The answer is no. There is no prohibition, and for the most part it is okay have alcohol at city or county events, and on city and county property. But exactly what you can do depends on the kind of alcohol. The answers are simpler for beer and wine than for hard liquor.

Key differences in the rules: hard liquor vs. beer and wine; sale vs. possession

The general rule to remember is that in North Carolina it is okay to possess, serve and consume beer and wine anywhere and anytime unless there is a statute specifically prohibiting it. For spirituous liquor — the bourbon and gin and vodka that goes in mixed drinks — the rule is just the opposite. Hard liquor may be possessed, served and consumed only where the law specifically says it is allowed.

Notice that both of those statements are about possessing, serving and consuming alcohol, not about sales. No alcohol of any kind may be sold anywhere in the state unless the sale of that kind of alcohol is lawful in that city or county and the seller has the proper permit from the state Alcoholic Beverage Control (ABC) Commission.

Now, to the specifics about local government events and property.

 Serving beer and wine

There is nothing in the ABC law, Chapter 18B of the General Statutes, that prohibits the possession, service or consumption of beer and wine on city or county property. Thus, under state law a city or county may serve — but not sell — beer and wine at its own events on its own property, or may allow others who are using the property to do so. The one hitch is that under G.S. 18B-300(a) a city or county by ordinance may prohibit possession of beer and wine on city or county property. If your local government has such an ordinance, then, depending on the wording, it could keep the city or county from having alcohol at its own events.

Selling beer and wine

Selling beer or wine is a different subject. First, the sale of beer and wine would have to have been approved in a local referendum for the city or county to even think of getting into that business. Second, the facility in which the sales are to be made would have to be a kind of establishment that qualifyies for a permit under G.S. 18B-1001(1) or (3). Cities and counties generally do not operate restaurants and hotels, but they may have cafes or snack bars at local parks and those kinds of places can get permits. A city or county also may have a convention center or community theater that is eligible for a permit. And some local governments own and operate ball parks which would qualify as retail businesses for beer and wine permits.

Even without regular ABC permits to sell beer and wine there is a circumstance when the city or county can use alcohol to make money on a one-time basis. Under G.S. 18B-1002(a)(5) a one-time permit may be issued to a local government to serve beer, wine and even mixed drinks at a ticketed fundraising event. Let’s say a county wanted to raise money for a new county historical museum and decided to have an auction. The county could sell tickets to that fundraiser and with the one-time permit from the ABC Commission could serve beer, wine, and mixed drinks to the people who attended. It’s not a direct sale of alcohol, but the local government profits from the tickets.

 Mixed drinks

Except for that ticketed fundraiser, a city or county’s ability to serve mixed drinks is limited by the rule mentioned earlier, that spirituous liquor may be possessed and consumed only where specifically authorized by law. A city or county can get in the business of selling mixed drinks only if liquor by the drink has been approved for the community and the local government operates a facility that qualifies for a mixed drink permit. The kinds of places that can get mixed drink permits are more limited than for beer and wine, but convention centers and community theaters qualify. And if a city or county operates a 36-seat restaurant it is eligible for a mixed drink permit. As with other ABC permits, the mixed drink permit comes with a diagram of the approved premises, and sales are lawful only within that area. Thus, if a city operates a convention center and has beer, wine, and mixed drink permits, those permits will define the part of the building where sales are allowed and it still will be unlawful to sell elsewhere in the building.

 Renting space and special occasion permits

What about allowing others to have alcohol on city or county property? Because the possession, service and consumption of beer and wine on local government property is lawful and does not require a permit, a city or county can allow anyone using its space to serve beer and wine, or can tell them they cannot do it.

There also is a means to allow others to serve — not sell — mixed drinks on city or county property. Say a citizen wants to use a large room in a city or county building for a wedding reception, or a local nonprofit wants to hold a raffle there, or a company wants to have a board meeting with a catered dinner. With the permission of the local government property owner, that person or organization could apply for and get a limited special occasion permit from the ABC Commission under G.S. 18B-1001(9). Such a permit authorizes them to bring spirituous liquor to that location for that event and serve it to the guests or participants.

There is another variation of the special occasion permit in G.S. 18B-1001(8). Using that subsection of the statute, the city or county itself could get a special occasion permit for a qualifying facility (say a restaurant or other eating establishment, or a convention center) owned by the local government and then it could allow the person renting space at that facility for a particular event to bring in spirituous liquor to serve to guests.

