquire by purchase any existing plenary retail consumption licenses within the
municipality that are inactive and retain them for up to five years.� Under
this bill, the municipality must acquire the license by purchase and the
license must be inactive for more than three years.� The bill also clarifies
that the municipality may retain the inactive licenses notwithstanding that the
Director of ABC has not issued a special ruling and the license holder has not
paid the annual license renewal fees.� The bill further amends current law to
provide that a municipality may have a public sale of an inactive plenary
retail consumption license for use only at a licensed premises in a real estate
development project within a qualifying smart growth municipality as defined in
the bill.