SUMMER LEGISLATIVE UPDATE

North Carolina’s legislative long session kicked off in January, and unlike years past, policymakers got right to work on their priorities for the biennium, including many issues affecting the hospitality industry.

NCRLA pushed forward with a very aggressive agenda, including working directly with legislators on the clarification of hotel tenancy rules, ABC modernization and reform, and modifying health inspection rules to allow for greater collaboration between restaurants and health inspectors. NCRLA is monitoring more than 100 bills, including those related to occupancy and meals taxes, short-term rentals, and online marketplace legislation.

Now that Republicans have a veto-proof supermajority in both chambers, the members have tied big budget items, including Medicaid expansion, to the passage of the state’s budget. This should help ensure that there is not a prolonged budget fight between the legislative and executive branches of government this session as we have seen in years past. The House and Senate released their individual budgets and are finalizing their compromised budget proposal. Both chambers have vocally stated their desire to adjourn the legislative session by mid-July this year.

Hotel Guest Tenancy

One of the first bills to begin making its way through the legislature this year was NCRLA’s SB 53/HB 41: Hotel Safety Issues. This bill clearly delineates that a hotel guest does not have landlord tenant rights until they have stayed 90 days. An earlier version of this bill passed last year but was vetoed by Governor Cooper. This year, the new bill moved quickly through the House before it slowed down in the Senate. NCRLA’s government affairs team worked directly with legislators as there were multiple attempts to rewrite the language. The bill finally passed both chambers and was sent to Governor Cooper who let it become law without his signature. This was one of the first bills to become law this session and a big win for hoteliers across the state.

ABC Reform

NCRLA continues to push for modernization of the ABC system in North Carolina. This session, the General Assembly is considering bills, which if enacted, would authorize sales “togo,”allow ABC permittees to purchase liquor from any ABC in the state, require an online liquor ordering system, and require transparency by local ABC Boards in the liquor allocation process.

Many NCRLA legislative priorities are included in SB 490: ABC Omnibus 2023 and House Bill 870: ABC Omnibus. We applaud Senators Moffitt and Johnson and Representative Pickett for their leadership on these critical changes for the hospitality industry. »

If enacted, these bills will take effect in the late summer and early fall this year.

SB 490: ABC Omnibus 2023

• Cocktails to-go reinstated and made permanent.

• Allows mixed beverage permittees to purchase at any ABC store in their county.

• Transparency with allocated spirits for retail. Local boards must submit their plans for approval to the ABC Commission and keep a record of sales of rare spirits with customer information.

• Allows mixed beverage permittees to cover tax stamps with clear adhesive to prevent them from falling off.

• Local boards can authorize Sunday sales and sell on New Year’s Day, the 4th of July, and Labor Day holidays.

• Extends the transitional permit period from 60 to 120 days and clarifies that you can purchase spirits under this permit.

SB 489: ABC Technical/Clarifying Changes

• Clarifies that under a transitional permit you can purchase spirits.

• Makes technical clarifications to the definition of a bar.

SB 526: ABC Law Changes

• Allows beer and wine wholesalers to offer quantity discounts.

• Allows for a set fee for the sale of less than a full case of product.

• This is in response to wholesalers introducing split case fees earlier this year.

HB 870: ABC Omnibus Bill

• Allows permittees to purchase liquor at any ABC in the state.

• Requires the ABC Commission to create an online statewide platform for purchasing liquor, seeing available inventory, and applying for permitting or pay renewals.

• Allows bars and restaurants to sell their private-label liquor to their customers.

• Would eliminate the requirement of a physical tax stamp sticker on a bottle of liquor but would add reporting and auditing requirements.

• Modernization of alcohol advertising regulations.

Charlotte Occupancy Tax

Midway through the legislative session, a bill that was originally to create a special license plate for the Charlotte Football Club got amended in the House Occupancy Tax Committee to include an extension of the sunset for Charlotte’s 1% meals tax and their additional 2% occupancy tax for the NASCAR Hall of Fame until 2060. HB 408 Char. FC Plate/Extend Meals Tax & OT Sunset was given a favorable report in the Occupancy Tax Subcommittee and Finance Committees. NCRLA continues to work closely with the bill’s sponsor and stakeholders to ensure that funds are very narrowly tailored in use and scope.

Short-Term Rentals

SB 325: Limit Online Marketplace Regulations was filed by Senators Perry, Lazzara, and Moffitt. This bill would ban local municipalities from regulating the operations of any online marketplace facilitator, such as Airbnb or a food delivery service.

Airbnb states that their attempt is to limit them from regulating their platform itself, not regulations on the activity. It would also ban locals from being able to attain users’ personally identifiable data unless pursuant to a subpoena or court order. Although it would cover every marketplace facilitator now and any new business models created, the legislation is being pushed by Airbnb’s lobbyists. NCRLA has been working with a wide coalition of opponents to this bill to mitigate its effect. We will continue to work against the overreaching impacts of this legislation.

SB 667: Regulation of Short-Term Rentals was introduced by Senator Moffitt. This bill limits the ability of municipalities to regulate short-term rentals across the state. Senator Moffitt is convening stakeholder meetings to work on the bill. NCRLA continues to advocate for a more even playing field with shortterm rentals in the lodging industry and we will fight to ensure this bill is fair to hoteliers.

Cash Commitment Bill

HB 20: Cash Commitment Act was introduced by Representative Brenden Jones and has passed through the House and was sent to the Senate. This bill would ensure retailers accept cash at their establishments. This bill includes numerous exceptions, including for hotels that NCRLA advocated for to ensure that hoteliers could still require credit cards for staying at their properties. NCRLA continues to work on this bill and express concerns on the impact of this legislation.

Health Inspection Bill

Senators Burgin, Lazzara, and Krawiec filed SB 412: Modify Food Establishment Rules modifying North Carolina restaurant health inspections. This bill would reduce the reinspection period from 15 days to five days. It would also allow that when a restaurant’s grade drops due to nonpriority score reductions, a restaurant’s grade would not change during the reinspection period. The bill would adjust the number of inspections for a grade four restaurant by requiring three graded inspections per year and changing the fourth inspection to an educational inspection. This would allow for further collaboration between restaurants and health inspectors. NCRLA applauds Senators Burgin, Lazzara, and Krawiec for introducing this bill and will push for its passage.

Restaurant Protections from Unfair Delivery Practices

HB 599 Unfair Advertising/ Food Delivery Platforms has gone through the House with overwhelming support and is on to the Senate. HB 599 would ensure that food delivery companies get written approval from a restaurant before they are able to put the location on their platforms. It would also allow a restaurant to withdraw that approval at any time and gives them a private right of action against any platform failing to comply. This bill was introduced by Rep. Donna White and NCRLA has advocated for its passage.

NCRLA continues to advocate on your behalf, protecting North Carolina’s hospitality industry from harmful legislation and ensuring the passage of top legislative priorities. Keep posted to our weekly View from Jones Street for the latest legislative updates.