New Jerseyans who have been missing that signature martini, sangria or other cocktail could soon be able to not only get spirits with their takeout order, but even have drinks delivered under one of three bills an Assembly committee cleared Monday that are aimed at helping the state’s hospitality industry.
In addition to allowing bars and brewers to deliver up to 16-ounce mixed drinks in a sealed container to residents, the Assembly Appropriations Committee voted to create two loan programs for small bars, restaurants and craft alcohol producers, among the numerous businesses that have been struggling through the seven-week shutdown due to the COVID-19 outbreak.
Monday marked the first legislative committee hearing ever to take place remotely, via teleconference. The committee considered eight bills dealing with issues related to the pandemic, all of which passed without opposition and only a few hiccups due to the technology.
Virtually all of the bills the state Legislature has passed since it stopped meeting in person in the State House due to concerns over the virus were done as emergency measures. Legislative leaders had said they wanted to resume the deliberative process that happens in committees. While Monday’s hearing was quick, there was at least some limited input from the public and lobbyists on a few of the measures and some of the bills, which had been recently introduced, were amended.
Since Gov. Phil Murphy began shutting down businesses on March 16, including all bars and restaurants except for takeout orders, the state has made exceptions for alcohol. For instance, when he closed virtually all businesses on March 21, Murphy classified liquor stores as an “essential business,” allowing them to remain open. The governor also allowed for takeout and delivery of beer from the dozens of craft breweries around the state.
Alcohol takeout, delivery allowed for six months
A bill (A-3966) sponsored by Assemblyman John Burzichelli (D-Gloucester), who chairs the committee, seeks to codify the sale of beverages made by the state’s brewers, wineries, cideries, and distilleries and go a bit further. It would permit any business with a retail consumption license or distillery to sell mixed drinks in pint containers and other alcoholic beverages in containers of any size for takeout or delivery, with that permission extended for six months after the end of the current required closure of these businesses.
This permission is needed because the state has strict laws about who can sell alcohol and how it is sold.
It was the last bill the committee considered, prompting Burzichelli to joke, “In the motion picture business, the last shot of the day is called the martini shot. This is the martini bill. How appropriate it is that it involves cocktails.”
More seriously, the bill would exempt from the state’s alcohol excise tax of $5.50 per gallon any alcohol used by distilleries to make hand sanitizer. Several have switched production to help compensate for the shortage of sanitizer, often donating it to first responders.
“I think that’s the least we can do for very civic-minded small business owners who are doing their part to try to keep people safe,” said Assemblyman Jay Webber (R-Morris), who voted for the bill.
No- or low-interest loans for hospitality business
Webber and other Republican members of the committee also supported two bills that would open additional no- or low-interest loan programs for craft brewers and those in the hospitality industry, although they complained that the state Economic Development Authority (EDA), which would provide these loans, has not been moving fast enough to give out money under existing programs.
“The NJEDA’s performance, in my opinion, has been very disappointing to date,” said Assemblyman Brian Bergen (R-Morris). “I would just like to see us as a body, as a Legislature, as a committee, to put some pressure on the EDA … to deliver to these small businesses in need in a time of crisis and put the money in their hands and put the money in their hands now and not delay these programs any further.”
Jake McNichol, a spokesman for the state EDA, said that to date, the authority has approved close to $3.2 million grants for 942 businesses through the initial $5 million Small Business Emergency Assistance Grant Program and distributed some $3 million to 892 of those businesses. In addition, it has approved another $1 million and distributed most of that to small businesses in Atlantic County with funding from the Casino Reinvestment Development Authority.
EDA is still analyzing 3,500 loan applications it has received requesting more than $250 million from the Small Business Emergency Assistance Loan Program and plans to distribute that money as soon as possible.
“Due to the nature of the loan program, the review is more complex and will take longer to complete than for the grant program,” McNichol said. “The loan program review requires financial analysis to determine the ability to repay the loan under the program eligibility and terms. We are committed to providing businesses with much needed support while completing a thorough review that upholds our commitments to fiscal responsibility and accountability.”
Helping small alcohol producers
One of the two new loan programs the committee approved in A-3965 would expand an existing EDA loan program to small alcoholic beverage producers — those with no more than 10 employees — for operating expenses during a state of emergency. Currently, vineyards and wineries are eligible but not other small craft brewers or distillers. These loans would carry an interest rate of up to three percentage points above the prime rate.
The other bill (A-3959) would create a new no-interest loan program to small hospitality businesses impacted by the pandemic. To qualify, a business could have no more than $2 million in annual revenue if open for more than a year, or less than $1 million in annual revenue if open for a shorter time. Loans could be used to cover immediate, unavoidable expenses, with payments deferred for the first nine months after the start date.
Assemblyman Raj Mukherji (D-Hudson), sponsor of the bill, said it is important to assist restaurants and hotels that have been “devastated” by the pandemic and the current limitations on their operations. A 2018 article by Total Food Service reported that the state had, at the time, more than 27,000 restaurants and 1,130 hotels employing more than 400,000.
“If we want our vibrant hospitality industry and its many employees to make it through this crisis, we must give these small businesses the tools they need to weather the pandemic until we can safely come together to once again enjoy all they have to offer,” he said.
The measures still need approval by the full Assembly and Senate before being sent to Murphy for his consideration.