Part I.

Section 1.

Directs that, on or after July 1, 2028, but no later than July 1, 2029, the local ABC boards will cease operations of any ABC stores and transfer all real property owned by the board and any fixtures and inventory used in the operation of ABC stores by public sale to the highest qualified bidder or bidders. Lists three requirements governing the ABC store sales, including that the inventory, fixtures, permit, and store location, including real property (if owned by the local ABC board), be sold as a package. Specifies that if a city or county has authorized the establishment and operation of an ABC store prior to July 1, 2027, and that city or county votes against off-premises spirituous liquor sales before July 1, 2028, the local ABC board applicable to that city or  county must do both of the following: (1) sell any spirituous liquor within their possession in the applicable city or county to a liquor wholesaler permitted under GS 18B-1109.1, as enacted by Part IV of the act and (2) offer any real property and fixtures for sale in any manner otherwise authorized by law. Clarifies that the act does not relieve an ABC Board of its debts or liabilities and prioritizes payment of any funds received under the act to satisfy said debts or liabilities, with any remaining distributed pursuant to GS 18B-805(e).

Tasks the ABC Commission (Commission) with developing a bid process by March 1, 2028. Directs, on July 1, 2029, for the Commission to cease the operation of the State warehouse. On or after July 1, 2029, and no later than December 31, 2029, directs the Commission to sell any remaining inventory of spirituous liquor (spirits) held in the State warehouse to a liquor wholesaler, described above.  Directs for any funds received to be used first to pay any amount owed to a distiller for inventory held in the warehouse, and any remaining funds shall be remitted to the General Fund to be used to fund education. Tasks the Department of Administration (DOA) with initiating proceedings to separate off and sell the described real property after the Commission ceases operations and sells off its inventory of spirits. Provides for priority use of sale proceeds and an appraisal. Requires DOA to assign the Commission office space by December 31, 2030. Of the funds appropriated to the Department of Public Safety (DPS) in Section 40.4(a) of SL 2023-134 for advance planning on a new ABC campus, directs any unexpended and unencumbered funds to revert to the General Fund.

Effective July 1, 2027.

Part II.

Section 2.

Makes the following changes to Article 6 of GS Chapter 18B (ABC Elections).  Replaces references to “ABC store” with “Off-premises spirituous liquor (liquor)” or “off-premises sale of spiritous liquor” and “an ABC store that is designated as a mixed beverage ABC store” to “package store” throughout the Article. Removes references to the Commission’s authority to sell liquor throughout the Article. Makes technical and conforming changes throughout the Article.

Sets the following requirements for a city holding an off-premises spirituous liquor elections in GS 18B-600 (places eligible to hold ABC elections): (1) retains population requirement applicable to ABC stores; (2) the county where the city is located does not allow the off-premises sale of spiritous liquor; and (3) at least one other city in the county allows the off-premises sale of spirituous liquor. Authorizes the commission to issue liquor permits to qualified persons in the jurisdiction in GS 18B-603 if the off-premises sale of spirituous liquor is approved.

Deems any city or county that has authorized the establishment and  operation of an ABC store prior to July 1, 2027, to have authorized the off-premises sale of spirituous liquor for purposes of Article 6 , as amended by the act, unless the city or county votes against authorizing off-premises spirituous liquor sales before July 1, 2028. A city or county that votes against off-premises spirituous liquor sales before July 1, 2028, may continue to operate ABC stores until July 1, 2029. If any city or county holds an off-premises spirituous liquor election on or after July 1, 2027, but prior to July 1, 2028, and the off-premises sale of spirituous liquor is approved, no off-premises sale of spirituous liquor is allowed until July 1, 2028.

Effective July 1, 2027, and applies to elections held on or after that date.

Part III.

Section 3.

Makes the following changes to Article 7, “Local ABC Boards,” in GS Chapter18B. Replaces references to “ABC store” with “Off-premises spirituous liquor (liquor)” or “off-premises sale of spiritous liquor” and “an ABC store that is designated as a mixed beverage ABC store” to “package store” throughout the Article. Removes references to the Commission’s authority to sell liquor throughout the Article. Makes technical and conforming changes throughout the Article.

