GENERAL ASSEMBLY OF NORTH CAROLINA

SESSION 1993

H	2 

HOUSE BILL 502
Committee Substitute Favorable 4/28/93

Short Title:  ABC Changes.	(Public)
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Sponsors:
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Referred to:  
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March 24, 1993

A BILL TO BE ENTITLED
AN ACT TO MAKE TECHNICAL AMENDMENTS TO THE ALCOHOLIC BEVERAGE LAWS, TO AUTHORIZE THE SALE OF ALCOHOLIC BEVERAGES IN CERTAIN AREAS OF THE STATE, AND TO MAKE OTHER CHANGES TO THE ALCOHOLIC BEVERAGE LAWS.
The General Assembly of North Carolina enacts:
Section 1.  G.S. 18B-101(13a) reads as rewritten:
"(13a)	'Special ABC area' means an area in a city or county, either unincorporated or incorporated, with less than 500 permanent residents that:
(1)	Borders on another state;
(2)	Where ABC stores are permitted in one or more cities in the county;
(3)	Where the on-premises or off-premises sale of unfortified wines and malt beverages by qualified persons and establishments, including persons and establishments qualified under G.S. 18B-603(c) or G.S. 18B-603(d), is permitted countywide or in two or more cities in the county; and such area
(a)	Contains more than 500 contiguous acres and is made up of privately-owned land and land owned by an association or club having more than 200 members and created for municipal and recreational purposes;
(b)	Which for three or more years has levied assessments or dues and provided municipal services; and
(c)	Is incorporated as a municipality or has within such area a private association or club that has been determined or is treated by the Internal Revenue Service to be exempt from tax on member source or exempt function income."
Sec. 2.  G.S. 18B-101 is amended by adding a new subdivision to read:
"(14a)	'Tourism ABC establishment' means a restaurant or hotel that is located within 1.5 miles of the end of an entrance or exit ramp of any junction on a national scenic parkway designed to attract local, State, national, and international tourists and is located in a county in which the on-premises sale of malt beverages or unfortified wine is authorized in at least one city in the county."
Sec. 3.  G.S. 18B-201(a) reads as rewritten:
	"(a) Financial Interests Restricted. – No person shall be appointed to or employed by the Commission, a local board, or the ALE  Division, if that person or a member of that person's family related to that person by blood or marriage to the first degree has or controls, directly or indirectly, a financial interest in any commercial alcoholic beverage enterprise, including any business required to have an ABC permit. The Commission may exempt from this provision any person, other than a Commission member, when the financial interest in question is so insignificant or remote that it is unlikely to affect the person's official actions in  any way. Exemptions may be granted only to individuals, not to groups or classes of people, and each exemption shall be in writing, be available for public inspection, and contain a statement of the financial interest in question."
Sec. 4.  G.S. 18B-603(d)(4) reads as rewritten:
"(4)	The Commission may issue brown-bagging permits for private clubs and congressionally chartered veterans organizations but may no longer issue and may not renew brown-bagging permits for restaurants, hotels, and community theatres. A restaurant, hotel, or community theatre may not be issued a mixed beverage permit under subdivision (1) until it surrenders its brown-bagging permit."
Sec. 5.  G.S. 18B-603(f) reads as rewritten:
"(f)	Permits Not Dependent on Elections. – The Commission may issue the following kinds of permits without approval at an election:
(1)	Special occasion permits;
(2)	Limited special occasion permits;
(3)	Brown-bagging permits for private clubs and congressionally chartered veterans organizations;
(4)	Culinary permits, except as restricted by subdivision (d)(5);
(5)	Special one-time permits issued under G.S. 18B-1002;
(6)	All permits listed in G.S. 18B-1100;
(7)	On-premises malt beverage permits and on-premises unfortified wine permits for a tourism ABC establishment."
Sec. 6.  G.S. 18B-603(h) reads as rewritten:
"(h)	Permits Based on Existing Permits. – In any county in which the sale of malt beverage on and off premises, the sale of unfortified wine on and off premises, the sale of mixed beverages, and the operation of an ABC system has been allowed in at least six cities in the county, or in any county adjacent to that county in which an ABC system has been allowed and which borders on the Atlantic Ocean, the Commission may issue permits to sports clubs as defined in G.S. 18B-1000(8) throughout the county. The Commission may issue the following permits:
(1)	On and Off Premises Malt Beverage;
(2)	On and Off Premises Unfortified Wine;
(3)	On and Off Premises Fortified Wine; or
(4)	Mixed Beverages.
The Commission may also issue on-premises malt beverage, unfortified wine, fortified wine and mixed beverages permits to a sports club located in a county adjacent to any county that has approved the sale of mixed beverages pursuant to the last paragraph of G.S. 18B-603(d), if the county in which the sports club is located borders another state and has at least one city that has approved the sale of mixed beverages. Sports clubs holding mixed beverages permits shall purchase their spirituous liquor at the nearest ABC system store that is located in the county.
  The Commission may further issue on-premises malt beverage and on-premises unfortified wine permits to a sports club located in a county bordering on another state that is adjacent to any county in which permits were issued pursuant to this subsection prior to the effective date of this paragraph.  The sports clubs must be located in the unincorporated areas of a county, in which the sale of malt beverages and unfortified wine is not permitted, and where there are six or more municipalities in that county where the sale of malt beverages and unfortified wine is permitted."
Sec. 7.  G.S. 18B-900(c) reads as rewritten:
"(c)	Who Must Qualify; Exceptions. – For an ABC permit to be issued to and held for a business, each of the following persons associated with that business must qualify under subsection (a):
(1) 	The owner of a sole proprietorship;
(2) 	Each member of a firm, association or general partnership;
(2a)	Each general partner in a limited partnership;
(3) 	Each officer, director and owner of twenty-five percent (25%) or more of the stock of a corporation except that the requirement of subdivision (a)(1) does not apply to such an officer, director, or stockholder unless he is a manager or is otherwise responsible for the day-to-day operation of the  business;
(4) 	The manager of an establishment operated by a corporation other than an establishment with only off-premises malt beverage, off-premises unfortified wine, or off-premises fortified wine permits;
(5) 	Any manager who has been empowered as attorney-in-fact for a nonresident individual or partnership."
Sec. 8.  G.S. 18B-1000 is amended by inserting a new subdivision in the appropriate alphabetical order to read:
"(5a)	Residential private club. – A private club that is  located in a privately owned, primarily residential and recreational development."
Sec. 9.  G.S. 18B-1000(8) reads as rewritten:
"(8)	Sports club. – An establishment substantially engaged in the business of providing an 18-hole golf course, a tennis court, or both.  The sports club can either be open to the general public or to members and their guests.  To qualify as a sports club, an establishment's gross receipts for club activities shall be greater than its gross receipts for alcoholic beverages.  This provision does not prohibit a sports club from operating a restaurant.  Receipts for food shall be included in with the club activity fee."
Sec. 10.  G.S. 18B-1004(e) reads as rewritten:
"(e)	This section does not prohibit at any time the wholesale delivery and sale of unfortified wine, fortified wine, and malt beverages to retailers issued permits pursuant to G.S. 18B-1001 or G.S. 18B-1002(a)(2) or (5)."
Sec. 11.  G.S. 18B-1006(h) reads as rewritten:
"(h)	Purchase Restrictions. – A retail permittee may purchase malt beverages, unfortified wine, or fortified wine only from a wholesaler who maintains a place of business in this State and has the proper permit."
Sec. 12. G.S. 18B-1006(j) reads as rewritten:
"(j)	Recreation Districts. –Notwithstanding the provisions of Article 6, the Commission may issue permits for the sale of malt beverages, unfortified wine, fortified wine, and mixed beverages to qualified businesses in recreation 
district.  A 'recreation district' is an area that is located in a county that has not approved the issuance of permits and has at least two cities that have approved the sale of malt beverages, wine, and the operation of an ABC store and contains a facility of at least 450 acres where five or more public auto racing events are held each year.  The recreation district includes the area within a half-mile radius of the racing facility."
Sec. 13.  G.S. 18B-1006(k) reads as rewritten:
"(k)	Residential Private Club and Sports Club Permits. – The Commission may issue the permits listed in G.S. 18B-1001, without approval at an election, to a residential private club or a sports club that is located in a county that meets the requirements set in any of the following subdivisions:
(1)	Has a population of less than 45,000 by the last federal census, has at least three but not more than four cities that have approved the sale of malt beverages or unfortified wine, has only one city that has approved the on-premises sale of malt beverages, and has at least two cities that approved the operation of ABC stores before July 10, 1992.
(2)	Borders a county that has called elections pursuant to G.S. 18B-600(f), has not approved the issuance of permits, other than malt beverage permits, in unincorporated areas of the county, and has no more than three cities that approved the operation of ABC stores before July 10, 1992.
(3)	Is bordered by four counties that have not approved the issuance of permits and have at least one city that has approved the operation of an ABC store.
The mixed beverages purchase-transportation permit authorized by G.S. 18B-404(b)	shall be issued by a local board operating a store located in the county. "
Sec. 14.  G.S. 18B-1104(7) reads as rewritten:
"(7)	In areas where the sale is legal, sell the brewery's malt beverages at the brewery upon receiving a permit under G.S. 18B-1001(1).  The brewery also may obtain a malt beverages wholesalers permit to sell, deliver, and ship at wholesale only malt beverages manufactured by the brewery.  The authorization of this subdivision applies to a brewery that sells, to consumers at the brewery, to wholesalers, to retailers, and to exporters, fewer than 310,000 gallons of malt beverages produced by it per year."
Sec. 15.  G.S. 18B-1106(a) reads as rewritten:
"(a)	Authorization. – The holder of a wine importer permit may:
(1) 	Import fortified and unfortified wines from outside the United States in closed containers;
(2) 	Store those wines;
(3) 	Sell those wines to wholesalers for purposes of resale."
Sec. 16.  G.S. 18B-1108 reads as rewritten:
"The holder of a malt beverages importer permit may:
(1)	Import malt beverages from outside the United States in closed containers;
(2)	Store those malt beverages;
(3)	Sell those malt beverages to wholesalers for purposes of resale."
Sec. 17. G.S. 18B-1113 reads as rewritten:
"§ 18B-1113.  Authorization of nonresident malt beverage vendor permit.
The holder of a nonresident malt beverage vendor permit may sell, deliver and ship malt beverages in this State only to wholesalers, importers and bottlers licensed under this Chapter, as authorized by the ABC laws.  The malt beverages must come to rest at the licensed premises of a wholesaler in this State before being resold to a retailer.  A nonresident malt beverage vendor permit may be issued to a brewery, importer or bottler outside North Carolina who desires to sell, deliver and ship malt beverages into this State."
Sec. 18. G.S. 18B-1114 reads as rewritten:
"§ 18B-1114.  Authorization of nonresident wine vendor permit.
The holder of a nonresident wine vendor permit may sell, deliver and ship unfortified and fortified wine in this State only to wholesalers, importers and bottlers licensed under this Chapter, as authorized by the ABC laws.  The unfortified and fortified wine must come to rest at the licensed premises of a wholesaler in this State before being resold to a retailer.  A nonresident wine vendor permit may be issued to a winery, wholesaler, importer, or bottler outside North Carolina who desires to sell, deliver and ship unfortified and fortified wine into this State."
Sec. 19.  G.S. 18B-1116(a) reads as rewritten:
"(a)	Prohibitions. – It shall be unlawful for any manufacturer, bottler, or wholesaler of any alcoholic beverages, or for any officer, director, or affiliate thereof, either directly or indirectly to:
(1)	Require that an alcoholic beverage retailer purchase any alcoholic beverages from that person to the full or partial exclusion of any other alcoholic beverages offered for sale by other persons in this State; or
(2)	Have any direct or indirect financial interest in the business of any alcoholic beverage retailer in this State or in the premises where the business of any alcoholic beverage  retailer in this State is conducted; or
(3)	Lend or give to any alcoholic beverage retailer in this State or his employee or to the owner of the premises where the business of any alcoholic beverage retailer in this State is  conducted, any money, service, equipment, furniture, fixtures or any other thing of value.
A brewery qualifying under G.S. 18B-1104(7)	to act as a wholesaler or retailer of its own malt beverages is not subject to the provisions of this subsection concerning financial interests in, and lending or giving things of value to, a wholesaler or retailer with respect to the brewery's transactions with the retail business on its premises.  The brewery is subject to the provisions of this subsection, however, with respect to its transactions with all other wholesalers and retailers."
Sec. 20.  This act is effective upon ratification.