Recommendations resulting from a legislative study commission have led to the creation of Senate Bill 1112. In an effort to “modernize” the ABC system, 14 pages of new rules and regulations aim at ensuring ethical practices at liquor stores.

This morning, study committee chair Don Davis and staff presented SB 1112 to the Senate Judiciary II Committee. Committee members asked the following questions about the bill:

  • Are pension benefits addressed? No, they are not included in the bill.
  • Will this bill change the amount of money going to local government and appointing authority? Yes, salaries will be adjusted and controlled, including private sector salaries.
  • SB 1112 changes how ABC elections start new stores in small communities. The study committee determined that it would be based on voting population. Senator Jacumin proposed that the elections be based on foresight of profitability, a more sensible approach.
  • Senator East questioned who is responsible for keeping records of loss and profits. Currently, local ABC boards have that responsibility. Appointing authority will get reports, amend budgets, hold public hearings, and the ABC would audit.
  • Will there be a salary cap? Yes, it will be capped at no more than local clerk of court’s salary, with no minimum.
  • Senator Jacumin questioned why anyone would go into business with no idea if they will fail or succeed. He then requested a list of all stores.
  • Will ABC stores pay property tax? ABC stores, just like any other government entity, would pay no property tax.
  • Will the State own its liquor? No, the State owns no liquor. They maintain the warehouse and provide bonded storage areas for the distilleries to store until the local boards buy the liquor.
  • Senator Davis spoke in support of the bill, citing an editorial in the Greensboro News and Record on June 11 that calls for a tune up rather than an overhaul. He said that the bill is about putting more sunshine in the ABC system. However, it seems more about protecting the revenue stream to local governments than anything else.

The subsequent remarks from the public showed mostly approval, yet revealed concerns about portions of the bill. For example:

  • Reverend Mark Creech with the Christian Action League spoke in opposition to the section that allows for new liquor stores based on population thresholds. 
  • In defense, Jon Kerr of the ABC boards said that he’s worked with League of Municipalities and County Commission Association through the process.
  • The League of Municipalities representative said that the process has been ?terrific.? They didn?t receive everything requested but overall, they support the bill.
  • The City of Wilmington representative claimed to be interested in the process, with the main concern being public safety.
  • Kevin Leonard with County Commission Association was in support the bill.
  • John Williams, chair of ABC Commission, says Governor Perdue has weighed in on accountability and transparency. This bill creates oversight between state board and local boards.
  •  Steve Metcalf of American Wine distillers and Dean Plunkett of Wine Wholesalers stated their reservations about Section 23 of the bill, concerning wine distribution. In order to ensure North Carolina distributors do not lose rights to international products as wineries are sold or merged, they want the wine distribution loophole to be fixed.

There was no vote on the bill today. Instead, discussion will continue next week in Senate Judiciary Committee II. There is a similar bill moving through the House, as well.

Many problems with the ABC system could be avoided if the sale of liquor was privatized in North Carolina.