Modifies the mission of local ABC Boards in GS 18B-700 so that it is now monitoring the sale of spirits and managing funds received as a result (was, controlling the sale of spirits and promoting customer friendly, modern, and efficient stores). Removes provisions pertaining to compensation of general managers (GM) of local boards and nepotism. Removes GM’s from the list of persons requiring to be bonded under the statute.

Removes most of the provision of GS 18B-701, listing the powers and duties of the local ABC Boards, except the following new and existing duties: (1) to authorize the operation of package stores, (2) distribute funds received pursuant to GS 105-113.82, (3) employ local ABC officers or make other provisions for enforcing ABC law, and (4) performing any other activity authorized or required by ABC law. Limits the local board’s duty to comply with the Commission’s rules under GS Chapter 18B, and removes provisions specifying requirement to meet all standards for performance and training established by the Commission.  

Removes all of the provision of GS 18B-702, the financial operations ABC Boards, except as follows. Retains the provisions listing the duties and powers of the finance officer, but removes duty to file a statement of financial condition of the local board and to supervise the investment of idle funds. Narrows the compliance obligations governing disbursement of local board funds so that it just Chapter 18B (currently, also the budget, preaudit obligations, and disbursements). Removes references to supervising money handled by authorized employees. Adds provisions requiring a local board to make specified statutory distributions of funds received pursuant to GS 105-113.82. Provides for other distributions after making the statutory distributions to the general fund of the city or county where the board is established, so long as no other distribution or schedule is provided for by law. Provides for expenditures of alcoholism funds.  Now prohibits a local board from borrowing money. Retains provisions pertaining to the applicability of criminal statutes and local acts.

Replaces references to “ABC system” with “ABC board” throughout GS 18B-703 (merger of local ABC board (currently, operations)). Removes provisions governing agreements for joint store operations. Replaces reference to “stores operated by the systems of” with “package stores” in the subject jurisdiction that serve the same general area as one of the conditions for merger. Requires the involved parties to agree upon a formula to distribute the funds received pursuant to GS 105-113.82 (was, formula for profit distribution).

Repeals GS 18B-705 (compliance with performance standards), GS 18B-707 (authorization to sample spirituous liquor products) and GS 18B-708 (sale of certain spirituous liquors below distiller’s price).

Adds new GS 18B-709, pertaining to authorizations of additional package stores. Imposes the following population requirements on the amount of package stores that may be authorized by a local board:

• If the jurisdiction of the local ABC board has a total population of less than 100,000, not more than one store per 20,000.
• If the jurisdiction of the local ABC board has a total population of at least 100,000 but less than 250,000, not more than one store per 25,000.
• If the jurisdiction of the local ABC board has a total population of 250,000 or more, not more than one store per 30,000.

Specifies that if a jurisdiction holds a liquor election and is required to merge with an existing local board, the merged local board may authorize at least one package store within the jurisdiction that held the election. Any additional stores must meet the above population requirements.  Requires Commission approval for the location of package stores, as described. Prevents a local board from placing a package store in a location where the municipality’s governing board has passed an ordinance barring package stores there after an evidentiary hearing on the matter. Allows for municipal objection to a location.

Specifies that any ABC store in operation by a local board on July 1, 2027, may be sold, and the authority to operate as a package store is  valid. From July 1, 2028, until June 30, 2029, specifies that the amendments to Article 7  apply to local ABC boards that have ceased operation of ABC stores. Local ABC boards that have not yet ceased operation of ABC stores during this period will continue to have any necessary authority provided by Article 7 as it reads on June 30, 2028. On July 1, 2029, the provisions of this section apply to all local ABC boards.

Effective July 1, 2028, except as provided above.

Part IV.

Section 4.

Makes the following changes to Article 9, “Issuance of Permits,” of GS Chapter 18B. Provides for an off-premises spirituous liquor (liquor) permit in GS 18B-900 (permit qualifications). Sets the liquor permit fee at $1,000 in GS 18B-902. Makes conforming changes to GS 18B-903 to account for new liquor permit.

