Bill Summary for S 290 (2019-2020)

Summary date: 

Jul 10 2019

Bill Information:

View NCGA Bill Details2019-2020 Session
Senate Bill 290 (Public) Filed Monday, March 18, 2019
AN ACT TO MAKE VARIOUS REVISIONS TO THE ALCOHOLIC BEVERAGE CONTROL LAWS OF THIS STATE.
Intro. by Gunn, Blue, Harrington.

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Bill summary

House committee substitute to the 4th edition makes the following changes.

Changes the effective date of the following sections from August 1, 2019, to September 1, 2019: Section 3(a) (amending GS 18B-800, concerning special orders of spirituous liquor); Section 4 (amending GS 18B-1105, GS 18B-804, and GS 18B-1116, concerning the sale of spirituous liquor at distilleries); and Section 5 (amending GS 18B-403 and GS 18B-901, concerning distilleries issuing purchase-transportation permits).

Part IV.

Deletes the changes to GS 18B-804(b1).

Part V.

Further amends GS 18B-403 to make language gender-neutral.

Eliminates the proposed changes to GS 18B-1007 concerning mixed beverage permittees and direct purchases from distilleries. 

Part VI.

Modifies the proposed changes to GS 18B-1114.7 to make organizational changes and add to the limitations set forth for consumer tastings conducted in an ABC store. Now provides the following: (1) the spirituous liquor used in the tasting must be purchased by the permit holder from any ABC store at a price set by the ABC Commission, with the permittee responsible for removing remaining liquor from the event from the premises; (2) the local board must limit tasting to between 1:00 p.m. and 7:00 p.m. on any day the store is authorized to sell spirituous liquor, and for no more than three hours; (3) the local board must limit the tasting events per ABC store to three tastings per calendar year and two different permit holders per tasting event; (4) the total samples offered to or consumed by each customer cannot exceed one-half ounce in any calendar day; (5) permit holders conducting the event cannot conduct any sales of branded merchandise or apparel to consumers at the event; (6) prohibits local boards or permit holders from advertising or promoting the tasting event to the public except as specified; (7) requires the permit holder to provide at least 48 hours' written notice to the ABC Commission of the tasting event; (8) requires the ABC Commission to adopt rules to ensure local boards that allow tasting by distilleries have reasonable oppotunities to conduct tastings; (9) deems any tasting conducted in an ABC store the sole responsibility of the permit holder, and prohibits any store employee from participation in or conduction of the tasting; (10) allows local boards to impose additional conditions, so long as they are written and noticed as specified; and (11) prohibits permit holders from providing consideration or any unlawful inducement to a local board, its board members, or its employees for any purposes related to the tasting event. Makes technical changes. 

Adds the following provisions.

Part VII.

Amends GS 18B-1303, concerning malt beverage distribution, to allow retail permit holder private label brands to be sold exclusively to the retailer that owns the brand name or to all retail permit holders within each territory without discrimination, at the retail permit holder's discretion. Defines retail permit holder to mean a malt beverage product that is labeled with a brand name owned by a retailer. Makes language gender-neutral. 

Part VIII.

Amends GS 18B-1104 regarding the authorizations of a brewery permit. Concerning the authorization to receive and sell malt beverages produced inside or outside the state under contract with a contract brewery, clarifies that the brewery that contracted with the contract brewery, which manufactures the malt beverage, is responsible for registering the contracted product with the ABC Commission, submitting the appropriate reports regarding the malt beverages, and remitting the appropriate taxes if required by the rules of the ABC Commission and the Department of Revenue. Applies to taxes collected on or after September 1, 2019.

Part IX.

Amends GS 18B-1114.5, regarding the authorizations of a malt beverage special event permit, to authorize the permit holder to give free tastings, sell branded merchandise, and sell its malt beverages by the glass or in closed containers at farmers markets.

Part X.

