SENATE AMENDED PRIOR PRINTER'S NOS. 1799, 1918 PRINTER'S NO. 2602
No. 1420 Session of 2007
INTRODUCED BY RAYMOND, DONATUCCI, BARRAR, BELFANTI, BENNINGHOFF, BEYER, BIANCUCCI, BLACKWELL, BRENNAN, BUXTON, CAPPELLI, CARROLL, DENLINGER, DiGIROLAMO, J. EVANS, EVERETT, FABRIZIO, GERGELY, HARHAI, HARKINS, HORNAMAN, JOSEPHS, KAUFFMAN, M. KELLER, W. KELLER, KENNEY, KILLION, KOTIK, MAHONEY, MANN, MARSICO, M. O'BRIEN, O'NEILL, PAYNE, PERZEL, PYLE, QUIGLEY, REICHLEY, SANTONI, SAYLOR, SEIP, SONNEY, STERN, J. TAYLOR, WANSACZ, WATSON, WOJNAROSKI, YOUNGBLOOD, NAILOR, SIPTROTH AND CALTAGIRONE, JUNE 5, 2007
SENATOR RAFFERTY, LAW AND JUSTICE, IN SENATE, AS AMENDED, OCTOBER 15, 2007
AN ACT 1 Amending the act of April 12, 1951 (P.L.90, No.21), entitled, as 2 reenacted, "An act relating to alcoholic liquors, alcohol and 3 malt and brewed beverages; amending, revising, consolidating 4 and changing the laws relating thereto; regulating and 5 restricting the manufacture, purchase, sale, possession, 6 consumption, importation, transportation, furnishing, holding 7 in bond, holding in storage, traffic in and use of alcoholic 8 liquors, alcohol and malt and brewed beverages and the 9 persons engaged or employed therein; defining the powers and 10 duties of the Pennsylvania Liquor Control Board; providing 11 for the establishment and operation of State liquor stores, 12 for the payment of certain license fees to the respective 13 municipalities and townships, for the abatement of certain 14 nuisances and, in certain cases, for search and seizure 15 without warrant; prescribing penalties and forfeitures; 16 providing for local option, and repealing existing laws," 17 further providing for the definition of "distributor"; <-- 18 DEFINITIONS OF "CASE," "DISTRIBUTOR" AND "IMPORTING <-- 19 DISTRIBUTOR"; providing for the definition of DEFINITIONS OF <-- 20 "HOLIDAY PACKAGE," "OUT-OF-STATE SMALL MANUFACTURER" AND 21 "small manufacturer"; and PROVIDING FOR MANUFACTURER'S <-- 22 PACKAGING EQUIPMENT GRANT FUND; further providing for SALE OF <-- 23 MALT OR BREWED BEVERAGES BY LIQUOR LICENSEES, FOR malt and 24 brewed beverages manufacturers', distributors' and importing 25 distributors' licenses, for malt and brewed beverages
1 alternating brewers' licenses, FOR SALES AND MINIMUM <-- 2 QUANTITIES, for distributors' and importing distributors' 3 restrictions on sales, storage, etc., FOR RETAIL DISPENSERS' <-- 4 RESTRICTIONS ON PURCHASES AND SALES, FOR INTERLOCKING 5 BUSINESS PROHIBITED and for breweries; PROVIDING FOR <-- 6 MANUFACTURER GRANT PROGRAM AND FOR PRODUCT ROTATION; AND 7 FURTHER PROVIDING FOR EXCHANGE OF CERTAIN LICENSES AND FOR 8 MONEYS PAID INTO THE STATE STORES FUND FOR USE OF THE 9 COMMONWEALTH. 10 This act shall be construed as an enactment of the General 11 Assembly's support for the 3-tier system for alcoholic beverages 12 production, distribution and sale that, through uniform 13 Statewide regulation, provides this Commonwealth regulatory 14 authority over the production, storage, distribution, 15 transportation, sale and consumption of alcoholic beverages by 16 and to its citizens, for the benefit of the public health and 17 welfare and this Commonwealth's economic stability. The General 18 Assembly intends that the liquor laws shall be enforced in order 19 to restrict sales to minors, collect all State and local taxes 20 due on the commerce in alcoholic beverages, establish open, 21 transparent and accountable distribution systems for alcoholic 22 beverages and the intent to exercise, to the fullest extent 23 allowed, all the authority granted a state under the Twenty- 24 first Amendment. 25 The General Assembly of the Commonwealth of Pennsylvania 26 hereby enacts as follows: 27 Section 1. The definition of "distributor" in section 102 of <-- 28 the act of April 12, 1951 (P.L.90, No.21), known as the Liquor 29 Code, reenacted and amended June 29, 1987 (P.L.32, No.14) and 30 amended May 31, 1996 (P.L.312, No.49), is amended and the 31 section is amended by adding definitions to read: 32 Section 102. Definitions.--The following words or phrases, 33 unless the context clearly indicates otherwise, shall have the 34 meanings ascribed to them in this section: 20070H1420B2602 - 2 -
1 * * * 2 "Distributor" shall mean any person licensed by the board to 3 engage in the purchase only from [Pennsylvania] small 4 manufacturers and from importing distributors and the resale of 5 malt or brewed beverages, except to importing distributors and 6 distributors, in the original sealed containers as prepared for 7 the market by the manufacturer at the place of manufacture, but 8 not for consumption on the premises where sold, and in 9 quantities of not less than a case or original containers 10 containing one hundred twenty-eight ounces or more which may be 11 sold separately. 12 * * * 13 "Out-of-State small manufacturer" shall mean a small 14 manufacturer located outside this Commonwealth with a maximum 15 production of three hundred thousand barrels of malt or brewed 16 beverages per year. In determining the annual production, the 17 out-of-State small manufacturer shall include a portion of the 18 production of any other manufacturer who holds, directly or 19 indirectly, an ownership interest in it or with whom it has a 20 distribution agreement in this Commonwealth. If another 21 manufacturer holds, directly or indirectly, an ownership 22 interest in the out-of-State small manufacturer, the percentage 23 of that interest shall be applied to the manufacturer's total 24 production of malt or brewed beverage products to determine the 25 amount that shall be included in determining the maximum 26 production for the out-of-State small manufacturer. If the out- 27 of-State small manufacturer has a distribution agreement with a 28 larger manufacturer for distribution in this Commonwealth, the 29 distributing manufacturer's total distribution in this 30 Commonwealth shall be added to the out-of-State small 20070H1420B2602 - 3 -
1 manufacturer's production to determine whether the three hundred 2 thousand barrel mark has been reached. 3 "Small manufacturer" shall mean a manufacturer of malt or 4 brewed beverages that produces no more than three hundred 5 thousand barrels of malt or brewed beverages per year. Only malt 6 or brewed beverages for which the manufacturer is responsible 7 for paying the malt beverage tax shall be considered in 8 calculating the total number of barrels produced per year for a 9 manufacturer. 10 * * * 11 Section 2. Section 431 of the act, amended December 20, 1996 12 (P.L.1513, No.196), December 21, 1998 (P.L.1202, No.155) and 13 December 8, 2004 (P.L.1810, No.239), is amended to read: 14 Section 431. Malt and Brewed Beverages Manufacturers', 15 Distributors' and Importing Distributors' Licenses.--(a) The 16 board shall issue to any person a resident of this Commonwealth 17 of good repute who applies therefor, and pays the license fee 18 hereinafter prescribed, a manufacturer's license to produce and 19 manufacture malt or brewed beverages, and to transport, sell and 20 deliver malt or brewed beverages from the place of manufacture 21 only in original containers, in quantities of not less than a 22 case or original containers containing one hundred twenty-eight 23 ounces or more which may be sold separately anywhere within the 24 Commonwealth. The application for such license shall be in such 25 form and contain such information as the board shall require. 26 All such licenses shall be granted for a license period to be 27 determined by the board. Every manufacturer shall keep at his or 28 its principal place of business, within the Commonwealth daily 29 permanent records which shall show, (1) the quantities of raw 30 materials received and used in the manufacture of malt or brewed 20070H1420B2602 - 4 -
1 beverages and the quantities of malt or brewed beverages 2 manufactured and stored, (2) the sales of malt or brewed 3 beverages, (3) the quantities of malt or brewed beverages stored 4 for hire or transported for hire by or for the licensee, and (4) 5 the names and addresses of the purchasers or other recipients 6 thereof. Every place licensed as a manufacturer shall be subject 7 to inspection by members of the board or by persons duly 8 authorized and designated by the board, at any and all times of 9 the day or night, as they may deem necessary, for the detection 10 of violations of this act or of the rules and regulations of the 11 board, or for the purpose of ascertaining the correctness of the 12 records required to be kept by licensees. The books and records 13 of such licensees shall at all times be open to inspection by 14 members of the board or by persons duly authorized and 15 designated by the board. Members of the board and its duly 16 authorized agents shall have the right, without hindrance, to 17 enter any place which is subject to inspection hereunder or any 18 place where such records are kept for the purpose of making such 19 inspections and making transcripts thereof. Whenever any checks 20 issued in payment of filing and/or license fees shall be 21 returned to the board as dishonored, the board shall charge a 22 fee of five dollars ($5.00) per hundred dollars or fractional 23 part thereof, plus all protest fees, to the maker of such check 24 submitted to the board. Failure to make full payment or pay the 25 face amount of the check in full and all charges thereon as 26 herein required within ten days after demand has been made by 27 the board upon the maker of the check or upon notification to 28 the board by the Department of Revenue or the Department of 29 Labor and Industry of its objection, the license of such person 30 shall immediately become invalid and shall remain invalid until 20070H1420B2602 - 5 -
1 payment and all charges are received by the board. 2 (a.1) Any [out of State] manufacturer whose products are 3 sold and delivered within this Commonwealth shall be authorized: 4 to rent, lease or otherwise acquire space from an importing 5 distributor or bailee for hire authorized by this act at no more 6 than two locations per manufacturer for use of a segregated 7 portion of a warehouse or other storage facility owned or 8 operated by the importing distributor or bailee for hire at 9 which the [out of State] manufacturer may store, repackage and 10 sell malt or brewed beverages to any importing distributor to 11 whom the [out of State] manufacturer has granted distribution 12 rights pursuant to subsection (b) or to any purchaser outside 13 this Commonwealth for delivery outside this Commonwealth; or to 14 ship to its storage facility outside this Commonwealth. Such 15 manufacturer may compensate the importing distributor or bailee 16 for hire for any related storage, repackaging or delivery 17 services. The [out of State] manufacturer must file with the 18 Liquor Control Board the rate of compensation to be paid. A 19 separate written application must be filed to acquire storage 20 licenses, and the board may establish the information that must 21 be provided on the application. The initial filing must be made 22 prior to any payments being made, and any subsequent changes in 23 the rate of compensation must be filed within thirty days of any 24 such change. Nothing in this act authorizing storage facilities 25 for [out of State] manufacturers is intended to make any change 26 in the manner malt or brewed beverages are distributed through 27 the three-tier system. 28 (a.2) The board shall issue to [a holder of a manufacturer's 29 license] a small manufacturer no more than two storage licenses 30 per small manufacturer to cover storage facilities separate from 20070H1420B2602 - 6 -
1 the location of the manufacturing facility. A small manufacturer 2 may use its storage facilities to receive, store, repackage, 3 sell and distribute malt or brewed beverages in the same manner 4 as it can at its place of manufacture or it may rent, lease or 5 otherwise acquire space from an importing distributor or bailee 6 for hire authorized by this act in the same manner as [an out of 7 State] a manufacturer as set forth in subsection (a.1). A 8 separate written application must be filed to acquire storage 9 licenses, and the board is empowered to establish what 10 information must be provided on that application. Nothing in 11 this act authorizing off-site storage facilities for 12 manufacturers is intended to make any change in the manner malt 13 or brewed beverages are distributed through the three-tier 14 system. 15 (a.3) An applicant for an out-of-State small manufacturer 16 license shall file a written application with the board in such 17 form and containing such information as the board shall from 18 time to time prescribe. The application and license fees and the 19 restrictions on who may apply for the license shall be the same 20 as the fees and restrictions imposed on in-State small 21 manufacturer applicants. In addition, the out-of-State small 22 manufacturer must obtain a sales tax license from the department 23 prior to submitting the application to the board. The 24 information contained in the application shall be provided by 25 the board to the department upon request. In order to continue 26 to be eligible to hold an out-of-State small manufacturer 27 license, the out-of-State small manufacturer may not produce in 28 excess of three hundred thousand barrels of malt or brewed 29 beverages per year, as that calculation is defined in section 30 102. No out-of-State small manufacturer licensee or its 20070H1420B2602 - 7 -
1 officers, directors, shareholders or members shall hold any 2 interest in any other license issued by the board; nor shall any 3 out-of-State manufacturer licensee or its officers, directors, 4 shareholders or members, either directly or indirectly, lend 5 moneys, credit or equivalent thereof, to any other licensee; nor 6 shall any out-of-State manufacturer licensee or it officers, 7 directors, shareholders or members guarantee the payment of any 8 bond, mortgage, note or other obligations of any other licensee; 9 nor shall any out-of-State manufacturer licensee or its 10 officers, directors, shareholders or members be the owner, 11 proprietor or lessor of any place for which any other license 12 has been issued by the board. Out-of-State small manufacturer 13 licensees are deemed to have submitted to the jurisdiction of 14 the board, any other Commonwealth agency and the courts of this 15 Commonwealth for purposes of enforcement of this section and any 16 related laws, rules or regulations. Out-of-State small 17 manufacturer licensees are subject to citation by the 18 enforcement bureau under section 471 and nonrenewal by the board 19 under section 470. The department may promulgate regulations 20 requiring the filing of periodic reports by out-of-State small 21 manufacturers to ensure compliance with the provisions of this 22 section. A holder of an out-of-State small manufacturer license 23 may deliver malt or brewed beverages it has manufactured to any 24 holder of any retail license issued by the board. In doing so, 25 the out-of-State small manufacturer must use its own vehicles 26 and may not, in the Commonwealth, use the services of a 27 transporter-for-hire or other commercial carrier. If the out-of- 28 State small manufacturer chooses to self-distribute in this 29 Commonwealth, it is not permitted to utilize storage services or 30 facilities otherwise available under section 431(a.1). 20070H1420B2602 - 8 -