Section 5.

Makes the following changes to Article 10, “Retail Activity” of GS Chapter 18B. Defines package store in GS 18B-1000 (definitions concerning establishments) and excludes a package store from a retail business. Allows off-premises fortified wine permits in GS 18B-1001 (kinds of ABC permits) to be issued for package stores. Creates the off-premises spirituous liquor permits, authorizing the retail sale of spirituous liquor in the manufacturer's original container for consumption off the premises, only issued to package stores. Requires warning signage. Makes conforming change to GS 18B-1004  (hours for sale and consumption) to account for liquor permits.

Section 6.

Makes the following changes to Article 11, “Commercial Activity” of GS Chapter 18B. Replaces references to “ABC store” with “Off-premises spirituous liquor (liquor)” or “off-premises sale of spiritous liquor” and “an ABC store that is designated as a mixed beverage ABC store” to “package store” throughout the Article. Removes references to the Commission’s authority to sell liquor throughout the Article. Makes technical and conforming changes throughout the Article.

Creates a liquor wholesaler commercial permit in GS 18B-1100 (commercial permits).  Expands the persons in GS 18B-1105 to whom holders of distillery permits may sell, deliver, and ship spirits to include licensed wholesalers under GS Chapter 18B so long as the spirits are not for resale in the State. Clarifies that the above does not prohibit the distiller from selling spirits to the described nonresident sellers for resale in the State if it’s shipped from the distillery to wholesalers licensed under GS Chapter 18B. Removes requirement that spirits sold must be listed as a code item and sold at a price set by the Commission. Authorizes the holder of a distillery permit to obtain a liquor wholesaler permit to sell, deliver, and ship at wholesale the described amounts of spirits. Provides for sales reports to the Commission.

Deletes the provisions of GS 18B-1105.1 (authorization of liquor importer bottler permit), except the following. Allows the holder of a liquor importer/bottler permit to import spirits from outside the US in closed containers and to bottle, package, or label imported spirituous liquor. Adds provisions allowing those permit holders to store and sell the spirits to liquor wholesalers for resale. Adds GS 18B-1109.1 (authorization of liquor wholesaler permits) enumerating four powers granted to those permit holders, including to receive, possess, and transport spirits.  Replaces reference to “local boards” with “liquor wholesalers” in GS 18B-1110.1 (authorization of packaging and logistic permit). Expands the authorizations for a holder of a salesman permit under GS 18B-1111 to sell and transport spirits for a liquor wholesaler. Makes conforming change to GS 18B-1113.1 to account for resale provisions of GS 18B-1005. Specifies that the spirits have to come to rest at the licensed premises of a liquor wholesaler in the State before being resold to a package store. Removes definition of distillery in the statute.

Prevents the sale of mixed beverages in conjunction with a consumer tasting at package stores under GS 18B-1114.7 (authorization of spirits for special events). Removes provisions placing additional limits on tastings on ABC stores. Now limits delivery of spirits to a liquor wholesaler, for delivery to an off-premises spirituous liquor permit holder, for delivery to a mixed beverages permit holder, or transport through the State to another state (was, delivery to ABC store or for transport to another state) in GS 18B-1115. Removes references to State code in requirements for a bill of lading. Expands the requirements for transportation by boat to spirits. Removes provisions pertaining to state warehouse carriers. Expands the purchase restrictions in GS 18B-1118 to liquor wholesalers and liquor importers/bottlers. Makes conforming change to account for sale of spirits by liquor wholesalers and liquor importers/bottlers.

Section 7.

Enacts Article 14, “Spirituous Liquor Franchise Law” to GS Chapter 18B, as follows. Provides for liberal construction of the Article to promote the four listed underlying purposes and policies. Emphasizes that the effect of new Article 14 may not be waived or varied by contract or agreement. Any contract or agreement purporting to do so is void and unenforceable to the extent of that waiver or variance. Exempts a North Carolina distillery holding a valid liquor wholesaler permit from new GS 18B-1404, 18B-1405, and 18B-1407. Defines four terms, including agreement (a commercial relationship between a liquor wholesaler and a distillery. The agreement may be of a definite or indefinite duration and is not required to be in writing. Lists five scenarios that are prima facia evidence of an agreement.)