Conclusion

If a city or county wants to serve beer or wine at one of its functions, or wants to allow others using government space to do so, it usually is lawful and requires no ABC permit. Selling beer and wine, on the other hand, always depends on a permit, as does both serving and selling mixed drinks. And the number and kind of local government facilities that might be eligible for such permits is limited, especially for mixed drinks.

A question asked at the end of that piece was whether federal equal protection law would preempt the state constitution. That is, would the one-person/one-vote requirement of the United States Constitution mandate that the state redraw its legislative districts as soon as possible after receiving the necessary census reports — and before the next election in 2012 — even though the state constitution might say wait until 2013?

It turns out that there is a case on this issue and it says go ahead and redistrict. The case is Desena v. Maine, 793 F. Supp.2d 456 (D. Me. 2011), from the federal district court in Maine.

In 1975 Maine rewrote its constitution to provide for redistricting to occur in 1983 and every ten years thereafter. The change was part of a package of reforms, including the establishment of a bipartisan redistricting commission, apparently intended to reduce partisan gerrymandering. But it meant there would always be an election between receipt of the census and redistricting.

Maine has two congressional districts. The 2010 census, when reported in detail in March 2011, showed them to be unequal in population. Some voters then sued to require redrawing of the congressional districts before the 2012 election rather than waiting until 2013. The federal court agreed, holding that equal protection establishes a “constitutional obligation to remedy that disparity as expeditiously as practicable” and that there was no legitimate state interest justifying a delay.

The Desena decision is merely a decision of a federal district court, and it is from Maine, so it has no binding effect on North Carolina. Still, it appears to be the only case directly addressing whether federal equal protection law requires redistricting immediately after the census regardless of a state constitutional provision providing for a more leisurely reapportionment. If the Desena reasoning were applied to North Carolina, it would not matter whether the state constitution was read to say redistricting should be done by the 2013 session, federal law would preemptively require it to be done in 2011 anyway.

The Democrats and other plaintiffs in their 2011 lawsuits have not asked a fundamental question — a question that also was not asked by the Republicans and other litigants back in 2001 or 1991 or any time before — Should the General Assembly have redistricted at all? Or put another way: Did the state constitution tell the legislature to redraw its House and Senate districts in 2011 or were legislators supposed to wait until 2013? The point is moot for this round of redistricting, but it is an intriguing, longstanding and long ignored question of constitutional interpretation that deserves to be answered clearly before the next census.

And the answer depends on what you think “return” means.         

What the constitution says

The North Carolina Constitution is specific about the timing of redistricting. Article II, Section 3 says of Senate districts: “The General Assembly, at the first regular session convening after the return of every decennial census of population taken by order of Congress, shall revise the senate districts and the apportionment of Senators among those districts, subject to the following requirements . . . .” Section 5 says the same thing about House districts.

Well, what is the first regular session of the General Assembly convening after the return of the 2010 census? We know the 2011 session convened on January 26, 2011. The issue is whether the 2010 census had been returned by that date.

How the census works

Census day was April 1, 2010. Well before then, though, census forms had been sent to all households in the country. Most households mailed in the form by April, but for those who did not census employees made home visits in May of 2010. The Census Bureau then began tabulating results. As required by 13 United States Code § 141, the Secretary of Commerce had to report to the president within nine months (i.e., by the end of 2010), the total population of each state, determining how many seats in Congress each state would have. Accordingly, just before the end of 2010 North Carolina learned that its total population had jumped from 8 million in 2000 to 9.5 million in 2010, and that the state would still have 13 members of the U.S. House of Representatives. But the December 2010 report contained only the statewide population; the county-by-county numbers and other breakdowns would not come for several more months.

Another part of the federal statute requires that population by county, city, precinct and block ― the so-called “P.L. 94-171 data”, named for the 1975 act requiring its reporting ― be reported to governors and state legislative redistricting bodies within one year of the census, that is, by April 1, 2011. In fact, the 2010 P.L. 94-171 data for North Carolina came a little early, the first week in March 2011. Those numbers, not the statewide total released in December, were the information needed to determine the current population of legislative districts and to draw new lines.

So when was the 2010 census “returned”?

What does “return” of the census mean?