1 (b) The board shall issue to any reputable person who 2 applies therefor, and pays the license fee hereinafter 3 prescribed, a distributor's or importing distributor's license 4 for the place which such person desires to maintain for the sale 5 of malt or brewed beverages, not for consumption on the premises 6 where sold, and in quantities of not less than a case or 7 original containers containing one hundred twenty-eight ounces 8 or more which may be sold separately as prepared for the market 9 by the manufacturer at the place of manufacture. The board shall 10 have the discretion to refuse a license to any person or to any 11 corporation, partnership or association if such person, or any 12 officer or director of such corporation, or any member or 13 partner of such partnership or association shall have been 14 convicted or found guilty of a felony within a period of five 15 years immediately preceding the date of application for the said 16 license: And provided further, That, in the case of any new 17 license or the transfer of any license to a new location, the 18 board may, in its discretion, grant or refuse such new license 19 or transfer if such place proposed to be licensed is within 20 three hundred feet of any church, hospital, charitable 21 institution, school or public playground, or if such new license 22 or transfer is applied for a place which is within two hundred 23 feet of any other premises which is licensed by the board: And 24 provided further, That the board shall refuse any application 25 for a new license or the transfer of any license to a new 26 location if, in the board's opinion, such new license or 27 transfer would be detrimental to the welfare, health, peace and 28 morals of the inhabitants of the neighborhood within a radius of 29 five hundred feet of the place proposed to be licensed. The 30 board shall refuse any application for a new license or the 20070H1420B2602 - 9 -
1 transfer of any license to a location where the sale of liquid 2 fuels or oil is conducted. The board may enter into an agreement 3 with the applicant concerning additional restrictions on the 4 license in question. If the board and the applicant enter into 5 such an agreement, such agreement shall be binding on the 6 applicant. Failure by the applicant to adhere to the agreement 7 will be sufficient cause to form the basis for a citation under 8 section 471 and for the nonrenewal of the license under section 9 470. If the board enters into an agreement with an applicant 10 concerning additional restrictions, those restrictions shall be 11 binding on subsequent holders of the license until the license 12 is transferred to a new location or until the board enters into 13 a subsequent agreement removing those restrictions. If the 14 application in question involves a location previously licensed 15 by the board, then any restrictions imposed by the board on the 16 previous license at that location shall be binding on the 17 applicant unless the board enters into a new agreement 18 rescinding those restrictions. The board shall require notice to 19 be posted on the property or premises upon which the licensee or 20 proposed licensee will engage in sales of malt or brewed 21 beverages. This notice shall be similar to the notice required 22 of hotel, restaurant and club liquor licensees. 23 Except as hereinafter provided, such license shall authorize 24 the holder thereof to sell or deliver malt or brewed beverages 25 in quantities above specified anywhere within the Commonwealth 26 of Pennsylvania, which, in the case of distributors, have been 27 purchased only from persons licensed under this act as small 28 manufacturers or importing distributors, and in the case of 29 importing distributors, have been purchased from manufacturers 30 or persons outside this Commonwealth engaged in the legal sale 20070H1420B2602 - 10 -
1 of malt or brewed beverages or from manufacturers or importing 2 distributors licensed under this article. In the case of an 3 importing distributor, the holder of such a license shall be 4 authorized to store and repackage malt or brewed beverages owned 5 by a manufacturer at a segregated portion of a warehouse or 6 other storage facility authorized by section 441(d) and operated 7 by the importing distributor within its appointed territory and 8 deliver such beverages to another importing distributor who has 9 been granted distribution rights by the manufacturer as provided 10 herein. The importing distributor shall be permitted to receive 11 a fee from the manufacturer for any related storage, repackaging 12 or delivery services. In the case of a bailee for hire hired by 13 a manufacturer, the holder of such a permit shall be authorized: 14 to receive, store and repackage malt or brewed beverages 15 produced by that manufacturer for sale by that manufacturer to 16 importing distributors to whom that manufacturer has given 17 distribution rights pursuant to this subsection or to purchasers 18 outside this Commonwealth for delivery outside this 19 Commonwealth; or to ship to that manufacturer's storage 20 facilities outside this Commonwealth. The bailee for hire shall 21 be permitted to receive a fee from the manufacturer for any 22 related storage, repackaging or delivery services. The bailee 23 for hire shall, as required in Article V of this act, keep 24 complete and accurate records of all transactions, inventory, 25 receipts and shipments and make all records and the licensed 26 areas available for inspection by the board and for the 27 Pennsylvania State Police, Bureau of Liquor Control Enforcement, 28 during normal business hours. 29 Each [out of State] manufacturer of malt or brewed beverages, 30 excluding small manufacturers, whose products are sold and 20070H1420B2602 - 11 -
1 delivered in this Commonwealth shall give distributing rights 2 for such products in designated geographical areas to specific 3 importing distributors, and such importing distributor shall not 4 sell or deliver malt or brewed beverages manufactured by the 5 [out of State] manufacturer to any person issued a license under 6 the provisions of this act whose licensed premises are not 7 located within the geographical area for which he has been given 8 distributing rights by such manufacturer. Should a licensee 9 accept the delivery of such malt or brewed beverages in 10 violation of this section, said licensee shall be subject to a 11 suspension of his license for at least thirty days: Provided, 12 That the importing distributor holding such distributing rights 13 for such product shall not sell or deliver the same to another 14 importing distributor without first having entered into a 15 written agreement with the said secondary importing distributor 16 setting forth the terms and conditions under which such products 17 are to be resold within the territory granted to the primary 18 importing distributor by the manufacturer. 19 When a [Pennsylvania] small manufacturer of malt or brewed 20 beverages licensed under this article names or constitutes a 21 distributor or importing distributor as the primary or original 22 supplier of his product, he shall also designate the specific 23 geographical area for which the said distributor or importing 24 distributor is given distributing rights, and such distributor 25 or importing distributor shall not sell or deliver the products 26 of such manufacturer to any person issued a license under the 27 provisions of this act whose licensed premises are not located 28 within the geographical area for which distributing rights have 29 been given to the distributor and importing distributor by the 30 said manufacturer: Provided, That the importing distributor 20070H1420B2602 - 12 -
1 holding such distributing rights for such product shall not sell 2 or deliver the same to another importing distributor without 3 first having entered into a written agreement with the said 4 secondary importing distributor setting forth the terms and 5 conditions under which such products are to be resold within the 6 territory granted to the primary importing distributor by the 7 manufacturer. Nothing herein contained shall be construed to 8 prevent any manufacturer from authorizing the importing 9 distributor holding the distributing rights for a designated 10 geographical area from selling the products of such manufacturer 11 to another importing distributor also holding distributing 12 rights from the same manufacturer for another geographical area, 13 providing such authority be contained in writing and a copy 14 thereof be given to each of the importing distributors so 15 affected. 16 (b.1) (1) Any person in this Commonwealth or elsewhere who 17 shall purchase or in any manner whatsoever acquire or otherwise 18 succeed to the business of a manufacturer, assets or rights to 19 import, market, ship into this Commonwealth or distribute a 20 brand of beer, or to use and exploit any trademark incorporated 21 as part of a brand of beer produced by such a manufacturer shall 22 be obligated to all terms of the manufacturer's franchise 23 agreements in effect on the effective date of the purchase, 24 acquisition or succession, or, if earlier, at the time the 25 agreement contemplating the purchase, acquisition or succession 26 is actually made. 27 (2) "Purchase" or "acquisition," for purposes of this 28 section, includes, but is not limited to, a purchase, 29 acquisition, lease, license or assignment of all or a 30 controlling interest in the capital stock or operating assets, 20070H1420B2602 - 13 -
1 including brand trademarks rights; merger; any corporate 2 reorganization or consolidation; and also, without limitation, 3 any license, cross-license, joint venture or other agreement or 4 arrangement, directly or indirectly, transferring, substituting 5 or materially changing the person or persons authorized by the 6 one owning or controlling a brand or any trademark as part of a 7 brand, to produce, import, ship, market or distribute the brand 8 of beer into or within this Commonwealth. 9 (3) "Manufacturer," as used in this subsection, shall mean 10 any person, including any agent of such person, who (i) is 11 licensed as a manufacturer of malt or brewed beverages located 12 within the Commonwealth of Pennsylvania, (ii) holds a 13 distributor or importing distributor license, or (iii) 14 manufactures any malt beverage, has title to any malt beverage 15 products or has the contractual right to distribute any malt 16 beverage product, whether licensed in this Commonwealth or not, 17 who enters into an "agreement" with any importing distributor 18 licensed to do business in this Commonwealth. 19 (c) The aforesaid licenses shall be issued only to reputable 20 individuals, partnerships and associations who are, or whose 21 members are, citizens of the United States and have for two 22 years prior to the date of their applications been residents of 23 the Commonwealth of Pennsylvania or to reputable corporations 24 organized or duly registered under the laws of the Commonwealth 25 of Pennsylvania. Such licenses shall be issued to corporations 26 duly organized or registered under the laws of the Commonwealth 27 of Pennsylvania only when it appears that all of the officers 28 and directors of the corporation are citizens of the United 29 States and have been are residents of the Commonwealth of 30 Pennsylvania for a period of at least two years prior to the 20070H1420B2602 - 14 -
1 date of application, and that at least fifty-one per centum of 2 the capital stock of such corporation is actually owned by 3 individuals who are citizens of the United States and have been 4 are residents of the Commonwealth of Pennsylvania for a period 5 of at least two years prior to the date of application: 6 Provided, That the provisions of this subsection with respect to 7 residence requirements shall not apply to individuals, partners, 8 officers, directors and owners of capital stock, of corporations 9 licensed or applying for licenses as manufacturers of malt or 10 brewed beverages, nor shall the provisions of this subsection 11 with respect to stockholder requirements apply to corporations 12 licensed or applying for licenses as manufacturers of malt or 13 brewed beverages. 14 (d) (1) All distributing rights as hereinabove required 15 shall be in writing, shall be equitable in their provisions and 16 shall be substantially similar as to terms and conditions with 17 all other distributing rights agreements between the 18 manufacturer giving such agreement and its other importing 19 distributors and distributors shall not be modified, cancelled, 20 terminated or rescinded by the manufacturer without good cause, 21 and shall contain a provision in substance or effect as follows: 22 "The manufacturer recognizes that the importing distributor and 23 distributor are free to manage their business in the manner the 24 importing distributor and distributor deem best and that this 25 prerogative vests in the importing distributor and distributor 26 the exclusive right to establish a selling price, to select the 27 brands of malt or brewed beverages they wish to handle and to 28 determine the efforts and resources which the importing 29 distributor and distributor will exert to develop and promote 30 the same of the manufacturer's products handled by the importing 20070H1420B2602 - 15 -
