By ADAM SICHKO
The Albany Business Review

New York Gov. David Paterson has called on the State Liquor Authority to eliminate its large backlog of liquor-license applications by October 2010.

Paterson issued the deadline as he announced the conclusion of a two-year review of the agency, performed by the state Law Review Commission. Thursday, the commission issued a final report on its work.

The Liquor Authority has the power to issue or deny permits for restaurants, bars and other entities to sell alcohol. The authority, known as the SLA, also has the legal ability to revoke or suspend permits, issue subpoenas and disciplines license holders.

As of October, the SLA had more than 3,000 unprocessed liquor-license applications - a nine-month backlog, the law commission said.

The agency has 22 employees who review permits, but needs at least 15 new staff members just to handle the logjam.

The state Law Revision Commission issued a scathing report in October, concluding that the agency was broken - echoing the constant criticisms of business owners around the state who must wait months to have liquor-license applications processed.

"Since its inception, the SLA has been plagued with problems of licensing delays, inadequate enforcement, inefficient and ineffective administration and, indeed, bribery and corruption," the report said. "Small-business owners, and some large ones as well, are forced to suffer ever-mounting expenses for months on end because of these delays."

As of today, the SLA has cut its backlog by almost 25 percent, to 2,360 applications. The law commission credits the drop to a number of changes implemented by SLA Chairman Dennis Rosen, an Orchard Park attorney who took over the agency in August.

A key change is allowing attorneys to verify, under penalty of perjury, that information on their clients' liquor-license applications is accurate.

The certification includes verifying a company's bank statements to visiting an establishment to confirm that floor plans, as submitted in the license application, are correct.

Rosen said the process slices the time SLA staff need to review an application from an average of five hours down to 45 minutes, since agency staff won't need to confirm the information reported in the application.

"The SLA's progress is remarkable," the law commission said in its report. "Hopefully, it will continue. The task faced by the new SLA administration is Herculean."

Still, Paterson and Rosen acknowledge the need to eliminate the entire backlog.

"Eliminating the application backlog is our top administrative priority," Rosen said.

The law commission noted the economic impact of the lengthy delays at the SLA.

"They (business owners) are reluctant to start new construction or remodeling, negatively affecting the community's economy. The people ordinarily hired - the construction crew, the plumbers, the carpenters, the electricians, the computer and communications technicians - cannot be put to work."

The commission's new 200-page report recommends changes to be made to the state's Alcohol Beverage Control Law, which dates to the Prohibition era and is administered by the SLA.

Key suggestions include:

• Streamlining the permit process for distillers and craft brewers.

• Easing regulations governing in-state wineries.

• Loosening a ban preventing alcohol sales within 200 feet of a school or place of worship.

• Erasing a Prohibition-era rule dictating that "package stores" - which sell bottled alcohol that cannot be consumed onsite - must be located at street level.

Many of the commission's recommendations will need to be codified in legislation.

"Despite the well-deserved criticisms of many parts of the law, New York's system for regulating beverage alcohol is basically sound," the report concludes.

The Liquor Authority generates $54 million in annual revenue, with 85 percent of that coming from the licensing process. The agency was created after Prohibition was repealed in 1933.

There are roughly 30,000 restaurants, bars and other entities that have state liquor licenses.