North Carolina’s Constitution of 1868 was the first to refer to the “return” of the census, requiring reapportionment “at the first session after the return of every enumeration.” (Nowadays we usually say “census” instead of “enumeration.”) Not surprisingly, the journal of the 1868 constitutional convention has no discussion of what the drafters meant by “return.”

The federal census law in effect in 1868 was the census act passed in 1850. It required U. S. marshals to count all inhabitants in their districts and to “return” their enumerations to the Secretary of the Interior by November 1^st. If that is the meaning of “return,” then the 2010 census was completed sometime in the summer of 2010 when all the completed surveys and the forms from household visits were returned to the Census Bureau for tabulation.

Since the middle of the 20th century, however, the language about return of the enumeration has not appeared in the federal statutes. Instead, 13 U.S.C. § 141 directs the Secretary of Commerce to take a census of population every ten years and sets out the two dates discussed above for reporting the results, the end-of-December date for reporting the statewide numbers and the within-one-year deadline for P.L. 94-171 data.

Other states have constitutional provisions similar to North Carolina’s, requiring redistricting within a certain time “after the next decennial census of the United States shall have been taken” or “at each such session following official publication of each federal enumeration” or “after the completion of the next census” or some other operative language tied to the taking or reporting of the census. In the few instances of litigation over the meaning of those requirements the courts generally have settled on the date on which the data needed for redistricting became available — that is, the reporting of what is now known as P.L. 94-171 data.

The most prominent case is from Connecticut, Cahill v. Leopold, 141 Conn. 1, 10-11(1954). The Connecticut Supreme Court said this about the meaning of “completion of the next census” in the 31^st amendment to that state’s constitution:

In ordinary parlance, the completion of a census refers to the time when an official counting of the people has been finished. But, as used in the thirty-first amendment the phrase means something more than that. The ‘census’ mentioned in the amendment must of necessity be one showing the figures which are essential for intelligent action on the part of the General Assembly. The mere enumeration of the entire state, without more, is of no help in the enactment of redistricting legislation. The Assembly needs other data if, as provided, it is to make the senatorial districts as nearly equal in population as possible, under the limitations prescribed in the amendment. A census, then, within the thirty-first amendment, is one showing the population figures broken down into counties, towns and wards; and the census is completed only when those figures have been released to the public by an official authorized by law to make such publication or when those figures are available for the use of the General Assembly.

If the interpretation given by the Connecticut court were applied to North Carolina, the census was not returned until March 2011 and it would be the 2013 General Assembly, not the 2011 session, which would be the “first regular session convening after the return.

Cases from other states lead to the same result. The situation most similar to Connecticut is found in the Colorado Supreme Court’s decision In re Interrogatories by the General Assembly, 467 P.2d 56 (Colo. 1970). Cases from New Jersey, Arkansas and Alabama, though not as directly on point, tend to support this view as well.

When does the legislature convene?

If the 2010 census was not returned until March 2011, is there any question that the 2013 General Assembly, not the 2011 version, is the first regular session convening after that date? Both common parlance and constitutional history indicate it is 2013.

Before the 1960s the state constitution said that the reapportionment was to occur at the “first session” after the return of the census. In 1962, however, the constitutional provision on State House redistricting was amended to provide that the reapportionment was to occur at the “first regular session of the General Assembly convening after the return” of the census. In a 1968 amendment the new language referring to the “first regular session . . . convening” was used for both the House and the Senate. There is no record of the reason for the insertion of “convening.”

The constitution itself says the General Assembly “shall meet” in regular session every two years, not using the word “convene,” and the standard language in the Senate and House journals is to state that the Senate or House “assembles” at a session. The dictionary definition of “convene” is “meet together” and most people think that the legislature convenes on the first date it meets as required by the Constitution. By common understanding the 2011 General Assembly convened on January 26, 2011. If the 2010 census was not returned until March 2011 ― the date the P.L. 94-171 data needed for redistricting became available ― the 2013 regular session will be the first session “convening” after the return of the census.   

What has been the legislative practice?

The question about the timing of redistricting — and the meaning of “first regular session . . . convening after the return” of the census — has existed since the constitution was amended in the 1960s. Each decade since then the redrawing of legislative districts has taken place in the first session after the census was taken, regardless of when detailed data was reported. Thus redistricting was undertaken by the 1971, 1981, 1991 and 2001 General Assemblies, all controlled by Democrats, even though the census data needed for that purpose was not available until after those sessions had convened. No one seems to have questioned the timing. That history would make it awkward for Democrats to argue this time around that the Republican legislature could not redistrict in 2011. And neither Republicans nor anyone else ever challenged the authority for those earlier redistrictings.

