Powdered alcohol bill gives ABC Commission more authority over permits

Posted April 15, 2015

Screen grab from video playing on  Palcohol website.

North Carolina's Alcoholic Beverage Control Commission would have more authority over when to withdraw a business' license to sell alcohol under a measure the House ABC Committee approved Wednesday morning.

The same measure would ban powdered alcohol, a currently unregulated substance that could go on sale sometime this summer.

"Legally, those products could be sold in this state right now and the ABC Commission couldn't regulate it," Robert Hamilton, the ABC Commission's chief administrator, told reporters after the meeting.

The subject of powdered alcohol has recently come front and center because federal regulators have approved the labels of an Arizona company that wants to sell it under the brand name Palcohol.

During the meeting, nobody spoke against implementing the powdered alcohol ban. By and large, committee members echoed concerns aired by ABC Commission Chairman Jim Gardner about potential abuses for powdered alcohol, particularly by young people.

"I've only heard one person complain about this bill, and that is a gentleman who sent me the nastiest email telling me I need to oppose this bill because he sells this product," Rep. Charles Jeter, R-Mecklenburg, said. "Whenever I can vote for this bill, you tell me when."

The measure cleared the committee on a voice vote and will next be vetted by the House Health Committee before getting a floor vote.

Regaining power on permit cases

While House Bill 290 was originally drafted exclusively as a powdered alcohol ban, committee members added a new section dealing with ABC permit revocation cases.

Until 2011, state agencies had the final say over "contested cases," disputes between members of the public or businesses and a state agency. For something like an environmental permit violation, for example, an administrative law judge could rule one way, but the Department of Environment and Natural Resources had an opportunity to essentially overrule that decision.

A change to state law made all rulings by judges working for the Office of Administrative Hearings final, cutting off the "final agency decision" step. Although it was meant as a regulatory reform measure to make approvals easier for builders and new companies, it caught up virtually all state agencies, including the ABC Commission.

Julian Mann, the Office of Administrative Hearings' director, said his agency was taken by surprise by the change.

Roughly 400 ABC Commission cases go to the OAH every year, although the vast majority are dismissed or settled, he said.

Hamilton said that the commission wanted its authority back in order to be more consistent with the administration of the state's alcohol laws. Some of the decisions from OAH, he said, were either harsher or more lenient than ABC Commission policy would dictate, and some cases asked the ABC Commission to carry out conflicting punishments.

"We're the experts on whether people should have an alcohol permit or not," Hamilton said.

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  • Roy Hinkley Apr 15, 2015
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    I do not understand why they don't simply modify the existing law to allow the ABC commission to also regulate the sale of powdered alcohol (like they already do with liquid alcohol). Banning it makes less sense than expanding the ABCs scope of control.