PRINTER'S NO. 1172
No. 1050 Session of 1997
INTRODUCED BY J. TAYLOR, LaGROTTA, GRUPPO, TANGRETTI, PETRONE, GODSHALL, DeWEESE, ADOLPH, SCRIMENTI, RAYMOND, FICHTER, HORSEY, SHANER, SAINATO, HENNESSEY, KENNEY, BUNT, BELARDI, STABACK, GANNON, DeLUCA, MELIO, LAWLESS, COY, CORNELL, CIVERA, GIGLIOTTI, COLAIZZO, DEMPSEY, STAIRS, OLASZ, VAN HORNE, ITKIN AND DERMODY, MARCH 25, 1997
REFERRED TO COMMITTEE ON FINANCE, MARCH 25, 1997
AN ACT 1 Amending the act of April 9, 1929 (P.L.343, No.176), entitled, 2 as amended, "An act relating to the finances of the State 3 government; providing for the settlement, assessment, 4 collection, and lien of taxes, bonus, and all other accounts 5 due the Commonwealth, the collection and recovery of fees and 6 other money or property due or belonging to the Commonwealth, 7 or any agency thereof, including escheated property and the 8 proceeds of its sale, the custody and disbursement or other 9 disposition of funds and securities belonging to or in the 10 possession of the Commonwealth, and the settlement of claims 11 against the Commonwealth, the resettlement of accounts and 12 appeals to the courts, refunds of moneys erroneously paid to 13 the Commonwealth, auditing the accounts of the Commonwealth 14 and all agencies thereof, of all public officers collecting 15 moneys payable to the Commonwealth, or any agency thereof, 16 and all receipts of appropriations from the Commonwealth, 17 authorizing the Commonwealth to issue tax anticipation notes 18 to defray current expenses, implementing the provisions of 19 section 7(a) of Article VIII of the Constitution of 20 Pennsylvania authorizing and restricting the incurring of 21 certain debt and imposing penalties; affecting every 22 department, board, commission, and officer of the State 23 government, every political subdivision of the State, and 24 certain officers of such subdivisions, every person, 25 association, and corporation required to pay, assess, or 26 collect taxes, or to make returns or reports under the laws 27 imposing taxes for State purposes, or to pay license fees or 28 other moneys to the Commonwealth, or any agency thereof, 29 every State depository and every debtor or creditor of the 30 Commonwealth," further providing for requirements of
1 cigarette dealers and wholesalers; and further providing for 2 price restrictions. 3 The General Assembly of the Commonwealth of Pennsylvania 4 hereby enacts as follows: 5 Section 1. Sections 203-A, 204-A, 205-A and 227-A of the act 6 of April 9, 1929 (P.L.343, No.176), known as The Fiscal Code, 7 added July 2, 1993 (P.L.250, No.46), are amended to read: 8 Section 203-A. Licensing of Cigarette Dealers.--(a) No 9 person, unless all of his sales of cigarettes are exempt from 10 Pennsylvania cigarette tax, shall sell, transfer or deliver any 11 cigarettes within this Commonwealth without first obtaining the 12 proper license pursuant to the provisions of this article. 13 (b) Every applicant for a dealer's license shall complete 14 and file an application with the department. 15 (c) In addition to specific requirements for cigarette 16 stamping agents, wholesalers and retailers, a cigarette dealer 17 must demonstrate that he has the facilities to come into actual 18 possession of the cigarettes he purchases and has the ability to 19 distribute and sell the cigarettes, and in the case of renewal, 20 that he has actual possession of the cigarettes he purchases and 21 actually distributes and sells the cigarettes from his licensed 22 premises. 23 Section 204-A. Licensing of Cigarette Stamping Agents.--(a) 24 The department may license as its agent for a one-year period 25 and may renew the license for further periods of one year if the 26 agent is and remains of good moral character who shall meet the 27 requirements imposed by the following provisions for the 28 privilege of operating as a cigarette stamping agency: 29 (1) The applicant [is] has been a wholesale dealer licensed 30 by the Commonwealth for a period of not less than five years. 19970H1050B1172 - 2 -
