ABC Proposal Released

Special Report - May 7, 2010
The Joint Study Committee on Alcoholic Beverage Control gave final approval on May 5 to its proposal for smaller and weaker changes to the state’s Alcoholic Beverage Control (ABC) system than had been originally discussed. The proposal would increase the authority of the state ABC Commission to audit local boards, establish a mission, set performance standards for liquor stores, limit the compensation of board members and employees, prohibit nepotism, and require local boards to adopt an ethics policy. ABC boards would also be subject to the same budget rules that currently apply to local governments. The proposal does not include any mention of privatization or agency stores. It maintains more local control than earlier versions, which would have granted much more authority to the ABC Commission to address inefficiencies and unprofitability through methods such as forcing board mergers.

However, several amendments passed by the 28-member Committee deleted some of the major proposals to address ethics, viability, and law enforcement concerns. Rather than subject the local boards to the state government ethics law, the proposal would require them to comply with the ethics rules established by their county commissioners or town councils. Most notably, last-minute amendments deleted provisions to raise the voter threshold to hold an alcohol referendum and to require local boards to help fund the Alcohol Law Enforcement (ALE) Division out of their gross receipts. As we previously reported, several committee members, representatives of local governments, nonprofits, businesses, law enforcement, and citizens supported raising the voter threshold that must be met for a county or municipality to be able to hold an alcohol election from 500 to 5,000. That proposed change was deleted, however, the committee did maintain a provision that would allow a city to hold a mixed beverage election, which would permit businesses to sell liquor by the drink, without also requiring the approval of an ABC store. Concerns regarding the law enforcement issues related to alcohol and various levels of cooperation between ALE and local law enforcement around the state had led the committee to include a requirement for boards to give two percent of their gross receipts to fund ALE’s enforcement of ABC laws. That provision was also struck out by an amendment. Senator Dan Clodfelter (D–Mecklenburg)—the lone dissenting vote on the final proposal—complained that the committee “gutted it” when “they took out the ethical standards.”

The proposal will go to the legislature as it reconvenes May 12 for the “Short Session.” Several members and chamber leaders have indicated a desire to begin to address problems in the ABC system this year. Any such bill would need to make its way through both chambers before the end of session—probably mid to late summer—and be signed by Governor Perdue before going into effect.

Related articles:
ABC Committee Floats Proposal - April 12, 2010
Alcohol Becomes Popular Topic - March 26, 2010

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