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S4404 1R FISCAL ESTIMATE
LEGISLATIVE FISCAL ESTIMATE
[First Reprint]
SENATE, No. 4404
STATE OF NEW JERSEY
222nd LEGISLATURE
DATED: JULY 6, 2026
SUMMARY
Synopsis:
Makes various revisions to the laws governing alcoholic
beverage licensing.
Type of Impact:
Annual State and local expenditure increases.
Annual State and local revenue increases.
Agencies Affected:
Department of Law and Public Safety; Department of the
Treasury; Municipalities.
Office of
Legislative Services Estimate
Annual Fiscal Impact
State and Local Expenditure Increases
Indeterminate
State and Local Revenue Increases
Indeterminate
�
The Office of Legislative Services (OLS) finds that the bill will
result in indeterminate increases in annual State and municipal expenditures
and revenues. The OLS, however, cannot assess the scope of the net effect of
the increases given the absence of information on workload increases for the
Division of Alcoholic Beverage Control in the Department of Law and Public
Safety and municipalities as well as the potential revenue collected from the
total number of licenses issued annually, future license fees, sales tax on
products sold, and any penalty collections.
BILL DESCRIPTION
����� This bill makes various revisions to the law governing
the manufacture and sale of alcoholic beverages in this State.
�����
Craft Alcoholic Beverage Manufacturers
:
Under current law, craft alcoholic beverage manufacturers are entitled to hold
certain events and coordinate with food vendors to allow food to be consumed on
the licensed premises. A craft alcoholic beverage manufacturer is defined by
current law as a limited brewery license, cidery and meadery license, and craft
distillery license.
����� This bill defines the phrase �coordinate with food
vendors� to mean a licensee, or anyone on the licensee�s behalf, directly or
indirectly arranging with a food truck, vendor, or restaurant to be present on
or off the licensed premises of a craft alcoholic beverage manufactures
licensee, provided that the license holder does not own or operate the food
truck, vendor, or restaurant and does not share in the proceeds or profits from
the sale of food. The bill also clarifies that the holder of a craft manufacturer�s
license may sell snacks and non-alcoholic beverages for consumption on and off
the licensed premises. In addition, the bill further clarifies that these craft
manufacturer�s license holders may sell their products by the glass or open
container for immediate consumption, sell or gratuitously provide samples for
immediate consumption, and sell chill and unchilled packaged goods or growlers
and crowlers for off-premises consumption.
����� The bill also requires these license holders to obtain
the endorsement of the municipal clerk or secretary of the municipal alcoholic
beverage control board and the chief of police of the municipality when holding
an event on private property.
�����
Farm Brewery Licenses
: This bill
expands the privileges of farm brewery license holders. Specifically, the bill
allows the holder of a farm brewery license to sell its products for
consumption on and off the licensed premises. The bill allows the holder of a
farm brewery license to distribute the license holder�s products to alcoholic
beverage wholesalers and retailers and to sell and distribute those products to
persons outside of the state in accordance with the laws of that state.� The
license holder would also be entitled to maintain a warehouse.
����� The bill allows the farm brewery license holder to
coordinate with food vendors and sell and distribute the license holder�s
products to alcoholic beverage retailers.
����� The bill requires these license holders to produce
malt alcoholic beverages that contain at least 51 percent of its ingredients
from hops, grains or other ingredients grown or cultivated on the tract of the
licensee�s land.
�����
Renewal of Inactive Alcoholic Beverage Retail
Licenses
:
Current law establishes procedures for transferring
inactive Class C licenses, which allow for the retail sales of alcoholic
beverages. Under current law, a license that remains inactive for two
consecutive license terms is to expire.
����� This bill allows a governing body to extend this time
period if it is satisfied that the licensee is making a good faith effort to
activate or transfer the license either within or without the municipality. If
the governing board of a municipality denies a licensee�s request to extend the
expiration date of its inactive license, a licensee may appeal to the Division
of Alcoholic Beverage Control within 30 days after receipt of the notice of
denial.
�����
Transfer of Inactive Alcoholic Beverage
Retail Licenses
: Under current law, contiguous municipalities may
transfer inactive plenary retail consumption licenses when the licenses are to
be used within a redevelopment, improvement, or revitalization plan. Current
law allows municipalities that have reached the population limit placed on the
issuance of a plenary retail consumption license to issue a request for
proposal to acquire an additional plenary retail consumption license from a
contiguous municipality.
