FILED SENATE
Mar 18, 2019
GENERAL ASSEMBLY OF NORTH CAROLINA
S.B. 290
SESSION 2019 PRINCIPAL CLERK
S D
SENATE BILL DRS45127-MLf-56C
Short Title: Distiller Regulatory Reform Bill. (Public)
Sponsors: Senators Gunn, Blue, and Harrington (Primary Sponsors).
Referred to:
1 A BILL TO BE ENTITLED
2 AN ACT TO ALLOW A DISTILLERY TO SELL MALT BEVERAGES AND UNFORTIFIED
3 AND FORTIFIED WINE; TO ALLOW A DISTILLERY TO SELL MIXED BEVERAGES;
4 TO ALLOW A DISTILLERY TO SELL SPIRITUOUS LIQUOR DISTILLED BY THE
5 DISTILLER DIRECTLY TO MIXED BEVERAGES PERMITTEES AND
6 OUT-OF-STATE CONSUMERS; TO REVISE THE LAW GOVERNING THE SALE OF
7 SPIRITUOUS LIQUOR BY A DISTILLERY TO VISITORS FOR CONSUMPTION OFF
8 THE PREMISES; TO ALLOW A DISTILLERY TO ISSUE
9 PURCHASE-TRANSPORTATION PERMITS FOR SPIRITUOUS LIQUOR SOLD BY
10 THE DISTILLERY; TO ALLOW SPIRITUOUS LIQUOR TASTINGS AT AN ABC
11 STORE; AND TO ALLOW BARS TO OBTAIN ON-PREMISES ABC PERMITS.
12 The General Assembly of North Carolina enacts:
13
14 PART I. ALLOW DISTILLERIES TO SELL MALT BEVERAGES AND UNFORTIFIED
15 AND FORTIFIED WINE
16 SECTION 1.(a) G.S. 18B-1001 reads as rewritten:
17 "§ 18B-1001. Kinds of ABC permits; places eligible.
18 When the issuance of the permit is lawful in the jurisdiction in which the premises are located,
19 the Commission may issue the following kinds of permits:
20 (1) On-Premises Malt Beverage Permit. – An on-premises malt beverage permit
21 authorizes (i) the retail sale of malt beverages for consumption on the
22 premises, (ii) the retail sale of malt beverages in the manufacturer's original
23 container for consumption off the premises, and (iii) the retail sale of malt
24 beverages in a cleaned and sanitized container that is filled or refilled and
25 sealed for consumption off the premises and that identifies the permittee and
26 the date the container was filled or refilled. It also authorizes the holder of the
27 permit to ship malt beverages in closed containers to individual purchasers
28 inside and outside the State. The permit may be issued for any of the
29 following:
30 …
31 k. The holder of a distillery permit authorized under G.S. 18B-1105.
32 …
33 (3) On-Premises Unfortified Wine Permit. – An on-premises unfortified wine
34 permit authorizes (i) the retail sale of unfortified wine for consumption on the
35 premises, either alone or mixed with other beverages, (ii) the retail sale of
36 unfortified wine in the manufacturer's original container for consumption off
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1 the premises, and (iii) the retail sale of unfortified wine dispensed from a tap
2 connected to a pressurized container utilizing carbon dioxide or similar gas
3 into a cleaned and sanitized container that is filled or refilled and sealed for
4 consumption off the premises and that identifies the permittee and the date the
5 container was filled or refilled. The permit also authorizes the permittee to
6 transfer unfortified wine, not more than four times per calendar year, to
7 another on-premises unfortified wine permittee that is under common
8 ownership or control as the transferor. Except as authorized by this
9 subdivision, transfers of wine by on-premises unfortified wine permittees,
10 purchases of wine by a retail permittee from another retail permittee for the
11 purpose of resale, and sale of wine by a retail permittee to another retail
12 permittee for the purpose of resale are unlawful. In addition, a particular brand
13 of wine may be transferred only if both the transferor and transferee are
14 located within the territory designated between the winery and the wholesaler
15 on file with the Commission. Prior to or contemporaneous with any such
16 transfer, the transferor shall notify each wholesaler who distributes the
17 transferred product of the transfer. The notice shall be in writing or verifiable
18 electronic format and shall identify the transferor and transferee, the date of
19 the transfer, quantity, and items transferred. The holder of the permit is
20 authorized to ship unfortified wine in closed containers to individual
21 purchasers inside and outside the State. Orders received by a winery by
22 telephone, Internet, mail, facsimile, or other off-premises means of
23 communication shall be shipped pursuant to a wine shipper permit and not
24 pursuant to this subdivision. The permit may be issued for any of the
25 following:
26 …
27 l. The holder of a distillery permit authorized under G.S. 18B-1105.
