A BILL TO BE ENTITLED
AN ACT to allow a distillery to sell malt beverages and unfortified and fortified wine; to ALLOW CERTAIN ORDERS OF ELIGIBLE DISTILLERY PRODUCTS; to revise the law governing the sale of spirituous liquor by a distillery to visitors for consumption off the premises; to allow a distillery to issue purchase‑transportation permits for spirituous liquor sold by the distillery; and to allow spirituous liquor tastings at an abc store.
The General Assembly of North Carolina enacts:

part i. allow distilleries to sell malt beverages and unfortified and fortified wine
SECTION 1.(a)  G.S. 18B‑1001 reads as rewritten:
"§ 18B‑1001.  Kinds of ABC permits; places eligible.
When the issuance of the permit is lawful in the jurisdiction in which the premises are located, the Commission may issue the following kinds of permits:
(1)	On‑Premises Malt Beverage Permit. – An on‑premises malt beverage permit authorizes (i) the retail sale of malt beverages for consumption on the premises, (ii) the retail sale of malt beverages in the manufacturer's original container for consumption off the premises, and (iii) the retail sale of malt beverages in a cleaned and sanitized container that is filled or refilled and sealed for consumption off the premises and that identifies the permittee and the date the container was filled or refilled. It also authorizes the holder of the permit to ship malt beverages in closed containers to individual purchasers inside and outside the State. The permit may be issued for any of the following:
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k.	The holder of a distillery permit authorized under G.S. 18B‑1105.
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(3)	On‑Premises Unfortified Wine Permit. – An on‑premises unfortified wine permit authorizes (i) the retail sale of unfortified wine for consumption on the premises, either alone or mixed with other beverages, (ii) the retail sale of unfortified wine in the manufacturer's original container for consumption off the premises, and (iii) the retail sale of unfortified wine dispensed from a tap connected to a pressurized container utilizing carbon dioxide or similar gas into a cleaned and sanitized container that is filled or refilled and sealed for consumption off the premises and that identifies the permittee and the date the container was filled or refilled. The permit also authorizes the permittee to transfer unfortified wine, not more than four times per calendar year, to another on‑premises unfortified wine permittee that is under common ownership or control as the transferor. Except as authorized by this subdivision, transfers of wine by on‑premises unfortified wine permittees, purchases of wine by a retail permittee from another retail permittee for the purpose of resale, and sale of wine by a retail permittee to another retail permittee for the purpose of resale are unlawful. In addition, a particular brand of wine may be transferred only if both the transferor and transferee are located within the territory designated between the winery and the wholesaler on file with the Commission. Prior to or contemporaneous with any such transfer, the transferor shall notify each wholesaler who distributes the transferred product of the transfer. The notice shall be in writing or verifiable electronic format and shall identify the transferor and transferee, the date of the transfer, quantity, and items transferred. The holder of the permit is authorized to ship unfortified wine in closed containers to individual purchasers inside and outside the State. Orders received by a winery by telephone, Internet, mail, facsimile, or other off‑premises means of communication shall be shipped pursuant to a wine shipper permit and not pursuant to this subdivision. The permit may be issued for any of the following:
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l.	The holder of a distillery permit authorized under G.S. 18B‑1105.
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(5)	On‑Premises Fortified Wine Permit. – An on‑premises fortified wine permit authorizes the retail sale of fortified wine for consumption on the premises, either alone or mixed with other beverages, and the retail sale of fortified wine in the manufacturer's original container for consumption off the premises. The permit also authorizes the permittee to transfer fortified wine, not more than four times per calendar year, to another on‑premises fortified wine permittee that is under common ownership or control as the transferor. Except as authorized by this subdivision, transfers of wine by on‑premises fortified wine permittees, purchases of wine by a retail permittee from another retail permittee for the purpose of resale, and sale of wine by a retail permittee to another retail permittee for the purpose of resale are unlawful. In addition, a particular brand of wine may be transferred only if both the transferor and transferee are located within the territory designated between the winery and the wholesaler on file with the Commission. Prior to or contemporaneous with any such transfer, the transferor shall notify each wholesaler who distributes the transferred product of the transfer. The notice shall be in writing or verifiable electronic format and shall identify the transferor and transferee, the date of the transfer, quantity, and items transferred. The holder of the permit is authorized to ship fortified wine in closed containers to individual purchasers inside and outside the State. Orders received by a winery by telephone, Internet, mail, facsimile, or other off‑premises means of communication shall be shipped pursuant to a wine shipper permit and not pursuant to this subdivision. The permit may be issued for any of the following:
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g.	The holder of a distillery permit authorized under G.S. 18B‑1105.
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(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 (i) to obtain a purchase‑transportation permit under G.S. 18B‑403 and 18B‑404, (ii) to obtain an antique spirituous liquor permit under subdivision (20) of this section, and (iii) to use for culinary purposes spirituous liquor lawfully purchased for use in mixed beverages. The permit may be issued for any of the following:
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i.	The holder of a distillery permit authorized under G.S. 18B‑1105.
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SECTION 1.(b)  G.S. 18B‑1105(a) is amended by adding a new subdivision to read:
"(6)	Sell malt beverages, unfortified wine, and fortified wine, for consumption on the premises upon obtaining the appropriate permit under G.S. 18B‑1001."

