As the New Jersey Legislature gets back to work, Gov. Phil Murphy has sent a liquor license reform bill back for reconsideration.

The bill, S3038, would give sale and event privileges to certain alcoholic beverage manufacturers by allowing craft breweries, wineries and others in the New Jersey craft alcohol industry to sell food, including things like chips, and non-alcoholic beverages. It would also allow for such vendors to partner with other local vendors to host 25 off-site events per year and host unlimited on-site events including private parties, trivia and quiz games, and live music.

In a statement released after he sent the conditional veto to the Legislature, Murphy said the bill on its own “does not sufficiently enhance our antiquated liquor license laws” and that he has “called for a more modern approach to these Prohibition-era laws to reflect the current economy and to better support present and future business owners."

“One of my goals in calling for comprehensive liquor license reform was to ensure that our liquor laws are both modern and fair,” Murphy said. “Our craft alcohol industry continues to grow throughout the state, and our beer and wine manufacturers, distilleries and meaderies deserve our support to help them succeed.”

Murphy also said more equitable access to liquor licenses would benefit small family-owned restaurants and called them the “heart and soul of many of our communities and downtowns.”

The governor noted that he is committed to liquor license reform but would like to see the bill amended to include a fix for getting inactive “pocket” licenses back into the market, and to provide more opportunities for shopping mall-bound businesses to partake in alcohol sales.

His changes include allowing for a new license to be issued when a license has not been properly renewed on time, or within a year in certain circumstances. It would also allow for a license that has not been renewed within eight years immediately before the enactment of the bill to be reissued at a public sale.

Murphy’s recommendations would also allow the governing body of a municipality to issue up to four special permits for use in connection with a food and beverage establishment within a shopping mall. The mall must have a minimum gross square footage of 500,000 and one additional special permit for each 150,000 square feet greater than the 500,000 minimum square footage. This does not include strip malls.

State Sen. Vin Gopal, D-Monmouth, one of the sponsors of the bill, said Monday that he was “disappointed” it had been vetoed and that it would affect a lot of small businesses throughout the state.

Gopal said he hadn’t had any discussions about the conditional veto but feels “strongly” that these issues should not be tied together in the bill.

What does Murphy want?

The idea of liquor license reform has been a talking point all year. The governor mentioned it during his State of the State address in January.

Calling the system "antiquated," he spelled out a plan that expands license availability and includes tax credits for current license holders.

Legislation bringing his version of reform to life was introduced in both chambers but didn’t gain much traction. Notably, statements released after Murphy's budget address by key Democratic legislators — including Scutari, Senate Budget Committee Chair Paul Sarlo and Senate Majority Leader Teresa Ruiz — did not mention the governor's efforts to modernize the liquor license system.

A related bill, already introduced in the Legislature by state Sen. Troy Singleton, would address the issue by bringing so-called pocket licenses back into circulation. There are an estimated 1,400 of these inactive licenses "sitting out there right now," Singleton said in February.

His bill would allow towns to publicly sell licenses that haven't been used for two years to the highest-bidding municipality. It would also require that buyer to issue the license in connection with an economic redevelopment plan. Sarlo has previously voiced support for that bill and is a co-sponsor.

When voting in committee on the bill Murphy vetoed, Sarlo said it was an example of what "we should be doing when we're talking about liquor license expansion, not just opening the doors, but very targeted."

"Blowing open the doors is not the right answer here. We should be focusing on specific targeted bills like this, getting the pocket licenses up and going. There are so many pocket licenses in the state," he said. "This is where I stand on liquor licenses and where I think we all should stand on liquor licenses."

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