[Adapted from Owens, Land Use Law in North Carolina (4th ed., 2023)]
Direct state regulation of an activity may be so extensive as to preempt the field, thus effectively preventing local regulation of that activity.
An example is state regulation of alcohol sales. Under North Carolina law, the state Alcoholic Beverage Control (ABC) Commission has the ultimate decision-making authority on most aspects of alcohol sales. The applicable statute, G.S. 18B-901, provides that the ABC Commission issues all ABC permits and sets forth the factors to be considered by the commission in issuing permits. These include several land use factors: the number of places already holding ABC permits within the neighborhood, parking and traffic, the kinds of businesses already in the neighborhood, the proximity of schools and churches,[1] zoning, local government recommendations, and potential detriment to the neighborhood.
The statutes require that notice be given to local governments before a decision is made on ABC permit applications.[2] The ABC Commission must consider local ordinances but is not bound by them. In 1994, the General Assembly amended G.S. 18B-901(c) to provide that the ABC Commission “shall consider” local zoning and related land use factors in making ABC permit decisions. The statute had previously read that the commission “may consider” zoning. This strengthens the consideration that must be given by the state to local zoning but stops short of mandating consistency. In 2005, this section was further amended to mandate that local governments return a Zoning and Compliance Form to the ABC Commission as part of the permit-review process. This act also expanded the provision relative to potential detriment to neighborhoods to specify that the commission is to consider past revocations, suspensions, and violations of ABC laws within the previous year at the location and evidence of illegal-drug activity, fighting, disorderly conduct, and other dangerous activities (both within the facility and on the associated premises).
Once a liquor merchant has secured a state ABC permit, that merchant is for the most part exempt from zoning restrictions, such as local restrictions on the location of the facility, limits on hours of operation, entertainment within the facility, and even signs advertising alcohol products.
Two North Carolina cases have prohibited local governments from imposing zoning restrictions on alcohol sales over and above those applied by the state. In the first, Staley v. City of Winston-Salem,[3] a Winston-Salem ordinance restricting wine sales in a nonconforming restaurant in a residential zoning district was invalidated. In the second, In re Melkonian,[4] the town of Havelock’s denial of a special use permit for a tavern that had secured an ABC license was invalidated.
State ABC licensing laws also address alcohol sales in redevelopment areas. Several cities raised concerns about convenience stores in economically depressed neighborhoods that sold large quantities of beer and wine. Some patrons had a tendency to loiter and consume the alcohol on nearby properties, contributing to crime in the area and impairing neighborhood-revitalization efforts. In response, G.S. 18B-309 was adopted in 1999 to address these concerns. A food business or eating establishment located in a designated urban-redevelopment area is not allowed to have alcohol sales in excess of 50 percent of its total annual sales. A city may request that the state ABC Commission conduct an audit of any such business to determine whether this maximum percentage of alcohol sales is being exceeded, but it may do so only once per year for any individual business. If a business exceeds the maximum percentage, its ABC permits are to be revoked.
State law also limits advertising of alcoholic beverages. G.S. 18B-105(b)(7) authorizes the state ABC Commission to prohibit or regulate advertising of alcoholic beverages on signs. Commission rules limit the size and text of outdoor advertising of beer, wine, and mixed beverages by permittees.[5] Industry groups may advertise beer and wine—but not liquor—on billboards.[6]
[1] G.S. 18B-901(c)(6) specifies that the ABC Commission shall consider whether the proposed location is within fifty feet of a church or school.
[2]. In addition to the matter of notice of permit decisions, the statutes also address the location of ABC stores. G.S. 18B-801 prohibits a local ABC board from locating an ABC store within a city over the objection of the city’s governing board. The law does allow the local ABC board to seek an override of this prohibition by the state ABC board. Also see S.L. 2009-295, which allows the ABC board to limit the location of ABC stores within 1000 feet of a school or church in Guilford County.
[3]. 258 N.C. 244, 128 S.E.2d 604 (1962).
[4]. 85 N.C. App. 351, 355 S.E.2d 503, review denied, 320 N.C. 631, 360 S.E.2d 91 (1987).
[5]. 14B N.C.A.C. 15B, § .1006.
[6]. 14B N.C.A.C. 15B, §§ .1007–.1008.