part ii. allow distilleries to sell mixed beverages
SECTION 2.  G.S. 18B‑1105(a) is amended by adding a new subdivision to read:
"(4a)	In an area where the sale of mixed beverages is authorized by law, sell mixed beverages for consumption on the premises. If a distillery elects to sell mixed beverages containing spirituous liquor other than that produced at the distillery, the distillery shall obtain a mixed beverages permit pursuant to G.S. 18B‑1001."

part iii. ALLOW CERTAIN orders of eligible distillery products
SECTION 3.(a)  G.S. 18B‑800 is amended by adding two new subsections to read:
"(c1)	Special Orders of Special Items. – Through the process established by rule of the Commission for special orders of spirituous liquor that are on the special item list approved by the Commission, ABC stores shall allow the purchase of individual bottles of spirituous liquor. ABC stores may sell in store any bottles it receives from a special item case in excess of what was purchased by the requesting customer.
(c2)	Orders of Eligible Distillery Products by Mixed Beverages Permittees. – A local board shall fulfill an order by a mixed beverages permittee for individual bottles or cases of spirituous liquor produced by an eligible distillery that are listed as a regular code item for sale in the State. If a local board cannot fulfill an order of a mixed beverages permittee for individual bottles or cases of spirituous liquor produced by an eligible distillery that are listed as a regular code item for sale in the State because the product ordered is not in the local board's stock inventory or the order cannot otherwise be fulfilled within the time period requested by the permittee, the local board shall notify the Commission within 48 hours of the request for the order and request authorization for direct shipment. The Commission shall then determine if the eligible distillery desires to directly ship the ordered product directly to the local board, and if so the Commission shall authorize the eligible distillery to ship the spirituous liquor ordered to the local board for the fulfillment of the mixed beverages permittee's order. Merchandise authorized to be shipped by direct shipment under this subsection shall be consigned by the State ABC warehouse to the distiller's account in care of the local board. The local board shall acknowledge receipt of the merchandise on the shipping documents and forward them to the State ABC warehouse for processing through the accounting system as though the merchandise were shipped from the State ABC warehouse. As used in this subsection, an "eligible distillery" is a distillery (i) that sells, to consumers at the distillery, to exporters, to local boards, and to private or public agencies or establishments of other states or nations, fewer than 10,000 proof gallons of in‑house brand spirituous liquors distilled and manufactured by it at the permit holder's distillery per year, and (ii) that is either the holder of a distillery permit pursuant to G.S. 18B‑1105 or is a business located outside the State that is licensed or permitted to manufacture spirituous liquor in the jurisdiction where the business is located and whose products are lawfully sold in this State."
SECTION 3.(b)  In order to facilitate the sale of any remainders of a special item case, increase customer access to products, and allow local ABC boards to more effectively manage inventory, the ABC Commission shall develop and implement an Internet‑based system to facilitate the sale and purchase of regular approved list items and special order list items of spirituous liquor by and among local ABC boards.
SECTION 3.(c)  The ABC Commission shall amend its rules consistent with this section.
SECTION 3.(d)  Subsection (a) of this section becomes effective August 1, 2019, and applies to special orders placed on or after that date. The remainder of this section is effective when it becomes law.

part iv. revise law authorizing distillers to sell spirituous liquor distilled by the distiller for consumption off the premises
SECTION 4.(a)  G.S. 18B‑1105(a)(4) reads as rewritten:
"(4)	Sell spirituous liquor distilled at the distillery in closed containers to visitors who tour the distillery for consumption off the premises. Sales under this subdivision are allowed only in a county where the establishment of a county or municipal ABC store has been approved pursuant to G.S. 18B‑602(g) and are subject to the time and day restrictions in G.S. 18B‑802. Spirituous liquor sold under this subdivision shall (i) be listed as a code item for sale in the State, (ii) be sold at the price set by the Commission for the code item pursuant to G.S. 18B‑804(b), and (iii) have affixed to its bottle any labeling requirements set by law."
SECTION 4.(b)  G.S. 18B‑804(b1) reads as rewritten:
"(b1)	Price of Spirituous Liquor Sold at Distillery. – When the holder of a distillery permit sells spirituous liquor distilled at the distillery pursuant to G.S. 18B‑1105, the retail price of the spirituous liquor shall be the uniform State price set by subsection (a) of this section. However, the holder of the distillery permit shall not be required to remit the components of the price set forth by subdivisions (2), (3), (5), (6), (6a), (6b), and (7) of subsection (b) of this section."
SECTION 4.(c)  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:
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A brewery qualifying under subdivision (7) or (8) of G.S. 18B‑1104(a) is not subject to the provisions of this section 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 or other retail locations allowed under G.S. 18B‑1104(a)(8). The brewery is subject to the provisions of this subsection, however, with respect to its transactions with all other wholesalers and retailers.
A distillery is not subject to the provisions of this section concerning financial interests in, and lending or giving things of value to, a wholesaler or retailer with respect to the distillery's transactions with the retail business allowed on its premises under G.S. 18B‑1105(a)(4). The distillery is subject to the provisions of this subsection, however, with respect to its transactions with all other wholesalers and retailers."
SECTION 4.(d)  This section becomes effective August 1, 2019, and applies to sales made on or after that date.

