HB 1374-FN - AS INTRODUCED

 

 

2024 SESSION

24-2352

08/05

 

HOUSE BILL 1374-FN

 

AN ACT relative to liquor licenses for restaurants.

 

SPONSORS: Rep. J. Sullivan, Graf. 2

 

COMMITTEE: Commerce and Consumer Affairs

 

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ANALYSIS

 

This bill changes the sales requirements for food for on-premises beverage and liquor licenses.

 

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Explanation: Matter added to current law appears in bold italics.

Matter removed from current law appears [in brackets and struckthrough.]

Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.

24-2352

08/05

 

STATE OF NEW HAMPSHIRE

 

In the Year of Our Lord Two Thousand Twenty Four

 

AN ACT relative to liquor licenses for restaurants.

 

Be it Enacted by the Senate and House of Representatives in General Court convened:

 

1  On-Premises Beverage and Liquor Licenses.  Amend RSA 178:21, II(a)(1)-(2) to read as follows:

(a)(1) Licenses for Full Service Restaurants. The commission may issue a license to any full service restaurant. Such license shall entitle the licensee to sell beverages, specialty beverages, and liquor at tables in the approved dining rooms of the restaurant with or without meals when the restaurant kitchen is in operation and meals are being actively promoted and served in that dining room. The dining room shall not, however, be used as a substitute for lounge operations. Licenses shall be granted only to restaurants approved by the commission and which show the commission on forms, filed with the license application, covering the 12 most recent calendar months prior to filing, that at least [50] 15 percent of the gross sales of any such licensee is in food. Restaurants with annual food sales of at least $75,000 shall be exempt from the [50] 15 percent requirement. The commission shall at least annually review each license, and application for renewal, on the conditions stated in this paragraph.

(2) The dining room shall be open for business at least [5] 3 days a week for evening meals, unless the commission has granted an exemption.

2  Effective Date.  This act shall take effect 60 days after its passage.

 

LBA

24-2352

11/29/23

 

HB 1374-FN- FISCAL NOTE

AS INTRODUCED

 

AN ACT relative to liquor licenses for restaurants.

 

FISCAL IMPACT:      [ X ] State              [    ] County               [    ] Local              [    ] None

 

 

Estimated State Impact - Increase / (Decrease)

 

FY 2024

FY 2025

FY 2026

FY 2027

Revenue

$0

Indeterminable

Indeterminable  

Indeterminable  

Revenue Fund(s)

 

 

Expenditures

$0

Indeterminable Increase

Indeterminable Increase

Indeterminable Increase

Funding Source(s)

Liquor Fund

 

Appropriations

$0

$0

$0

$0

Funding Source(s)

None

 

• Does this bill provide sufficient funding to cover estimated expenditures? [X] No

• Does this bill authorize new positions to implement this bill? [X] No

 

 

METHODOLOGY:

This bill changes the sales requirements for food for on-premises beverage and liquor licenses. The Liquor Commission indicates current laws provides restaurants with 3 licensing options, each with a different operational requirements and different license fees.  Licensees are able to choose the license type that best suits their business operation.  

 

  • “On-Premise Beverage and Wine License” is a restaurant license serving beer and wine and where the availability of food is a requirement, but the licensee is not required to meet any food sales figures to retain the license.  The annual license fee is $480.

 

  • On-Premise Cocktail Lounge License has the same food reporting requirements as the “On-Premise Beverage and Liquor License” below as well as more detailed requirements for use of designated spaces, kitchen operations and days of operation.  The annual license fee is $1,200.

 

  • The On-Premise Beverage and Liquor License, which would be amended by the bill, is a restaurant seeking to sell liquor that must maintain a level of food sales which implies the restaurant's focus is on their food operation and liquor sales are an accompaniment to the food operation rather than a bar that sells some level of food.  The annual license  fee is $840. Current law requires the “On-Premise Beverage and Liquor License” licensee to prove they are focused on food sales by requiring that 50% of their gross sales be food. If the licensee achieves $75,000 of annual gross food sales, they've demonstrated the business is a food service operation and the licensee is not required to maintain half of it's gross sales in food sales.  This license type is also required to be open for evening meals at least 5 days per week.  The Commission has, on a case-by-case basis, granted requests for exemption to the 5 day requirement.

 

This bill would make the following changes to the On-Premise Beverage and Liquor License:

  • Require that only 15% instead of 50% the gross sales be in food sales,
  • Restaurants with annual food sales of at least $75,000 would be exempt from the 15%  requirement,
  • The dining room must be open for evening meals for only 3 days a week instead of 5 days.

 

The Commission makes the following assumptions concerning the fiscal impact of this bill:

  • The majority of the 360 restaurants licensed as “On-Premise Beverage and Wine License” will request to upgrade to the “On-Premise Beverage and Liquor License” when they learn the requirements for a On-Premise Beverage and Liquor License have been reduced.  Such a license upgrade will require the applicant to pay an additional $360.  If all of the eligible businesses seek to upgrade it could result in a one-time increase in licensing revenue of $129,600 (360 x $360).

 

  • Transitioning businesses to the upgraded licenses would strain understaffed licensing personnel until such upgrades are complete.  To ensure compliance with the law change, the Commission anticipates an increase in licensee audits.  It is possible that the Commission may seek additional personnel to complete these responsibilities.

 

  • “On-Premise Cocktail Lounge Licenses” may choose to reduce the cost of their license from $1200 per year to $840 per year when the see the reduced requirements the “On-Premise Beverage and Liquor License”.  This may decrease license revenue by an indeterminable amount.

 

  • Full service restaurant licensees that do not meet the food sales percentage requirement  would be returned to a beer and wine restaurant license due to non-compliance.  This would result in an indeterminable decrease in licensing fee revenue.  The Commission expects a number of licensees returned to a beer and wine license may request a hearing before the change occurs.  The Commission believes a significant number of businesses would request hearings resulting in an increase in enforcement, reporting and hearings. The Commission does not believe they have sufficient personnel to handle these matters in a timely fashion.

 

  • Food service sales figures are subject to audit.  The Commission's audit unit is understaffed and the Commission anticipates it would need additional staff to keep up with the need to audit new licensees to verify reported food sales.

 

  • The Commission does not administer the meals and rooms tax, but anticipates the opportunity to sell less food may decrease State rooms and meals tax revenue.

 

 

AGENCIES CONTACTED:

Liquor Commission