1 distributor and distributor. However, the manufacturer expects 2 that the importing distributor and distributor will price 3 competitively the products handled by them, devote reasonable 4 effort and resources to the sale of such products and maintain a 5 reasonable sales level." "Good cause" shall mean the failure by 6 any party to an agreement, without reasonable excuse or 7 justification, to comply substantially with an essential, 8 reasonable and commercially acceptable requirement imposed by 9 the other party under the terms of an agreement. 10 (2) After January 1, 1980, no manufacturer shall enter into 11 any agreement with more than one distributor or importing 12 distributor for the purpose of establishing more than one 13 agreement for designated brand or brands of malt or brewed 14 beverages in any one territory. Each franchise territory which 15 is granted by a manufacturer shall be geographically contiguous. 16 All importing distributors shall maintain sufficient records to 17 evidence compliance of this section. With regard to any 18 territorial distribution authority granted to an importing 19 distributor by a manufacturer of malt or brewed beverages after 20 January 1, 1996, the records shall establish that each and every 21 case of a brand of malt or brewed beverages for which the 22 importing distributor is assigned was sold, resold, stored, 23 delivered or transported by the importing distributor, either 24 from a point or to a point with the assigned geographically 25 contiguous territory, to any person or persons, whether such 26 person or persons are licensed by this act or not licensed by 27 this act. 28 (3) Except for discontinuance of a brand or a valid 29 termination for good cause, the purchaser of the assets of the 30 manufacturer as defined in this act shall become obligated to 20070H1420B2602 - 16 -
1 all the territorial and brand designations of the agreement in 2 effect on the date of purchase. Purchase of assets as defined 3 for the purposes of this act shall include, but not be limited 4 to, the sale of stock, sale of assets, merger, lease, transfer 5 or consolidation. 6 (4) The court of common pleas of the county wherein the 7 licensed premises of the importing distributor or distributor 8 are located is hereby vested with jurisdiction and power to 9 enjoin the modification, rescission, cancellation or termination 10 of a franchise or agreement between a manufacturer and an 11 importing distributor or distributor at the instance of such 12 importing distributor or distributor who is or might be 13 adversely affected by such modification, rescission, 14 cancellation or termination, and in granting an injunction the 15 court shall provide that no manufacturer shall supply the 16 customers or territory of the importing distributor or 17 distributor by servicing the territory or customers through 18 other importing distributors or distributors or any other means 19 while the injunction is in effect: Provided, however, That any 20 injunction issued under this subsection shall require the 21 posting of sufficient bond against damages arising from an 22 injunction improvidently granted and a showing that the danger 23 of irrevocable loss or damage is immediate and that during the 24 pendency of such injunction the importing distributor or 25 distributor shall continue to service the accounts of the 26 manufacturer in good faith. 27 (5) The provisions of this subsection shall not apply to 28 [Pennsylvania] small manufacturers [whose principal place of 29 business is located in Pennsylvania] unless they name or 30 constitute a distributor or importing distributor as a primary 20070H1420B2602 - 17 -
1 or original supplier of their products subsequent to the 2 effective date of this act, or unless such [Pennsylvania] small 3 manufacturers have named or constituted a distributor or 4 importing distributor as a primary or original supplier of their 5 products prior to the effective date of this act, and which 6 status is continuing when this act becomes effective. 7 (e) In addition to the fees under section 614-A of the act 8 of April 9, 1929 (P.L.177, No.175), known as "The Administrative 9 Code of 1929," the board shall assess a fee surcharge of ninety- 10 five dollars ($95.00) for a distributor's license and a fee 11 surcharge of four hundred seventy dollars ($470.00) for an 12 importing distributor's license and a fee surcharge of seventy- 13 five dollars ($75.00) for brand registration. Money collected 14 under this subsection shall be placed in a restricted account in 15 The State Stores Fund. The board may use the money in this 16 account to implement section 216. In the event the provisions of 17 section 447(a)(2) and/or (c) are held invalid, then this 18 subsection shall be void and shall not apply. 19 (f) (1) Any malt or brewed beverage produced outside this 20 Commonwealth that is repackaged by a bailee for hire or 21 importing distributor on behalf of an out of State manufacturer 22 must be returned to the out of State manufacturer and come to 23 rest out of State before it may reenter this Commonwealth. Such 24 repackaged malt or brewed beverages must be distributed through 25 the three-tier system. Any malt or brewed beverage that is 26 repackaged by a bailee for hire or importing distributor on 27 behalf of an in State manufacturer must be returned to the in 28 State manufacturer and come to rest at the in State 29 manufacturer's licensed facility. 30 (2) For purposes of this section, "repackage" shall mean any 20070H1420B2602 - 18 -
1 change or alteration to the containers or container 2 configuration of a case. 3 Section 3. Section 431.1(d) of the act, added February 21, 4 2002 (P.L.103, No.10), is amended to read: 5 Section 431.1. Malt and Brewed Beverages Alternating 6 Brewers' Licenses.--* * * 7 (d) Malt and brewed beverages manufactured under the 8 authority of an alternating brewer's license must be distributed 9 in this Commonwealth only through specific importing 10 distributors who shall first have been given distributor rights 11 for such products in designated geographical areas through the 12 distribution system required for [out-of-State] manufacturers 13 under section 431(b) as well as all other pertinent sections of 14 this act. The alternating brewer must comply with section 444. 15 * * * 16 Section 4. Section 441(g) of the act, added December 20, 17 1996 (P.L.1513, No.196), is amended to read: 18 Section 441. Distributors' and Importing Distributors' 19 Restrictions on Sales, Storage, Etc.--* * * 20 (g) All malt or brewed beverages purchased by an importing 21 distributor from a [Pennsylvania] manufacturer of malt or brewed 22 beverages [or from any person located outside this Commonwealth] 23 for resale shall be invoiced to the importing distributor, shall 24 come physically into the possession of such importing 25 distributor and shall be unloaded into and distributed from the 26 licensed premises of such importing distributor. The board may 27 act to further define and control the storage and distribution 28 of malt or brewed beverages in conformity with this section and 29 this act. 30 Section 5. Section 446 of the act, amended June 30, 1992 20070H1420B2602 - 19 -
1 (P.L.327, No.66), May 31, 1996 (P.L.312, No.49) and January 6, 2 2006 (P.L.1, No.1), is amended to read: 3 Section 446. Breweries.--Holders of a brewery license may: 4 (1) Sell malt or brewed beverages produced and owned by the 5 brewery on the licensed premises under such conditions and 6 regulations as the board may enforce, to individuals for 7 consumption on the premises [and]. Additionally, a small 8 manufacturer may sell malt or brewed beverages produced and 9 owned by the brewery on the licensed premises under such 10 conditions and regulations as the board may enforce to hotel, 11 restaurant, club and public service liquor licensees. 12 (2) Operate a restaurant or brewery pub on the licensed 13 premises under such conditions and regulations as the board may 14 enforce: Provided, however, That sales on Sunday may be made 15 irrespective of the volume of food sales if the licensed 16 premises are at a public venue location. The holder of a brewery 17 license may sell at its brewery pub premises Pennsylvania wines 18 it has purchased from either the holder of a Pennsylvania 19 limited winery license or from the board: Provided, however, 20 That said wines must be consumed at the licensed brewery pub 21 premises. 22 (3) Use brewery storage and distribution facilities for the 23 purpose of receiving, storing and distributing malt or brewed 24 beverages manufactured outside this Commonwealth if the 25 beverages are distributed in this Commonwealth only through 26 specific importing distributors who shall have first been given 27 distributing rights for such products in designated geographical 28 areas through the distribution system required for [out-of- 29 State] manufacturers under section 431(b) as well as all other 30 pertinent sections of this act. The manufacturer of the 20070H1420B2602 - 20 -
1 beverages must comply with section 444. 2 (4) Apply for and hold a hotel liquor license, a restaurant 3 liquor license or a malt and brewed beverages retail license to 4 sell for consumption at the restaurant or brewery pub on the 5 licensed brewery premises, liquor, wine and malt or brewed 6 beverages regardless of the place of manufacture, under the same 7 conditions and regulations as any other hotel liquor license, 8 restaurant liquor license or malt and brewed beverages retail 9 license, but must brew at least two hundred fifty barrels per 10 year. Each holder of a brewery license who receives a hotel 11 liquor license, a restaurant liquor license or a malt or brewed 12 beverages retail license to operate a brew pub shall not sell 13 directly to any person licensed by this act, except if any malt 14 or brewed beverage is to be distributed in this Commonwealth it 15 shall be only through specific importing distributors who shall 16 have first been given distributing rights for such products in 17 designated geographical areas through the distribution system 18 required for [out-of-State] manufacturers under section 431(b) 19 as well as all other pertinent sections of this act. 20 Section 6. The provisions of this act are severable. If any 21 provision of this act or its application to any person or 22 circumstance is held invalid, the invalidity shall not affect 23 other provisions or applications of this act which can be given 24 effect without the invalid provision or application. 25 Section 7. This act shall take effect December 31, 2007. 26 SECTION 1. THE DEFINITIONS OF "CASE," "DISTRIBUTOR" AND <-- 27 "IMPORTING DISTRIBUTOR" IN SECTION 102 OF THE ACT OF APRIL 12, 28 1951 (P.L.90, NO.21), KNOWN AS THE LIQUOR CODE, REENACTED AND 29 AMENDED JUNE 29, 1987 (P.L.32, NO.14) AND AMENDED MAY 31, 1996 30 (P.L.312, NO.49) AND JULY 7, 2006 (P.L.584, NO.84), ARE AMENDED 20070H1420B2602 - 21 -
1 AND THE SECTION IS AMENDED BY ADDING DEFINITIONS TO READ: 2 SECTION 102. DEFINITIONS.--THE FOLLOWING WORDS OR PHRASES, 3 UNLESS THE CONTEXT CLEARLY INDICATES OTHERWISE, SHALL HAVE THE 4 MEANINGS ASCRIBED TO THEM IN THIS SECTION: 5 * * * 6 "CASE" SHALL MEAN A PACKAGE PREPARED BY THE MANUFACTURER FOR 7 SALE OR DISTRIBUTION OF TWELVE OR MORE ORIGINAL CONTAINERS 8 TOTALING TWO HUNDRED SIXTY-FOUR OR MORE FLUID OUNCES OF MALT OR 9 BREWED BEVERAGES EXCEPTING THOSE PACKAGES CONTAINING TWENTY-FOUR 10 OR MORE ORIGINAL CONTAINERS EACH HOLDING SEVEN FLUID OUNCES OR 11 MORE. BEGINNING ON SEPTEMBER 1, 2008, "CASE" SHALL MEAN A 12 PACKAGE PREPARED BY THE MANUFACTURER FOR SALE OR DISTRIBUTION IN 13 ANY CONFIGURATION OF ORIGINAL CONTAINERS TOTALING SIXTY-SIX OR 14 MORE FLUID OUNCES OF MALT OR BREWED BEVERAGES. 15 * * * 16 "DISTRIBUTOR" SHALL MEAN ANY PERSON LICENSED BY THE BOARD TO 17 ENGAGE IN THE PURCHASE ONLY FROM [PENNSYLVANIA] SMALL 18 MANUFACTURERS AND FROM IMPORTING DISTRIBUTORS AND THE RESALE OF 19 MALT OR BREWED BEVERAGES, EXCEPT TO IMPORTING DISTRIBUTORS AND 20 DISTRIBUTORS, IN THE ORIGINAL SEALED CONTAINERS AS PREPARED FOR 21 THE MARKET BY THE MANUFACTURER AT THE PLACE OF MANUFACTURE, BUT 22 NOT FOR CONSUMPTION ON THE PREMISES WHERE SOLD, AND IN 23 QUANTITIES OF NOT LESS THAN A CASE OR ORIGINAL CONTAINERS 24 CONTAINING ONE HUNDRED TWENTY-EIGHT OUNCES OR MORE, OR HOLIDAY 25 PACKAGES APPROVED BY THE BOARD, WHICH MAY BE SOLD SEPARATELY. 26 * * * 27 "HOLIDAY PACKAGE" SHALL MEAN A PACKAGE CONSISTING OF AN 28 ORIGINAL CONTAINER OF A MALT OR BREWED BEVERAGE CONTAINING AT 29 LEAST FORTY FLUID OUNCES AND A NON-MALT OR BREWED BEVERAGE ITEM 30 AS PACKAGED BY THE MANUFACTURER. 20070H1420B2602 - 22 -
1 * * * 2 "IMPORTING DISTRIBUTOR" SHALL MEAN ANY PERSON LICENSED BY THE 3 BOARD TO ENGAGE IN THE PURCHASE FROM MANUFACTURERS AND OTHER 4 PERSONS LOCATED OUTSIDE THIS COMMONWEALTH AND FROM PERSONS 5 LICENSED AS MANUFACTURERS OF MALT OR BREWED BEVERAGES AND 6 IMPORTING DISTRIBUTORS UNDER THIS ACT, AND THE RESALE OF MALT OR 7 BREWED BEVERAGES IN THE ORIGINAL SEALED CONTAINERS AS PREPARED 8 FOR THE MARKET BY THE MANUFACTURER AT THE PLACE OF MANUFACTURE, 9 BUT NOT FOR CONSUMPTION ON THE PREMISES WHERE SOLD, AND IN 10 QUANTITIES OF NOT LESS THAN A CASE OR ORIGINAL CONTAINERS 11 CONTAINING ONE HUNDRED TWENTY-EIGHT OUNCES OR MORE, OR HOLIDAY 12 PACKAGES APPROVED BY THE BOARD, WHICH MAY BE SOLD SEPARATELY. 13 * * * 14 "OUT-OF-STATE SMALL MANUFACTURER," BEGINNING ON JULY 1, 2008, 15 SHALL MEAN A SMALL MANUFACTURER LOCATED OUTSIDE THIS 16 COMMONWEALTH WITH A MAXIMUM PRODUCTION OF THREE HUNDRED THOUSAND 17 BARRELS OF MALT OR BREWED BEVERAGES PER YEAR. IN DETERMINING THE 18 ANNUAL PRODUCTION, THE OUT-OF-STATE SMALL MANUFACTURER SHALL 19 INCLUDE A PORTION OF THE PRODUCTION OF ANY OTHER MANUFACTURER 20 WHO HOLDS, DIRECTLY OR INDIRECTLY, AN OWNERSHIP INTEREST IN IT 21 OR WITH WHOM IT HAS A DISTRIBUTION AGREEMENT IN THIS 22 COMMONWEALTH. IF ANOTHER MANUFACTURER HOLDS, DIRECTLY OR 23 INDIRECTLY, AN OWNERSHIP INTEREST IN AN OUT-OF-STATE SMALL 24 MANUFACTURER, THE PERCENTAGE OF THAT INTEREST SHALL BE APPLIED 25 TO THE MANUFACTURER'S TOTAL PRODUCTION OF MALT OR BREWED 26 BEVERAGE PRODUCTS TO DETERMINE THE AMOUNT THAT SHALL BE INCLUDED 27 IN DETERMINING THE MAXIMUM PRODUCTION FOR THE OUT-OF-STATE SMALL 28 MANUFACTURER. IF THE OUT-OF-STATE SMALL MANUFACTURER HAS A 29 DISTRIBUTION AGREEMENT WITH A LARGER MANUFACTURER FOR 30 DISTRIBUTION IN THIS COMMONWEALTH, THE DISTRIBUTING 20070H1420B2602 - 23 -
