House lawmakers reconvened this week for just one day of committee meetings and an afternoon voting session. The most notable bill to receive action was SB 527: ABC Omnibus 2023, which passed the House Alcoholic Beverage Control committee on Tuesday. Senators who sponsored the bill joined the House committee to provide an overview of the lengthy bill. If passed, SB 527 would make several changes to North Carolina's alcohol regulation rules, including:
Section 1: Exclude ready-to-drink cocktails from the mixed beverage charge
- Current state alcohol law does not have a specific classification for premixed cocktails which has caused some confusion around their taxation. The bill would create a definition for premixed cocktails and classify premixed cocktails as mixed beverages, thus eliminating the mixed beverage charge for these products when sold to permittees.
Section 2: Allow ABC Commission members and staff and local board members to sample products
- Currently, ABC Commission members, local board members, and employees cannot sample spirituous liquor. The bill would allow these individuals to sample small quantities of liquor under certain conditions, including tastings on property owned by the Commission or local board.
Section 3: Local ABC Board Sunday Option and Flexibility on Certain Holidays
- Currently, ABC stores cannot operate on Sundays or certain holidays. The bill would allow local governments, with petition and approval, to permit Sunday operations and opening on New Year's Day, the Fourth of July, and Labor Day, if the local board chooses to do so.
Section 4: Raise cap on point-of-sale advertising materials, product displays, and coolers
- The current cap limits the value of advertising items and product displays provided to retailers. The bill would increase these limits and introduces an allowance for coolers, promoting product promotion within reasonable thresholds.
Section 5: Allow to-go and delivery sales of mixed beverages
- Due to the COVID-19 pandemic, temporary provisions allowed certain establishments to offer to-go and delivery sales of mixed beverages. The bill would make these provisions permanent, enabling various establishments to continue these sales practices.
Section 6: Allow mixed beverage permittees to purchase spirituous liquor from any designated ABC store in the same county and modify eligibility for small towns to hold alcohol elections
- The bill would allow a mixed beverage permittee to purchase spirituous liquor from any ABC board operating in the same county as the permittee. The bill would also allow a city to hold a malt beverage or unfortified wine election if it has a population of at least four hundred and would allow a mixed beverage election to be held if the city has at least two hundred registered voters.
Section 8: Increase Transparency in sales of apportioned spirituous liquors
- Apportioned products have limited availability and the bill introduces a requirement for local boards to submit distribution plans for these products to the Commission. Sales to retail customers are limited to residents of certain counties.
Section 9: Special Purchase Allowance Modification
- The bill would change the notification period for retail price reductions and limit the duration of reduced prices for local boards.
Section 10: Allow ABC stores to sell branded consumer specialty items and value-added products, gift cards, and barrels
- The bill would permit ABC stores to sell a variety of branded items, electronic gift cards, and empty barrels received from distillers, enhancing customer options and experiences.
Section 11: Allow local boards to sell products below the distiller's price
- Current law prevents local boards from selling spirits below the distiller's price. The bill would enable the Commission to authorize local boards to lower prices, allowing boards to clear shelves for better selling products.
Section 13: Allow sale of two mixed beverages at spirituous liquor special events
- Current law limits special event permittees to selling one mixed beverage per customer per day. The bill would allow the sale of two mixed beverages to each customer.
Section 14: Transition period for ABC permittee ownership; safe harbor and late renewal fees; and temporary permit changes
- The bill streamlines the transition process for permit ownership changes, establishes a safe harbor for late permit renewals, and clarifies rules governing temporary permits.
Section 15: Bar technical corrections
- The bill makes technical corrections to the definition of "bar," ensuring that it includes brewery, winery, and distillery establishments for health inspection purposes.
Section 16: Establish a malt beverage shop permit
- The bill would create a new malt beverage shop permit for businesses selling malt beverages in manufacturer's original containers for off-premises consumption, similar to wine shop permits.
Section 17: Establish two new permits and regulate outside alcohol at adult live entertainment businesses
- The bill introduces a "bring your own beverage" permit for adult live entertainment businesses, allowing patrons to bring closed containers of malt beverages and unfortified wine.
Section 20: Add two members to the ABC Commission
- The bill would expand the ABC Commission by adding two associate members appointed by legislative leaders.
Section 21: Require law enforcement to notify permit holder of violations
- The bill would require that Alcohol Law Enforcement notify the named permit holder when issuing a criminal citation to an employee.
Section 23: Wholesaler distribution centers
- The bill would allow the holder of a wine importer, malt beverage importer, or spirituous liquor importer/bottler permit to receive wine, male beverages, or spirituous liquor, respectively, into the state for storage, sale, shipment, or transshipment.
Section 24: Minimum prices for spirituous liquor
- The bill would set a minimum price for spirituous liquor based on the size of the container. Currently, there is no minimum price for spirituous liquor.
Section 25: Pricing flexibility local option
- The bill would empower local governments to regulate pricing flexibility for certain alcohol permits.
Section 26: Establish Catawba Indian Nation tribal Alcoholic Beverage Control commission
- The bill would authorize the Catawba Indian Nation to operate a tribal ABC commission, aligning their regulations with that of the Eastern Band of the Cherokee.
Section 30: Allow private club franchises to receive ABC permits immediately if franchisor has been in operation for at least 12 months
- The bill would allow franchisees of private clubs with franchisees operating for at least 12 months to receive ABC permits without the usual 12-month operation requirement.
SB 527 now heads to the House Committee on Finance.