NORTH CAROLINA GENERAL ASSEMBLY
1979 SESSION

CHAPTER 699
HOUSE BILL 1155

AN ACT TO ALLOW THE COMMERCIAL DISTILLATION OF SPIRITUOUS LIQUORS IN NORTH CAROLINA.

The General Assembly of North Carolina enacts:

Section 1.  G.S. 18A-5(b) is amended by deleting the period after the word "control" and substituting in lieu thereof the following phrase:
", except as expressly authorized in this Chapter."
Sec. 2.  G.S. 18A-9 is repealed.
Sec. 3.  G.S. 18A-29(a) is amended by adding a new subsection thereto to read:
"(d)	Notwithstanding any other provision in this Chapter, any distillery operating under the laws of this State may, without a transportation permit, transport into or out of that distillery the maximum amount of intoxicating liquor allowed under federal law, as long as the transportation is related to the distilling process."
Sec. 4.  A new Article is added to Chapter 18A of the General Statutes to read:
"Article 8.
"Distilleries.
"§ 18A-59.  Distillation of spirituous liquors. — Notwithstanding any other provision of law, it shall be lawful for any person, firm, or corporation to engage in the business of distilling spirituous liquors in this State, pursuant to the provisions of this Article. Distilling includes blending, mixing, and purchasing for processing spirituous liquors of other manufacturers and distillers.
"§ 18A-60.  Permit and license required. — Spirituous liquors may be manufactured, bottled or sold in this State only after the person desiring to engage in that activity has acquired an appropriate permit from the State Board of Alcoholic Control as provided in this Article, and has secured the license or licenses required by Article 2C, Subchapter I, Chapter 105 of the General Statutes.
All permits shall be for a period of 10 years unless sooner revoked or suspended and shall expire on April 30 of each tenth year.
The State Board of Alcoholic Control shall arrange to computerize the files for permits as soon as feasible and once computerized shall retain a permanent number for each permit.
No permit issued under this section shall be transferable. When the ownership of any business to which a permit has been issued changes by merger, consolidation or otherwise, the permit shall automatically be terminated and returned immediately to the State Board of Alcoholic Control.
A change in ownership does not occur simply from the exchange or sale of stock unless a stockholder acquires more than twenty-five percent (25%) of the stock and that acquiring stockholder has not previously held twenty-five percent (25%) of the stock of the corporation.
"§ 18A-61.  Power of State Board of Alcoholic Control to issue permits. — The State Board of Alcoholic Control shall be referred to herein as 'the Board'. The Board shall have the sole power, in its discretion, to determine the fitness and qualifications of an applicant for a permit to sell, manufacture, and bottle spirituous liquors. With the assistance of the Alcohol Law Enforcement Division of the Department of Crime Control and Public Safety, the Board shall inquire into the character of the applicant and the location, general appearance, and type of place or business of the applicant. The Board, in addition to all powers now conferred upon it by law, is vested with additional powers to regulate the distillation and distribution of spirituous liquors as follows: A distillation permit authorizes the permittee to
(1)	manufacture, purchase, import, possess, and transport ingredients and equipment used in the distillation of spirituous liquors;
(2)	distill, sell, deliver, or ship spirituous liquors in accordance with the regulations of the Board in bottles or other permitted closed containers to persons authorized under the provisions of this Chapter;
(3)	sell spirituous liquors at wholesale to county, township, and municipal boards of alcoholic control within this State, and, subject to the laws of other jurisdictions, sell spirituous liquors at wholesale or retail to private or governmental agencies or establishments of other states and nations. The State Board of Alcoholic Control may issue any regulations it deems necessary concerning wholesale sales within this State, including prohibitions against exclusive outlet sales and other practices not in the public interest.
"§ 18A-62.  Application for permit; contents and fees. — (a) All resident distillers shall file a written application for a permit with the State Board of Alcoholic Control, and in the application shall state under oath therein:
(1)	the name and residence of the applicant and the length of his residence within the State of North Carolina;
(2)	the particular place for which the license is desired, designating the same by street and number if practicable; if not, by other description which definitely locates it;
(3)	the name of the owner of the premises upon which the business licensed is to be carried on, and, if the owner is not the applicant, that the applicant is the actual and bona fide lessee of the premises;
(4)	that the place or building in which it is proposed to do business conforms to all laws of health and fire regulations applicable thereto, and is a safe and proper place or building;
(5)	that the applicant intends to carry on the business authorized by the permit for himself or under his immediate supervision and direction;
(6)	that the applicant has been a bona fide resident of this State for a period of at least one year immediately preceding the date of filing his application and that he is not less than 21 years of age;
(7)	the place of birth of applicant and, if a naturalized citizen, when and where naturalized;
(8)	that the applicant has not been convicted of, or entered a plea of guilty or nolo contendere to, a felony or other crime involving moral turpitude within the past three years; that the applicant's citizenship has been restored by the court if he has been so deprived of it; that he has not, within the two years next preceding the filing of the application, been adjudged guilty of violating the prohibition or liquor laws, either State or federal. It shall be within the discretion of the Board, after making investigation, to determine whether any person who has ever been convicted of, or entered a plea of guilty or nolo contendere to, a felony shall be deemed a suitable person to receive and hold a distilling permit;