1 MANUFACTURER'S TOTAL DISTRIBUTION IN THIS COMMONWEALTH SHALL BE 2 ADDED TO THE OUT-OF-STATE SMALL MANUFACTURER'S PRODUCTION TO 3 DETERMINE WHETHER THE THREE HUNDRED THOUSAND BARREL MARK HAS 4 BEEN REACHED. 5 * * * 6 "SMALL MANUFACTURER," BEGINNING ON JULY 1, 2008, SHALL MEAN A 7 MANUFACTURER OF MALT OR BREWED BEVERAGES THAT PRODUCES NO MORE 8 THAN THREE HUNDRED THOUSAND BARRELS OF MALT OR BREWED BEVERAGES 9 PER YEAR. ONLY MALT OR BREWED BEVERAGES FOR WHICH THE 10 MANUFACTURER IS RESPONSIBLE FOR PAYING THE MALT BEVERAGE TAX 11 SHALL BE CONSIDERED IN CALCULATING THE TOTAL NUMBER OF BARRELS 12 PRODUCED PER YEAR FOR A MANUFACTURER. 13 * * * 14 SECTION 2. THE ACT IS AMENDED BY ADDING A SECTION TO READ: 15 SECTION 218. MANUFACTURER'S PACKAGING EQUIPMENT GRANT 16 FUND.--(A) THERE IS CREATED A SPECIAL FUND WITHIN THE BOARD TO 17 BE KNOWN AS THE MANUFACTURER'S PACKAGING EQUIPMENT GRANT FUND. 18 THE BOARD SHALL ADMINISTER THE FUND, WHICH SHALL BE USED TO 19 PROVIDE GRANTS TO MALT OR BREWED BEVERAGE MANUFACTURERS LOCATED 20 WITHIN THIS COMMONWEALTH FOR THE PURPOSE OF PURCHASING OR 21 UPGRADING MALT OR BREWED BEVERAGE PACKAGING EQUIPMENT. 22 (B) NOTWITHSTANDING ANY OTHER PROVISION OF LAW OR THIS ACT 23 TO THE CONTRARY, THE SUM OF FIVE MILLION DOLLARS ($5,000,000) IS 24 HEREBY APPROPRIATED TO THE FUND SOLELY FOR THE PURPOSE OF 25 FUNDING GRANTS TO MANUFACTURERS UNDER SECTION 448. 26 SECTION 3. SECTION 407(A) OF THE ACT, AMENDED JULY 7, 2006 27 (P.L.584, NO.84), IS AMENDED TO READ: 28 SECTION 407. SALE OF MALT OR BREWED BEVERAGES BY LIQUOR 29 LICENSEES.--(A) EVERY LIQUOR LICENSE ISSUED TO A HOTEL, 30 RESTAURANT, CLUB, OR A RAILROAD, PULLMAN OR STEAMSHIP COMPANY 20070H1420B2602 - 24 -
1 UNDER THIS SUBDIVISION (A) FOR THE SALE OF LIQUOR SHALL 2 AUTHORIZE THE LICENSEE TO SELL MALT OR BREWED BEVERAGES AT THE 3 SAME PLACES BUT SUBJECT TO THE SAME RESTRICTIONS AND PENALTIES 4 AS APPLY TO SALES OF LIQUOR, EXCEPT THAT LICENSEES OTHER THAN 5 CLUBS MAY SELL MALT OR BREWED BEVERAGES FOR CONSUMPTION OFF THE 6 PREMISES WHERE SOLD IN QUANTITIES OF NOT MORE THAN [ONE HUNDRED 7 NINETY-TWO] TWO HUNDRED SIXTEEN FLUID OUNCES IN A SINGLE SALE TO 8 ONE PERSON. NO LICENSEE UNDER THIS SECTION SHALL BE PERMITTED TO 9 SELL A PACKAGE PREPARED BY THE MANUFACTURER FOR SALE OR 10 DISTRIBUTION IN ANY CONFIGURATION OF ORIGINAL CONTAINERS 11 TOTALING BETWEEN ONE HUNDRED FORTY-FIVE FLUID OUNCES AND TWO 12 HUNDRED SIXTEEN FLUID OUNCES OF MALT OR BREWED BEVERAGES PRIOR 13 TO SEPTEMBER 1, 2008. NO LICENSEE UNDER THIS SUBDIVISION (A) 14 SHALL AT THE SAME TIME BE THE HOLDER OF ANY OTHER CLASS OF 15 LICENSE, EXCEPT A RETAIL DISPENSER'S LICENSE AUTHORIZING THE 16 SALE OF MALT OR BREWED BEVERAGES ONLY. 17 * * * 18 SECTION 4. SECTION 431 OF THE ACT, AMENDED DECEMBER 20, 1996 19 (P.L.1513, NO.196), DECEMBER 21, 1998 (P.L.1202, NO.155) AND 20 DECEMBER 8, 2004 (P.L.1810, NO.239), IS AMENDED TO READ: 21 SECTION 431. MALT AND BREWED BEVERAGES MANUFACTURERS', 22 DISTRIBUTORS' AND IMPORTING DISTRIBUTORS' LICENSES.--(A) THE 23 BOARD SHALL ISSUE TO ANY PERSON A RESIDENT OF THIS COMMONWEALTH 24 OF GOOD REPUTE WHO APPLIES THEREFOR, AND PAYS THE LICENSE FEE 25 HEREINAFTER PRESCRIBED, A MANUFACTURER'S LICENSE TO PRODUCE AND 26 MANUFACTURE MALT OR BREWED BEVERAGES, AND TO TRANSPORT, SELL AND 27 DELIVER MALT OR BREWED BEVERAGES FROM THE PLACE OF MANUFACTURE 28 ONLY IN ORIGINAL CONTAINERS, IN QUANTITIES OF NOT LESS THAN A 29 CASE OR ORIGINAL CONTAINERS CONTAINING ONE HUNDRED TWENTY-EIGHT 30 OUNCES OR MORE, OR HOLIDAY PACKAGES APPROVED BY THE BOARD, WHICH 20070H1420B2602 - 25 -
1 MAY BE SOLD SEPARATELY ANYWHERE WITHIN THE COMMONWEALTH. THE 2 APPLICATION FOR SUCH LICENSE SHALL BE IN SUCH FORM AND CONTAIN 3 SUCH INFORMATION AS THE BOARD SHALL REQUIRE. ALL SUCH LICENSES 4 SHALL BE GRANTED FOR A LICENSE PERIOD TO BE DETERMINED BY THE 5 BOARD. EVERY MANUFACTURER SHALL KEEP AT HIS OR ITS PRINCIPAL 6 PLACE OF BUSINESS, WITHIN THE COMMONWEALTH DAILY PERMANENT 7 RECORDS WHICH SHALL SHOW, (1) THE QUANTITIES OF RAW MATERIALS 8 RECEIVED AND USED IN THE MANUFACTURE OF MALT OR BREWED BEVERAGES 9 AND THE QUANTITIES OF MALT OR BREWED BEVERAGES MANUFACTURED AND 10 STORED, (2) THE SALES OF MALT OR BREWED BEVERAGES, (3) THE 11 QUANTITIES OF MALT OR BREWED BEVERAGES STORED FOR HIRE OR 12 TRANSPORTED FOR HIRE BY OR FOR THE LICENSEE, AND (4) THE NAMES 13 AND ADDRESSES OF THE PURCHASERS OR OTHER RECIPIENTS THEREOF. 14 EVERY PLACE LICENSED AS A MANUFACTURER SHALL BE SUBJECT TO 15 INSPECTION BY MEMBERS OF THE BOARD OR BY PERSONS DULY AUTHORIZED 16 AND DESIGNATED BY THE BOARD, AT ANY AND ALL TIMES OF THE DAY OR 17 NIGHT, AS THEY MAY DEEM NECESSARY, FOR THE DETECTION OF 18 VIOLATIONS OF THIS ACT OR OF THE RULES AND REGULATIONS OF THE 19 BOARD, OR FOR THE PURPOSE OF ASCERTAINING THE CORRECTNESS OF THE 20 RECORDS REQUIRED TO BE KEPT BY LICENSEES. THE BOOKS AND RECORDS 21 OF SUCH LICENSEES SHALL AT ALL TIMES BE OPEN TO INSPECTION BY 22 MEMBERS OF THE BOARD OR BY PERSONS DULY AUTHORIZED AND 23 DESIGNATED BY THE BOARD. MEMBERS OF THE BOARD AND ITS DULY 24 AUTHORIZED AGENTS SHALL HAVE THE RIGHT, WITHOUT HINDRANCE, TO 25 ENTER ANY PLACE WHICH IS SUBJECT TO INSPECTION HEREUNDER OR ANY 26 PLACE WHERE SUCH RECORDS ARE KEPT FOR THE PURPOSE OF MAKING SUCH 27 INSPECTIONS AND MAKING TRANSCRIPTS THEREOF. WHENEVER ANY CHECKS 28 ISSUED IN PAYMENT OF FILING AND/OR LICENSE FEES SHALL BE 29 RETURNED TO THE BOARD AS DISHONORED, THE BOARD SHALL CHARGE A 30 FEE OF FIVE DOLLARS ($5.00) PER HUNDRED DOLLARS OR FRACTIONAL 20070H1420B2602 - 26 -
1 PART THEREOF, PLUS ALL PROTEST FEES, TO THE MAKER OF SUCH CHECK 2 SUBMITTED TO THE BOARD. FAILURE TO MAKE FULL PAYMENT OR PAY THE 3 FACE AMOUNT OF THE CHECK IN FULL AND ALL CHARGES THEREON AS 4 HEREIN REQUIRED WITHIN TEN DAYS AFTER DEMAND HAS BEEN MADE BY 5 THE BOARD UPON THE MAKER OF THE CHECK OR UPON NOTIFICATION TO 6 THE BOARD BY THE DEPARTMENT OF REVENUE OR THE DEPARTMENT OF 7 LABOR AND INDUSTRY OF ITS OBJECTION, THE LICENSE OF SUCH PERSON 8 SHALL IMMEDIATELY BECOME INVALID AND SHALL REMAIN INVALID UNTIL 9 PAYMENT AND ALL CHARGES ARE RECEIVED BY THE BOARD. 10 (A.1) ANY [OUT OF STATE] MANUFACTURER WHOSE PRODUCTS ARE 11 SOLD AND DELIVERED WITHIN THIS COMMONWEALTH SHALL BE AUTHORIZED: 12 TO RENT, LEASE OR OTHERWISE ACQUIRE SPACE FROM AN IMPORTING 13 DISTRIBUTOR OR BAILEE FOR HIRE AUTHORIZED BY THIS ACT AT NO MORE 14 THAN TWO LOCATIONS PER MANUFACTURER FOR USE OF A SEGREGATED 15 PORTION OF A WAREHOUSE OR OTHER STORAGE FACILITY OWNED OR 16 OPERATED BY THE IMPORTING DISTRIBUTOR OR BAILEE FOR HIRE AT 17 WHICH THE [OUT OF STATE] MANUFACTURER MAY STORE, REPACKAGE AND 18 SELL MALT OR BREWED BEVERAGES TO ANY IMPORTING DISTRIBUTOR TO 19 WHOM THE [OUT OF STATE] MANUFACTURER HAS GRANTED DISTRIBUTION 20 RIGHTS PURSUANT TO SUBSECTION (B) OR TO ANY PURCHASER OUTSIDE 21 THIS COMMONWEALTH FOR DELIVERY OUTSIDE THIS COMMONWEALTH; OR TO 22 SHIP TO ITS STORAGE FACILITY OUTSIDE THIS COMMONWEALTH. SUCH 23 MANUFACTURER MAY COMPENSATE THE IMPORTING DISTRIBUTOR OR BAILEE 24 FOR HIRE FOR ANY RELATED STORAGE, REPACKAGING OR DELIVERY 25 SERVICES. THE [OUT OF STATE] MANUFACTURER MUST FILE WITH THE 26 LIQUOR CONTROL BOARD THE RATE OF COMPENSATION TO BE PAID. A 27 SEPARATE WRITTEN APPLICATION MUST BE FILED TO ACQUIRE STORAGE 28 LICENSES, AND THE BOARD MAY ESTABLISH THE INFORMATION THAT MUST 29 BE PROVIDED ON THE APPLICATION. THE INITIAL FILING MUST BE MADE 30 PRIOR TO ANY PAYMENTS BEING MADE, AND ANY SUBSEQUENT CHANGES IN 20070H1420B2602 - 27 -
1 THE RATE OF COMPENSATION MUST BE FILED WITHIN THIRTY DAYS OF ANY 2 SUCH CHANGE. NOTHING IN THIS ACT AUTHORIZING STORAGE FACILITIES 3 FOR [OUT OF STATE] MANUFACTURERS IS INTENDED TO MAKE ANY CHANGE 4 IN THE MANNER MALT OR BREWED BEVERAGES ARE DISTRIBUTED THROUGH 5 THE THREE-TIER SYSTEM. 6 (A.2) THE BOARD SHALL ISSUE TO A [HOLDER OF A MANUFACTURER'S 7 LICENSE] SMALL MANUFACTURER NO MORE THAN TWO STORAGE LICENSES 8 PER SMALL MANUFACTURER TO COVER STORAGE FACILITIES SEPARATE FROM 9 THE LOCATION OF THE MANUFACTURING FACILITY. A SMALL MANUFACTURER 10 MAY USE ITS STORAGE FACILITIES TO RECEIVE, STORE, REPACKAGE, 11 SELL AND DISTRIBUTE MALT OR BREWED BEVERAGES IN THE SAME MANNER 12 AS IT CAN AT ITS PLACE OF MANUFACTURE OR IT MAY RENT, LEASE OR 13 OTHERWISE ACQUIRE SPACE FROM AN IMPORTING DISTRIBUTOR OR BAILEE 14 FOR HIRE AUTHORIZED BY THIS ACT IN THE SAME MANNER AS [AN OUT OF 15 STATE] A MANUFACTURER AS SET FORTH IN SUBSECTION (A.1). A 16 SEPARATE WRITTEN APPLICATION MUST BE FILED TO ACQUIRE STORAGE 17 LICENSES, AND THE BOARD IS EMPOWERED TO ESTABLISH WHAT 18 INFORMATION MUST BE PROVIDED ON THAT APPLICATION. NOTHING IN 19 THIS ACT AUTHORIZING OFF-SITE STORAGE FACILITIES FOR 20 MANUFACTURERS IS INTENDED TO MAKE ANY CHANGE IN THE MANNER MALT 21 OR BREWED BEVERAGES ARE DISTRIBUTED THROUGH THE THREE-TIER 22 SYSTEM. 23 (A.3) AN APPLICANT FOR AN OUT-OF-STATE SMALL MANUFACTURER 24 LICENSE SHALL FILE A WRITTEN APPLICATION WITH THE BOARD IN SUCH 25 FORM AND CONTAINING SUCH INFORMATION AS THE BOARD SHALL FROM 26 TIME TO TIME PRESCRIBE. THE APPLICATION AND LICENSE FEES AND THE 27 RESTRICTIONS ON WHO MAY APPLY FOR THE LICENSE SHALL BE THE SAME 28 AS THE FEES AND RESTRICTIONS IMPOSED ON IN-STATE SMALL 29 MANUFACTURER APPLICANTS. IN ADDITION, THE OUT-OF-STATE SMALL 30 MANUFACTURER MUST OBTAIN A SALES TAX LICENSE FROM THE DEPARTMENT 20070H1420B2602 - 28 -
1 OF REVENUE PRIOR TO SUBMITTING THE APPLICATION TO THE BOARD. THE 2 INFORMATION CONTAINED IN THE APPLICATION SHALL BE PROVIDED BY 3 THE BOARD TO THE DEPARTMENT OF REVENUE UPON REQUEST. IN ORDER TO 4 CONTINUE TO BE ELIGIBLE TO HOLD AN OUT-OF-STATE SMALL 5 MANUFACTURER LICENSE, THE OUT-OF-STATE SMALL MANUFACTURER MAY 6 NOT PRODUCE IN EXCESS OF THREE HUNDRED THOUSAND BARRELS OF MALT 7 OR BREWED BEVERAGES PER YEAR, AS THAT CALCULATION IS DEFINED IN 8 SECTION 102. NO OUT-OF-STATE SMALL MANUFACTURER LICENSEE OR ITS 9 OFFICERS, DIRECTORS, SHAREHOLDERS OR MEMBERS SHALL HOLD ANY 10 INTEREST IN ANY OTHER LICENSE ISSUED BY THE BOARD; NOR SHALL ANY 11 OUT-OF-STATE SMALL MANUFACTURER LICENSEE OR ITS OFFICERS, 12 DIRECTORS, SHAREHOLDERS OR MEMBERS, EITHER DIRECTLY OR 13 INDIRECTLY, LEND MONEYS, CREDIT OR EQUIVALENT THEREOF, TO ANY 14 OTHER LICENSEE; NOR SHALL ANY OUT-OF-STATE SMALL MANUFACTURER 15 LICENSEE OR ITS OFFICERS, DIRECTORS, SHAREHOLDERS OR MEMBERS 16 GUARANTEE THE PAYMENT OF ANY BOND, MORTGAGE, NOTE OR OTHER 17 OBLIGATION OF ANY OTHER LICENSEE; NOR SHALL ANY OUT-OF-STATE 18 SMALL MANUFACTURER LICENSEE OR ITS OFFICERS, DIRECTORS, 19 SHAREHOLDERS OR MEMBERS BE THE OWNER, PROPRIETOR OR LESSOR OF 20 ANY PLACE FOR WHICH ANY OTHER LICENSE HAS BEEN ISSUED BY THE 21 BOARD. OUT-OF-STATE SMALL MANUFACTURER LICENSEES ARE DEEMED TO 22 HAVE SUBMITTED TO THE JURISDICTION OF THE BOARD, ANY OTHER 23 COMMONWEALTH AGENCY AND THE COURTS OF THE COMMONWEALTH FOR 24 PURPOSES OF ENFORCEMENT OF THIS SECTION AND ANY RELATED LAWS, 25 RULES OR REGULATIONS. OUT-OF-STATE SMALL MANUFACTURER LICENSEES 26 ARE SUBJECT TO CITATION BY THE ENFORCEMENT BUREAU UNDER SECTION 27 471 AND NONRENEWAL BY THE BOARD UNDER SECTION 470. THE 28 DEPARTMENT OF REVENUE MAY PROMULGATE REGULATIONS REQUIRING THE 29 FILING OF PERIODIC REPORTS BY OUT-OF-STATE SMALL MANUFACTURERS 30 TO ENSURE COMPLIANCE WITH THE PROVISIONS OF THIS SECTION. A 20070H1420B2602 - 29 -
1 HOLDER OF AN OUT-OF-STATE SMALL MANUFACTURER LICENSE MAY DELIVER 2 MALT OR BREWED BEVERAGES IT HAS MANUFACTURED TO ANY HOLDER OF 3 ANY RETAIL LICENSE ISSUED BY THE BOARD. IN DOING SO, THE OUT-OF- 4 STATE SMALL MANUFACTURER MUST USE ITS OWN VEHICLES AND MAY NOT, 5 IN THIS COMMONWEALTH, USE THE SERVICES OF A TRANSPORTER-FOR-HIRE 6 OR OTHER COMMERCIAL CARRIER. IF THE OUT-OF-STATE SMALL 7 MANUFACTURER CHOOSES TO SELF-DISTRIBUTE IN THIS COMMONWEALTH, IT 8 IS NOT PERMITTED TO UTILIZE STORAGE SERVICES OTHER THAN THOSE 9 AVAILABLE UNDER SECTION 431(A.1). 10 (B) THE BOARD SHALL ISSUE TO ANY REPUTABLE PERSON WHO 11 APPLIES THEREFOR, AND PAYS THE LICENSE FEE HEREINAFTER 12 PRESCRIBED, A DISTRIBUTOR'S OR IMPORTING DISTRIBUTOR'S LICENSE 13 FOR THE PLACE WHICH SUCH PERSON DESIRES TO MAINTAIN FOR THE SALE 14 OF MALT OR BREWED BEVERAGES, NOT FOR CONSUMPTION ON THE PREMISES 15 WHERE SOLD, AND IN QUANTITIES OF NOT LESS THAN A CASE OR 16 ORIGINAL CONTAINERS CONTAINING ONE HUNDRED TWENTY-EIGHT OUNCES 17 OR MORE, OR HOLIDAY PACKAGES APPROVED BY THE BOARD, WHICH MAY BE 18 SOLD SEPARATELY AS PREPARED FOR THE MARKET BY THE MANUFACTURER 19 AT THE PLACE OF MANUFACTURE. THE BOARD SHALL HAVE THE DISCRETION 20 TO REFUSE A LICENSE TO ANY PERSON OR TO ANY CORPORATION, 21 PARTNERSHIP OR ASSOCIATION IF SUCH PERSON, OR ANY OFFICER OR 22 DIRECTOR OF SUCH CORPORATION, OR ANY MEMBER OR PARTNER OF SUCH 23 PARTNERSHIP OR ASSOCIATION SHALL HAVE BEEN CONVICTED OR FOUND 24 GUILTY OF A FELONY WITHIN A PERIOD OF FIVE YEARS IMMEDIATELY 25 PRECEDING THE DATE OF APPLICATION FOR THE SAID LICENSE: AND 26 PROVIDED FURTHER, THAT, IN THE CASE OF ANY NEW LICENSE OR THE 27 TRANSFER OF ANY LICENSE TO A NEW LOCATION, THE BOARD MAY, IN ITS 28 DISCRETION, GRANT OR REFUSE SUCH NEW LICENSE OR TRANSFER IF SUCH 29 PLACE PROPOSED TO BE LICENSED IS WITHIN THREE HUNDRED FEET OF 30 ANY CHURCH, HOSPITAL, CHARITABLE INSTITUTION, SCHOOL OR PUBLIC 20070H1420B2602 - 30 -
1 PLAYGROUND, OR IF SUCH NEW LICENSE OR TRANSFER IS APPLIED FOR A 2 PLACE WHICH IS WITHIN TWO HUNDRED FEET OF ANY OTHER PREMISES 3 WHICH IS LICENSED BY THE BOARD: AND PROVIDED FURTHER, THAT THE 4 BOARD SHALL REFUSE ANY APPLICATION FOR A NEW LICENSE OR THE 5 TRANSFER OF ANY LICENSE TO A NEW LOCATION IF, IN THE BOARD'S 6 OPINION, SUCH NEW LICENSE OR TRANSFER WOULD BE DETRIMENTAL TO 7 THE WELFARE, HEALTH, PEACE AND MORALS OF THE INHABITANTS OF THE 8 NEIGHBORHOOD WITHIN A RADIUS OF FIVE HUNDRED FEET OF THE PLACE 9 PROPOSED TO BE LICENSED. THE BOARD SHALL REFUSE ANY APPLICATION 10 FOR A NEW LICENSE OR THE TRANSFER OF ANY LICENSE TO A LOCATION 11 WHERE THE SALE OF LIQUID FUELS OR OIL IS CONDUCTED. THE BOARD 12 MAY ENTER INTO AN AGREEMENT WITH THE APPLICANT CONCERNING 13 ADDITIONAL RESTRICTIONS ON THE LICENSE IN QUESTION. IF THE BOARD 14 AND THE APPLICANT ENTER INTO SUCH AN AGREEMENT, SUCH AGREEMENT 15 SHALL BE BINDING ON THE APPLICANT. FAILURE BY THE APPLICANT TO 16 ADHERE TO THE AGREEMENT WILL BE SUFFICIENT CAUSE TO FORM THE 17 BASIS FOR A CITATION UNDER SECTION 471 AND FOR THE NONRENEWAL OF 18 THE LICENSE UNDER SECTION 470. IF THE BOARD ENTERS INTO AN 19 AGREEMENT WITH AN APPLICANT CONCERNING ADDITIONAL RESTRICTIONS, 20 THOSE RESTRICTIONS SHALL BE BINDING ON SUBSEQUENT HOLDERS OF THE 21 LICENSE UNTIL THE LICENSE IS TRANSFERRED TO A NEW LOCATION OR 22 UNTIL THE BOARD ENTERS INTO A SUBSEQUENT AGREEMENT REMOVING 23 THOSE RESTRICTIONS. IF THE APPLICATION IN QUESTION INVOLVES A 24 LOCATION PREVIOUSLY LICENSED BY THE BOARD, THEN ANY RESTRICTIONS 25 IMPOSED BY THE BOARD ON THE PREVIOUS LICENSE AT THAT LOCATION 26 SHALL BE BINDING ON THE APPLICANT UNLESS THE BOARD ENTERS INTO A 27 NEW AGREEMENT RESCINDING THOSE RESTRICTIONS. THE BOARD SHALL 28 REQUIRE NOTICE TO BE POSTED ON THE PROPERTY OR PREMISES UPON 29 WHICH THE LICENSEE OR PROPOSED LICENSEE WILL ENGAGE IN SALES OF 30 MALT OR BREWED BEVERAGES. THIS NOTICE SHALL BE SIMILAR TO THE 20070H1420B2602 - 31 -