Amends GS 18B-1001(1), concerning on-premises malt beverage permit holders. Expands the authorization of on-premises malt beverage permit holders to allow permittees to transfer malt beverages to another on-premises malt beverage permittee under common ownership or control of the transferor. Limits the permittee to no more than four such transfers per calendar year. Clarifies that other transfers by on-premises malt beverage permittees, the purchase of malt beverages by a retail permittee from another retail permittee for the purpose of resale, and the sale of malt beverages by a retail permittee to another retail permittee for the purpose of resale are unlawful. Restricts authorized transfers of a particular brand of malt beverages to transferors and transferees located within the territory designated between the brewery and the wholesaler on file with the ABC Commission (Commission). Requires the transferor to notify each wholesaler who distributes the product of the transfer prior to or contemporaneous with the transfer, in writing or verifiable electronic format, and identifying the transferor, the transferee, the transfer date, quantity, and items transferred. Makes identical additions to expand the authorizations for off-premises malt beverage permit holders set out in GS 18B-1001(2) to allow for the transfer of malt beverages from the permittee to another off-premises malt beverage permittee, subject to the same restrictions and requirements.

Part XI.

Requires the ABC Commission to implement the Discount Rule (14B NCAC 15B .1004) by limiting a combinations of the use of a coupon, rebate, or a permittee's loyalty card, discount card, or membership card to no more than 35% of the advertised retail price for the purchase of a malt beverage or wine, and prohibiting a coupon or rebate, or a loyalty card, discount card, or membership card from providing a discount exceeding 35% of the advertised retail price for the purchase of a malt beverage or wine. Requires the ABC Commission to adopt temporary rules to comply with the provision, and adopt permanent rules consistent with the provisions no later than September 1, 2019.

Part XII.

Amends GS 18B-101 to now define premises to mean a fixed permanent establishment, including all areas inside or outside the licensed establishment, where the permittee has control through a lease, deed, or other legal process. 

Part VIII (intends XIII).

Enacts GS 18B-1010, authorizing the sale and delivery by the holder of an on-premises malt beverage permit, on-premises wine permit, on-premises fortified wine permit, or mixed beverages permit of (1) no more than two alcoholic beverage drinks at one time if the drink is a malt beverage, unfortified wine, and/or fortified wine and (2) no more than one alcoholic beverage at one time if the drink is a mixed beverage or contains spirituous liquor at a time to a single patron for consumption on the premises. Restricts sales at a stadium, athletic facility, or arena on the campus or property of a public college or university, or during a sports event sponsored by a public college or university, to one alcoholic beverage drink per single patron at one time. Applies to sales made on or after September 1, 2019.

Part XIV.

Repeals GS 18B-308, which made it unlawful to sell or consume alcoholic beverages at bingo games. Makes conforming repeals of GS 14-309.14(3). Makes conforming changes to GS 18B-112(b)(3).

Applies to offenses committed on or after September 1, 2019.

Part XV.

Eliminates the proposed changes to GS 130A-250, which exempted licensed breweries not engaged in food preparation from food and lodging facility sanitation regulations. 

Instead, amends GS 130A-247 to define brewery to mean an establishment licensed under GS 18B-1104 that is not engaged in the preparation of food (excluding beverages) on the premises, and amends GS 130A-248 to exempt ABC permitted establishments meeting the definition of a brewery, as defined, from compliance with sanitation laws under Article 8, as specified. Makes conforming changes to GS 130A-250 to explicitly exempt breweries, as defined, from the food and lodging facilities laws in Part 6 of Article 8. 

Provides that penalties imposed and fees charged before the effective date of the Part are not abated or affected by the provisions, and the statutes that would be applicable but for the provisions remain applicable to those penalties and fees.

Part XVI.

Enacts GS 18B-700(c1) to prohibit the creation of any new local ABC boards in any county where a local board operates an ABC store unless the new board enters into an agreement to merge with an existing board. Specifies that the new provision does not prohibit local boards from serving multiple cities and/or counties.

Amends GS 18B-600 to allow a jurisdiction in a county where an ABC board is already in operation to hold an ABC store election if the jurisdiction has already negotiated a merger if approved, and the details of the planned merger have been made available to all registered voters in the jurisdiction. Explicitly limits elections to cities in which at least one other city in the same county operates an ABC store.