����� This bill changes the process of transferring inactive
plenary retail consumption licenses. Under the bill, a municipality entitled to
issue a new license would be able to offer that license at public sale to the
highest bidding governing body of any other municipality in this State. In
addition, the bill allows the holder or contract purchaser of an inactive
plenary retail consumption license issued by any municipality to apply to the
governing bodies of an issuing municipality and a receiving municipality
located within the same county or a contiguous municipality not located in the
same county to use the license in connection with a premises located in the
receiving municipality. The license only would be used as part of an economic
redevelopment plan or in connection with a premises located within a
redevelopment, improvement, or revitalization area.
�����
Shopping Malls
: Current law
authorizes special licenses to be issued to a person or other legal entity for
use in connection with a food and beverage establishment located within a
shopping mall. The license authorizes the sale of alcoholic beverages for
immediate consumption on the operator's premises.
����� This bill amends the statutory definition of shopping
mall to include office spaces with pad sites located on the same parcel or
premises as the shopping mall. In addition, the bill amends the shopping mall
definition to being both under common ownership �or has ownership interests in
common or shares ownership or control among multiple entities.�
FISCAL ANALYSIS
EXECUTIVE BRANCH
����� None received.
OFFICE OF LEGISLATIVE SERVICES
����� The OLS finds that the bill will result in
indeterminate increases in annual State and municipal expenditures and revenues.
The OLS, however, cannot assess the scope of the net effect of the increases
given the absence of information on workload increases for the Division of
Alcoholic Beverage Control in the Department of Law and Public Safety and
municipalities as well as the potential revenue collected from the total number
of licenses issued annually, future license fees, sales tax on products sold,
and any penalty collections.
�����
State Revenue Impacts
:��� This bill may
increase State revenue from the taxable sale of products permitted to be sold
by craft manufacturers licensees and farm brewery licensees as well as the
potential transfer and sale of inactive plenary retail consumption licenses and
special licenses in municipalities with shopping malls, and the taxable
products eventually sold within these businesses.
����� The OLS anticipates that the expansion of licenses,
and the transfer and sale of the inactive plenary retail consumption licenses,
may increase the overall sale of alcohol beverage products, thus increasing the
amount of State sales tax collected by the Division of Taxation in the
Department of the Treasury.
�����
State Expenditure Impacts
: The bill may
increase the Division of Alcoholic Beverage Control�s workload depending on the
enforcement and administrative requirements of the bill�s provisions related to
craft manufacturers licenses, farm brewery licenses, the transfer of plenary
retail consumption licenses, inactive plenary retail consumption licenses, and special
licenses issued in municipalities with shopping malls. Depending on the
division�s resource allocation policies, the added workload may or may not augment
State administrative expenditures.
����� The OLS anticipates that any increased sales by the
transfer and sale of the plenary retail consumption licenses may affect the
workload of the Division of Taxation.
�����
Municipal Revenue Impacts
: The bill may
increase the municipal revenue from the transfer and sale of the inactive
plenary retail consumption license, from the transfer fee of the license to
another receiving municipality, and any annual renewal fees charged. The OLS
cannot determine the average price of alcoholic beverage licenses Statewide.
Pursuant to State law, municipalities may charge an annual fee, established by
ordinance, of no less $250, but no more than $2,500 for the renewal of a
plenary retail consumption license.
����� Additionally, current law requires the fee for the
initial issuance of the sale of special licenses in municipalities with
shopping malls to be at least $250,000. The municipality is entitled to
establish an annual fee that would not exceed the annual fee charged for the
plenary retail consumption licenses within the municipality. By expanding the
definition of shopping mall, the OLS estimates that additional licenses may be
sold.
�����
Municipal Expenditure Impacts
: The bill may
increase costs to municipalities associated with the administration,
regulation, and enforcement of the transfer and sale of licenses.
����� The OLS notes that these municipalities may employ
additional law enforcement due to the increased cost of public safety, as there
may be an increased need for enforcement of alcoholic beverage statutes and
ordinances.
Section:
Law and Public Safety
Analyst:
Kristin Brunner Santos
Lead Fiscal Analyst
Approved:
Thomas Koenig
Legislative Budget and Finance Officer
This legislative fiscal estimate has been produced by the
Office of Legislative Services due to the failure of the Executive Branch to
respond to our request for a fiscal note.
This fiscal estimate has been prepared pursuant to P.L.1980,
c.67 (C.52:13B-6 et seq.).