28 …
29 (5) On-Premises Fortified Wine Permit. – An on-premises fortified wine permit
30 authorizes the retail sale of fortified wine for consumption on the premises,
31 either alone or mixed with other beverages, and the retail sale of fortified wine
32 in the manufacturer's original container for consumption off the premises. The
33 permit also authorizes the permittee to transfer fortified wine, not more than
34 four times per calendar year, to another on-premises fortified wine permittee
35 that is under common ownership or control as the transferor. Except as
36 authorized by this subdivision, transfers of wine by on-premises fortified wine
37 permittees, purchases of wine by a retail permittee from another retail
38 permittee for the purpose of resale, and sale of wine by a retail permittee to
39 another retail permittee for the purpose of resale are unlawful. In addition, a
40 particular brand of wine may be transferred only if both the transferor and
41 transferee are located within the territory designated between the winery and
42 the wholesaler on file with the Commission. Prior to or contemporaneous with
43 any such transfer, the transferor shall notify each wholesaler who distributes
44 the transferred product of the transfer. The notice shall be in writing or
45 verifiable electronic format and shall identify the transferor and transferee, the
46 date of the transfer, quantity, and items transferred. The holder of the permit
47 is authorized to ship fortified wine in closed containers to individual
48 purchasers inside and outside the State. Orders received by a winery by
49 telephone, Internet, mail, facsimile, or other off-premises means of
50 communication shall be shipped pursuant to a wine shipper permit and not
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1 pursuant to this subdivision. The permit may be issued for any of the
2 following:
3 …
4 g. The holder of a distillery permit authorized under G.S. 18B-1105.
5 …."
6 SECTION 1.(b) G.S. 18B-1105(a) is amended by adding a new subdivision to read:
7 "(6) Sell malt beverages, unfortified wine, and fortified wine, for consumption on
8 the premises upon obtaining the appropriate permit under G.S. 18B-1001."
9
10 PART II. ALLOW DISTILLERIES TO SELL MIXED BEVERAGES
11 SECTION 2. G.S. 18B-1105(a) is amended by adding a new subdivision to read:
12 "(4a) In an area where the sale of mixed beverages is authorized by law, sell mixed
13 beverages for consumption on the premises. A mixed beverages permit under
14 G.S. 18B-1001 is not required, but a distillery selling mixed beverages under
15 this subdivision is subject to the same laws governing the sale of mixed
16 beverages by a mixed beverages permittee."
17
18 PART III. ALLOW DISTILLERIES TO SELL SPIRITUOUS LIQUOR DISTILLED BY
19 THE DISTILLER DIRECTLY TO MIXED BEVERAGES PERMIT HOLDERS AND
20 CONSUMERS IN OTHER STATES
21 SECTION 3.(a) G.S. 18B-1105(a) reads as rewritten:
22 "(a) The holder of a distillery permit may do any of the following:
23 …
24 (2) Sell, deliver and ship spirituous liquor in closed containers as follows:
25 a. at At wholesale to exporters and exporters within the State, local
26 boards within the State, and holders of a mixed beverages permit
27 issued under G.S. 18B-1001.
28 b. and, subject Subject to the laws of other jurisdictions, at wholesale or
29 retail to consumers, private or public agencies agencies, or
30 establishments of establishments, in other states or nations.
31 …."
32 SECTION 3.(b) G.S. 18B-1105 is amended by adding a new subsection to read:
33 "(d) Payment of Taxes. – Each month, in addition to any other applicable fees or taxes, a
34 distillery permit holder shall make the following payments for spirituous liquor sold to a mixed
35 beverages permittee under subdivision (2) of subsection (a) of this section:
36 (1) To the Department of Revenue, one-half of both the mixed beverages
37 surcharge required by G.S. 18B-804(b)(8) and the guest room cabinet
38 surcharge required by G.S. 18B-804(b)(9).
39 (2) To the Department of Health and Human Services, five percent (5%) of both
40 the mixed beverages surcharge required by G.S. 18B-804(b)(8) and the guest
41 room cabinet surcharge required by G.S. 18B-804(b)(9). The Department
42 shall spend the funds described in this subdivision in accordance with the
43 purposes set forth in G.S. 18B-805(b)(3)."
44 SECTION 3.(c) G.S. 18B-1007(a) reads as rewritten:
45 "(a) Purchases. – A mixed beverages permittee may purchase spirituous liquor for resale
46 as mixed beverages and a guest room cabinet permittee may purchase spirituous liquor for resale
47 from a guest room cabinet (i) only at an ABC store designated by a local board or a distillery
48 holding a permit issued under G.S. 18B-1105 and (ii) only with a purchase-transportation permit
49 issued by that local board or distillery under G.S. 18B-403 and 18B-404."
50 SECTION 3.(d) The Alcoholic Beverage Control Commission (Commission) shall
51 develop and implement a process for allowing a holder of a distillery permit issued under
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1 G.S. 18B-1105 to affix a mixed beverages tax stamp to spirituous liquor sold to a mixed
2 beverages permit holder in accordance with G.S. 18B-1105(a)(2), as amended by subsection (a)
3 of this section. The Commission shall revise 14B NCAC 15A .1901 as appropriate to implement
4 the requirement set forth in this subsection.