Does the federal constitution make a difference?

The one-person/one-vote requirement that triggers redistricting comes from the Equal Protection Clause of the federal constitution. The U. S. Supreme Court said in Reynolds v. Sims, 377 U.S. 533 (1964), that districts should be redrawn after each census. Is there an argument, then, that the federal constitution trumps the schedule set out in the state constitution, that federal constitutional law requires the General Assembly to redistrict before the next legislative election after the census regardless of what the state constitution says about the timing?

It turns out that Reynolds v. Sims is less than precise about the timing of redistricting. The 1964 opinion said that because 41 states already provided for redistricting after each census “[d]ecennial reapportionment appears to be a rational approach to readjustment of legislative representation in order to take into account population shifts and growth. . . .” 377 U.S. at 583. The court then went on to say it did “not intend to indicate that decennial reapportionment is a constitutional requisite” but that doing so “would clearly meet the minimal requirements for maintaining a reasonably current scheme of legislative representation.” Id. at 583-84.

Reynolds v. Sims, then, does not clearly say redistricting has to occur immediately after the census, that it would not be permissible to wait until the “first regular session convening after the return” of the census. On the other hand, the longer one waits after the census the staler the numbers become and the shorter the period of time in which new districts will really be nearly equal in population. At some point that becomes an equal protection issue. [For more information on this issue, click here.]

So what about the 2011 redistricting plans?

It’s almost certainly too late for anyone to challenge the 2011 redistricting plans based on Article II, Sections 3 and 5. When it comes to lawsuits about elections the courts are quick to apply laches — that is, even if a lawsuit is permissible under the statute of limitations, the court still will not hear it if the case could have been brought sooner, the plaintiffs sat on their rights while the government went ahead in good faith, and the relief the plaintiffs now seek would be highly disruptive. A lawsuit claiming the 2011 General Assembly did not have authority to redistrict could have been brought before the legislature began drawing maps, certainly before plans were finalized, but none was. And the issue has not been raised in the current litigation which focuses on several other constitutional and statutory issues. Everyone would benefit from having the constitutional issue resolved before the convening of the 2021 General Assembly. It appears that a constitutional amendment is necessary, but someone may be able to think of a different approach.

State constitutional amendments in the early 1960s created a uniform statewide court system. All courts were placed in the General Court of Justice and those various local courts and justices of the peace were replaced with the new district court and magistrates. The jurisdiction of the courts and their rules and procedure were to be the same statewide; all judges were to be chosen by the same method; and all judges and court employees were to be salaried rather than depending on fees. A state Administrative Office of the Courts (AOC) was created and assigned responsibility for running the system. Article IV, Section 20 of the constitution specifies that the legislature is to establish a uniform statewide schedule of fees and that the “operating expenses of the judicial department . . . shall be paid from State funds.” By statute, GS 7A-302, counties are responsible for providing courtrooms and other facilities.

This division of fiscal responsibilities — the State pays all operating expenses and counties provide courthouses — was intended to establish uniformity in actuality. Judges, clerks, judicial assistants, prosecutors, etc., all would be paid by the state and would be paid the same regardless of whether they worked in Charlotte or Whiteville, and the number of positions needed in each district would be determined by the AOC applying a standardized needs assessment.

Fifty years on from the creation of the General Court of Justice that uniformity has begun to break down. Local governments have been given the green light by the legislature to supplement the funding of court operations, and the larger counties are adding positions and functions that their less prosperous neighbors cannot afford.

This change has come about through a series of statutes enacted in the last decade or so authorizing counties and cities to contract with the AOC for support of certain categories of positions in their communities. The core statutes are GS 153A-212.1 for counties and GS 160A-289.1 for cities. The wording is identical and each authorizes the local government to appropriate funds to contact with the AOC “for the provision of services for the speedy disposition of cases involving drug offenses, domestic violence, or other offenses involving threats to public safety.”