Amends GS 18B-703 to restrict dissolution of a merger if a city or county is merging with a different local board or the city or county is ceasing operation of all ABC stores within the city or county.

Applies to elections held on or after September 1, 2019.

Part XVII.

Amends GS 18B-404 to require local boards to accept electronic payments for spirituous liquor purchased by a mixed beverage permittee. Prohibits the board from charging an electronic payment fee. Defines electronic payment to include payment by debit card or by electronic funds transfer; excludes payment by charge card or credit card. Applies to sales made or after October 1, 2019.

Part XVIII.

Enacts GS 18B-907 to require the ABC Commission to make all permitting forms available on its website, and to allow for electronic submission of permit forms to the extent practicable. Provides for submissions with electronic signatures. Requires the Commission to accept electronic payment for any permit fees under the Chapter. Defines electronic payment to mean payment by a charge card, credit card, debit card, or by electronic funds transfer. Authorizes the Commission to charge a fee not exceeding $5 to cover costs incurred in accepting and processing electronic payments. Applies to permits applied for on or after September 1, 2019.

Part XIX.

Amends GS 18B-1001 by creating a common area entertainment permit to be issued to the owner or property owners' association of a multi-tenant establishment that has at least two tenants that holds an on-premises malt beverage permit, on-premises unfortified wine permit, on-premises fortified wine permit, or mixed beverages permit. The permit allows the customer of a multi-tenant establishment tenant holding one of those specified permit types to exit the licensed premises with an open container of alcohol sold by the tenant and consume the beverage within the confines of any common area on the premises of the multi-tenant establishment designated for such consumption. Defines a multi-tenant establishment as a building or structure, or multiple buildings and structures on the same property, or within the same planned development project that may be subject to a common declaration of restrictive covenants administered by a common property owners' association, and under common ownership, control, or property owners' association governance that contain or contains multiple businesses that sell food, goods, services, or a combination of food, goods, and services, and that include or are connected by common areas, as defined. Sets out eight additional conditions that apply to a common area entertainment permit, including that alcoholic beverages sold for consumption in a designated common area must be dispensed only in a container that clearly identifies the licensed premises from which the beverage was purchased and limits the amount to 16 fluid ounces, prohibits a customer from possessing or consuming more than one alcoholic beverage at a time while within the designated common area, and requires a customer in the designated common area to dispose of any alcoholic beverage prior to exiting the designated common area unless the customer is entering a licensed premises that allows the customer to enter with the alcoholic beverage.

Amends GS 18B-902 by setting the permit fee at $750.

Part XX.

Enacts GS 18B-1001.4, authorizing the holder of a delivery service permit or the holder's employee or independent contractor to deliver malt beverages, unfortified wine, or fortified wine to a location designed by the purchaser on behalf of the retailer holding an on-premises malt beverage permit, off-premises malt beverage permit, on-premises unfortified wine permit, off-premises unfortified wine permit, on-premises fortified wine permit, off-premises fortified wine permit, and a wine shop permit. Further authorizes a delivery service permittee to facilitate delivery through technology service, as specified. Requires the permittee to successfully complete a course approved by the ABC Commission prior to making any deliveries. Requires the ABC Commission to approve, deny, or request modifications within 15 business days of receipt of a proposed training program from a holder of a delivery service permit. Prohibits a permittee from handling or possessing any funds used to purchase an alcoholic beverage, but allows the permittee to facilitate the sales transaction. Prohibits delivery to a person under 21 years of age and requires packages to contain a statement, as specified, if the manufacturer's original packaging is obscured. Subjects deliveries to local laws of the jurisdiction where the delivery is located. Prohibits deliveries from being made more than 50 miles from the retailer's licensed premises or the premises of another retailer. Limits delivery to alcoholic beverages purchased for personal consumption and from a licensed retailer's existing inventory located on the retailer's premises. Does not require a delivery service permit for a common carrier to lawfully transport or ship alcoholic beverages. Subjects deliveries pursuant to a delivery service permit to the requirements of Article 4 (Transportation). Specifies that the new statute does not require a technology services company to obtain a delivery service permit if the company does not employ or contract with delivery drivers, but instead provides software or an application that connects consumers and licensed retailers for the delivery of alcoholic beverages from the licensed retailer. Establishes the following maximum fines for delivery service permittees for violations of the Chapter when delivering to a residence hall located on the premises of an institution of higher education: $1,000 for the first violation; $1,500 for the second violation within three years of the first violation; and $2,000 for the third or subsequent violation within three years of the first violation. Allows for the ABC Commission to accept a compromise penalty of $10,000 in cases where there are two or more violations within three years by a delivery service permittee when delivering to a residence hall on the premises of an institution of higher education whereby the Commission is entitled to suspend or revoke the permit. Requires the ABC Commission to either accept a compromise or revoke the permit, but not both, in those circumstances; allows the ABC Commission to accept a compromise and suspend the permit in the same case.

