Bill Summary for H 870 (2023-2024)

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Summary date: 

Apr 27 2023

Bill Information:

View NCGA Bill Details2023-2024 Session
House Bill 870 (Public) Filed Tuesday, April 25, 2023
AN ACT TO PROHIBIT PATRONS OF CERTAIN ESTABLISHMENTS FROM BRINGING MALT BEVERAGES AND UNFORTIFIED WINE ONTO THE PREMISES AND CONSUMING THE MALT BEVERAGES OR UNFORTIFIED WINE UNLESS THE ESTABLISHMENT HOLDS A PERMIT; TO ALLOW MIXED BEVERAGES PERMITTEES TO PURCHASE SPIRITUOUS LIQUOR FROM ANY ABC STORE DESIGNATED TO MAKE SALES TO MIXED BEVERAGES PERMITTEES; TO ALLOW RESTAURANTS AND BARS HOLDING MIXED BEVERAGES PERMITS TO SELL SPIRITUOUS LIQUOR WITH PERSONALIZED LABELING IN CLOSED CONTAINERS FOR CONSUMPTION OFF THE PREMISES; TO ELIMINATE THE PHYSICAL MIXED BEVERAGES TAX STAMP AND TO ENSURE COMPLIANCE WITH THE CHARGE ASSESSED ON SPIRITUOUS LIQUOR SOLD TO MIXED BEVERAGE PERMITTEES THROUGH RECORD KEEPING; TO ALLOW ON-PREMISES ABC PERMIT HOLDERS TO CONDUCT CERTAIN SALES AND ADVERTISING; TO DIRECT THE ALCOHOLIC BEVERAGE CONTROL COMMISSION TO IMPLEMENT A SYSTEM FOR APPLICANTS, PERMITTEES, AND LOCAL ABC BOARDS TO CONDUCT BUSINESS WITH THE COMMISSION ELECTRONICALLY; TO DIRECT THE ALCOHOLIC BEVERAGE CONTROL COMMISSION TO AMEND THE DEFINITION OF COOPERATIVE ADVERTISING ESTABLISHED BY RULE; AND TO DIRECT THE ALCOHOLIC BEVERAGE CONTROL COMMISSION TO IMPLEMENT A CENTRALIZED ELECTRONIC INVENTORY MANAGEMENT SYSTEM.
Intro. by Pickett, Saine, T. Brown, Willingham.

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Bill summary

Makes several changes to state Alcohol Beverage Control (ABC) laws and operations of the ABC Commission. 

Part I

Creates a bring your own beverage permit by amending GS 18B-1001 (Kinds of ABC permits; places eligible). The new permit allows a patron of an establishment to bring malt beverages, unfortified wine, or both, onto the premises for consumption. Outlines locations that may apply for a permit, including restaurants, retail businesses, private clubs, convention centers, community theaters, sports and entertainment venues, private bars, and breweries and distilleries under certain circumstances. Amends GS 18B-300 to make it unlawful to bring malt beverages and unfortified wine onto the premises of any of these locations unless the location holds a bring your own beverage permit and the location has given the patron permission to bring a beverage. Amends GS 18B-902(d) to make the cost of a bring your own beverage permit $500. 

Effective July 1, 2023. 

Part II

Expands the number of ABC stores where mixed beverage permit holders may purchase liquor by amending GS 18B-600. Amends the sections regarding mixed beverage elections for cities, small cities, ski resorts, small towns, multicounty/city, and small resort towns, to allow mixed beverages permit holders to purchase liquor from any ABC store designated by any local ABC board to make sales to mixed beverages permit holders. Previously these sections required mixed beverages permit holders to buy liquor from specific stores. Makes a corresponding change to GS 18B-1007(a), allowing mixed beverages permit holders and guest room cabinet permittees to purchase liquor from any ABC store designated by any local ABC board. 

Part III

Makes several amendments to GS Chapter 18B to allow restaurants and bars holding mixed beverages permits to sell liquor with personalized labels. Amends GS 18B-1001(10) (Mixed Beverages Permit) to allow restaurants and bars to sell liquor with personalized labeling in closed containers for consumption off the premises as long as the label complies with GS 18B-1007(f). Amends GS 18B-1007 to create new subsection (f) (Resale of Spirituous Liquor with Personalized Labeling), outlining requirements including a limit of three barrels (53 gallons per barrel) a year, price and tax collection requirements, and limits on hours of sales. Makes a conforming change to GS 18B-804(a) to include restaurants and bars in the requirements for uniform price of spirituous liquors across the state. 

Effective and applies to sales made on or after July 1, 2023. 