Those general enabling laws are matched by a series of statutes in Chapter 7A, the courts chapter, authorizing the AOC to enter contracts with local governments for defined activities. These include GS 7A-44.1 (judicial secretaries for superior court judges), GS 7A-64 (assistant DAs), GS 7A-102 (assistant and deputy clerks of court) and GS 7A-498.7 (assistant public defenders). In each instance the statute requires the official requesting AOC approval of the contract for local support — the senior resident superior court judge, the clerk of court, the district attorney or public defender — to show that “the overwhelming public interest warrants the use of additional resources for the speedy disposition of cases involving drug offenses, domestic violence, or other offenses involving a threat to public safety.” There does not seem to be any difficulty in making that showing.

The contracts between the AOC and local governments for the most recently completed fiscal year amounted to nearly $8 million in local support. Counties and cities were paying for assistant DAs, emergency judges, victim witness coordinators, assistant clerks, investigators, legal assistants, drug treatment court personnel and so on. The contracts were all in twelve counties, usually with the county but sometimes with a city and sometimes both. Not surprisingly, Charlotte/Mecklenburg led with over $4 million in local support. Guilford was next with $1.3 million, then Winston-Salem/Forsyth with $770,000, Durham city and county with $326,000 and Raleigh/Wake with $320,000. Others providing local funding were Union, Brunswick, Haywood, Alamance, Cumberland and Orange counties and Asheville and Buncombe County.

 A sampling of the locally funded positions show:

• An emergency judge for a “Nuisance Court” in Asheville.
• An assistant DA to prosecute gang offenses in Durham.
• An investigator for the DA’s office in Raleigh.
• A deputy clerk for an infractions court in Winston-Salem/Forsyth.
• An assistant DA and victim witness coordinator for domestic violence cases in Brunswick.
• A program manager, administrative assistant and screeners for pre-trial screening services in Guilford.
• A coordinator and case manager for a High Point drug treatment court.

The 2010 enactment of GS 7A-300.1 will take local funding a step further. Under that statute the AOC now may contract with counties and cities with a population of 300,000 or more — that means Mecklenburg, Wake, Guilford, Forsyth and Cumberland counties and the cities of Charlotte and Raleigh — to supplement the salaries of court employees other than the judges, elected clerks, elected DAs and magistrates. At some time in the near future, then, there may be assistant and deputy clerks in Raleigh, say, making more than their counterparts in Smithfield, and assistant DAs in Guilford getting higher salaries than prosecutors in next door Alamance.

Moreover, the AOC contracts are really only part of the story. Several local governments are funding court-related positions directly rather than through contracts with the AOC. A county might hire investigators for the sheriff’s department, for example, and assign them to assist the DA’s office. Or, has happened recently with the elimination of state funding for the popular drug treatment courts, a county or city may be putting counselors or secretaries on the local payroll and assigning them to assist court personnel. Guilford pre-trial screening employees and Mecklenburg drug treatment court personnel, for example, now are on the counties’ payrolls instead of being paid through contracts with the AOC. When this kind of direct local funding is considered, the Charlottle/Mecklenburg trial court administrator estimates that the total local financial support for the courts is closer to $6.3 million than the $ 4 million shown in AOC contracts. Indeed, local funding accounts for about 19 percent of overall Mecklenburg court funding based on full-time positions.

During the Depression the state took over funding of public school operations, including all teachers and administrators salaries, leaving counties responsible only for providing buildings. Over the years, though, supplemental local funding for teachers salaries and other operating expenses became an accepted way of life, and significant disparities developed in the funding of public schools from county to county. Are the courts headed in the same direction? Are we reaching a point where some kinds of judicial services — drug treatment courts, for example — will be available only in counties where local governments can afford to provide the funding, and will not be available to citizens in other parts of the state? Or has uniformity been employed too rigidly in the courts and are different funding formulas needed to address the stark differences in the volume and kinds of cases and costs of living between urban and rural areas? If so, should that additional funding come from the state or local governments?

What is the process for amending the constitution?

There are two ways to amend the state constitution, both requiring voter approval as the final step. 

The first method is through a constitutional convention, but that has not happened since 1875.  It’s an arduous process.  Two-thirds of the members of each house of the legislature have to call for a convention and then the voters have to agree in a statewide referendum.  If all that happens the convention is convened and is limited to the subjects set out in the act calling the convention.  The number of delegates is the same as the number of House members, 120, and they are elected from the same districts.  A new constitution or any amendments approved by the convention are subject to a referendum.

The second, easier and more common method of amendment is initiation by the General Assembly.  A constitutional amendment may be proposed and put on the ballot by vote of three-fifths of the membership of each house.  There is no opportunity for a gubernatorial veto, which makes sense because a three-fifths vote would override a veto anyway.

