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.

The General Assembly of North Carolina enacts:

part i. require permit for persons to bring malt beverages and unfortified wine on the premises of certain establishments

SECTION 1.(a)  G.S. 18B‑1001 is amended by adding a new subdivision to read:

(24)    Bring Your Own Beverage Permit. – A bring your own beverage permit authorizes each individual patron of an establishment listed in this subdivision, with the permission of the permittee, to bring malt beverages, unfortified wine, or malt beverages and unfortified wine onto the premises and consume the malt beverages, unfortified wine, or malt beverages and unfortified wine on the premises. The permit may be issued for any of the following:

a.         Restaurants.

b.         Eating establishments.

c.         Food businesses.

d.         Retail businesses.

e.         Private clubs.

f.          Convention centers.

g.         Community theatres.

h.         Breweries as authorized by subdivisions (7) and (8) of G.S. 18B‑1104(a).

i.          Sports and entertainment venues.

j.          Private bars.

k.         The holder of a distillery permit authorized under G.S. 18B‑1105.

SECTION 1.(b)  G.S. 18B‑300 is amended by adding a new subsection to read:

(b1)    Consumption of Malt Beverages and Unfortified Wine Brought onto Premises. – It shall be unlawful for an individual patron of an establishment listed in subdivision (24) of G.S. 18B‑1001 to bring malt beverages, unfortified wine, or malt beverages and unfortified wine onto the premises and to consume those malt beverages, unfortified wine, or malt beverages and unfortified wine on the premises unless (i) the establishment holds a permit issued under subdivision (1), (3), (10), or (24) of G.S. 18B‑1001 and (ii) the permittee provides permission to bring and consume on the premises the malt beverages, unfortified wine, or malt beverages and unfortified wine.

SECTION 1.(c)  G.S. 18B‑902(d) is amended by adding a new subdivision to read:

(52)    Bring your own beverage permit – $500.00.

SECTION 1.(d)  This section becomes effective July 1, 2023.

part ii. expand number of abc stores from which mixed beverages permittees may purchase spirituous liquor

SECTION 2.(a)  G.S. 18B‑600 reads as rewritten:

§ 18B‑600.  Places eligible to hold alcoholic beverage elections.

…

(e)        City Mixed Beverage Elections. – A city may hold a mixed beverage election if the city has at least 500 registered voters. Provided, that if a city that qualifies for an election under this subsection approves the sale of mixed beverages, a mixed beverages permittees permittee in the city may purchase liquor from the any ABC store designated by the any local ABC board that has been approved by the Commission for this purpose.to make sales to mixed beverages permittees.

(e1)      Small City Mixed Beverage Elections. – A city may also hold a mixed beverage election if the city has at least 300 registered voters and is located in a county with at least one other city that has approved the sale of mixed beverages. Provided, that if a city that qualifies for an election under this subsection approves the sale of mixed beverages, a mixed beverages permittees permittee in the smaller city may purchase liquor from the any ABC store designated by any local ABC board in any other city that has approved the sale of mixed beverages.to make sales to mixed beverages permittees.

This subsection shall not apply to Alamance, Avery, Burke, Caldwell, Carteret, Cleveland, Henderson, Onslow, Polk, Robeson, Rowan, Rutherford, and Wilkes Counties.

(e2)      Ski Resorts ABC Elections. – Notwithstanding any other provisions of this section, any city that provides governmental services to as many as 1,000 snow skiers weekly during the normal ski season from December 1 through March 15, may hold an election authorized by subdivision (a)(1), (2), or (4) of this section. If the sale of mixed beverages is approved, the sales of liquor shall be made by any ABC store designated by any local board designated by the State ABC Commission.to make sales to mixed beverages permittees.

(e3)      Small Town Mixed Beverage Elections. – A town may hold a mixed beverage election if the town (i) has at least 200 registered voters, is located in a county bordering the Neuse River and Pamlico Sound that has not approved the sale of mixed beverages, and that county has only one city that has approved the sale of mixed beverages or (ii) has at least 200 registered voters, has a total area of less than 1 square mile, operates an ABC store, and is located in a county that has at least three cities that have approved the sale of mixed beverages. Provided, that if a town that qualifies for an election under this subsection approves the sale of mixed beverages, a mixed beverages permittees permittee in the town may purchase liquor from the any ABC store designated by any local ABC board in any other city that has approved the sale of mixed beverages.to make sales to mixed beverages permittees.