Amends GS 18B-902, as amended, setting the delivery service permit fee at $400.

The above provisions are effective December 1, 2019.

Directs the ABC Commission to begin accepting permit applications and approving training programs by September 1, 2019.

Part XXI.

Further amends GS 18B-1104 concerning the authorizations of a brewery permit. Allows permittees to sell the malt beverages owned by the brewery at the brewery for on- or off-premise consumption, subject to obtaining the appropriate permit under GS 18B-1001, regardless of the results of any local malt beverage election (previously, requires approval from the governing body of the city or county where the brewery is located, as appropriate, with approval granted by resolution after public notice and hearing requirements are met). Effective October 1, 2019.

Part XXII.

Amends GS 18B-1001 to allow sports and entertainment venues to obtain an on-premises fortified wine permit and a special occasion permit.

Part XXIII.

Amends GS 18B-303 to allow a mixed beverage permittee or its employee to purchase and transport any amount of fortified wine or spirituous liquor for use by the mixed beverage permittee without obtaining a purchase-transportation permit. Allows a local board employee to transport to a mixed beverage permittee any amount of fortified wine or spirituous liquor purchased by the permittee without obtaining a purchase-transportation permit. Deems independent contractors employed pursuant to GS 18B-701(a)(1), as amended, neither an employee of a mixed beverage permittee or a local board under these provisions. Makes conforming changes to GS 18B-403. Applies to fortified wine and spirituous liquor purchased on or after September 1, 2019.

Part XXIV.

Directs the ABC Commission to submit a quarterly report beginning October 15, 2019, to the specified NCGA committee detailing the progress made in bidding and selecting an independent contractor for the receipt, storage, and distribution of spirituous liquor at and from the State warehouse in accordance with GS 18B-204(a)(3). Sets out the parameters for the report. Terminates the reporting requirements upon the earlier date of the award of the contract for services described in GS 18B-204(a)(3) or January 1, 2022.

Part XXV.

Amends GS 18B-701(a), authorizing a local ABC board to charge a fee for the provision of delivery, by its employees or an independent contractor, of liquor to a mixed beverages permittee. Explicitly authorizes a mixed beverages permittee to contract with an independent contractor for the provisions of spirituous liquor deliveries from an ABC board's store or warehouse to the permittee's premises. Makes technical and clarifying changes. Applies to deliveries made on or after September 1, 2019.

Directs the Commission to adopt rules to implement the statute, including parameters for the delivery fee and requirements for independent contractors making deliveries.

Part XXVI.

Directs the Joint Legislative Program Evaluation Oversight Committee to include in its biennial 2019-20 work plan a study by the Program Evaluation Division (PED) of the action the ABC Commission is authorized to take under GS 18B-104 for violations of GS Chapter 18B. Details required examinations of the study, inducing the proportionality of the punishment that can be imposed in relation to the violation. Requires the ABC Commission to provide any necessary information, data, or documents from their records or available to them upon request of PED. Requires PED to report to the Oversight Committee by March 15, 2020. Effective when the act becomes law. 

Part XXIX.

Changes the act's effective date from August 1, 2019, to September 1, 2019, unless otherwise provided. 

Makes organizational changes. Changes the act's titles.

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