BILL NUMBER:  S7728

 TITLE OF BILL :

An act to amend the alcoholic beverage control law, in relation to
clarifying the basis upon which the state liquor authority has the
authority to revoke, suspend or cancel a license or permit by
excluding perceived violations of the laws of other states unless the
conduct falls within certain exceptions and establishes standards in
statute for the delivery of alcoholic beverage

 PURPOSE OR GENERAL IDEA OF BILL :

To amend the alcoholic beverage control law to clarify the State
Liquor Authority's (SLA) legal authority to enforce what it perceives
that the laws of other states require concerning any New York State
issued license or permit. The bill provides that, with certain
exceptions, the SLA cannot make any judgment as to the requirements of
any other state as to a particular licensee/permittee until such
licensee/permittee has exhausted its due process rights in such other
state.

 SUMMARY OF PROVISIONS :

Section 1. Amends subdivision 3 of section 118 of the alcoholic
beverage control law by excluding conduct which the authority
              

determines to be in violation of the laws of another state from the
definition of "for cause" for purposes of the power to revoke, cancel,
or suspend any license unless such conduct independently violates a
specific provision of this chapter, due process of law has been
provided by authorities of competent jurisdiction in such other state
and the licensee or permittee has exhausted its due process rights and
has been determined to have violated the laws of such other
state,engaged in illegal sales to minors in another state or failed to
pay properly owed taxes of another state.

Section 2. Effective date.

 JUSTIFICATION :

The State Liquor Authority has fined, and could suspend, revoke or
cancel the license of small businesses for "improper conduct" due to
online, direct to consumer interstate wine shipments to state(s) that
may have laws restricting such sales and shipments. It is concerning
that the State Liquor Authority (SLA) is conducting enforcement
activity on, behalf of other states, when these states have not
requested their enforcement or intervention, nor has the New York
merchant been found to have violated the law of those states.
Additionally, a multitude of out-of-state interests are shipping
alcoholic beverages into New York including interests from states
where the SLA is attempting to use their laws against New York
businesses. It appears that the SLA's enforcement of other states'
laws against New York state businesses is a solely unique enforcement
action by a state.

The area of law the SLA is attempting to enforce is also vague
considering that 9NYCRR 53.1 (n) does not specifically list
out-of-state shipments as constituting "improper conduct". While the
SLA has used its authority under 9NYCRR 53.1 (n) in the past to
appropriately sanction licensees for "improper conduct" involving the
committing of felonies or serious misdemeanors, the notable difference
in this case being that the New York merchant has not violated any
provision of the New York State Alcoholic Beverage Law, or any SLA
rule or regulation, nor has it been found to have violated such other
state's law or regulation. The legislation clarifies that the SLA's

authority does not extend to the enforcement of other states' laws
with exceptions.

Despite the troubling exercise by the SLA of enforcement authority of
other states' laws against New York licensees, the legislation limits
the refinement of the SLA's authority to permit the SLA to exercise
authority over New York licensees for out of state conduct which
independently constitutes a violation of the Alcoholic Beverage
Control Law, conduct where a licensee has been found to violate
another state's law provided that due process of law has been
provided, sales to minors in other states, situations in which another
state has notified a licensee that the conduct is a violation of that
state's laws and the licensee continues to engage in the conduct and a
demonstrated failure to pay other state taxes. These modifications
address concerns raised with a prior version of the legislation.

 LEGISLATIVE HISTORY :

Similar legislation passed both houses in 2015 but was vetoed.

 FISCAL IMPLICATIONS :

None to the State of New York.

 EFFECTIVE DATE :
After 60 days.