(e4)      Multicounty/City ABC Elections. – If a city is located in two or more counties, the following provisions shall apply:

(1)        The city may hold a malt beverage or unfortified wine election if any county in which a portion of the city is located has already held such an election, the vote in the last election of the particular type was against the sale of that type of alcoholic beverage, and the city has a population of 500 or more.

(2)        The city may hold a mixed beverage election if the city has at least 500 registered voters and a county in which a portion of the city is located operates ABC stores, or a municipality in either county in which the city is located operates an ABC store.

(3)        If an election is held by a city under this subsection, all of the city voters may vote in the election. If the vote is for approval, alcoholic beverages may be sold on the basis of that approval and under the provisions of this Chapter. If the sale of mixed beverages is approved, the a mixed beverage permittees shall permittee may purchase their liquor from one or more any ABC stores located within the city that have been store designated by the any local boards for those purchases. board to make sales to mixed beverages permittees. The remaining gross receipts shall be distributed in accordance with existing law applicable to those ABC stores, except that after the applicable distributions have been made pursuant to G.S. 18B‑805(b), (c), and (d), the local share of the mixed beverages surcharge and the guest room cabinet surcharge required by G.S. 18B‑804(b)(8) and (9) shall be distributed one‑half to the general fund of the city where the mixed beverage permittees are located and one‑half to the local ABC boards from whose stores liquor is purchased.

(e5)      Small Resort Town ABC Elections. – A town may hold a mixed beverage election if it:

(1)        Was incorporated after 1990 and prior to the effective date of this subsection;

(2)        Has at least 100 residents;

(3)        Is located in a county that borders another state and that has two other municipalities which have ABC stores; and

(4)        At the time of the election, has corporate boundaries that border or include land in three counties.

Provided, that if a town that qualifies for an election under this subsection approves the sale of mixed beverages, a mixed beverages permittees permittee in the town may purchase liquor from the any ABC store designated by any local ABC board in any other city that has approved the sale of mixed beverages.to make sales to mixed beverages permittees.

….

SECTION 2.(b)  G.S. 18B‑1007(a) reads as rewritten:

(a)      Purchases. – A mixed beverages permittee may purchase spirituous liquor for resale as mixed beverages and a guest room cabinet permittee may purchase spirituous liquor for resale from a guest room cabinet only at an any ABC store designated by a any local board.board to make sales to mixed beverages permittees.

part iii. allow restaurants and bars holding mixed beverages permits to sell private label liquor

SECTION 3.(a)  G.S. 18B‑1001(10) reads as rewritten:

(10)    Mixed Beverages Permit. – A mixed beverages permit authorizes the retail sale of mixed beverages for consumption on the premises. The permit also authorizes a mixed beverages permittee to obtain an antique spirituous liquor permit under subdivision (20) of this section and to use for culinary purposes spirituous liquor lawfully purchased for use in mixed beverages. The permit also authorizes restaurants and bars holding a mixed beverages permit to sell in closed containers and for consumption off the premises spirituous liquor with personalized labeling in accordance with G.S. 18B‑1007(f). The permit may be issued for any of the following:

a.         Restaurants.

b.         Hotels.

c.         Private clubs.

d.         Convention centers.

e.         Community theatres.

f.          Nonprofit organizations.

g.         Political organizations.

h.         Sports and entertainment venues.

i.          Private bars.

j.          The holder of a distillery permit authorized under G.S. 18B‑1105.

SECTION 3.(b)  G.S. 18B‑1007 is amended by adding a new subsection to read:

(f)       Resale of Spirituous Liquor with Personalized Labeling. – A restaurant or bar holding a mixed beverages permit may purchase spirituous liquor with personalized labeling for resale in closed containers and for consumption off premises only pursuant to the process set forth in G.S. 18B‑800(c1) and subject to the following requirements:

(1)        The label shall be from the distillery who distilled the spirituous liquor.

(2)        A restaurant or bar shall purchase the equivalent of an entire barrel of spirituous liquor under the authority set forth in this subsection and shall not purchase more than the equivalent of three barrels of spiritous liquor per calendar year under the authority set forth in this subsection. For purposes of this subdivision, the term barrel, when used in connection with spiritous liquor, is a unit of 53 liquid gallons.