Prohibits distilleries from engaging in or attempting to perform any of the four listed acts of inducement, coercion, or discrimination in GS 18B-1402.

Requires, in GS 18B-1403, for each agreement to designate the sales territory of the wholesaler. Prohibits distilleries from entering into more than one agreement for each brand of spirituous liquor or beverage it offers in any territory. Prevents wholesalers from distributing any brand of spirituous liquor to a package store whose premises are located outside the territory designated in the wholesaler's agreement for that brand. Allows a wholesale to distribute spirits outside of its territory with Commission approval under the circumstances described. Requires redesignations of sales territories after July 1, 2028, to be reported to the Commission in 30 days. Requires wholesalers to service package stores without discrimination and to make good faith efforts to provide any brand of spirits it is authorized to distribute in the territory. Prevents in GS 18B-1404 a distillery from acting to amend, cancel, terminate, or refuse to continue to renew any agreement, or cause a wholesaler to resign from an agreement, unless good cause (defined) exists for the refusal to continue with the agreement under GS 18B-1405. Provides process for a distillery’s notice of intent to terminate an agreement. Prohibits a distillery from acting to unreasonably withhold or delay consent to any transfer of the wholesaler's business whenever the wholesaler to be substituted meets the material and reasonable qualifications and standards required of the distillery's wholesalers under GS 18B-1406. Allows distilleries to object to a transfer of a wholesaler’s business to members of the wholesaler’s family (defined). Provides for judicial remedies. in GS 18B-1407, Prohibits price fixing, discrimination, and retaliatory action by a distillery. Prohibits a distillery from interfering with the wholesaler’s change of management or personnel unless the current or potential management or personnel fails to meet reasonable qualifications and standards required by the distillery. Prohibits a distillery from requiring a waiver of any of the conditions of GS Chapter 18B. Clarifies, in GS 18B-1413, that a purchaser of a distillery and their successors are subject to all the terms and conditions of an agreement, except if any of the four instances of good cause exist. Enumerates three prohibited practices in GS 18B-1414. Specifies the Article’s intent to prohibit discrimination on the basis of the listed protected classes in GS 18B-1415. Clarifies, in GS 18B-1416, that nothing in the Article relieves a distillery or wholesaler of any obligation, duty, or prohibition imposed by any other provision of GS Chapter 18B or by GS 75-1.1 or by any other provision of State law, and the remedies provided in the Article are nonexclusive.

Section 8.

Specifies that sections 4 through 7 become effective January 1, 2028. The Commission may issue liquor wholesaler permits beginning January 1, 2028, but must limit the permits such that a liquor wholesaler may not sell spirituous liquor to any package store until July 1, 2028.

Part V.

Section 9.

Makes the following changes to Article 1, “General Provisions” of GS Chapter 18B. Replaces references to the operation or establishment of an ABC store with “the off-premises sale of spirituous liquor is lawful” throughout the Article. Replaces references to “ABC stores” with “package stores.” Makes technical and conforming changes.

Expands the types of permits that the Native American tribes may issue in their territories under GS 18B-112 to include spirits.  

Section 10.

Makes the following changes to Article 2, “”state administration” of GS Chapter 18B. Replaces references to the operation or establishment of an ABC store with “the off-premises sale of spirituous liquor is lawful” throughout the Article. Replaces references to “ABC stores” with “package stores.” Makes technical and conforming changes.

Narrows the Commission’s authority under GS 18B-203 to approve or disapprove the location of package stores (currently approves the opening and location of ABC stores). Removes provisions from the enumerated list of Commission powers pertaining to construction of warehouse and distribution of spirits. Expands its power pertaining to warning signs to include providing them to spirituous liquor permittees. Deletes provisions of GS 18B-208 (Commission bonds and funds) except the following. Retains provisions of the ABC Commission Fund and makes the following changes. Removes outdated language. Removes provisions relating to bonds and bailment surcharges, as described.