1 NOTICE REQUIRED OF HOTEL, RESTAURANT AND CLUB LIQUOR LICENSEES.
2 EXCEPT AS HEREINAFTER PROVIDED, SUCH LICENSE SHALL AUTHORIZE
3 THE HOLDER THEREOF TO SELL OR DELIVER MALT OR BREWED BEVERAGES
4 IN QUANTITIES ABOVE SPECIFIED ANYWHERE WITHIN THE COMMONWEALTH
5 OF PENNSYLVANIA, WHICH, IN THE CASE OF DISTRIBUTORS, HAVE BEEN
6 PURCHASED ONLY FROM PERSONS LICENSED UNDER THIS ACT AS SMALL
7 MANUFACTURERS OR IMPORTING DISTRIBUTORS, AND IN THE CASE OF
8 IMPORTING DISTRIBUTORS, HAVE BEEN PURCHASED FROM MANUFACTURERS
9 OR PERSONS OUTSIDE THIS COMMONWEALTH ENGAGED IN THE LEGAL SALE
10 OF MALT OR BREWED BEVERAGES OR FROM MANUFACTURERS OR IMPORTING
11 DISTRIBUTORS LICENSED UNDER THIS ARTICLE. IN THE CASE OF AN
12 IMPORTING DISTRIBUTOR, THE HOLDER OF SUCH A LICENSE SHALL BE
13 AUTHORIZED TO STORE AND REPACKAGE MALT OR BREWED BEVERAGES OWNED
14 BY A MANUFACTURER AT A SEGREGATED PORTION OF A WAREHOUSE OR
15 OTHER STORAGE FACILITY AUTHORIZED BY SECTION 441(D) AND OPERATED
16 BY THE IMPORTING DISTRIBUTOR WITHIN ITS APPOINTED TERRITORY AND
17 DELIVER SUCH BEVERAGES TO ANOTHER IMPORTING DISTRIBUTOR WHO HAS
18 BEEN GRANTED DISTRIBUTION RIGHTS BY THE MANUFACTURER AS PROVIDED
19 HEREIN. THE IMPORTING DISTRIBUTOR SHALL BE PERMITTED TO RECEIVE
20 A FEE FROM THE MANUFACTURER FOR ANY RELATED STORAGE, REPACKAGING
21 OR DELIVERY SERVICES. IN THE CASE OF A BAILEE FOR HIRE HIRED BY
22 A MANUFACTURER, THE HOLDER OF SUCH A PERMIT SHALL BE AUTHORIZED:
23 TO RECEIVE, STORE AND REPACKAGE MALT OR BREWED BEVERAGES
24 PRODUCED BY THAT MANUFACTURER FOR SALE BY THAT MANUFACTURER TO
25 IMPORTING DISTRIBUTORS TO WHOM THAT MANUFACTURER HAS GIVEN
26 DISTRIBUTION RIGHTS PURSUANT TO THIS SUBSECTION OR TO PURCHASERS
27 OUTSIDE THIS COMMONWEALTH FOR DELIVERY OUTSIDE THIS
28 COMMONWEALTH; OR TO SHIP TO THAT MANUFACTURER'S STORAGE
29 FACILITIES OUTSIDE THIS COMMONWEALTH. THE BAILEE FOR HIRE SHALL
30 BE PERMITTED TO RECEIVE A FEE FROM THE MANUFACTURER FOR ANY
20070H1420B2602 - 32 -
1 RELATED STORAGE, REPACKAGING OR DELIVERY SERVICES. THE BAILEE 2 FOR HIRE SHALL, AS REQUIRED IN ARTICLE V OF THIS ACT, KEEP 3 COMPLETE AND ACCURATE RECORDS OF ALL TRANSACTIONS, INVENTORY, 4 RECEIPTS AND SHIPMENTS AND MAKE ALL RECORDS AND THE LICENSED 5 AREAS AVAILABLE FOR INSPECTION BY THE BOARD AND FOR THE 6 PENNSYLVANIA STATE POLICE, BUREAU OF LIQUOR CONTROL ENFORCEMENT, 7 DURING NORMAL BUSINESS HOURS. 8 EACH [OUT OF STATE] MANUFACTURER OF MALT OR BREWED BEVERAGES, 9 EXCLUDING SMALL MANUFACTURERS, WHOSE PRODUCTS ARE SOLD AND 10 DELIVERED IN THIS COMMONWEALTH SHALL GIVE DISTRIBUTING RIGHTS 11 FOR SUCH PRODUCTS IN DESIGNATED GEOGRAPHICAL AREAS TO SPECIFIC 12 IMPORTING DISTRIBUTORS, AND SUCH IMPORTING DISTRIBUTOR SHALL NOT 13 SELL OR DELIVER MALT OR BREWED BEVERAGES MANUFACTURED BY THE 14 [OUT OF STATE] MANUFACTURER TO ANY PERSON ISSUED A LICENSE UNDER 15 THE PROVISIONS OF THIS ACT WHOSE LICENSED PREMISES ARE NOT 16 LOCATED WITHIN THE GEOGRAPHICAL AREA FOR WHICH HE HAS BEEN GIVEN 17 DISTRIBUTING RIGHTS BY SUCH MANUFACTURER. SHOULD A LICENSEE 18 ACCEPT THE DELIVERY OF SUCH MALT OR BREWED BEVERAGES IN 19 VIOLATION OF THIS SECTION, SAID LICENSEE SHALL BE SUBJECT TO A 20 SUSPENSION OF HIS LICENSE FOR AT LEAST THIRTY DAYS: PROVIDED, 21 THAT THE IMPORTING DISTRIBUTOR HOLDING SUCH DISTRIBUTING RIGHTS 22 FOR SUCH PRODUCT SHALL NOT SELL OR DELIVER THE SAME TO ANOTHER 23 IMPORTING DISTRIBUTOR WITHOUT FIRST HAVING ENTERED INTO A 24 WRITTEN AGREEMENT WITH THE SAID SECONDARY IMPORTING DISTRIBUTOR 25 SETTING FORTH THE TERMS AND CONDITIONS UNDER WHICH SUCH PRODUCTS 26 ARE TO BE RESOLD WITHIN THE TERRITORY GRANTED TO THE PRIMARY 27 IMPORTING DISTRIBUTOR BY THE MANUFACTURER. 28 WHEN A [PENNSYLVANIA] SMALL MANUFACTURER OF MALT OR BREWED 29 BEVERAGES LICENSED UNDER THIS ARTICLE NAMES OR CONSTITUTES A 30 DISTRIBUTOR OR IMPORTING DISTRIBUTOR AS THE PRIMARY OR ORIGINAL 20070H1420B2602 - 33 -
1 SUPPLIER OF HIS PRODUCT, HE SHALL ALSO DESIGNATE THE SPECIFIC 2 GEOGRAPHICAL AREA FOR WHICH THE SAID DISTRIBUTOR OR IMPORTING 3 DISTRIBUTOR IS GIVEN DISTRIBUTING RIGHTS, AND SUCH DISTRIBUTOR 4 OR IMPORTING DISTRIBUTOR SHALL NOT SELL OR DELIVER THE PRODUCTS 5 OF SUCH MANUFACTURER TO ANY PERSON ISSUED A LICENSE UNDER THE 6 PROVISIONS OF THIS ACT WHOSE LICENSED PREMISES ARE NOT LOCATED 7 WITHIN THE GEOGRAPHICAL AREA FOR WHICH DISTRIBUTING RIGHTS HAVE 8 BEEN GIVEN TO THE DISTRIBUTOR AND IMPORTING DISTRIBUTOR BY THE 9 SAID MANUFACTURER: PROVIDED, THAT THE IMPORTING DISTRIBUTOR 10 HOLDING SUCH DISTRIBUTING RIGHTS FOR SUCH PRODUCT SHALL NOT SELL 11 OR DELIVER THE SAME TO ANOTHER IMPORTING DISTRIBUTOR WITHOUT 12 FIRST HAVING ENTERED INTO A WRITTEN AGREEMENT WITH THE SAID 13 SECONDARY IMPORTING DISTRIBUTOR SETTING FORTH THE TERMS AND 14 CONDITIONS UNDER WHICH SUCH PRODUCTS ARE TO BE RESOLD WITHIN THE 15 TERRITORY GRANTED TO THE PRIMARY IMPORTING DISTRIBUTOR BY THE 16 MANUFACTURER. NOTHING HEREIN CONTAINED SHALL BE CONSTRUED TO 17 PREVENT ANY MANUFACTURER FROM AUTHORIZING THE IMPORTING 18 DISTRIBUTOR HOLDING THE DISTRIBUTING RIGHTS FOR A DESIGNATED 19 GEOGRAPHICAL AREA FROM SELLING THE PRODUCTS OF SUCH MANUFACTURER 20 TO ANOTHER IMPORTING DISTRIBUTOR ALSO HOLDING DISTRIBUTING 21 RIGHTS FROM THE SAME MANUFACTURER FOR ANOTHER GEOGRAPHICAL AREA, 22 PROVIDING SUCH AUTHORITY BE CONTAINED IN WRITING AND A COPY 23 THEREOF BE GIVEN TO EACH OF THE IMPORTING DISTRIBUTORS SO 24 AFFECTED. 25 (B.1) (1) ANY PERSON IN THIS COMMONWEALTH OR ELSEWHERE WHO 26 SHALL PURCHASE OR IN ANY MANNER WHATSOEVER ACQUIRE OR OTHERWISE 27 SUCCEED TO THE BUSINESS OF A MANUFACTURER, ASSETS OR RIGHTS TO 28 IMPORT, MARKET, SHIP INTO THIS COMMONWEALTH OR DISTRIBUTE A 29 BRAND OF BEER, OR TO USE AND EXPLOIT ANY TRADEMARK INCORPORATED 30 AS PART OF A BRAND OF BEER PRODUCED BY SUCH A MANUFACTURER SHALL 20070H1420B2602 - 34 -
1 BE OBLIGATED TO ALL TERMS OF THE MANUFACTURER'S FRANCHISE 2 AGREEMENTS IN EFFECT ON THE EFFECTIVE DATE OF THE PURCHASE, 3 ACQUISITION OR SUCCESSION, OR, IF EARLIER, AT THE TIME THE 4 AGREEMENT CONTEMPLATING THE PURCHASE, ACQUISITION OR SUCCESSION 5 IS ACTUALLY MADE. 6 (2) "PURCHASE" OR "ACQUISITION," FOR PURPOSES OF THIS 7 SECTION, INCLUDES, BUT IS NOT LIMITED TO, A PURCHASE, 8 ACQUISITION, LEASE, LICENSE OR ASSIGNMENT OF ALL OR A 9 CONTROLLING INTEREST IN THE CAPITAL STOCK OR OPERATING ASSETS, 10 INCLUDING BRAND TRADEMARKS RIGHTS; MERGER; ANY CORPORATE 11 REORGANIZATION OR CONSOLIDATION; AND ALSO, WITHOUT LIMITATION, 12 ANY LICENSE, CROSS-LICENSE, JOINT VENTURE OR OTHER AGREEMENT OR 13 ARRANGEMENT, DIRECTLY OR INDIRECTLY, TRANSFERRING, SUBSTITUTING 14 OR MATERIALLY CHANGING THE PERSON OR PERSONS AUTHORIZED BY THE 15 ONE OWNING OR CONTROLLING A BRAND OR ANY TRADEMARK AS PART OF A 16 BRAND, TO PRODUCE, IMPORT, SHIP, MARKET OR DISTRIBUTE THE BRAND 17 OF BEER INTO OR WITHIN THIS COMMONWEALTH. 18 (3) "MANUFACTURER," AS USED IN THIS SUBSECTION, SHALL MEAN 19 ANY PERSON, INCLUDING ANY AGENT OF SUCH PERSON, WHO (I) IS 20 LICENSED AS A MANUFACTURER OF MALT OR BREWED BEVERAGES LOCATED 21 WITHIN THE COMMONWEALTH OF PENNSYLVANIA, (II) HOLDS A 22 DISTRIBUTOR OR IMPORTING DISTRIBUTOR LICENSE, OR (III) 23 MANUFACTURES ANY MALT BEVERAGE, HAS TITLE TO ANY MALT BEVERAGE 24 PRODUCTS OR HAS THE CONTRACTUAL RIGHT TO DISTRIBUTE ANY MALT 25 BEVERAGE PRODUCT, WHETHER LICENSED IN THIS COMMONWEALTH OR NOT, 26 WHO ENTERS INTO AN "AGREEMENT" WITH ANY IMPORTING DISTRIBUTOR 27 LICENSED TO DO BUSINESS IN THIS COMMONWEALTH. 28 (B.2) ANY MANUFACTURER OF MALT OR BREWED BEVERAGES, NOT 29 INCLUDING A SMALL MANUFACTURER, THAT IS ENGAGED IN COMMERCIAL 30 BREWING OF SOME OR ALL OF ITS PRODUCTS IN A BREWERY BUILDING 20070H1420B2602 - 35 -
1 THAT IS MORE THAN ONE HUNDRED FORTY-FIVE YEARS OLD MAY ENGAGE IN 2 DIRECT SALES TO LICENSEES WHOSE PRINCIPAL PLACE OF BUSINESS IS 3 WITHIN THE SAME COUNTY AS THE BREWERY AND TO NON-LICENSEES, ALL 4 SUBJECT TO THE RESTRICTIONS STATED HEREIN, WITHOUT THE 5 REQUIREMENT OF USING THE DISTRIBUTION SYSTEM. 6 (C) THE AFORESAID LICENSES SHALL BE ISSUED ONLY TO REPUTABLE 7 INDIVIDUALS, PARTNERSHIPS AND ASSOCIATIONS WHO ARE, OR WHOSE 8 MEMBERS ARE, CITIZENS OF THE UNITED STATES AND HAVE FOR TWO 9 YEARS PRIOR TO THE DATE OF THEIR APPLICATIONS BEEN RESIDENTS OF 10 THE COMMONWEALTH OF PENNSYLVANIA OR TO REPUTABLE CORPORATIONS 11 ORGANIZED OR DULY REGISTERED UNDER THE LAWS OF THE COMMONWEALTH 12 OF PENNSYLVANIA. SUCH LICENSES SHALL BE ISSUED TO CORPORATIONS 13 DULY ORGANIZED OR REGISTERED UNDER THE LAWS OF THE COMMONWEALTH 14 OF PENNSYLVANIA ONLY WHEN IT APPEARS THAT ALL OF THE OFFICERS 15 AND DIRECTORS OF THE CORPORATION ARE CITIZENS OF THE UNITED 16 STATES AND [HAVE BEEN] ARE RESIDENTS OF THE COMMONWEALTH OF 17 PENNSYLVANIA [FOR A PERIOD OF AT LEAST TWO YEARS PRIOR TO THE 18 DATE OF APPLICATION], AND THAT AT LEAST FIFTY-ONE PER CENTUM OF 19 THE CAPITAL STOCK OF SUCH CORPORATION IS ACTUALLY OWNED BY 20 INDIVIDUALS WHO ARE CITIZENS OF THE UNITED STATES AND [HAVE 21 BEEN] ARE RESIDENTS OF THE COMMONWEALTH OF PENNSYLVANIA [FOR A 22 PERIOD OF AT LEAST TWO YEARS PRIOR TO THE DATE OF APPLICATION]: 23 PROVIDED, THAT THE PROVISIONS OF THIS SUBSECTION WITH RESPECT TO 24 RESIDENCE REQUIREMENTS SHALL NOT APPLY TO INDIVIDUALS, PARTNERS, 25 OFFICERS, DIRECTORS AND OWNERS OF CAPITAL STOCK, OF CORPORATIONS 26 LICENSED OR APPLYING FOR LICENSES AS MANUFACTURERS OF MALT OR 27 BREWED BEVERAGES, NOR SHALL THE PROVISIONS OF THIS SUBSECTION 28 WITH RESPECT TO STOCKHOLDER REQUIREMENTS APPLY TO CORPORATIONS 29 LICENSED OR APPLYING FOR LICENSES AS MANUFACTURERS OF MALT OR 30 BREWED BEVERAGES. 20070H1420B2602 - 36 -