(3)        Spirituous liquor sold in a closed container under this subsection shall be sold at the price set in accordance with G.S. 18B‑804(b), and the restaurant or bar selling the spirituous liquor shall be responsible for all applicable taxes.

(4)        A restaurant or bar shall remove the mixed beverages tax stamp affixed to any spiritous liquor it sells under the authority set forth in this subsection.

(5)        Notwithstanding any provision of law to the contrary, sales under this subsection may occur between the hours of 9:00 A.M. and 9:00 P.M. on Monday through Saturday of each week, from 12:00 noon to 9:00 P.M. on Sundays, and from 9:00 A.M. to 9:00 P.M. on each of the following holidays that do not fall on a Sunday: New Year's Day, Fourth of July, Labor Day, and Thanksgiving Day.

SECTION 3.(c)  G.S. 18B‑804(a) reads as rewritten:

(a)      Uniform Price of Spirituous Liquor. – The retail price of spirituous liquor sold in ABC stores and stores, permitted distilleries distilleries, and restaurants and bars under G.S. 18B‑1007(f) shall be uniform throughout the State, unless otherwise provided by the ABC law.

SECTION 3.(d)  This section becomes effective July 1, 2023, and applies to sales made on or after that date.

part iv. eliminate physical mixed beverages tax stamp

SECTION 4.(a)  G.S. 18B‑1007, as amended by Section 2(b) and Section 3(b) of this act, reads as rewritten:

§ 18B‑1007.  Additional requirements for mixed beverages permittees.

(a)        Purchases. – A mixed beverages permittee may purchase spirituous liquor for resale as mixed beverages and a guest room cabinet permittee may purchase spirituous liquor for resale from a guest room cabinet at any ABC store designated by any local board to make sales to mixed beverages permittees.

(b)        Handling Bottles. – It shall be unlawful for a mixed beverages permittee or the permittee's agent or employee to do any of the following:

(1)        Store any other spirituous liquor with liquor possessed for resale in mixed beverages or from a guest room cabinet.

(2)        Refill any spirituous liquor container having a mixed beverages tax stamp with any other alcoholic beverage, or add to the contents of such a container any other alcoholic beverage.

(3)        Transfer from one container to another a mixed beverages tax stamp.

(4)        Possess any container of spirituous liquor not bearing a mixed beverages tax stamp, except for containers being brought onto the premises by the host of a private function under a special occasion permit.

(c)        Price List. – Each mixed beverages permittee shall have available for its customers the printed prices of the most common or popular mixed beverages offered for sale by the permittee. Violation of this subsection shall not be a criminal offense, but shall be punishable under G.S. 18B‑104.

(d)       Transfer of Mixed Beverages Inventory. – When a temporary mixed beverages permit has been issued to a new permittee for the continuation of a business at the same location, the permittee going out of business may sell existing mixed beverages inventory to the new permittee, and the Commission may request that the local ABC board restamp the inventory with the mixed beverages tax stamp assigned by the local board to the new mixed beverages permittee.permittee.

(e)        Record Keeping and Audit Requirements. – Each mixed beverages permittee and common carrier vehicle permittee shall maintain full and accurate monthly records of its finances, as follows:

(1)        Monthly records maintained by a permittee shall separately indicate all of the following:

a.         Amounts expended for the purchase of spirituous liquor from ABC stores and the quantity of spirituous liquor purchased.

b.         Amounts collected from the sale of mixed beverages and, by brand and container size, the quantity of spirituous liquor sold.

c.         The quantity of spirituous liquor, by brand and container size, that was not sold but is no longer on the premises due to stated reasons, such as breakage or theft.

d.         If the permittee is a private club, amounts received in payment of members' dues and amounts received from charges to members and guests of members.

e.         If the permittee is a guest room cabinet permittee, the amounts collected from the sale of liquor from guest room cabinets and, by container size, the quantity of liquor sold from cabinets.

f.          If the permittee is a restaurant, tour boat, or common carrier vehicle permittee, amounts collected from the sale of:

1.         Food and nonalcoholic beverages.

2.         Items other than food and beverages of all kinds.

3.         Malt beverages, unfortified wine, and fortified wine.

g.         If the permittee is a hotel, amounts collected from:

1.         Furnishing lodging.

2.         Sale of meals.

3.         Sale of malt beverages, unfortified wine, and fortified wine.

4.         All other sources.

(2)        Records of purchases of spirituous liquor and sales of alcoholic beverages shall be filed separate and apart from all other records maintained on the premises.