Section 11.

Makes the following changes to Article 3, “sale, possession, and consumption to GS Chapter 18B. Removes references to ABC store in GS 18B-301. Makes it unlawful for a person to consumer the listed alcoholic beverages on the premises of a package store holding an off-premises spirituous liquor permit.

Section 12.

Allows a mixed beverage permittee to purchase spirits from either an ABC store or a package store in its county in GS 18B-404 (currently, just ABC store).

Section 13.

Removes provisions in GS 18B-503 pertaining to the sale of spirits only allowing the sale of  such seized alcohol to the local ABC board serving the city or county in which the liquor was seized or the closest ABC board if none exists. Instead, adds spirits to the sale procedure set forth in the statute.

Section 14.

Applies GS 18B-808’s warning signage requirements to package stores. Makes conforming changes.

Section 15.

Makes the following changes to Article 10, “retail activity,” of GS Chapter 18B, as modified by the act.  Allows a mobile bar services permittee in GS 18B-1001 to purchase spirits from a package store and an ABC store (currently, can only purchase from an ABC store that sells spirits). Allows mixed beverages permittees to purchase spirits from a package store or an ABC store.

Section 16.

Sections 9 through 15 of this act become effective July 1, 2028, and expire June 30, 2029.

Part VI.

Effective July 1, 2029, makes the following revisions to GS Chapter 18B after the phase out of ABC stores.

Section 17.

Removes ABC system, bailment surcharge, and general manager from GS Chapter 18B’s general definitions. Replaces references to the operation or establishment of an ABC store with “the off-premises sale of spirituous liquor is lawful” in special ABC area. Modifies finance officer. Removes the Governor’s power to order the closure of all ABC stores during a state of emergency in GS 118B-110. Removes provisions of GS 18B-112 authorizing the Commission to enter into agreements with Native American tribes to sell spirits. Allows for the two named tribes to adopt ordinances to sell spirits.

Section 18.

Removes references to the local ABC board in GS 18B-121 (claims for relief created for sale to underage person) and GS 18B-124 (joint and several liability).

Section 19.

Removes the listed enumerated powers of the Commission that relate to State ABC warehouses, local ABC stores, bailment charges, and the distribution of spirits to the listed federal entities in GS 18B-203. Replaces reference to local ABC store with “off-premises spirituous liquor premises” in enumerated power relating to signage. Allows the Commission to approve the opening and location of any off-premises spirituous liquor premises (was, approval of ABC stores). Tasks the Commission with developing warning signage pertaining to alcohol consumption during pregnancy. Repeals GS 18B-204 (state warehouses) and GS 18B-205 (required accounts and reports).  Removes provisions of GS 18B-208 (Commission bonds and funds) pertaining to bailment surcharges, issuing bonds, and outdated language.

Section 20.

Removes references to “ABC store/ABC store employee” or replaces those references with “a package store,” as described in GS 18B-301 (possession of fortified wine and spirituous liquor) and GS 18B-305 (other prohibited sales).

Section 21.

Removes references to ABC stores and electronic payments in GS 18B-404 (additional provisions for purchase and transportation by mixed beverage permittees).

Section 22.

Replaces references to “local board” with “package stores.”  Removes provisions limiting sales of spirits to ABC stores in GS 18B-503 (disposition of seized alcoholic beverages). Expands the provisions pertaining to sale of forfeited alcohol by public auction to include spirits.  Removes references to the local board in provisions authorizing a judge to order delivery of forfeited property in GS 18B-504 (pertaining to forfeiture).

Section 23.  

Repeals Article 8 of GS Chapter 18B, pertaining to the operation of ABC stores.

Section 24.

