Committee: Fiscal Responsibility and Economic DevelopmentSponsor: Orr
Analyst: Daniel DavenportDate: 04/02/2019


Senate Bill 77 as introduced requires the ABC Board to phase out retail sales prior to October 1, 2024 by adopting, amending, or repealing rules of the board, in accordance with the Administrative Procedures Act, that includes: (1) revising wholesale operations; (2) establishing a phase-out schedule; (3) creating an annual retail license, not to exceed $750; (4) providing severance pay, preferential treatment, and other benefits for displaced employees as authorized by the State Personnel Board; (5) adjusting the markup on liquor as necessary to hold recipients of store profits harmless; and (6) enforcing the provisions of this bill. 

This bill will also increase license fee receipts for retail outlet operation to the State General Fund by an estimated $1.1 million annually assuming all current privately owned retail stores remain and an estimated 600 new retail stores open. This bill will also increase nonrefundable filing fee receipts to the State General Fund by an estimated $30,000 from the new retail stores. 

This bill provides that alcohol sold at state-operated retail stores prior to October 1, 2024 shall be subject to the present tax and markup with the proceeds from the tax distributed as presently provided by law; and alcohol sold after the phase-out shall be subject to the markup established by board rule. In addition, this bill requires a general or local law to provide for the distribution of sales tax proceeds if a local law allocates a portion of sales tax proceeds received by a county or municipality pursuant to Sections 28-3-280 to 28-3-286, as those sections will be repealed on October 1, 2024. This bill could increase receipts, based on FY 2018 distributions, to counties and municipalities by an estimated $8.7 million annually, with counties receiving approximately $2.2 million annually and municipalities receiving approximately $6.5 million annually.  

This bill allows the board to increase the markup, following the effective date of this act, to: (1) fund the remaining operating expenses of the board; (2) provide severance pay or other benefits to displaced workers; and (3) hold current recipients of store profits harmless. There were no store profits distributed according to FY 2018 financial information; however, the board is prohibited from increasing the markup above 20 percent subsequent to October 1, 2024. 

 Steve Livingston, Chairperson
Fiscal Responsibility and Economic Development