1 (D) (1) ALL DISTRIBUTING RIGHTS AS HEREINABOVE REQUIRED 2 SHALL BE IN WRITING, SHALL BE EQUITABLE IN THEIR PROVISIONS AND 3 SHALL BE SUBSTANTIALLY SIMILAR AS TO TERMS AND CONDITIONS WITH 4 ALL OTHER DISTRIBUTING RIGHTS AGREEMENTS BETWEEN THE 5 MANUFACTURER GIVING SUCH AGREEMENT AND ITS OTHER IMPORTING 6 DISTRIBUTORS AND DISTRIBUTORS SHALL NOT BE MODIFIED, CANCELLED, 7 TERMINATED OR RESCINDED BY THE MANUFACTURER WITHOUT GOOD CAUSE, 8 AND SHALL CONTAIN A PROVISION IN SUBSTANCE OR EFFECT AS FOLLOWS: 9 "THE MANUFACTURER RECOGNIZES THAT THE IMPORTING DISTRIBUTOR AND 10 DISTRIBUTOR ARE FREE TO MANAGE THEIR BUSINESS IN THE MANNER THE 11 IMPORTING DISTRIBUTOR AND DISTRIBUTOR DEEM BEST AND THAT THIS 12 PREROGATIVE VESTS IN THE IMPORTING DISTRIBUTOR AND DISTRIBUTOR 13 THE EXCLUSIVE RIGHT TO ESTABLISH A SELLING PRICE, TO SELECT THE 14 BRANDS OF MALT OR BREWED BEVERAGES THEY WISH TO HANDLE AND TO 15 DETERMINE THE EFFORTS AND RESOURCES WHICH THE IMPORTING 16 DISTRIBUTOR AND DISTRIBUTOR WILL EXERT TO DEVELOP AND PROMOTE 17 THE SAME OF THE MANUFACTURER'S PRODUCTS HANDLED BY THE IMPORTING 18 DISTRIBUTOR AND DISTRIBUTOR. HOWEVER, THE MANUFACTURER EXPECTS 19 THAT THE IMPORTING DISTRIBUTOR AND DISTRIBUTOR WILL PRICE 20 COMPETITIVELY THE PRODUCTS HANDLED BY THEM, DEVOTE REASONABLE 21 EFFORT AND RESOURCES TO THE SALE OF SUCH PRODUCTS AND MAINTAIN A 22 REASONABLE SALES LEVEL." "GOOD CAUSE" SHALL MEAN THE FAILURE BY 23 ANY PARTY TO AN AGREEMENT, WITHOUT REASONABLE EXCUSE OR 24 JUSTIFICATION, TO COMPLY SUBSTANTIALLY WITH AN ESSENTIAL, 25 REASONABLE AND COMMERCIALLY ACCEPTABLE REQUIREMENT IMPOSED BY 26 THE OTHER PARTY UNDER THE TERMS OF AN AGREEMENT. 27 (2) AFTER JANUARY 1, 1980, NO MANUFACTURER SHALL ENTER INTO 28 ANY AGREEMENT WITH MORE THAN ONE DISTRIBUTOR OR IMPORTING 29 DISTRIBUTOR FOR THE PURPOSE OF ESTABLISHING MORE THAN ONE 30 AGREEMENT FOR DESIGNATED BRAND OR BRANDS OF MALT OR BREWED 20070H1420B2602 - 37 -
1 BEVERAGES IN ANY ONE TERRITORY. EACH FRANCHISE TERRITORY WHICH 2 IS GRANTED BY A MANUFACTURER SHALL BE GEOGRAPHICALLY CONTIGUOUS. 3 ALL IMPORTING DISTRIBUTORS SHALL MAINTAIN SUFFICIENT RECORDS TO 4 EVIDENCE COMPLIANCE OF THIS SECTION. WITH REGARD TO ANY 5 TERRITORIAL DISTRIBUTION AUTHORITY GRANTED TO AN IMPORTING 6 DISTRIBUTOR BY A MANUFACTURER OF MALT OR BREWED BEVERAGES AFTER 7 JANUARY 1, 1996, THE RECORDS SHALL ESTABLISH THAT EACH AND EVERY 8 CASE OF A BRAND OF MALT OR BREWED BEVERAGES FOR WHICH THE 9 IMPORTING DISTRIBUTOR IS ASSIGNED WAS SOLD, RESOLD, STORED, 10 DELIVERED OR TRANSPORTED BY THE IMPORTING DISTRIBUTOR, EITHER 11 FROM A POINT OR TO A POINT WITH THE ASSIGNED GEOGRAPHICALLY 12 CONTIGUOUS TERRITORY, TO ANY PERSON OR PERSONS, WHETHER SUCH 13 PERSON OR PERSONS ARE LICENSED BY THIS ACT OR NOT LICENSED BY 14 THIS ACT. 15 (3) EXCEPT FOR DISCONTINUANCE OF A BRAND OR A VALID 16 TERMINATION FOR GOOD CAUSE, THE PURCHASER OF THE ASSETS OF THE 17 MANUFACTURER AS DEFINED IN THIS ACT SHALL BECOME OBLIGATED TO 18 ALL THE TERRITORIAL AND BRAND DESIGNATIONS OF THE AGREEMENT IN 19 EFFECT ON THE DATE OF PURCHASE. PURCHASE OF ASSETS AS DEFINED 20 FOR THE PURPOSES OF THIS ACT SHALL INCLUDE, BUT NOT BE LIMITED 21 TO, THE SALE OF STOCK, SALE OF ASSETS, MERGER, LEASE, TRANSFER 22 OR CONSOLIDATION. 23 (4) THE COURT OF COMMON PLEAS OF THE COUNTY WHEREIN THE 24 LICENSED PREMISES OF THE IMPORTING DISTRIBUTOR OR DISTRIBUTOR 25 ARE LOCATED IS HEREBY VESTED WITH JURISDICTION AND POWER TO 26 ENJOIN THE MODIFICATION, RESCISSION, CANCELLATION OR TERMINATION 27 OF A FRANCHISE OR AGREEMENT BETWEEN A MANUFACTURER AND AN 28 IMPORTING DISTRIBUTOR OR DISTRIBUTOR AT THE INSTANCE OF SUCH 29 IMPORTING DISTRIBUTOR OR DISTRIBUTOR WHO IS OR MIGHT BE 30 ADVERSELY AFFECTED BY SUCH MODIFICATION, RESCISSION, 20070H1420B2602 - 38 -
1 CANCELLATION OR TERMINATION, AND IN GRANTING AN INJUNCTION THE 2 COURT SHALL PROVIDE THAT NO MANUFACTURER SHALL SUPPLY THE 3 CUSTOMERS OR TERRITORY OF THE IMPORTING DISTRIBUTOR OR 4 DISTRIBUTOR BY SERVICING THE TERRITORY OR CUSTOMERS THROUGH 5 OTHER IMPORTING DISTRIBUTORS OR DISTRIBUTORS OR ANY OTHER MEANS 6 WHILE THE INJUNCTION IS IN EFFECT: PROVIDED, HOWEVER, THAT ANY 7 INJUNCTION ISSUED UNDER THIS SUBSECTION SHALL REQUIRE THE 8 POSTING OF SUFFICIENT BOND AGAINST DAMAGES ARISING FROM AN 9 INJUNCTION IMPROVIDENTLY GRANTED AND A SHOWING THAT THE DANGER 10 OF IRREVOCABLE LOSS OR DAMAGE IS IMMEDIATE AND THAT DURING THE 11 PENDENCY OF SUCH INJUNCTION THE IMPORTING DISTRIBUTOR OR 12 DISTRIBUTOR SHALL CONTINUE TO SERVICE THE ACCOUNTS OF THE 13 MANUFACTURER IN GOOD FAITH. 14 (5) THE PROVISIONS OF THIS SUBSECTION SHALL NOT APPLY TO 15 [PENNSYLVANIA] SMALL MANUFACTURERS [WHOSE PRINCIPAL PLACE OF 16 BUSINESS IS LOCATED IN PENNSYLVANIA] UNLESS THEY NAME OR 17 CONSTITUTE A DISTRIBUTOR OR IMPORTING DISTRIBUTOR AS A PRIMARY 18 OR ORIGINAL SUPPLIER OF THEIR PRODUCTS SUBSEQUENT TO THE 19 EFFECTIVE DATE OF THIS ACT, OR UNLESS SUCH [PENNSYLVANIA] SMALL 20 MANUFACTURERS HAVE NAMED OR CONSTITUTED A DISTRIBUTOR OR 21 IMPORTING DISTRIBUTOR AS A PRIMARY OR ORIGINAL SUPPLIER OF THEIR 22 PRODUCTS PRIOR TO THE EFFECTIVE DATE OF THIS ACT, AND WHICH 23 STATUS IS CONTINUING WHEN THIS ACT BECOMES EFFECTIVE. 24 (E) IN ADDITION TO THE FEES UNDER SECTION 614-A OF THE ACT 25 OF APRIL 9, 1929 (P.L.177, NO.175), KNOWN AS "THE ADMINISTRATIVE 26 CODE OF 1929," THE BOARD SHALL ASSESS A FEE SURCHARGE OF NINETY- 27 FIVE DOLLARS ($95.00) FOR A DISTRIBUTOR'S LICENSE AND A FEE 28 SURCHARGE OF FOUR HUNDRED SEVENTY DOLLARS ($470.00) FOR AN 29 IMPORTING DISTRIBUTOR'S LICENSE AND A FEE SURCHARGE OF SEVENTY- 30 FIVE DOLLARS ($75.00) FOR BRAND REGISTRATION. MONEY COLLECTED 20070H1420B2602 - 39 -
1 UNDER THIS SUBSECTION SHALL BE PLACED IN A RESTRICTED ACCOUNT IN 2 THE STATE STORES FUND. THE BOARD MAY USE THE MONEY IN THIS 3 ACCOUNT TO IMPLEMENT SECTION 216. IN THE EVENT THE PROVISIONS OF 4 SECTION 447(A)(2) AND/OR (C) ARE HELD INVALID, THEN THIS 5 SUBSECTION SHALL BE VOID AND SHALL NOT APPLY. 6 (F) (1) ANY MALT OR BREWED BEVERAGE PRODUCED OUTSIDE THIS 7 COMMONWEALTH THAT IS REPACKAGED BY A BAILEE FOR HIRE OR 8 IMPORTING DISTRIBUTOR ON BEHALF OF AN OUT OF STATE MANUFACTURER 9 MUST BE RETURNED TO THE OUT OF STATE MANUFACTURER AND COME TO 10 REST OUT OF STATE BEFORE IT MAY REENTER THIS COMMONWEALTH. SUCH 11 REPACKAGED MALT OR BREWED BEVERAGES MUST BE DISTRIBUTED THROUGH 12 THE THREE-TIER SYSTEM. ANY MALT OR BREWED BEVERAGE THAT IS 13 REPACKAGED BY A BAILEE FOR HIRE OR IMPORTING DISTRIBUTOR ON 14 BEHALF OF AN IN STATE MANUFACTURER MUST BE RETURNED TO THE IN 15 STATE MANUFACTURER AND COME TO REST AT THE IN STATE 16 MANUFACTURER'S LICENSED FACILITY. 17 (2) FOR PURPOSES OF THIS SECTION, "REPACKAGE" SHALL MEAN ANY 18 CHANGE OR ALTERATION TO THE CONTAINERS OR CONTAINER 19 CONFIGURATION OF A CASE. 20 SECTION 5. SECTION 431.1(D) OF THE ACT, ADDED FEBRUARY 21, 21 2002 (P.L.103, NO.10), IS AMENDED TO READ: 22 SECTION 431.1. MALT AND BREWED BEVERAGES ALTERNATING 23 BREWERS' LICENSES.--* * * 24 (D) MALT AND BREWED BEVERAGES MANUFACTURED UNDER THE 25 AUTHORITY OF AN ALTERNATING BREWER'S LICENSE MUST BE DISTRIBUTED 26 IN THIS COMMONWEALTH ONLY THROUGH SPECIFIC IMPORTING 27 DISTRIBUTORS WHO SHALL FIRST HAVE BEEN GIVEN DISTRIBUTOR RIGHTS 28 FOR SUCH PRODUCTS IN DESIGNATED GEOGRAPHICAL AREAS THROUGH THE 29 DISTRIBUTION SYSTEM REQUIRED FOR [OUT-OF-STATE] MANUFACTURERS 30 UNDER SECTION 431(B) AS WELL AS ALL OTHER PERTINENT SECTIONS OF 20070H1420B2602 - 40 -
1 THIS ACT. THE ALTERNATING BREWER MUST COMPLY WITH SECTION 444. 2 * * * 3 SECTION 6. SECTION 440 OF THE ACT, AMENDED JULY 17, 2003 4 (P.L.63, NO.15), IS AMENDED TO READ: 5 SECTION 440. SALES BY MANUFACTURERS OF MALT OR BREWED 6 BEVERAGES; MINIMUM QUANTITIES.--[NO] EXCEPT AS OTHERWISE 7 PROVIDED IN THIS SECTION, NO MANUFACTURER SHALL SELL ANY MALT OR 8 BREWED BEVERAGES FOR CONSUMPTION ON THE PREMISES WHERE SOLD, NOR 9 SELL OR DELIVER ANY SUCH MALT OR BREWED BEVERAGES IN OTHER THAN 10 ORIGINAL CONTAINERS APPROVED AS TO CAPACITY BY THE BOARD, NOR IN 11 QUANTITIES OF LESS THAN A CASE OR ORIGINAL CONTAINERS CONTAINING 12 SIXTY-FOUR OUNCES OR MORE WHICH MAY BE SOLD SEPARATELY; NOR 13 SHALL ANY MANUFACTURER MAINTAIN OR OPERATE WITHIN THE 14 COMMONWEALTH ANY PLACE OR PLACES OTHER THAN THE PLACE OR PLACES 15 COVERED BY HIS OR ITS LICENSE WHERE MALT OR BREWED BEVERAGES ARE 16 SOLD OR WHERE ORDERS ARE TAKEN. NOTWITHSTANDING ANY OTHER 17 PROVISION OF LAW TO THE CONTRARY, UPON APPLICATION TO AND 18 APPROVAL BY THE BOARD, A MANUFACTURER MAY SELL HOLIDAY PACKAGES 19 BETWEEN NOVEMBER 1 OF EACH YEAR AND JANUARY 31 OF THE 20 IMMEDIATELY SUCCEEDING YEAR. 21 SECTION 7. SECTION 441(B) AND (G) OF THE ACT, AMENDED OR 22 ADDED DECEMBER 20, 1996 (P.L.1513, NO.196) AND DECEMBER 9, 2002 23 (P.L.1653, NO.212), ARE AMENDED AND THE SECTION IS AMENDED BY 24 ADDING SUBSECTIONS TO READ: 25 SECTION 441. DISTRIBUTORS' AND IMPORTING DISTRIBUTORS' 26 RESTRICTIONS ON SALES, STORAGE, ETC.--* * * 27 (B) [NO] EXCEPT AS OTHERWISE PROVIDED IN SUBSECTION (B.1) OR 28 (B.2), NO DISTRIBUTOR OR IMPORTING DISTRIBUTOR SHALL SELL ANY 29 MALT OR BREWED BEVERAGES IN QUANTITIES OF LESS THAN A CASE OR 30 ORIGINAL CONTAINERS CONTAINING ONE HUNDRED TWENTY-EIGHT OUNCES 20070H1420B2602 - 41 -
1 OR MORE WHICH MAY BE SOLD SEPARATELY: PROVIDED, THAT NO MALT OR 2 BREWED BEVERAGES SOLD OR DELIVERED SHALL BE CONSUMED UPON THE 3 PREMISES OF THE DISTRIBUTOR OR IMPORTING DISTRIBUTOR, OR IN ANY 4 PLACE PROVIDED FOR SUCH PURPOSE BY SUCH DISTRIBUTOR OR IMPORTING 5 DISTRIBUTOR. NOTWITHSTANDING ANY OTHER PROVISION OF THIS SECTION 6 OR ACT, MALT OR BREWED BEVERAGES WHICH ARE PART OF A TASTING 7 CONDUCTED PURSUANT TO THE BOARD'S REGULATIONS MAY BE CONSUMED ON 8 LICENSED PREMISES. 9 (B.1) NOTWITHSTANDING ANY OTHER PROVISION OF LAW TO THE 10 CONTRARY, A DISTRIBUTOR OR IMPORTING DISTRIBUTOR MAY SELL ANY 11 HOLIDAY PACKAGE THAT HAS BEEN APPROVED BY THE BOARD BETWEEN 12 NOVEMBER 1 OF EACH YEAR AND JANUARY 31 OF THE IMMEDIATELY 13 SUCCEEDING YEAR. 14 (B.2) NOTWITHSTANDING ANY OTHER PROVISION OF LAW TO THE 15 CONTRARY, BEGINNING ON THE EFFECTIVE DATE OF THIS SUBSECTION, A 16 DISTRIBUTOR OR IMPORTING DISTRIBUTOR MAY SELL: 17 (I) A PACKAGE PREPARED BY THE MANUFACTURER FOR SALE OR 18 DISTRIBUTION OF SIX ORIGINAL CONTAINERS TOTALING NOT LESS THAN 19 SIXTY-SIX FLUID OUNCES NOR MORE THAN SEVENTY-TWO FLUID OUNCES OF 20 MALT OR BREWED BEVERAGES. 21 (II) A PACKAGE PREPARED BY THE MANUFACTURER FOR SALE OR 22 DISTRIBUTION OF FOUR ORIGINAL CONTAINERS TOTALING ONE HUNDRED 23 OUNCES OR MORE OF MALT OR BREWED BEVERAGES. 24 THERE SHALL BE NO LIMIT ON THE AMOUNT OF FLUID OUNCES THAT MAY 25 BE SOLD IN A SINGLE SALE TO ONE PERSON UNDER THIS SECTION. THIS 26 SECTION SHALL EXPIRE SEPTEMBER 1, 2008. 27 * * * 28 (G) ALL MALT OR BREWED BEVERAGES PURCHASED BY AN IMPORTING 29 DISTRIBUTOR FROM A [PENNSYLVANIA] MANUFACTURER OF MALT OR BREWED 30 BEVERAGES [OR FROM ANY PERSON LOCATED OUTSIDE THIS COMMONWEALTH] 20070H1420B2602 - 42 -