How often does the constitution get amended?

North Carolina currently is operating under the Constitution of 1971.  In the 40 years since the constitution was adopted there have been 30 amendments approved and seven rejected by the voters.  The latest amendment was in 2010 to prohibit convicted felons from becoming sheriff.  Before that the three most recent were in 2004.  One addressed the handling of civil penalties and another changed magistrates’ terms.  The third was the amendment to Article V, Section 14 for project development financing, a proposition that had been rejected twice before when identified as tax increment bonds.  In fact, one of those previous versions was the last constitutional amendment to be rejected by the voters, in 1993.  Amendments are on a winning streak, the last eight amendments having been accepted by the voters.  The most amendments on the ballot in one year was five in 1977.

What kind of amendments might be taken up this year?

Thus far 22 constitutional amendments have been introduced this session and all would be eligible for debate in September.  The rules for session also seem to allow the introduction of new constitutional amendments at that time, so more could be on the way.  Three amendments have already passed the House: House Bill 8, limiting the use of eminent domain; House Bill 61, putting term limits on legislative leaders; and House Bill 823, restructuring the State Board of Education. 

A likely headliner for September is an amendment to prohibit same-sex marriages, two versions of which have already been introduced.  The perennial effort to change the manner of selecting judges, already the subject of several proposed amendments this session, might get attention again.  There are two proposals to take redistricting out of the hands of the legislature and give it to an independent commission.  And there are various proposals for term limits, restrictions on budget growth and new taxes, open meetings, English as the official state language, and so on.

Here is a list the constitutional amendments that have been introduced to date.  The brief summaries do not do justice to the complexity of some of the proposals, and all are subject to drastic change once the action starts in September.  The list:

• House Bill 8 (Limit use of eminent domain) ― One of three amendments to have already passed the House, H8 would declare that eminent domain (condemnation) may be used only to take property for a public use and that compensation would be determined by a jury.  As originally introduced the amendment was identical to Senate Bill 37 (see below), but in its present form H8 does not specially declare that taking property for economic development is not a public use.
• House Bill 61 (Speaker, president pro tem limits) ― Another amendment that already has passed the House.  It would bar anyone from serving as speaker of the House or as president pro tem of the Senate for more than two sessions.
• House Bill 99 (Judicial vacancy terms) ― Judges appointed to vacancies on the Supreme Court or Court of Appeals would get to serve at least two full years before standing for election.
• House Bill 158 (Legislative term limits) ― Legislators would be limited to four consecutive terms in the same house.
• House Bill 188 (Budget growth restricted) ― The legislature would be prohibited from appropriating more in a fiscal year’s budget than the previous year’s expenditure plus an increase based on a specified fiscal growth formula.
• House Bill 325 (Judicial selection) ― Appellate judges appointed to fill vacancies would serve at least two years before being subject to election and then would face only a retention election. 
• House Bill 475 (English as official language) ― A declaration that English is the official language of the state. 
• House Bill 777 (No same-sex marriage) ― A declaration that the state may recognize only marriage between a man and woman. 
• House Bill 783 (Redistricting commission) ― Congressional and legislative redistricting would be taken away from the General Assembly and given to a commission whose members would be appointed by the governor, chief justice, speaker, president pro tem and the minority party’s legislative leaders.
• House Bill 784 (Three-fifths vote to levy tax) ― A three-fifths vote of the membership of each house would be required to levy a new tax or increase an existing tax.
• House Bill 800 (Secret ballot for union vote) ― A declaration that voting on union representation must be by secret ballot. 
• House Bill 823 (State Board of Education) ― One of three amendments to have passed the House, H823 would add the Superintendent of Public Instruction to the State Board of Education, reduce the governor’s appointments from eleven to eight, add four legislative appointments, and reduce terms from eight to six years.  The amendment would also specify that the superintendent would make all state-level administrative and supervisory appointments.
• House Bill 913 (State savings account) ― The legislature would have to appropriate a specified percentage of the state budget to a state savings account each year, and could spend money from the account only to offset budget shortfalls or for capital projects.
• Senate Bill 37 (Limit use of eminent domain) ― Like H8 above, S37 would declare that private property may be taken only for a public use and that compensation would be determined by a jury.  Unlike the House bill, this version of the constitutional amendment declares that public use does not include taking property for economic development. 
• Senate Bill 67 (Open meetings and public records) ― This bill would establish a constitutional right of public access to governmental meetings and records and would require a two-thirds vote of both houses of the legislature for exceptions.  Back in March, Frayda Bluestein wrote a blog post offering additional insight into this particular proposal (“Self-Executing Constitutional Provisions“).
• Senate Bill 106 (No same-sex marriage) ― Although the wording is slightly different, this amendment has the same effect as H777. 
• Senate Bill 134 (Appointment of magistrates) ― The chief district judge rather than the senior resident superior court judge would appoint magistrates.
• Senate Bill 140 (Legislative leader terms, gubernatorial ticket) ― The amendment would prohibit anyone from serving as speaker or president pro tem for more than three consecutive sessions, and provide for the governor and lieutenant governor to be elected as a team.
• Senate Bill 398 (Charitable trusts) ― Declaration that the constitutional prohibition against perpetuities does not apply to charitable trusts. 
• Senate Bill 458 (Judicial selection) ― The governor would fill appellate and superior court vacancies by appointing one of two people nominated by a commission; at the next election the person appointed would run against the other nominee; and subsequent elections would be only retention elections. 
• Senate Bill 591 (Redistricting commission) ― Like H783 this bill would turn redistricting over to a commission.  The proposed amendment specifies the various political, racial, gender and geographic balances required for the commission but leaves the details of its appointment to legislation.
• Senate Bill 641 (State Board of Education) ― Half a dozen legislative appointments would be added to the State Board of Education, the governor’s appointments reduced, and the UNC and community college presidents added. 

