LEGISLATIVE FISCAL ESTIMATE

SENATE, No. 3977

STATE OF NEW JERSEY

219th LEGISLATURE

 

DATED: DECEMBER 21, 2021

 

 

SUMMARY

 

Synopsis:

Establishes advisory council for the brewery, cidery, meadery, and distillery industries in NJ and provides for funding through certain alcoholic beverage tax receipts.

Type of Impact:

Potential increase in annual State expenditures; Revenue shift within State’s General Fund to dedicated account.

Agencies Affected:

Department of State

 

 

Office of Legislative Services Estimate

Fiscal Impact

FY 2022 and Thereafter

 

State Cost Increase

Indeterminate

 

State Revenue Shift

$150,000 to $200,000 annually

 

 

 

 

·         The Office of Legislative Services (OLS) believes the fiscal impact of the bill is twofold; indeterminate annual administrative expenses related to the advisory council and an annual revenue shift of State General Fund monies to a dedicated account.  The Department of State’s existing resources are likely to cover the advisory council’s expenses.

 

·         Based on data provided by the Executive, the bill’s dedication would shift roughly $150,000 to $200,000 within the State’s General Fund to the New Jersey Brewery, Cidery, Meadery, and Distillery Industry Promotion Account.

 

 

BILL DESCRIPTION

 

      This bill establishes the New Jersey Brewery, Cidery, Meadery, and Distillery Industry Advisory Council and provides for funding through certain alcoholic beverage tax receipts.  The seven members of the advisory council are to serve without compensation, but may be reimbursed for certain expenses.  The advisory council is to meet twice annually and at other times as determined by the advisory council.  The advisory council is to assess the condition of the limited brewery, restricted brewery, cidery, meadery, and craft distillery industries of the State.

      The bill also establishes a New Jersey Brewery, Cidery, Meadery, and Distillery Industry Promotion Account.  All monies received in this account are to be expended by the executive director for research and development concerning the limited brewery, restricted brewery, cidery, meadery, and craft distillery industries in the State and for the promotion of New Jersey’s limited brewery, restricted brewery, cidery, meadery, and craft distillery industries, consistent with the recommendations of the advisory council.  The bill provides that the account is to be credited annually, via an appropriation by law, with an amount equal to 50 percent of the receipts from the per gallon tax imposed on all sales of beer, cider, mead, and liquors sold by limited breweries, restricted breweries, cideries, meaderies, and craft distilleries in this State, and any other monies made available to it.  The bill also requires the Secretary of State to include with the annual budget request for the Department of State a request for funds sufficient to carry out the purposes and intent of the bill.  The advisory council is to advise the executive director on expenditures from the account for research, development, and promotion of the New Jersey limited brewery, restricted brewery, cidery, meadery, and craft distillery industries.

      The bill further requires the Director of the Division of Taxation to certify by March 1 annually to the advisory council the taxable volume of beer, cider, mead, and liquors sold by qualifying licensees during the preceding taxable year.

 

 

FISCAL ANALYSIS

 

EXECUTIVE BRANCH

 

      The Executive provided data to the OLS regarding tax payments made by licensee type under the State’s Alcoholic Beverage Tax.  According to the Executive, limited brewery licensees paid $200,608, restricted breweries paid $8,626, and craft distilleries paid $110,901 in tax during CY 2020.  Payments by cidery and meadery licensees are unavailable.  For perspective, across all licensees, the preliminary CY 2020 total for payments received was $167.5 million.  Plenary Wholesaler licensees account for almost all of those payments, totaling $153.2 million.

 

OFFICE OF LEGISLATIVE SERVICES

 

      The OLS believes the fiscal impact of the bill is twofold; indeterminate annual administrative expenses related to the advisory council and an annual revenue shift of State General Fund monies to a dedicated account.  The advisory council could yield an on-going State expenditure increase related to reimbursements to members for discharging official duties.  The Department of State’s existing resources are likely to cover these expenses.  Based on data provided by the Executive, the bill’s dedication would shift roughly $150,000 to $200,000 within the State’s General Fund to the New Jersey Brewery, Cidery, Meadery, and Distillery Industry Promotion Account.

 

Section:

Revenue, Finance and Appropriations

Analyst:

Jordan M. DiGiovanni

Revenue 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.).