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Orange County Alcoholic Beverage Control Board Agenda Item oy <br />Report to the County Commissioners <br />Subject: The North Carolina ABC System is Unique. <br />Meeting Date: June 16, 2009 <br />1. Introduction: <br />a. Overview: The purpose of this report is to provide the Board of Orange <br />County Commissions with information regarding the unique method that <br />North Carolina employs regarding the control and sale of spirituous <br />beverages. <br />b. History: North Carolina established astate-wide ABC system in 1937; the <br />history of ABC in NC is best depicted by Attachment "A "1. The Orange <br />County ABC Board was established in 1959. <br />c. Authority: NC GS 18B Article 2 governs "State Administration" which <br />includes creation of the NC ABC Commission and its powers and duties. <br />Additional information can be found on the NC ABC Commission <br />website; the address is: www.ncabc.com. <br />2. Description of the System: <br />a. "North Carolina ....has a different system for regulating the sale of liquor. <br />All 50 states regulate the sale and distribution of alcoholic beverages by <br />either directly controlling the distribution and sale of liquor or licensing <br />suppliers, wholesalers, and retail businesses that distribute and sell liquor. <br />North Carolina is considered a control state, but it is the only control <br />state where local governments appoint a board to operate retail stores <br />[bold type added for emphasis] a". <br />b. Local Control: This is also referred to as "Local Option" because the <br />citizens, and their elected/appointed officials, have greater control over <br />local ABC activities. Although the citizens of Orange County voted for a <br />county-wide ABC system in 1959, not all systems are county-wide and <br />there are still some dry counties3. Please see Attachment "B': <br />c. Distributions: Local ABC Boards must distribute net profits for Alcohol <br />Law Enforcement, Alcohol Education and the General Fund per below: <br />i. Alcohol Law Enforcement: Local ABC Boards can hire local <br />ABC officers or they may contract with law enforcement agencies <br />within their territorial jurisdiction4. Local ABC Boards must <br />expend at least 5% of Net Income (after certain adjustments) for <br />Alcohol Law Enforcements. <br />ii. Alcohol Rehabilitation and Education: Local ABC Boards must <br />spend (or pay to the county commissioners to spend) at least 7% of <br />Net Income (after certain adjustments) for alcohol education6. <br />' NC ABC History - NC General Assembly Program Evaluation Report (# 2008-12-01, page 3, Exhibit 1). <br />z NC General Assembly Program Evaluation Division Report (No. 2008-12-01, Summary) <br />s NC General Assembly Program Evaluation Division Report (No. 2008-12-01, Exhibit 3); <br />a Local ABC Officers -Source: NC GS 18B-501, paragaph (a) and (f). <br />s Alcohol Law Enforcement Distributions -Source: NC GS 18B-805(c) (2). <br />6 Alcohol Education Distributions -Source: NC GS 18B-805(c) (3). <br />Page 1 of 3 <br />