part v. allow distilleries to issue purchase‑transportation permits for spirituous liquor sold by the distillery
SECTION 5.(a)  G.S. 18B‑403 reads as rewritten:
"§ 18B‑403.  Purchase‑transportation permit.
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(b)	Issuance of Permit. – A purchase‑transportation permit may be issued by any of the following:
(1)	The local board chairman.
(2)	A member of the local board.
(3)	The general manager or supervisor of the local board.
(4)	The manager or assistant manager of an ABC store, if he or she is authorized to issue permits by the local board chairman.
(5)	For spirituous liquor sold by the distillery only, the owner, or an employee designated by the owner, of a distillery authorized to sell spirituous liquor under G.S. 18B‑1105.
(c)	Disqualifications. – A purchase‑transportation permit shall not be issued to a person who meets any of the following requirements:
(1)	Is not sufficiently identified or known to the issuer.
(2)	Is known or shown to be an alcoholic or bootlegger.
(3)	Has been convicted within the previous three years of an offense involving the sale, possession, or transportation of  nontaxpaid alcoholic beverages.
(4)	Has been convicted within the previous three years of an offense involving the sale of alcoholic beverages without a permit.
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(e)	Restrictions on Permit. – A purchase may be made only from the store or distillery named on the permit. One copy of the permit shall be kept by the issuing person, one by the purchaser, and one by the store or distillery from which the purchase is made. The purchaser shall display his copy of the permit to any law‑enforcement officer upon request. A permit for the purchase and transportation of spirituous liquor may be issued only by an authorized agent of the local board for the jurisdiction in which the purchase will be made or in accordance with subdivision (5) of subsection (b) of this section.
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SECTION 5.(c)  G.S. 18B‑901(a) reads as rewritten:
"(a)	Who Issues. – All ABC permits shall be issued by the Commission. Purchase‑transportation permits shall be issued by local boards or distilleries under G.S. 18B‑403."
SECTION 5.(d)  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 ABC store designated by a local board, or a distillery when purchasing spirituous liquor directly from the distillery in accordance with G.S. 18B‑1105, and only with a purchase‑transportation permit issued by that local board or distillery under G.S. 18B‑403 and 18B‑404."
SECTION 5.(e)  This section becomes effective August 1, 2019, and applies to purchases made on or after that date.

part vi. abc stores/allow in‑store spirituous liquor tastings
SECTION 6.(a)  G.S. 18B‑1114.7(a) reads as rewritten:
"(a)	Authorization. – The holder of a supplier representative permit, brokerage representative permit, or distillery permit issued under G.S. 18B‑1105 may obtain a spirituous liquor special event permit allowing the permittee to give free tastings of its spirituous liquors at ABC stores where the local ABC board has approved the tasting, trade shows, conventions, shopping malls, street festivals, holiday festivals, agricultural festivals, balloon races, local fund‑raisers, and other similar events approved by the Commission."
SECTION 6.(b)  G.S. 18B‑1114.7(b) reads as rewritten:
"(b)	Limitations. – Any consumer tasting is subject to the following limitations:
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(3)	Each consumer shall be limited to one tasting sample containing 0.25 ounces of any product made available for sampling at the consumer tasting, and the total amount of the tasting samples offered to and consumed by each consumer shall not exceed 1.0 ounce of spirituous liquor in any calendar day.
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(11)	For tastings conducted in an ABC store, the Commission shall adopt rules to ensure that holders of distillery permits issued under G.S. 18B‑1105 are provided by local ABC boards reasonable opportunities to conduct tastings."
SECTION 6.(c)  G.S. 18B‑301(f)(1) reads as rewritten:
"(1)	Any person to consume fortified wine, spirituous liquor, or mixed beverages or to offer such beverages to another person at any of the following places:
a.	Unless a consumer tasting authorized by G.S. 18B‑1114.7 is being conducted, on the premises of an ABC store.
b.	Upon any property used or occupied by a local board.
c.	On any public road, street, highway, or sidewalk, unless a consumer tasting authorized by G.S. 18B‑1114.7 is being conducted."

part vii. rules
SECTION 7.  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 section.

part VIII. severability clause
SECTION 8.  If any provision of this act or its application is held invalid, the invalidity does not affect other provisions or applications of this act that can be given effect without the invalid provisions or application, and to this end the provisions of this act are severable.

part Ix. effective date
SECTION 9.  Except as otherwise provided, this act becomes effective August 1, 2019.