(3)        Records, including original invoices for the items in subdivision (1) of this subsection, shall be maintained on the premises for three years and shall be open for inspection or audit pursuant to G.S. 18B‑502.

(4)        A permittee shall submit to the Commission for its review reports summarizing the information required to be maintained by this Rule. These reports shall be submitted on an annual basis or upon request by the Commission.

(5)        As part of any review of records under this subsection, the Commission may require a permittee to provide a written attestation, under penalty of perjury, that the permittee paid the mixed beverages surcharge and the guest room cabinet surcharge required by G.S. 18B‑804(b)(8) and (b)(9) for all spirituous liquor resold in mixed beverages or in guest room cabinets.

SECTION 4.(b)  G.S. 18B‑1006.1(b) reads as rewritten:

(b)      Notwithstanding subsection (a) of this section, recyclable spirituous liquor containers may be used for display purposes as provided by the Commission. The permit holder shall notify the Commission of any such containers to be used for display purposes, and each container used for display purposes shall be stamped with a mixed beverages tax stamp. purposes. When a container is no longer used for display purposes, the permit holder shall recycle the container as provided in subsection (a) of this section.

SECTION 4.(c)  The ABC Commission shall not require a physical mixed beverages tax stamp to be affixed to any container of spirituous liquor or antique spirituous liquor sold to a mixed beverages or common carrier vehicle permittee. The Commission shall adopt rules to comply with this section.

SECTION 4.(d)  This section becomes effective December 1, 2023, and applies to offenses committed on or after that date.

part v. allow on‑premises abc permit holders to conduct certain sales and advertising

SECTION 5.(a)  Article 10 of Chapter 18B of the General Statutes is amended by adding a new section to read:

§ 18B‑1012.  Certain sales and advertising authorized.

(a)        The holder of an on‑premises malt beverage permit, on‑premises unfortified wine permit, on‑premises fortified wine permit, or mixed beverages permit may, for any period of time:

(1)        Sell more than one drink to a patron for a single price.

(2)        Establish a single price based upon the required purchase of more than one drink.

(3)        Give away or sell a drink at a price that is different from the usual or established price charged for the drink.

(b)        The holder of an on‑premises malt beverage permit, on‑premises unfortified wine permit, on‑premises fortified wine permit, or mixed beverages permit may advertise the price of malt beverages, unfortified wine, fortified wine, or mixed beverages on outside signage.

SECTION 5.(b)  This section becomes effective July 1, 2023.

part vi. direct the abc commission to implement a system allowing persons to conduct business with the commission electronically

SECTION 6.(a)  Implementation Date. – By no later than December 31, 2023, the Alcoholic Beverage Control Commission (Commission) shall implement and maintain a system that allows applicants and permittees to conduct business with the Commission electronically. The system required under this section shall, at a minimum, allow for all of the following:

(1)        The submission of applications and other forms required for permits issued by the Commission, including all applications and forms required for renewal and registration under G.S. 18B‑903.

(2)        The ability to check the status of any application submitted to the Commission for a permit issued by the Commission.

(3)        The ability to pay any fee or fine owed to the Commission.

(4)        The ability for local Alcoholic Beverage Control boards (local ABC board) and mixed beverages permittees to place orders for spirituous liquor from the State warehouse or the applicable local ABC board.

(5)        The ability to see the inventory of spiritous liquor available for purchase at the State warehouse and at the local ABC boards.

SECTION 6.(b)  Use of Third‑Party Entity. – The Commission may contract with a third‑party entity with relevant experience to implement and maintain the system required under subsection (a) of this section.

SECTION 6.(c)  Local ABC Board Requirement. – All local ABC boards shall provide the Commission with all information deemed necessary by the Commission to comply with the requirement set forth in subsection (a) of this section. Additionally, upon implementation, all local ABC boards shall utilize the system required under subsection (a) of this section when placing orders for spirituous liquor, for accepting orders of spirituous liquor from mixed beverages permittees, and for conducting other business with the Commission that can be completed through the system.

SECTION 6.(d)  Report. – By no later than October 1, 2023, the Commission shall submit a report to the Joint Legislative Oversight Committee on Justice and Public Safety and the House of Representatives Committee on Alcoholic Beverage Control on its progress in complying with the requirement set forth in subsection (a) of this section.

part vii. direct the abc commission to amend the definition of cooperative advertising established by rule

SECTION 7.(a)  Definition. – For purposes of this section and its implementation, Cooperative Advertising Definition means 14B NCAC 15B .1001 (Definitions).