(9)	that the applicant has not during the three years next preceding the date of the application had any permit issuable hereunder, or any license issued to him pursuant to the laws of this State or any other state to make or sell intoxicating liquors of any kind, revoked;
(10)	if the applicant is a firm, association, or partnership, the application shall state the matters required in subdivisions (6), (7), (8), and (9), with respect to each of the members thereof, and each of those members must meet all the requirements in those subdivisions;
(11)	if the applicant is a corporation, organized or authorized to do business in this State, the application shall state the matters required in subdivisions (7), (8) and (9), with respect to each of the officers and directors thereof, and any stockholder owning more then twenty-five percent (25%) of the stock of that corporation, and the person or persons who shall conduct and manage the licensed premises for the corporation. Each of those persons must meet all the requirements in those subdivisions; provided that the requirements as to residence shall not apply to the officers, directors, and stockholders of the corporation; however, the Board may apply that requirement to any officer, director or stockholder, agent, or employee who is also the manager and in charge of the premises for which the permit is applied.
(b)	The application must be verified by the affidavit of the applicant before a notary public or other person duly authorized by law to administer oaths. The foregoing provisions and requirements are prerequisites for the issuance of a permit; if any applicant fails to qualify under the same, or if any false statement is knowingly made in any application, the permit shall be refused. If a permit is granted on any application containing a false statement knowingly made, it shall be revoked and the applicant upon conviction shall be guilty of a misdemeanor. In addition to the information furnished in any application, the Director of the Alcohol Law Enforcement Division of the Department of Crime Control and Public Safety shall make any additional and independent investigation of each applicant and of the place to be occupied, as deemed necessary or advisable.
(c)	Every person applying to the State Board of Alcoholic Control for a permit to distill spirituous liquors under the provisions of this section shall pay an application fee at the time of application in the amount of one hundred dollars ($100.00), to be paid by check or money order made payable to the State Board of Alcoholic Control. These fees shall be deposited by the Board with the State Treasurer.
(d)	The application of any person who fails to comply with the provisions of this section shall be refused, and if the permit has been granted, it shall be cancelled.
"§ 18A-63.  Revocation or suspension of permit. — (a) If any permittee violates any of the provisions of this Chapter, or Chapter 105, or any rule or regulation promulgated under authority of either Chapter, or fails to superintend in person or through a manager the business for which the permit was issued, or allows the premises with respect to which the permit was issued to be used for any unlawful, disorderly, or immoral purpose, or knowingly employs in the sale or distribution or spirituous liquors any person who has been convicted of, or entered a plea of guilty or nolo contendere to a felony involving moral turpitude (federal or State) within the past three years, or adjudged guilty of violating the liquor or drug laws (federal or State) within two years, or leaves the licensed premises in charge of any person who has had a license or permit to make or sell intoxicating liquors of any kind revoked within the past two years, or otherwise fails to carry out in good faith the purposes of this Chapter, his permit may be revoked or suspended by the State Board of Alcoholic Control.
(b)	The Board may refuse to issue a new permit or may suspend or revoke any permit issued by it if, in the discretion of the Board, the applicant or permittee is not a suitable person to hold the permit or the place occupied by the applicant or permittee is not a suitable place. In making its determination, the Board may consider the number already holding permits within the neighborhood, the recommendations of the governing body of the city or county in which the premises is located, reputation and criminal record of the applicant, and any other factors directly related to the suitability of the person and the premises.
(c)	Whenever any license or permit which has been issued by the Secretary of Revenue or by the State Board of Alcoholic Control has been revoked, the State Board may refuse to issue a permit for the premises to any person for any period not to exceed six months after the revocation of that permit or license.
(d)	The State A.B.C. Board may suspend or revoke any permit issued by it if the Board finds that the permittee has violated any provision of this Chapter or Chapter 105, or any rule or regulation of the State A.B.C. Board or the State Department of Revenue.
(e)	Hearings before revocations or suspensions shall be conducted in accord with G.S. 18A-44."
Sec. 5.  G.S. 105-113.72 is amended by:
(1)	changing the catchline of that section fo read:
"Manufacturers and bottlers of fortified wines and spirituous liquors."
(2)	designating the present language as subsection (a); and
(3)	adding a new subsection thereto to read:
"(b)	Any person, firm, or corporation authorized to do business in North Carolina may, subject to the laws of this State and the rules and regulations of the State Board of Alcoholic Control, engage in the business of manufacturing, producing, and bottling of spirituous liquors, and is authorized and permitted to manufacture, purchase, import, and transport the ingredients and equipment used in the distillation process; provided that G.S. 18A-29 shall be applicable to the transportation of alcohol used in the process.
The same annual license tax imposed upon manufacturers of unfortified wines in G.S. 105-113.70 shall be paid by the manufacturer of spirituous liquors."
Sec. 6.  Nothing in this act shall prohibit the levy of additional license, permit, or other taxes on distilleries operating under this act.
Sec. 7.  This act shall become effective on January 1, 1980.
In the General Assembly read three times and ratified, this the 30th day of May, 1979.