New Jersey’s liquor license laws have generally remained unchanged for decades and have been a sore spot for municipalities seeking to fuel economic growth and small businesses hoping to open in town centers across the State.  Assemblymen John Burzichelli and Raj Mukherji have heard those concerns and others, and recently sponsored a bill in the New Jersey Assembly, A3494, which proposes reforms to the NJ liquor license system.

Under the current liquor license laws, the State of New Jersey limits the number of maximum liquor licenses within a municipality based on population.  Critics of the existing framework argue that the municipalities are beholden to census numbers that are updated every 10 years and with many of the issued licenses pocketed and not in use, many business owners that are ready and willing to serve cannot because of population density issues and pocketed licenses.  Proponents of reform also note that liquor licenses tend to be very expensive, even topping $1,000,000 in some particularly hot markets, which may give established restaurant groups with deeper pockets an advantage over start-ups.

The bill, in its proposed form, would allow municipalities to issue two new types of liquor licenses to smaller businesses.  One proposed license would permit service at tables, but not at a bar, and another proposed license would allow for only beer and wine service.  The new licenses would have a significantly lower price than the existing liquor licenses.  However, existing liquor license owners oppose the bill because new purchasers would be able to obtain a liquor license at a much lower cost which, in turn, may devalue existing liquor licenses obtained at a high price tag.  To address this concern, the bill contemplates a tax credit to those existing businesses that have paid market value for their licenses, with a portion of the initial fee and renewal fees for new licenses paid to the State to help offset the cost of tax credits that would be issued to existing license holders.

The bill was released from the Assembly Oversight, Reform and Federal Relations Committee on May 17, 2018 and subsequently referred to the Assembly Appropriations Committee.  As Assemblyman John Burzichelli has said, the bill is a work in progress.  For now, supporters of the bill will need to wait and see if the traction persists and in the meantime, continue to BYOB.

 

New York City finally got its groove back.  After 91 years, the Cabaret Law (New York City Administrative Code § 20-359), a Prohibition-era law that has forbidden dancing at some New York City bars and clubs has been repealed.

As it currently stands, the Cabaret Law requires any New York City business where dancing occurs to obtain a cabaret license prior to operating, and if that business is desirous of selling alcohol on premise, it is required to provide a copy of its cabaret license to the New York State Liquor Authority to be licensed to sell or serve alcohol on premises.  Artistic performances, singing, and other forms of entertainment at New York City businesses also require a cabaret license.  In the past, the Cabaret Law stopped singers Billie Holiday, Ray Charles and others from performing in New York City, and caused Frank Sinatra to boycott some of his New York City performances.

Over the years, the Cabaret Law survived several attempts at repeal, but not this time.   On October 31, 2017, the New York City Council voted overwhelmingly to pass legislation (Int. 1652) that repeals the Cabaret Law, finally allowing the city that never sleeps to dance the night away.   Proponents of the new legislation say the process to obtain a cabaret license is time-consuming, difficult, and costly.   This sentiment is reflected through the numbers – currently, only 97 out of approximately 25,000 New York City food and beverage establishments have a cabaret license, according to the New York Times.  Under the current laws, applicants are required to get electrical inspections and fill out several applications through the New York City Department of Consumer Affairs, who submits the applications to the Community Board where the premises are to be located, and to the Fire Department of New York for approval.  The license fee is determined by room capacity and could costs hundreds of dollars to up to $1,000 (for a two-year license term), and additional money for each additional room or floor.

Despite repealing the Cabaret Law in its entirety, the new legislation is expected to retain certain security requirements at large entertainment venues from the old law. Owners and operators of some large entertainment spaces (as defined by the New York City zoning laws), will be required to maintain security cameras and certified security guards.  These rules will be codified under new section 10-177 § 2, Title 10 of the Administrative Code of the City of New York.  Once the new legislation goes into effect, owners and operators of New York City venues where dancing occurs will not have to apply for a cabaret license at all.

The lead sponsor of the new legislation is Rafael L. Espinal (D-Brooklyn), a City Council Member and Chairman of the Council’s Committee on Consumer Affairs.  Councilman Espinal comes from a district where bars and unique venues have advocated repealing the Cabaret Law for decades.  Also on board is Mayor Bill de Blasio, who is expected to sign Int. 1652 into law soon.

“It’s over,” Councilman Espinal told the New York Times.  So, in the words of the late David Bowie, “Let’s Dance!”

As New Yorkers enjoy their pumpkin spice lattes, the fact that a Grande (16oz) serving will cost them about 380 calories (including 2% milk and whipped cream, because why not?) is becoming common knowledge.  Calorie information has been conspicuously posted on menus at “covered establishments” in New York City for nearly a decade, but on August 28, 2017, New York City agreed to postpone enforcement of its rule requiring restaurants, convenience stores and other establishments to post calorie counts for prepared food in response to a law suit brought by the food industry and supported by the Federal government.

In 2008, New York City became the first jurisdiction in the United States to require chain restaurants to post calorie information on menus and menu boards.   Shortly thereafter in 2010, the Federal government adopted similar laws by way of the Affordable Care Act.  The Federal government’s implementation of such laws has continually been delayed over the years, but now the Food and Drug Administration (“FDA”) plans to provide additional guidance on menu labeling requirements in May 2018.  New York City did not want to wait for the Federal guidance to begin enforcement of its Rule 81.50, New York City’s nearly identical version of its federal counterpart.

New York City’s most recent version of Rule 81.50 tracks its federal counterpart and applies to “covered establishments”, which means “a food service establishment or similar retail food establishment that is part of a chain with 15 or more locations nationally doing business under the same name and offering for sale substantially the same menu items, or a food service establishment that is not party of such a chain that voluntarily registers with the United States Food and Drug Administration to be subject to the federal requirements for nutrition labeling of standard menu items pursuant to 21 CFR 101.11(d), or successor regulation”.   For any such covered establishment, “[m]enus and menu boards must provide the number of calories contained in each standard item.”

While the FDA plans to provide guidance in May 2018, New York City nonetheless wanted to move forward with its enforcement of Regulation 81.50 beginning on August 21, 2017, but on July 7, 2017, the Food Marketing Institute and the National Restaurant Association teamed with several other food-service industry groups to file suit against the City of New York for what it said was premature enforcement of nutritional disclosure guidelines for food-service establishments. The National Association of Convenience Stores and the New York Association of Convenience Stores also joined in the suit, which was filed in the U.S. District Court for the Southern District of New York.

Court documents claim that that the local New York City rules are not identical to the impending FDA rules because they are effective immediately which would clash with the Federal government’s plan to delay compliance for one more year.  The plaintiffs asked the court to stop New York City from enforcing the regulations on the local level prior to the nation-wide rollout in May 2018 and argued that New York City’s Rule 81.50 was preempted by Federal law. The FDA filed court papers in support of the lawsuit.

New York City has now agreed to honor May 2018 as the start date due to the preemption of Regulation 81.50 by the similar provisions contained in the Affordable Care Act. As such, “covered establishments” will have more time to comply and the FDA will be able to set forth guidance as it planned in May 2018.

As the nation awaits the FDA’s guidance, food establishments in New York City should begin to think about whether or not they are a “covered establishment” and the steps they will need to take in order to avoid eventual enforcement action.