Can the ABC Commission settle an administrative case against a permittee by accepting an offer in compromise that includes restitution paid to a local ABC board, when the permittee has been charged with refilling mixed-beverages liquor containers without paying the mixed-beverages surcharge?
Plain-English summary
The Alcoholic Beverage Control Commission had a recurring problem: bar and restaurant permittees were refilling empty mixed-beverages liquor bottles with bulk liquor on which the state's mixed-beverages surcharge had not been paid. The practice cheated local ABC boards out of revenue (they sold the legitimate bottled product) and bypassed the surcharge that funds public health programs. The Commission wanted to use its compromise authority under § 18B-104 to settle these cases in exchange for the permittee paying restitution to the affected local ABC board, on top of the usual monetary penalty.
Chairman Marvin L. Speight, Jr. asked the AG whether the Commission had statutory authority to do this. Chief Deputy Attorney General Andrew A. Vanore, Jr. and Special Deputy Attorney General Robin P. Pendergraft of the Law Enforcement Liaison Section answered no.
The AG read § 18B-104 narrowly. The statute lists what the Commission can do: suspend a permit, revoke a permit, impose a monetary penalty, or combine suspension with a fine. It also lets the Commission accept a monetary payment from the permittee in compromise. All fines and penalties collected are remitted to the State Treasurer for the General Fund. Restitution is conspicuously absent from this list.
The omission, the AG said, is intentional. The legislature knew how to provide for restitution in the ABC context, because it did so in § 18B-505 for criminal cases involving alcohol offenses, where law enforcement may be awarded restitution. When the legislature provides for a remedy in one part of a statute and omits it from a parallel part, the canonical inference is that the omission was deliberate. The Commission's administrative-penalty authority is therefore limited to the four enumerated remedies.
The flow-of-funds rule reinforces the result. The statute directs all fines and penalties collected by the Commission to the General Fund. Restitution to a local ABC board would put money into a different account, which the statute does not authorize. If the legislature had wanted the Commission to collect restitution for local boards, it would have provided that authority and a mechanism for the local payment.
The opinion is short, but it carries practical force: the Commission's penalty letters had to stay within the four-corners list, and recovery of local-board losses had to come from a different proceeding (a civil action by the local board, a criminal prosecution where § 18B-505 might apply, or both).
Currency note
This opinion was issued in 1996. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here. Chapter 18B has been amended substantially since 1996, including changes to the Commission's enforcement powers, civil-penalty caps, and mixed-beverages surcharge mechanics. The narrow statutory-omission analysis the AG used in 1996 remains a standard canon of interpretation, but anyone evaluating current Commission authority should review the current text of § 18B-104, § 18B-505, and related provisions.
Background and statutory framework
North Carolina is a control state for liquor distribution. The state sells distilled spirits through local ABC stores operated by local ABC boards (county- and city-level public agencies). When a permitted bar or restaurant buys mixed-beverages-grade liquor from a local ABC store, the price includes a surcharge that funds rehabilitation, education and enforcement programs. Refilling a bottle bypasses the resale tracking and avoids the surcharge.
Enforcement of mixed-beverages-permit rules falls primarily to the state ABC Commission, which holds the permits and administers the licensing system. The Commission's penalty authority is set out in § 18B-104. The statute is the kind of administrative-penalty regime familiar across regulatory law: tiered remedies (suspension, revocation, fines), an option for the agency and the regulated party to negotiate a compromise payment in lieu of a contested hearing, and a single destination for all collected funds (the General Fund).
The local ABC board's economic injury from a refilling violation is real but indirect. The local board lost the unit sale and the surcharge associated with that sale. Under the criminal-prosecution channel in § 18B-505, restitution to the affected local board is available. Under the administrative channel, it is not.
The 1996 opinion reflects the classic separation between administrative-penalty regimes (which typically channel proceeds to a state fund) and judgment-based remedies (which can compensate specific victims). The AG opinion told the Commission to respect that separation: if local ABC boards needed compensation, the criminal process or a civil suit was the right venue.
Common questions
What is the mixed-beverages surcharge?
The mixed-beverages surcharge is added to the price of liquor sold by local ABC stores to permittees who hold mixed-beverages permits. Proceeds support state alcohol-rehabilitation, education and enforcement programs.
Why is refilling bottles a problem?
Refilling a bottle with non-ABC-store liquor lets the permittee resell drinks without ever paying the ABC store and the surcharge that goes with the sale. The local board loses the unit sale; the state loses the surcharge; the permittee pockets the difference.
Why couldn't the Commission negotiate restitution as part of a compromise?
Because § 18B-104 does not authorize it. The statute lists the Commission's penalty options, none of which is restitution, and directs all collected fines and penalties to the State Treasurer for the General Fund. Compromise authority does not enlarge the substantive remedies; it only lets the parties settle within the enumerated remedies.
Can a local ABC board still recover its losses?
Yes, through other channels. § 18B-505 allows restitution in criminal cases involving alcohol offenses. A local board could also pursue a civil action against a permittee who knowingly bypassed the surcharge.
What canon of interpretation did the AG use?
The omission canon. When a statute provides for a remedy in one place and omits it from a parallel place, courts infer that the omission is intentional. The AG noted that § 18B-505 provides for restitution in criminal cases and that § 18B-104 omits it from administrative penalties, then concluded the legislature did not give the Commission restitution authority.
Source
Citations
- N.C.G.S. § 18B-104 (administrative penalties; compromise; General Fund destination)
- N.C.G.S. § 18B-505 (criminal restitution to law enforcement in alcohol offenses)
Original opinion text
January 4, 1996
Marvin L. Speight, Jr., Chairman Alcoholic Beverage Control Commission Post Office Box 26687 Raleigh, North Carolina 27611-6687
Re: Advisory Opinion; N.C.G.S. § 18B-104; Authority of the Commission to Accept Restitution
Dear Mr. Speight:
By request submitted on January 3, 1996, the Commission has inquired as to its statutory authority to accept from a permittee, who has been charged with refilling mixed beverages liquor containers with liquor on which the mixed beverages surcharge has not been paid, an offer in compromise which includes restitution to local ABC boards. Based upon our reading of N.C.G.S. § 18B-104 and Chapter 18B in general, it is our opinion that there exists no statutory authority which would allow the Commission to enter into such settlement agreements.
The Legislature specified the administrative penalties available to the Commission in N.C.G.S. § 18B-104 and clearly provided that the Commission may suspend a permit, revoke a permit, impose a monetary penalty, or suspend a permit and impose a fine. This statute further allows the Commission to accept a monetary payment from the permittee as a compromise, with all fines and penalties collected being remitted by the Commission to the State Treasurer for the General Fund. Notably absent from this penalty statute is any mention of restitution. One would have to conclude that this omission is intentional since the Legislature has provided for restitution elsewhere in Chapter 18B, i.e. law enforcement may be awarded restitution in criminal cases pursuant to N.C.G.S. § 18B-505. More significant, however, is the legislative mandate that all fines and penalties shall be allocated to the General Fund. Had the legislature intended for the Commission to collect restitution for the local boards, it would have specifically provided the Commission with such authority.
Should you or any member of the Commission have any questions regarding this letter, please do not hesitate to contact this office.
Andrew A. Vanore, Jr. Chief Deputy Attorney General
Robin P. Pendergraft Special Deputy Attorney General Law Enforcement Liaison Section