1 FOR RESALE SHALL BE INVOICED TO THE IMPORTING DISTRIBUTOR, SHALL 2 COME PHYSICALLY INTO THE POSSESSION OF SUCH IMPORTING 3 DISTRIBUTOR AND SHALL BE UNLOADED INTO AND DISTRIBUTED FROM THE 4 LICENSED PREMISES OF SUCH IMPORTING DISTRIBUTOR. THE BOARD MAY 5 ACT TO FURTHER DEFINE AND CONTROL THE STORAGE AND DISTRIBUTION 6 OF MALT OR BREWED BEVERAGES IN CONFORMITY WITH THIS SECTION AND 7 THIS ACT. 8 SECTION 8. SECTION 442(A) OF THE ACT, AMENDED NOVEMBER 29, 9 2006 (P.L.1421, NO.155), IS AMENDED TO READ: 10 SECTION 442. RETAIL DISPENSERS' RESTRICTIONS ON PURCHASES 11 AND SALES.--(A) (1) NO RETAIL DISPENSER SHALL PURCHASE OR 12 RECEIVE ANY MALT OR BREWED BEVERAGES EXCEPT IN ORIGINAL 13 CONTAINERS AS PREPARED FOR THE MARKET BY THE MANUFACTURER AT THE 14 PLACE OF MANUFACTURE. THE RETAIL DISPENSER MAY THEREAFTER BREAK 15 THE BULK UPON THE LICENSED PREMISES AND SELL OR DISPENSE THE 16 SAME FOR CONSUMPTION ON OR OFF THE PREMISES SO LICENSED: 17 PROVIDED, HOWEVER, THAT NO RETAIL DISPENSER MAY SELL MALT OR 18 BREWED BEVERAGES FOR CONSUMPTION OFF THE PREMISES IN QUANTITIES 19 IN EXCESS OF [ONE HUNDRED NINETY-TWO] TWO HUNDRED SIXTEEN FLUID 20 OUNCES: PROVIDED, FURTHER, THAT NO LICENSEE UNDER THIS SECTION 21 SHALL BE PERMITTED TO SELL A PACKAGE PREPARED BY THE 22 MANUFACTURER FOR SALE OR DISTRIBUTION IN ANY CONFIGURATION OF 23 ORIGINAL CONTAINERS TOTALING BETWEEN ONE HUNDRED FORTY-FIVE 24 FLUID OUNCES AND TWO HUNDRED SIXTEEN FLUID OUNCES OF MALT OR 25 BREWED BEVERAGES PRIOR TO SEPTEMBER 1, 2008: PROVIDED, FURTHER, 26 THAT NO CLUB LICENSEE MAY SELL ANY MALT OR BREWED BEVERAGES FOR 27 CONSUMPTION OFF THE PREMISES WHERE SOLD OR TO PERSONS NOT 28 MEMBERS OF THE CLUB. 29 (2) NOTWITHSTANDING ANY OTHER PROVISION OF LAW OR ANY 30 EXISTING PERMIT AUTHORIZING THE SALE OF MALT OR BREWED BEVERAGES 20070H1420B2602 - 43 -
1 FOR CONSUMPTION OFF THE PREMISES, A RETAIL DISPENSER LICENSEE 2 LOCATED IN A CITY OF THE FIRST CLASS WHO IS OTHERWISE PERMITTED 3 TO SELL MALT OR BREWED BEVERAGES FOR CONSUMPTION OFF THE 4 PREMISES MAY NOT DO SO AFTER OCTOBER 31, 2007, UNLESS IT 5 ACQUIRES A PERMIT FROM THE BOARD. 6 (3) THE APPLICATION FOR A PERMIT TO SELL MALT OR BREWED 7 BEVERAGES FOR CONSUMPTION OFF THE PREMISES SHALL BE ON FORMS 8 DESIGNATED BY THE BOARD AND CONTAIN SUCH INFORMATION AS THE 9 BOARD MAY REQUIRE. THE APPLICATION AND RENEWAL FEE SHALL BE AS 10 PRESCRIBED IN SECTION 614-A(28) OF THE ACT OF APRIL 9, 1929 11 (P.L.177, NO.175), KNOWN AS "THE ADMINISTRATIVE CODE OF 1929." 12 HOWEVER, NO APPLICANT WHO CURRENTLY HAS A PERMIT SHALL BE 13 REQUIRED TO PAY ANY ADDITIONAL FEES UNDER SECTION 614-A(28) OF 14 "THE ADMINISTRATIVE CODE OF 1929" IN ORDER TO CONTINUE SELLING 15 MALT OR BREWED BEVERAGES FOR CONSUMPTION OFF THE PREMISES AT ITS 16 CURRENTLY LICENSED LOCATION FOR THE LICENSING TERM BEGINNING 17 NOVEMBER 1, 2007, AND ENDING OCTOBER 31, 2008. 18 (4) THE APPLICATION FOR A PERMIT TO SELL MALT OR BREWED 19 BEVERAGES FOR CONSUMPTION OFF THE PREMISES MUST BE ACCOMPANIED 20 BY A COPY OF THE APPROVAL OF SUCH REQUEST BY THE HEARING BOARD 21 AUTHORIZED BY THIS SECTION. 22 (5) A CITY OF THE FIRST CLASS SHALL CREATE A HEARING BOARD 23 WITHIN ITS DEPARTMENT OF LICENSES AND INSPECTIONS TO HEAR 24 REQUESTS FROM LICENSEES WHO ARE SEEKING A PERMIT FROM THE 25 HEARING BOARD AUTHORIZING THE LICENSEE TO SELL MALT OR BREWED 26 BEVERAGES FOR CONSUMPTION OFF THE PREMISES. EACH HEARING BOARD 27 SHALL CONSIST OF THREE PERSONS APPOINTED BY THE MAYOR OF THE 28 CITY OF THE FIRST CLASS, WHO ARE SUBJECT TO APPROVAL BY THE CITY 29 COUNCIL OF THE CITY OF THE FIRST CLASS. EACH PERSON SO APPOINTED 30 SHALL SERVE AT THE PLEASURE OF THE APPOINTING AUTHORITY. THE 20070H1420B2602 - 44 -
1 HEARING BOARD MAY, IN ITS DISCRETION, HOLD HEARINGS TO ADDUCE 2 TESTIMONY REGARDING A REQUEST. THE HEARING BOARD MUST RENDER A 3 DECISION WITHIN NINETY DAYS OF RECEIPT OF A REQUEST FOR APPROVAL 4 OF A PERMIT TO SELL MALT OR BREWED BEVERAGES FOR CONSUMPTION OFF 5 THE PREMISES. THE HEARING BOARD MUST APPROVE THE REQUEST UNLESS 6 IT FINDS THAT DOING SO WOULD ADVERSELY AFFECT THE WELFARE, 7 HEALTH, PEACE AND MORALS OF THE CITY OR ITS RESIDENTS. A 8 DECISION BY THE HEARING BOARD TO DENY A REQUEST MAY BE APPEALED 9 TO THE COURT OF COMMON PLEAS IN THE COUNTY IN WHICH THE CITY IS 10 LOCATED. THE FAILURE TO RENDER A DECISION BY THE HEARING BOARD 11 WITHIN THE REQUIRED TIME PERIOD SHALL BE DEEMED APPROVAL OF THE 12 PERMIT. 13 (6) UPON BEING SATISFIED THAT THE APPLICANT HAS FULFILLED 14 ALL THE REQUIREMENTS OF THIS ACT AND THE BOARD'S REGULATIONS, 15 THE BOARD SHALL APPROVE THE APPLICATION. SUCH PERMITS SHALL 16 EXPIRE UPON THE TRANSFER OF THE LICENSE TO A NEW ENTITY OR TO A 17 NEW LOCATION, OR BOTH; OTHERWISE, SUCH PERMITS SHALL EXPIRE AT 18 THE SAME TIME AS THE EXPIRATION OF THE UNDERLYING LICENSE. 19 * * * 20 SECTION 8.1. SECTION 443 OF THE ACT, AMENDED MAY 31, 1996 21 (P.L.312, NO.49) AND JUNE 18, 1998 (P.L.664, NO.86), IS AMENDED 22 TO READ: 23 SECTION 443. INTERLOCKING BUSINESS PROHIBITED.--(A) NO 24 MANUFACTURER OF MALT OR BREWED BEVERAGES AND NO OFFICER OR 25 DIRECTOR OF ANY SUCH MANUFACTURER SHALL AT THE SAME TIME BE A 26 DISTRIBUTOR, IMPORTING DISTRIBUTOR OR RETAIL DISPENSER, OR AN 27 OFFICER, DIRECTOR OR STOCKHOLDER OR CREDITOR OF ANY DISTRIBUTOR, 28 IMPORTING DISTRIBUTOR OR RETAIL DISPENSER, NOR, EXCEPT AS 29 HEREINAFTER PROVIDED, BE THE OWNER, PROPRIETOR OR LESSOR OF ANY 30 PLACE FOR WHICH A LICENSE HAS BEEN ISSUED FOR ANY IMPORTING 20070H1420B2602 - 45 -
1 DISTRIBUTOR, DISTRIBUTOR OR RETAIL DISPENSER, OR FOR WHICH A 2 HOTEL, RESTAURANT OR CLUB LIQUOR LICENSE HAS BEEN ISSUED: 3 PROVIDED, HOWEVER, THAT [A HOLDER OF A MANUFACTURER'S LICENSE 4 UNDER SECTION 431(A) WHO IS ELIGIBLE TO OPERATE A BREWERY PUB 5 UNDER SECTION 446(2) OR] A LIMITED WINERY AS PROVIDED FOR UNDER 6 SECTION 505.2 MAY ALSO HOLD AND OPERATE UNDER A HOTEL LIQUOR 7 LICENSE, A RESTAURANT LIQUOR LICENSE OR A MALT AND BREWED 8 BEVERAGES RETAIL LICENSE ON THE [MANUFACTURER'S OR] LIMITED 9 WINERY'S LICENSED PREMISES. THE HOTEL LIQUOR LICENSE OR 10 RESTAURANT LIQUOR LICENSE OR THE MALT AND BREWED BEVERAGES 11 RETAIL LICENSE SHALL BE ACQUIRED BY THE [MANUFACTURER OR] 12 LIMITED WINERY SUBJECT TO SECTION 461 AND SHALL SATISFY ALL 13 REQUIREMENTS FOR EACH RESPECTIVE LICENSE. 14 (B) NO DISTRIBUTOR OR IMPORTING DISTRIBUTOR AND NO OFFICER 15 OR DIRECTOR OF ANY DISTRIBUTOR OR IMPORTING DISTRIBUTOR SHALL AT 16 THE SAME TIME BE A MANUFACTURER, A RETAIL DISPENSER OR A LIQUOR 17 LICENSEE, OR BE AN OFFICER, DIRECTOR, STOCKHOLDER OR CREDITOR OF 18 A MANUFACTURER, A RETAIL DISPENSER OR A LIQUOR LICENSEE, OR, 19 DIRECTLY OR INDIRECTLY, OWN ANY STOCK OF, OR HAVE ANY FINANCIAL 20 INTEREST IN, OR BE THE OWNER, PROPRIETOR OR LESSOR OF, ANY PLACE 21 COVERED BY ANY OTHER MALT OR BREWED BEVERAGE OR LIQUOR LICENSE. 22 (C) NO LICENSEE LICENSED UNDER THIS SUBDIVISION (B) OF 23 ARTICLE IV AND NO OFFICER OR DIRECTOR OF SUCH LICENSEE SHALL, 24 DIRECTLY OR INDIRECTLY, OWN ANY STOCK OF, OR HAVE ANY FINANCIAL 25 INTEREST IN, ANY OTHER CLASS OF BUSINESS LICENSED UNDER THIS 26 SUBDIVISION: PROVIDED, HOWEVER, THAT [A HOLDER OF A 27 MANUFACTURER'S LICENSE UNDER SECTION 431(A) WHO IS ELIGIBLE TO 28 OPERATE A BREWERY PUB UNDER SECTION 446(2) OR] A LIMITED WINERY 29 AS PROVIDED FOR UNDER SECTION 505.2 MAY ALSO HOLD AND OPERATE 30 UNDER A HOTEL LIQUOR LICENSE, A RESTAURANT LIQUOR LICENSE OR A 20070H1420B2602 - 46 -
1 MALT AND BREWED BEVERAGES RETAIL LICENSE ON THE [MANUFACTURER'S 2 OR] LIMITED WINERY'S LICENSED PREMISES. THE HOTEL LIQUOR LICENSE 3 OR RESTAURANT LIQUOR LICENSE OR THE MALT AND BREWED BEVERAGES 4 RETAIL LICENSE SHALL BE ACQUIRED BY THE [MANUFACTURER OR] 5 LIMITED WINERY SUBJECT TO SECTION 461 AND SHALL SATISFY ALL 6 REQUIREMENTS FOR EACH RESPECTIVE LICENSE. 7 (D) EXCEPTING AS HEREINAFTER PROVIDED, NO MALT OR BREWED 8 BEVERAGE MANUFACTURER, IMPORTING DISTRIBUTOR OR DISTRIBUTOR 9 SHALL IN ANY WISE BE INTERESTED, EITHER DIRECTLY OR INDIRECTLY, 10 IN THE OWNERSHIP OR LEASEHOLD OF ANY PROPERTY OR IN ANY MORTGAGE 11 AGAINST THE SAME, FOR WHICH A LIQUOR OR RETAIL DISPENSER'S 12 LICENSE IS GRANTED; NOR SHALL ANY SUCH MANUFACTURER, IMPORTING 13 DISTRIBUTOR OR DISTRIBUTOR, EITHER DIRECTLY OR INDIRECTLY, LEND 14 ANY MONEYS, CREDIT OR EQUIVALENT THEREOF TO, OR GUARANTEE THE 15 PAYMENT OF ANY BOND, MORTGAGE, NOTE OR OTHER OBLIGATION OF, ANY 16 LIQUOR LICENSEE OR RETAIL DISPENSER, IN EQUIPPING, FITTING OUT, 17 OR MAINTAINING AND CONDUCTING, EITHER IN WHOLE OR IN PART, AN 18 ESTABLISHMENT OR BUSINESS OPERATED UNDER A LIQUOR OR RETAIL 19 DISPENSER'S LICENSE, EXCEPTING ONLY THE USUAL AND CUSTOMARY 20 CREDITS ALLOWED FOR RETURNING ORIGINAL CONTAINERS IN WHICH MALT 21 OR BREWED BEVERAGES WERE PACKAGED FOR MARKET BY THE MANUFACTURER 22 AT THE PLACE OF MANUFACTURE: PROVIDED, HOWEVER, THAT [A HOLDER 23 OF A MANUFACTURER'S LICENSE UNDER SECTION 431(A) WHO IS ELIGIBLE 24 TO OPERATE A BREWERY PUB UNDER SECTION 446(2) OR] A LIMITED 25 WINERY AS PROVIDED FOR UNDER SECTION 505.2 MAY ALSO HOLD AND 26 OPERATE UNDER A HOTEL LIQUOR LICENSE, A RESTAURANT LIQUOR 27 LICENSE OR A MALT AND BREWED BEVERAGES RETAIL LICENSE ON THE 28 [MANUFACTURER'S OR] LIMITED WINERY'S LICENSED PREMISES. THE 29 HOTEL LIQUOR LICENSE OR RESTAURANT LIQUOR LICENSE OR THE MALT 30 AND BREWED BEVERAGES RETAIL LICENSE SHALL BE ACQUIRED BY THE 20070H1420B2602 - 47 -