SECTION 7.(b)  Cooperative Advertising Rule. – Until the effective date of the revised permanent rule that the Alcoholic Beverage Control Commission (Commission) is required to adopt pursuant to subsection (d) of this section, the Commission shall implement the Cooperative Advertising Definition Rule as provided in subsection (c) of this section.

SECTION 7.(c)  Implementation. – Cooperative advertising means any joint effort between permittees occupying a vertical relationship to each other to advertise alcoholic beverages, the retailer's business, or any promotion as defined in 14B NCAC 15C .0701(3). Cooperative advertising, however, shall not be construed to include any of the following:

(1)        Point‑of‑sale advertising furnished by an industry member.

(2)        Advertisements of off‑premises special events authorized under G.S. 18B‑1114.1, 18B‑1114.5, or 18B‑1114.7, or events approved by the Commission pursuant to 14B NCAC 15C .1302.

(3)        Print or electronic advertising of on‑premises events that are visible or audible to the permittee's patrons only when on the permittee's premises.

(4)        Unpaid internet‑based social media advertisements directed to social media users who have opted to receive content from the permittee, and which advertise any of the following:

a.         An on‑premises brand promotion.

b.         Malt beverage, wine, or spirituous liquor tastings.

c.         On behalf of a supplier, the availability of the supplier's products at two or more retail permittees.

d.         On behalf of a retail permittee, a listing or promotion that allows an individual to determine the availability of a specific product at permitted retailers in a certain geographic area.

e.         Events at on‑premises retail permittees, which advertising includes the logo or trade dress of the retail permittee, supplier, or retail permittee and supplier.

SECTION 7.(d)  Additional Rulemaking Authority. – The Commission shall adopt a rule to amend the Cooperative Advertising Definition Rule consistent with subsection (c) of this section. Notwithstanding G.S. 150B‑19(4), the rule adopted by the Commission pursuant to this section shall be substantively identical to the provisions of subsection (c) of this section. Rules adopted pursuant to this section are not subject to Part 3 of Article 2A of Chapter 150B of the General Statutes. Rules adopted pursuant to this section shall become effective as provided in G.S. 150B‑21.3(b1), as though 10 or more written objections had been received as provided in G.S. 150B‑21.3(b2).

SECTION 7.(e)  Sunset. – This section expires when permanent rules adopted as required by subsection (d) of this section become effective.

SECTION 7.(f)  Effective Date. – This section is effective when it becomes law.

part viii. direct the abc commission to implement a centralized inventory management system

SECTION 8.(a)  Implementation Date. – By no later than December 31, 2023, the Alcoholic Beverage Control Commission (Commission) shall implement and maintain a centralized inventory management system that allows, at a minimum, for (i) persons to view electronically the inventory of spirituous liquor available for purchase at the State warehouse and at the local Alcoholic Beverage Control boards (local ABC board) and (ii) the ability for local ABC boards and mixed beverages permittees to place orders electronically for spirituous liquor from the State warehouse or the applicable local ABC board.

SECTION 8.(b)  Use of Third‑Party Entity. – The Commission may contract with a third‑party entity with relevant experience to implement and maintain the system required under subsection (a) of this section.

SECTION 8.(c)  Local ABC Board Requirement. – All local ABC boards shall provide the Commission with all information deemed necessary by the Commission to comply with the requirement set forth in Section 1 of this act. Additionally, upon implementation, all local ABC boards shall utilize the system required under subsection (a) of this section when managing inventory and placing orders for spirituous liquor.

SECTION 8.(d)  Report. – By no later than October 1, 2023, the Commission shall submit a report to the Joint Legislative Oversight Committee on Justice and Public Safety and the House of Representatives Committee on Alcoholic Beverage Control on its progress in complying with the requirement set forth in subsection (a) of this section.

part ix. rules and effective date

SECTION 9.(a)  The Alcoholic Beverage Control Commission shall amend its rules consistent with the provisions of this act. The Commission may use the procedure set forth in G.S. 150B‑21.1 to amend any rules as required under this act.

SECTION 9.(b)  Except as otherwise provided, this act is effective when it becomes law.