Relates to the powers of chairman and members of the authority

Section 2 of the bill would amend Alcoholic Beverage Control Law § 17 to clarify the Authority's power to direct forfeiture of bonds; and to remove from the members of the Authority the power to remove employees, make budget and fiscal decisions, make required annual reports, and develop minimum criteria for the Alcohol Training Awareness Program.

Section 3 of the bill would amend Alcoholic Beverage Control Law § 18 to confer upon the Chairman the power to hire and fire employees, make budget and fiscal decisions, make required reports, and develop minimum criteria for the alcohol Training Awareness Program (ATAP).

Section 4 of the bill would provide for an immediate effective date and a three year sunset provision.

Existing law

Under existing law, the powers which this bill would grant the Chairman are vested in the Board of the Authority. Pursuant to the budget bill passed by the Legislature for fiscal year 2011-12, unlike the Chairman who remains salaried, the other two commissioners of the Authority are now per diem members of the Board.

Prior legislative history

This is the same bill that was introduced in the Senate and passed by the Assembly in 2011 (S.4303B/A.7016A) except for the addition of a three-year sunset provision to the enacting clause. A similar bill, without the three year sunset provision, was passed by the Senate in 2010 (S.7698/A.11010).

Statement in support

In response to the 2009 New York State Law Revision Commission Report on the Alcoholic Beverage Control Law and its Administration ("LRC Report"), this bill proposes amendments to implement a recommendation of the Law Revision Commission.

With respect to the powers of the Chairman, the Law Revision Commission recommended, in relevant part, as follows (LRC Report, p.25):

The ABC Law should be amended to grant the Chairman of the Authority exclusive executive authority over both the division of alcoholic beverage control and the Authority, including the authority to hire, assign, and fire deputies, counsels, assistants, investigators and all other employees within the limits of the agency appropriation, in consultation with the other members of the Authority, removing all such responsibility from the Authority.

ABC Law §§ 15 and 17(4) currently delegate the power to hire and fire to the three-member State Liquor Authority acting as a full board. The Law Revision Commission noted that full board control over hiring and firing may well prevent employment decisions from being made where there is a vacancy on the Full Board and a disagreement between the two serving board members (LRC Report, p. 122):

Although by statute, the Chairman has administrative control, he does not have the power to hire and fire. The entire Board has to agree on an employment decision. If there were not unanimous agreement between the two current Commissioners, no employment decisions could be made.

Even where the Authority's board is fully staffed with its three members, the Chairman's ability to lake administrative action may be called into question by a challenge to the scope of his authority:

The multiple agency head exercising administrative authority could result in the Chairman being undermined if the other members disagree with him or her. For example, in 2008, two of the Commissioners disagreed with certain actions of the Chairman so they voted to rescind previous delegations of authority to the Chairman.

Sections 1 through 3 of the instant bill, in the first instance, seek to implement the Law Revision Commission recommendation that the Chairman be delegated exclusive administrative control over hiring and firing. These sections also make clear the scope of the Chairman's administrative authority over budget and fiscal matters, the submission of required reports, and the development of minimum criteria for ATAP.

Delegation of administrative functions to the exclusive control of the Chairman does not diminish the regulatory powers exercised by the three-member Authority. The three members of the Authority, acting together as a full board, will continue to regulate alcoholic beverage traffic within the State.

Briefly stated, Alcoholic Beverage Control Law § 17 will continue to empower the three-member Authority:

1. To approve or disapprove license and permit applications; 2. To limit the number of licenses of each class to be issued within the state or any political subdivision thereof; 3. To revoke, cancel or suspend for cause any license or permit issued under this chapter and/or to impose a civil penalty for cause against any holder of a license or permit issued pursuant to this chapter; 4. To fix by rule the standards in the manufacture of alcoholic beverages to be sold or consumed in the state; 5. To hold bearings, subpoena and examine any person under oath, and require the production of any books or papers relative to the inquiry; 6. To prohibit during a period of a public emergency the sale of any or all alcoholic beverages; 7. To delegate the powers provided in this section to the Chairman, or to such other officers or employees as may be designated by the Chairman; 8. To appoint advisory groups; and 9. To approve or disapprove the request of a county legislative body to restrict or modify the legal hours of sale within such county.

Thus, while granting exclusive administrative authority to the Chairman, this legislation would preserve for the full board those functions best performed by a deliberative body, and those regulatory determinations involving broad policy considerations that are best left to a contemplative body.

Budget implications

This bill would have no cost to the State. If enacted, this bill would help effectuate the savings anticipated by the implementation of the reforms of the Authority sought in the Executive budget for State Fiscal Year 2011-12.

Local impact

None.

Effective date

This act shall take effect immediately and shall expire and be deemed repealed three years after such effective date.