Part IV

Amends GS 18B-1007 to eliminate the requirement for a physical mixed beverage tax stamp on bottles of liquor. Amends subsection (b) (Handling Bottles) to remove any references to a mixed beverage tax stamp and to remove the prohibition on possessing a container of liquor without a mixed beverage tax stamp. Amends subsection (d) (Transfer of Mixed Beverages Inventory) to allow the sale of inventory from a permit holder going out of business to the new mixed beverages permit holder taking over the same location without having the local ABC board restamp the inventory with new tax stamps. Creates new subsection (e) (Record Keeping and Audit Requirements) establishing requirements for monthly records to be kept by mixed beverages permit holders, including amounts expended for the purchase of liquor and amounts received from the sale of mixed beverages. Requires these records to be maintained for three years and available for inspection. Also requires mixed beverage permit holders to prepare and submit reports summarizing the information required by the subsection to the ABC Commission annually or as required by the Commission. Allows the ABC Commission to require an attestation under penalty of perjury from the permit holder that they paid the applicable surcharge. 

Removes the requirement that bottles used for display purposes must have a physical tax stamp from GS 18B-1006.1. 

Forbids the ABC Commission from requiring a physical tax stamp on any container of liquor sold to a mixed beverages or common carrier vehicle permit holder. Directs the ABC Commission to adopt rules to comply with this requirement. 

Effective and applies to offenses committed on or after December 1, 2023. 

Part V

Creates new GS 18B-1012 (Certain sales and advertising authorized), which allows on-premises malt beverage, unfortified wine, fortified wine, or mixed beverages permit holders to provide certain sales and promotional specials for drink prices for any period of time. Sales include selling more than one drink for a single price, and giving away or selling drinks at prices that are different than the usual or established price for the drink. The section also allows advertisement of the price of drinks on outside signs. 

Effective July 1, 2023. 

Part VI

Directs the ABC Commission to implement a system that allows persons to conduct business with the Commission electronically no later than December 21, 2023. Establishes minimum requirements for the system, such as the submission of applications and forms for permits, the ability to check status of applications, the ability to pay fees and fines, the ability for local ABC boards to place orders from the state warehouse, and the ability to see inventory available for purchase at the state warehouse. Permits the ABC Commission to contract with a third-party entity to establish and maintain the system. Requires local ABC boards to provide the ABC Commission with the information required to establish the system, and to utilize the system when placing and accepting orders for liquor and conducting other business with the Commission. 

Requires the ABC Commission to report by October 1, 2023, to the Joint Legislative Oversight Committee on Justice and Public Safety and the House Committee on Alcoholic Beverage Control on its progress in implementing the system. 

Part VII

Requires the ABC Commission to implement the Cooperative Advertising Definition Rule, 14B NCAC 15B .1001 in accordance with outlined requirements. Defines cooperative advertising to include any joint effort between permittees in a vertical relationship to advertise alcoholic beverages, the retailer’s business, or any promotion, but does not include (1) point-of-sale advertising furnished by an industry member, (2) advertisements of off premises special events as allowed by law or rule, (3) advertising of on-premises events that are visible or audible to the permittee’s patrons only when they are on the premises, (4) and unpaid internet-based social media advertisements directed to users who have opted to receive content from the permittee, including on-premises brand promotions, tastings, the availability of a supplier’s products at two or more retail permittees, the availability of a product in a specific geographic area, and events with advertising showing the logo or trade dress of permittees. Requires the ABC Commission to adopt a rule to amend the existing Cooperative Advertising Definition Rule consistent with this provision. 

Effective when the act becomes law, and expires when a permanent rule is adopted as required. 

Part VIII

Requires the ABC Commission to implement a centralized inventory management system no later than December 31, 2023, that will allow for (1) persons to electronically view the inventory of liquor available for purchase at the state warehouse and at local ABC boards, and (2) the ability for local ABC boards and mixed beverages permit holders to place orders electronically for liquor from the state warehouse or applicable local ABC board. Permits the ABC Commission to contract with a third-party entity to implement and maintain this system. Requires local ABC boards to provide the ABC Commission with the information required to establish the system, and to utilize the system when managing inventory and placing orders for liquor.

Requires the ABC Commission to report by October 1, 2023, to the Joint Legislative Oversight Committee on Justice and Public Safety and the House Committee on Alcoholic Beverage Control on its progress in implementing the system.

Part IX

Requires the ABC Commission to amend rules consistent with the act, and permits the Commission to use the procedure in GS 150B-21.1 (Procedure for adopting a temporary rule) to amend rules as required.