Makes the following changes to Article 10 of GS Chapter 18B, as amended by the act. Modifies the mobile bar services permit under GS 18B-1001 to direct permittees to purchase spirits from package stores (was, ABC stores). Now allows a guest room cabinet permit to be issued to the described golf course  holding a mixed beverages permit or located in a county the off-premises sale of spirituous liquor has been established (was, where ABC stores have been established). Replaces references to “operation of an ABC stores” with “off-premises sale of spirituous liquor” in GS 18B-1006 (miscellaneous provisions). Replaces references to the described ABC store in GS 18B-1007 with “package store.”

Section 25.

Replaces references to the “establishment of ABC stores” with “off-premises sales of spirituous liquor” in GS 18B-1114.1 (authorization of winery special event permit) and GS 18B-1114.5 (authorization of malt beverage special event permit).

Sections 16-25 are effective July 1, 2029.

Part VII.

Section 27.

Makes the following changes to Article 2C, “alcoholic beverage license tax and excise taxes” of GS Chapter 105.

Amends wholesaler or importer in GS 105-113.68 (definitions) so it applies to wholesalers and importers of spirits and includes distilleries that sell spirits, or spirits produced for the permittee under contract, at wholesale to a package store or at retail. Includes distillery permits, liquor importer/bottler permits, and liquor wholesaler permits in the types of permits to whom the definition applies. Adds a $15 off-premises spirits fee to GS 105-11.77 (city retail licenses) and a $25 off-premises spirits fee to GS 105-11.78 (county retail licenses) and makes conforming change to each statute’s title. Adds liquor wholesalers as one of the entities to obtain a city wholesaler license under GS 105-113.79. Makes conforming changes. Increases the excise tax on spirits from 30% to 60% under GS 105-113.80 (excises taxes on malt, wine and liquor) for sales in package stores (was, ABC stores). Specifies that the price of the liquor is calculated at the wholesale’s price (was, seller’s price plus ABC add-ons). Expands the circumstances under which exemptions are allowed in GS 105-113.81 to include spirituous liquor.

Expands the net amount of the excise taxes that the Secretary must distribute under GS 105-113.82 (pertaining to distribution of alcoholic beverage taxes) to include spirituous liquor. Makes organizational changes. Requires the Secretary to now distribute 30% of the tax on spirits to the local ABC board in counties or cities in which the off-premises sale of spirituous liquor is authorized. Specifies that if more than one county or city in which the off-premises sale of spirituous liquor is authorized are served by a single local ABC board, the local ABC board will receive the portion of the amount distributed that is attributable to each city and county within the board's jurisdiction, that portion to be determined on the basis of population. Limits the use of funds distributed to ABC boards to those set forth in new GS 18B-702. Provides for additional distributions to DHHS, DPI, and the Commission in the amounts specified. Makes conforming changes, including to statute title. Amends GS 105-113.83 (payment and reporting of excise tax) so that the monthly payment is now made by a resident wholesaler or importer who first handles the liquor 27 in this State and by a distillery if the liquor is sold to the consumer at the distillery. Tasks the wholesaler or reporter with the reporting requirement (was, ABC board).

For the taxable year beginning July 1, 2028, and ending June 30, 2029, the amendments provided in this section apply only to spirituous liquor distributed by wholesalers and importers and sold in package stores. Spirituous liquor sold in ABC stores will continue to be taxed pursuant to Article 2C of GS Chapter 105 as it reads on June 30, 2028. For the taxable year beginning July 1, 2029, the provisions of this section apply to all spirituous liquor.

Effective for taxes imposed for taxable years beginning on or after July 1, 2028, except as otherwise provided.

Part VIII.

Section 28.

Applies GS 105-251.2 to liquor wholesalers, effective July 1, 2028, and expires June 30, 2029.

Effective July 1, 2029, deletes reference to ABC store and continues to apply GS 105-251.2 to liquor wholesalers.

Section 29.

Amends GS 150B-1(d) (exemptions from rulemaking) so that ABC determinations relating to package stores are exempt, effective July 1, 2028, and expires June 30, 2029. Effective July 1, 2029, deletes provisions to ABC warehouses so that the Commission’s decision pertaining to alcoholic beverages sold in package stores are only subject to the exemption under GS 150B-1(d).

Part IX.

Effective July 1, 2027, unless otherwise specified.