The seeds for change were planted when the General Assembly’s new (at the time) Program Evaluation Division in late 2008 issued its report “North Carolina’s Alcohol Beverage Control System is Outdated and Needs Modernization.” The report emphasized the problems created by the existence of 158 separate local ABC boards.  Some of those boards are too small to make money, and new ABC stores in small communities tend to steal business from neighboring ABC systems. Plus, those 158 local boards generally operate as they wish, with neither the state ABC Commission nor the local appointing authority ― the county commissioners or city council ― having much control over their conduct. 

The 2008 report got some attention but did not generate any significant legislative reaction until several local boards behaved badly in 2009, attracting news media interest to the issues. The poster children for reform were the Mecklenburg and New Hanover county boards.  In Mecklenburg the ABC board accepted a $13,000 holiday dinner from its major liquor supplier. The New Hanover board at first tried to withhold public records about the salaries and bonuses paid its employees, then revealed that its general manager received about $280,000 the previous year and had a son on the payroll for $140,000. Although publicity forced resignations at both boards, the ABC Commission and county commissioners were quick to point out their limited authority over the local ABC boards.

The result of the Mecklenburg and New Hanover stories was a special joint legislative committee appointed in early 2010, and the result of the committee’s work was the introduction and enactment of House Bill 1717 as Session Law 2010-122:

The major parts of the new legislation, most of which take effect on October 1, 2010, are:

• To stem the tide of small, financially shaky local ABC systems, the number of registered voters required for a city to hold an ABC store election is increased from 500 to 1,000. And the law eliminates the requirement that a city have an ABC store election in order to approve mixed drinks. Moreover, as discussed below, local ABC systems now will be subject to performance standards, and board members can be ousted and systems closed for failure to perform.
• Starting with next fiscal year, local ABC boards will be subject to fiscal control statutes that mirror the Local Government Budget and Fiscal Control Act for counties and cities. Audits are to be shared with the appointing authority as well as the ABC Commission, and the commission can require changes in a board’s internal control procedures. These changes will be significant for some ABC boards that have never previously even adopted budgets.
• The bonds required of board members and employees are increased tenfold.
• The compensation and expense reimbursement paid local ABC board members and employees is limited by state statute unless the appointing authority specifically approves and notifies the ABC Commission of the higher levels.
• Counties and cities can choose between having three-member or five-member ABC boards.
• New conflict of interest rules for local ABC boards are spelled out in the statute; boards are required to adopt codes of ethics and receive training much the same as county commissioners and city council members; the applicability of state laws against self-dealing and receipt of gifts and favors is reiterated; and a new statute limits nepotism in local board hiring.
• The ABC Commission is to adopt performance standards and is to conduct periodic and special audits to check on local compliance. When local boards do not meet the standards, the county or city that appointed the board will have to develop a remedial plan for compliance, and continued failure can result in state action to close or merge the local ABC system.
• The authority of the ABC Commission and the appointing authority to remove local ABC board members is expanded.
• Local ABC enforcement officers, and city police and other agencies contracted for ABC enforcement, will have to report regularly on their activities to assure that their efforts are directed at ABC enforcement rather than other activity.