5 SECTION 3.(e) This section becomes effective July 1, 2019, and applies to sales
6 made on or after that date.
7
8 PART IV. REVISE LAW AUTHORIZING DISTILLERS TO SELL SPIRITUOUS
9 LIQUOR DISTILLED BY THE DISTILLER FOR CONSUMPTION OFF THE
10 PREMISES
11 SECTION 4.(a) G.S. 18B-1105(a)(4) reads as rewritten:
12 "(4) Sell spirituous liquor distilled at the distillery in closed containers to visitors
13 who tour the distillery for consumption off the premises. Sales under this
14 subdivision are allowed only in a county where the establishment of a county
15 or municipal ABC store has been approved pursuant to G.S. 18B-602(g) and
16 are subject to the time and day restrictions in G.S. 18B-802. Spirituous liquor
17 sold under this subdivision shall (i) be listed as a code item for sale in the
18 State, (ii) be sold at the price set by the Commission for the code item pursuant
19 to G.S. 18B-804(b), and (iii) have affixed to its bottle a sticker that bears the
20 words "North Carolina Distillery Tour Commemorative Spirit" in addition to
21 any other labeling requirements set by law. Consumers purchasing spirituous
22 liquor under this subdivision are limited to purchasing, and the selling
23 distillery is limited to selling to each consumer, no more than five bottles of
24 spirituous liquor per 12 month period. The distillery shall use a commonly
25 adopted standard point of sale system to maintain searchable electronic
26 records captured at the point of sale, to include the purchaser's name, drivers
27 license number, and date of birth for at least 12 months from the date of
28 purchase. The Commission shall adopt rules regulating the retail sale of
29 spirituous liquor under this subdivision."
30 SECTION 4.(b) G.S. 18B-804(b1) reads as rewritten:
31 "(b1) Price of Spirituous Liquor Sold at Distillery. – When the holder of a distillery permit
32 sells spirituous liquor distilled at the distillery pursuant to G.S. 18B-1105(a)(4), G.S. 18B-1105,
33 the retail price of the spirituous liquor shall be the uniform State price set by subsection (a) of
34 this section. However, the holder of the distillery permit shall not be required to remit the
35 components of the price set forth by subdivisions (2), (3), (5), (6), (6a), (6b), and (7) of subsection
36 (b) of this section."
37 SECTION 4.(c) G.S. 18B-1116(a) reads as rewritten:
38 "(a) Prohibitions. – It shall be unlawful for any manufacturer, bottler, or wholesaler of any
39 alcoholic beverages, or for any officer, director, or affiliate thereof, either directly or indirectly
40 to:
41 …
42 A brewery qualifying under subdivision (7) or (8) of G.S. 18B-1104(a) is not subject to the
43 provisions of this section concerning financial interests in, and lending or giving things of value
44 to, a wholesaler or retailer with respect to the brewery's transactions with the retail business on
45 its premises or other retail locations allowed under G.S. 18B-1104(a)(8). The brewery is subject
46 to the provisions of this subsection, however, with respect to its transactions with all other
47 wholesalers and retailers.
48 A distillery is not subject to the provisions of this section concerning financial interests in,
49 and lending or giving things of value to, a wholesaler or retailer with respect to the distillery's
50 transactions with the retail business allowed on its premises under G.S. 18B-1105(a)(4). The
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1 distillery is subject to the provisions of this subsection, however, with respect to its transactions
2 with all other wholesalers and retailers."
3 SECTION 4.(d) This section becomes effective July 1, 2019, and applies to sales
4 made on or after that date.
5
6 PART V. ALLOW DISTILLERIES TO ISSUE PURCHASE-TRANSPORTATION
7 PERMITS FOR SPIRITUOUS LIQUOR SOLD BY THE DISTILLERY
8 SECTION 5.(a) G.S. 18B-403 reads as rewritten:
9 "§ 18B-403. Purchase-transportation permit.
10 …
11 (b) Issuance of Permit. – A purchase-transportation permit may be issued by:by any of
12 the following:
13 (1) The local board chairman;chairman.
14 (2) A member of the local board;board.
15 (3) The general manager or supervisor of the local board; orboard.
16 (4) The manager or assistant manager of an ABC store, if he or she is authorized
17 to issue permits by the local board chairman.
18 (5) For spirituous liquor sold by the distillery only, the owner, or an employee
19 designated by the owner, of a distillery authorized to sell spirituous liquor
20 under G.S. 18B-1105.
21 (c) Disqualifications. – A purchase-transportation permit shall not be issued to a person
22 who:who meets any of the following requirements:
23 (1) Is not sufficiently identified or known to the issuer;issuer.
24 (2) Is known or shown t