1 (2) The applicant maintains warehousing facilities, adequate 2 to protect the revenue, for the purpose of receiving, storing 3 and distributing cigarettes and conducting their business [and 4 has received commitments from at least two cigarette 5 manufacturers whose aggregate share is at least forty per centum 6 of the Commonwealth's cigarette market]. 7 (3) The applicant is a person of good moral character and of 8 reasonable financial stability and is reasonably experienced in 9 the wholesale cigarette business. 10 (4) The applicant, or any shareholder controlling more than 11 ten per centum of the stock if the applicant is a corporation or 12 any officer or director if the applicant is a corporation, shall 13 not have been convicted of any crime involving moral turpitude. 14 (5) The applicant shall have filed all required State tax 15 reports and paid any State taxes not subject to a timely 16 perfected administrative or judicial appeal or subject to a duly 17 authorized deferred payment plan. 18 (b) The department shall, by regulation, prescribe the form, 19 content and manner of the application. 20 (c) The cigarette stamping agency license shall be valid for 21 one specific location only. 22 (d) The department may reject any application for a new or 23 renewal license if it finds that any of the aforementioned 24 requirements have not been met or finds that such applicant or 25 licensee has (i) failed to disclose any material information 26 required; (ii) made any material false statement in his 27 application; or (iii) violated any provisions of this article. 28 (e) For purposes of this section, a person convicted of 29 committing any felony, any infamous crime or any crime involving 30 moral turpitude shall not be a person of good moral character 19970H1050B1172 - 3 -
1 and shall not be licensed as a cigarette stamping agent. 2 (f) Notwithstanding any other provision of this article, the 3 department shall not issue any additional licenses, on or after 4 the effective date of this subsection, unless the board finds 5 that: 6 (1) the sole use of the license is to permit the applicant 7 to be a tax agent for the purpose of supplying cigarettes to the 8 licensee's wholly owned retail establishments; 9 (2) the applicant is a manufacturer whose sole use of the 10 license is to apply tax indicia to its brands pursuant to a 11 marketing or sales plan approved by the board; 12 (3) additional licenses are necessary to preserve and incur 13 the collection of taxes as required under Article XII of the act 14 of March 4, 1971 (P.L.6, No.2), known as the "Tax Reform Code of 15 1971"; 16 (4) a current licensee is transferring its license to an 17 unlicensed person who meets all of the requirements established 18 in this article for licensing of cigarette dealers; 19 (5) a current licensee is transferring its license to a new 20 location pursuant to this article; or 21 (6) a current licensee adds or deletes a controlling person 22 pursuant to this article and regulations. 23 (g) Any license which is returned to the department for any 24 reason, other than for a suspension, shall not be reissued 25 except as provided in subsection (f). 26 Section 205-A. Licensing of Wholesalers.--(a) Applicants 27 for a wholesale license or renewal thereof shall meet the 28 following requirements: 29 (1) The premises on which the applicant proposes to conduct 30 business are adequate to protect the revenue. 19970H1050B1172 - 4 -
1 (2) The applicant is a person of reasonable financial 2 stability and reasonable business experience. 3 (3) The applicant, or any shareholder controlling more than 4 ten per centum of the stock if the applicant is a corporation or 5 any officer or director if the applicant is a corporation, shall 6 not have been convicted of any crime involving moral turpitude. 7 (4) The applicant shall not have failed to disclose any 8 material information required by the department, including 9 information that the applicant has complied with this article by 10 providing a signed statement, under penalty of perjury, of 11 adherence to State presumptive minimum prices or written 12 approval from the department to sell at a specific different 13 price. 14 (5) The applicant shall not have made any material false 15 statement in his application. 16 (6) The applicant shall not have violated any provision of 17 this article. 18 (7) The applicant shall have filed all required State tax 19 reports and paid any State taxes not subject to a timely 20 perfected administrative or judicial appeal or subject to a duly 21 authorized deferred payment plan. 22 (b) The wholesale dealer's license shall be valid for one 23 specific location only. 24 (c) Notwithstanding any other provision of this article, the 25 department shall not issue any additional licenses, on or after 26 the effective date of this subsection, unless the board finds 27 that: 28 (1) additional licenses are necessary to preserve and incur 29 the collection of taxes as required under Article XII of the act 30 of March 4, 1971 (P.L.6, No.2), known as the "Tax Reform Code of 19970H1050B1172 - 5 -