This is a quick and superficial summary of the new legislation.  For more detail, go to this longer explanation.

Almost all the law on this subject is in one statute, G.S. 18B-700, which tries to set uniform rules on appointments, terms, vacancies, etc., for all ABC boards in the state.  Those rules can be modified by a local act of the General Assembly for a particular county or city, however, and G.S. 18B-700 itself says such acts passed before enactment of Chapter 18B in 1981 remain in effect.  So, before doing anything else, check whether there is a local act which sets a different size ABC board, different terms, different method of appointment, or different whatever.

The statewide statute says that a local ABC board has three members appointed by the board of county commissioners (if the ABC system was established by a county vote) or city council (if established by a city election).  Board members serve three-year, staggered terms.  They are to be appointed on the basis of their “interest in public affairs, good judgment, knowledge, ability, and good moral character.”  The appointing authority designates one member to serve as chair.

The appointing authority ― the city or county governing body ― may remove a local ABC board member for cause at any time.  The statute says nothing about the procedure for removal, but it ought to include the basics of due process:  notice of the reason for removal, a chance to respond, and a decisionmaker whose mind is not already made up.  Good advice to commissioners and council members is not to stake themselves out in the local newspaper before hearing from the ABC board member whose job is on the line.

Local ABC board members “may be compensated as determined by the appointing authority,” which seems to mean that the commissioners or city council can set the salary at any level they want, or decide that board members won’t be paid at all, and may change the pay at any time.

The ABC board hires and fires its employees, including the manager of the ABC system, and sets all their salaries.  The commissioners and city council have no role in those decisions, but a rule of the state ABC Commission, 4 N.C. Admin. Code 2R.1009, says the local ABC board is supposed to adopt a personnel policy.  ABC system employees are not county or city employees, meaning the local government is not liable for the misdeeds of an ABC system employee.  See Brewer v. Catawba County, 29 N.C. App. 417 (1976).

While a local appointing authority may remove only the members of the local ABC board, the state ABC Commission can remove both ABC board members and employees (G.S. 18B-203(a)(8)).  Again, though, it has to be for cause.  The ABC Commission’s rules address certain conflicts of interest, including a prohibition on local board members and employees from having financial interests in liquor businesses (see 4 N.C. Admin. Code 2R.1008), but don’t say much about the conduct of board members and employees.  There is a rule setting a hearing procedure for removal by the state commission, and it says that cause for rejecting local board members and employees includes “violation of the terms or spirit of the ABC laws”  (4 N.C. Admin. Code 2R.1006).

There are several tools available to a board of county commissioners or city council short of removing local ABC board members, if the commissioners or council are unhappy with the way the ABC system is being run.  First, as already mentioned, the commissioners or council can change the pay of the ABC board members.  Second, they can change which ABC board member they designate as chair.  And, third, the commissioners or council can adopt a policy describing the standard of conduct expected of ABC board members.  Because the appointing authority can remove board members for cause, it would seem useful to say upfront what kind of behavior will be considered cause.

Another method employed by commissioners and city councils to exert control over ABC boards is to appoint themselves or their own employees to the ABC board.  When ABC board terms expired in Currituck recently, the board of commissioners appointed two of its own members to the ABC board.  That does not violate the dual office-holding law, G.S. 128-1.1, which allows a person to hold one elected and one appointed office simultaneously.  In New Hanover, the resignation of the ABC board gave the commissioners the chance to appoint the county manager, attorney and finance director to the board.  One expects that those new appointees likely will not serve full terms, but their selection and service for a while gives the appointing authority more direct influence over operation of the ABC system.

The recent controversies about local ABC operations have brought attention to the December 2008 report by the legislature’s Program Evaluation Division on the state ABC system.  The report recommended greater authority of the state ABC Commission over local boards.  The report can be found here.

As happens from time to time, there also has been talk of having the state get out of the business of selling liquor, leaving it to private enterprise.  That seems unlikely to happen soon in light of the current economic situation and the $250 million in revenue the ABC system pays to state and local government each year.  About $65 million of that goes to counties and cities.