1 1971," and the additional license would promote fair competition 2 without increasing the incidence of cigarette usage; 3 (2) a current licensee is transferring its license to an 4 unlicensed person who meets all of the requirements established 5 in this article for licensing of cigarette dealers; 6 (3) a current licensee is transferring its license to a new 7 location pursuant to this article; or 8 (4) a current licensee adds or deletes a controlling person 9 pursuant to this article and regulations. 10 (d) Any license which is returned to the department for any 11 reason, other than for a suspension, shall not be reissued 12 except as provided in subsection (c). 13 Section 227-A. Administration Powers and Duties.--(a) The 14 administration of this article is hereby vested in the 15 department. The department shall adopt rules and regulations for 16 the enforcement of this article and may from time to time make 17 or cause to be made one or more cost surveys to establish the 18 lowest cost of the cigarette stamping agent, the lowest cost of 19 the retailer and the lowest cost of the wholesaler, as defined 20 in this article for the Commonwealth or such trading area or 21 areas therein as it shall define. Any such survey made or caused 22 to be made by the department may be used for the purposes 23 specified in this article. If the survey is conducted in 24 connection with a cigarette dealer's request to sell at a price 25 different from the presumptive minimum, the cigarette dealer 26 shall pay for the survey. Regulations shall provide a procedure 27 for dealers to prove a cost different from the State presumptive 28 costs, including proof of lower costs, filing of petitions, cost 29 allocation, data to be submitted and guidelines necessary to 30 implement this article. Authorization to sell below the 19970H1050B1172 - 6 -
1 presumptive minimum prices shall be in writing published in the 2 Pennsylvania Bulletin and otherwise in conformance with the 3 requirements of this article and shall contain a statement that 4 the authorization is effective forty-five days after the 5 issuance of the writing and is valid for twelve months 6 therefrom. Authorization by the department for a dealer to sell 7 cigarettes below the established presumptive minimum prices 8 shall be stated as a percentage and be applied to all levels of 9 cigarette prices in the percentage allowed, and this percentage 10 shall also be applied to any new presumptive minimum prices 11 established by the department during the effective period of the 12 dealer's authorization. The department may impose such fees as 13 may be necessary to cover the costs incurred in administering 14 this section, including review and audit of petitioning dealer's 15 audited financial statement. [On the effective date of this 16 article and until such time as a dealer receives authorization 17 from the department, in accordance with its regulations, to sell 18 cigarettes at a price different from the presumptive minimum 19 prices established pursuant to this article, the last dealer 20 request to have been authorized by the department shall continue 21 in effect.] 22 (b) The department is authorized to jointly administer this 23 article with the act of March 4, 1971 (P.L.6, No.2), known as 24 the "Tax Reform Code of 1971," including joint reporting of 25 information, forms, returns, statements, documents or other 26 information submitted to the department. 27 Section 2. The licenses initially issued prior to the 28 effective date of this act shall continue in full force and 29 effect and may be renewed in accordance with the provisions of 30 Article II-A of the act of April 9, 1929 (P.L.343, No.176), 19970H1050B1172 - 7 -
1 known as The Fiscal Code, as in effect on January 1, 1997. 2 Section 3. This act shall take effect in 60 days. C11L72JLW/19970H1050B1172 - 8 -