1 [MANUFACTURER OR] LIMITED WINERY SUBJECT TO SECTION 461 AND 2 SHALL SATISFY ALL REQUIREMENTS FOR EACH RESPECTIVE LICENSE. 3 (E) EXCEPTING AS HEREINAFTER PROVIDED, NO MANUFACTURER OF 4 MALT OR BREWED BEVERAGES SHALL IN ANY WISE BE INTERESTED, EITHER 5 DIRECTLY OR INDIRECTLY, IN THE OWNERSHIP OR LEASEHOLD OF ANY 6 PROPERTY OR ANY MORTGAGE LIEN AGAINST THE SAME, FOR WHICH A 7 DISTRIBUTOR'S OR IMPORTING DISTRIBUTOR'S LICENSE IS GRANTED; NOR 8 SHALL ANY SUCH MANUFACTURER, EITHER DIRECTLY OR INDIRECTLY, LEND 9 ANY MONEYS, CREDIT, OR THEIR EQUIVALENT TO, OR GUARANTEE THE 10 PAYMENT OF ANY BOND, MORTGAGE, NOTE OR OTHER OBLIGATION OF, ANY 11 DISTRIBUTOR OR IMPORTING DISTRIBUTOR, IN EQUIPPING, FITTING OUT, 12 OR MAINTAINING AND CONDUCTING, EITHER IN WHOLE OR IN PART, AN 13 ESTABLISHMENT OR BUSINESS WHERE MALT OR BREWED BEVERAGES ARE 14 LICENSED FOR SALE BY A DISTRIBUTOR OR IMPORTING DISTRIBUTOR, 15 EXCEPTING ONLY THE USUAL CREDITS ALLOWED FOR THE RETURN OF 16 ORIGINAL CONTAINERS IN WHICH MALT OR BREWED BEVERAGES WERE 17 ORIGINALLY PACKAGED FOR THE MARKET BY THE MANUFACTURER AT THE 18 PLACE OF MANUFACTURE: PROVIDED, HOWEVER, THAT [A HOLDER OF A 19 MANUFACTURER'S LICENSE UNDER SECTION 431(A) WHO IS ELIGIBLE TO 20 OPERATE A BREWERY PUB UNDER SECTION 446(2) OR] A LIMITED WINERY 21 AS PROVIDED FOR UNDER SECTION 505.2 MAY ALSO HOLD AND OPERATE 22 UNDER A HOTEL LIQUOR LICENSE, A RESTAURANT LIQUOR LICENSE OR A 23 MALT AND BREWED BEVERAGES RETAIL LICENSE ON THE [MANUFACTURER'S 24 OR] LIMITED WINERY'S LICENSED PREMISES. THE HOTEL LIQUOR LICENSE 25 OR RESTAURANT LIQUOR LICENSE OR THE MALT AND BREWED BEVERAGES 26 RETAIL LICENSE SHALL BE ACQUIRED BY THE [MANUFACTURER OR] 27 LIMITED WINERY SUBJECT TO SECTION 461 AND SHALL SATISFY ALL 28 REQUIREMENTS FOR EACH RESPECTIVE LICENSE. NOTHING IN THIS 29 SECTION SHALL BE CONSTRUED TO PROHIBIT AN OUT OF STATE 30 MANUFACTURER FROM ENGAGING IN A TRANSACTION OR MAKING PAYMENTS 20070H1420B2602 - 48 -
1 AUTHORIZED BY SECTION 431(A.1). 2 (F) NO DISTRIBUTOR, IMPORTING DISTRIBUTOR OR RETAIL 3 DISPENSER SHALL IN ANYWISE RECEIVE, EITHER DIRECTLY OR 4 INDIRECTLY, ANY CREDIT, LOAN, MONEYS OR THE EQUIVALENT THEREOF 5 FROM ANY OTHER LICENSEE, OR FROM ANY OFFICER, DIRECTOR OR FIRM 6 MEMBER OF ANY OTHER LICENSEE, OR FROM OR THROUGH A SUBSIDIARY OR 7 AFFILIATE OF ANOTHER LICENSEE, OR FROM ANY FIRM, ASSOCIATION OR 8 CORPORATION, EXCEPT BANKING INSTITUTIONS, IN WHICH ANOTHER 9 LICENSEE OR ANY OFFICER, DIRECTOR OR FIRM MEMBER OF ANOTHER 10 LICENSEE HAS A SUBSTANTIAL INTEREST OR EXERCISES A CONTROL OF 11 ITS BUSINESS POLICY, FOR EQUIPPING, FITTING OUT, PAYMENT OF 12 LICENSE FEE, MAINTAINING AND CONDUCTING, EITHER IN WHOLE OR IN 13 PART, AN ESTABLISHMENT OR BUSINESS OPERATED UNDER A 14 DISTRIBUTOR'S, IMPORTING DISTRIBUTOR'S OR RETAIL DISPENSER'S 15 LICENSE, EXCEPTING ONLY THE USUAL AND CUSTOMARY CREDITS ALLOWED 16 FOR THE RETURN OF ORIGINAL CONTAINERS IN WHICH MALT OR BREWED 17 BEVERAGES WERE PACKAGED FOR THE MARKET BY THE MANUFACTURER AT 18 THE PLACE OF MANUFACTURE: PROVIDED, HOWEVER, THAT [A HOLDER OF A 19 MANUFACTURER'S LICENSE UNDER SECTION 431(A) WHO IS ELIGIBLE TO 20 OPERATE A BREWERY PUB UNDER SECTION 446(2) OR] A LIMITED WINERY 21 AS PROVIDED FOR UNDER SECTION 505.2 MAY ALSO HOLD AND OPERATE 22 UNDER A HOTEL LIQUOR LICENSE, A RESTAURANT LIQUOR LICENSE OR A 23 MALT AND BREWED BEVERAGES RETAIL LICENSE ON THE [MANUFACTURER'S 24 OR] LIMITED WINERY'S LICENSED PREMISES. THE HOTEL LIQUOR LICENSE 25 OR RESTAURANT LIQUOR LICENSE OR THE MALT AND BREWED BEVERAGES 26 RETAIL LICENSE SHALL BE ACQUIRED BY THE [MANUFACTURER OR] 27 LIMITED WINERY SUBJECT TO SECTION 461 AND SHALL SATISFY ALL 28 REQUIREMENTS FOR EACH RESPECTIVE LICENSE. NOTHING IN THIS 29 SECTION SHALL BE CONSTRUED TO PROHIBIT AN IMPORTING DISTRIBUTOR 30 FROM RECEIVING PAYMENT FROM AN OUT OF STATE MANUFACTURER FOR 20070H1420B2602 - 49 -
1 ENGAGING IN A TRANSACTION OR PERFORMING SERVICES AUTHORIZED BY 2 SECTION 431(B) OR 444(A.1). 3 (G) THE PURPOSE OF THIS SECTION IS TO REQUIRE A SEPARATION 4 OF THE FINANCIAL AND BUSINESS INTERESTS BETWEEN THE VARIOUS 5 CLASSES OF BUSINESS REGULATED BY SUBDIVISION (B) OF THIS 6 ARTICLE, AND NO PERSON OR CORPORATION SHALL, BY ANY DEVICE 7 WHATSOEVER, DIRECTLY OR INDIRECTLY, EVADE THE PROVISIONS OF THIS 8 SECTION. BUT IN VIEW OF EXISTING ECONOMIC CONDITIONS, NOTHING 9 CONTAINED IN THIS SECTION SHALL BE CONSTRUED TO PROHIBIT THE 10 OWNERSHIP OF PROPERTY OR CONFLICTING INTEREST BY A MALT OR 11 BREWED BEVERAGE MANUFACTURER OF ANY PLACE OCCUPIED BY A 12 DISTRIBUTOR, IMPORTING DISTRIBUTOR OR RETAIL DISPENSER AFTER THE 13 MANUFACTURER HAS CONTINUOUSLY OWNED AND HAD A CONFLICTING 14 INTEREST IN SUCH PLACE FOR A PERIOD OF AT LEAST FIVE YEARS PRIOR 15 TO THE EIGHTEENTH DAY OF JULY, ONE THOUSAND NINE HUNDRED THIRTY- 16 FIVE: PROVIDED, HOWEVER, THAT [A HOLDER OF A MANUFACTURER'S 17 LICENSE UNDER SECTION 431(A) WHO IS ELIGIBLE TO OPERATE A 18 BREWERY PUB UNDER SECTION 446(2) OR] A LIMITED WINERY AS 19 PROVIDED FOR UNDER SECTION 505.2 MAY ALSO HOLD AND OPERATE UNDER 20 A HOTEL LIQUOR LICENSE, A RESTAURANT LIQUOR LICENSE OR A MALT 21 AND BREWED BEVERAGES RETAIL LICENSE ON THE [MANUFACTURER'S OR] 22 LIMITED WINERY'S LICENSED PREMISES. THE HOTEL LIQUOR LICENSE OR 23 RESTAURANT LIQUOR LICENSE OR THE MALT AND BREWED BEVERAGES 24 RETAIL LICENSE SHALL BE ACQUIRED BY THE [MANUFACTURER OR] 25 LIMITED WINERY SUBJECT TO SECTION 461 AND SHALL SATISFY ALL 26 REQUIREMENTS FOR EACH RESPECTIVE LICENSE. 27 THE TERM "MANUFACTURER" AS USED IN THIS SECTION SHALL INCLUDE 28 MANUFACTURERS OF MALT OR BREWED BEVERAGES AS DEFINED IN THIS ACT 29 AND ANY PERSON MANUFACTURING ANY MALT OR BREWED BEVERAGES 30 OUTSIDE OF THIS COMMONWEALTH. 20070H1420B2602 - 50 -
1 SECTION 9. SECTION 446 OF THE ACT, AMENDED JUNE 30, 1992 2 (P.L.327, NO.66), MAY 31, 1996 (P.L.312, NO.49) AND JANUARY 6, 3 2006 (P.L.1, NO.1), IS AMENDED TO READ: 4 SECTION 446. BREWERIES.--HOLDERS OF A BREWERY LICENSE MAY: 5 (1) SELL MALT OR BREWED BEVERAGES PRODUCED AND OWNED BY THE 6 BREWERY ON THE LICENSED PREMISES UNDER SUCH CONDITIONS AND 7 REGULATIONS AS THE BOARD MAY ENFORCE, TO INDIVIDUALS FOR 8 CONSUMPTION ON THE PREMISES [AND]. ADDITIONALLY, A SMALL 9 MANUFACTURER MAY SELL MALT OR BREWED BEVERAGES PRODUCED AND 10 OWNED BY THE BREWERY ON THE LICENSED PREMISES UNDER SUCH 11 CONDITIONS AND REGULATIONS AS THE BOARD MAY ENFORCE TO HOTEL, 12 RESTAURANT, CLUB AND PUBLIC SERVICE LIQUOR LICENSEES. 13 (2) OPERATE A RESTAURANT OR BREWERY PUB ON THE LICENSED 14 PREMISES UNDER SUCH CONDITIONS AND REGULATIONS AS THE BOARD MAY 15 ENFORCE: PROVIDED, HOWEVER, THAT SALES ON SUNDAY MAY BE MADE 16 IRRESPECTIVE OF THE VOLUME OF FOOD SALES IF THE LICENSED 17 PREMISES ARE AT A PUBLIC VENUE LOCATION. THE HOLDER OF A BREWERY 18 LICENSE MAY SELL AT ITS BREWERY PUB PREMISES PENNSYLVANIA WINES 19 IT HAS PURCHASED FROM EITHER THE HOLDER OF A PENNSYLVANIA 20 LIMITED WINERY LICENSE OR FROM THE BOARD: PROVIDED, HOWEVER, 21 THAT SAID WINES MUST BE CONSUMED AT THE LICENSED BREWERY PUB 22 PREMISES. 23 (3) USE BREWERY STORAGE AND DISTRIBUTION FACILITIES FOR THE 24 PURPOSE OF RECEIVING, STORING AND DISTRIBUTING MALT OR BREWED 25 BEVERAGES MANUFACTURED OUTSIDE THIS COMMONWEALTH IF THE 26 BEVERAGES ARE DISTRIBUTED IN THIS COMMONWEALTH ONLY THROUGH 27 SPECIFIC IMPORTING DISTRIBUTORS WHO SHALL HAVE FIRST BEEN GIVEN 28 DISTRIBUTING RIGHTS FOR SUCH PRODUCTS IN DESIGNATED GEOGRAPHICAL 29 AREAS THROUGH THE DISTRIBUTION SYSTEM REQUIRED FOR [OUT-OF- 30 STATE] MANUFACTURERS UNDER SECTION 431(B) AS WELL AS ALL OTHER 20070H1420B2602 - 51 -
1 PERTINENT SECTIONS OF THIS ACT. THE MANUFACTURER OF THE 2 BEVERAGES MUST COMPLY WITH SECTION 444. 3 (4) APPLY FOR AND HOLD A HOTEL LIQUOR LICENSE, A RESTAURANT 4 LIQUOR LICENSE OR A MALT AND BREWED BEVERAGES RETAIL LICENSE TO 5 SELL FOR CONSUMPTION AT THE RESTAURANT OR BREWERY PUB ON THE 6 LICENSED BREWERY PREMISES, LIQUOR, WINE AND MALT OR BREWED 7 BEVERAGES REGARDLESS OF THE PLACE OF MANUFACTURE, UNDER THE SAME 8 CONDITIONS AND REGULATIONS AS ANY OTHER HOTEL LIQUOR LICENSE, 9 RESTAURANT LIQUOR LICENSE OR MALT AND BREWED BEVERAGES RETAIL 10 LICENSE, BUT MUST BREW AT LEAST TWO HUNDRED [FIFTY] BARRELS PER 11 YEAR. EACH HOLDER OF A BREWERY LICENSE WHO RECEIVES A HOTEL 12 LIQUOR LICENSE, A RESTAURANT LIQUOR LICENSE OR A MALT OR BREWED 13 BEVERAGES RETAIL LICENSE TO OPERATE A BREW PUB SHALL NOT SELL 14 DIRECTLY TO ANY PERSON LICENSED BY THIS ACT, EXCEPT IF ANY MALT 15 OR BREWED BEVERAGE IS TO BE DISTRIBUTED IN THIS COMMONWEALTH IT 16 SHALL BE ONLY THROUGH SPECIFIC IMPORTING DISTRIBUTORS WHO SHALL 17 HAVE FIRST BEEN GIVEN DISTRIBUTING RIGHTS FOR SUCH PRODUCTS IN 18 DESIGNATED GEOGRAPHICAL AREAS THROUGH THE DISTRIBUTION SYSTEM 19 REQUIRED FOR [OUT-OF-STATE] MANUFACTURERS UNDER SECTION 431(B) 20 AS WELL AS ALL OTHER PERTINENT SECTIONS OF THIS ACT. SECTIONS 21 411 AND 443 OF THE ACT SHALL NOT APPLY TO THE APPLICATION FOR OR 22 HOLDING OF A HOTEL LIQUOR LICENSE, A RESTAURANT LIQUOR LICENSE 23 OR A MALT OR BREWED BEVERAGES RETAIL LICENSE AUTHORIZED UNDER 24 THIS CLAUSE. 25 SECTION 10. THE ACT IS AMENDED BY ADDING SECTIONS TO READ: 26 SECTION 448. MANUFACTURER GRANT PROGRAM.--(A) IT IS THE 27 INTENT OF THE GENERAL ASSEMBLY TO ESTABLISH A GRANT PROGRAM TO 28 PROVIDE FINANCIAL ASSISTANCE TO MALT AND BREWED BEVERAGE 29 MANUFACTURERS LOCATED WITHIN THIS COMMONWEALTH AND LICENSED BY 30 THE BOARD FOR THE PURPOSE OF PURCHASING OR UPGRADING MALT OR 20070H1420B2602 - 52 -
1 BREWED BEVERAGE PACKAGING EQUIPMENT. IT IS THE FURTHER INTENT OF 2 THE GENERAL ASSEMBLY THAT THE GRANTS AUTHORIZED UNDER THIS 3 PROGRAM BE LIMITED TO ONE PER MANUFACTURER. THE BOARD SHALL 4 DEVELOP GUIDELINES TO EFFECTUATE THE LEGISLATIVE INTENT OF THIS 5 SECTION. 6 (B) A MANUFACTURER MAY SUBMIT AN APPLICATION TO THE BOARD 7 REQUESTING A GRANT FOR A PROJECT. THE APPLICATION SHALL BE ON 8 THE FORM REQUIRED BY THE BOARD AND SHALL INCLUDE OR DEMONSTRATE 9 ALL OF THE FOLLOWING: 10 (1) THE NAME AND ADDRESS OF THE APPLICANT. 11 (2) A STATEMENT THAT THE APPLICANT IS ELIGIBLE TO RECEIVE A 12 GRANT, INCLUDING THE AMOUNT OF BARRELS MANUFACTURED PER YEAR. 13 (3) A STATEMENT OF THE AMOUNT OF GRANT SOUGHT. 14 (4) A STATEMENT OF THE PROJECT, INCLUDING A DETAILED 15 STATEMENT OF THE COST OF THE PROJECT. 16 (5) A COMMITMENT FROM THE APPLICANT TO COMPLETE THE PROJECT. 17 (6) ANY OTHER INFORMATION REQUIRED BY THE BOARD. 18 (C) (1) UPON RECEIPT, THE BOARD SHALL REVIEW THE 19 APPLICATION TO DETERMINE IF THE APPLICANT HAS MET ALL OF THE 20 CRITERIA SET FORTH IN SUBSECTION (B). UPON BEING SATISFIED THAT 21 ALL REQUIREMENTS HAVE BEEN MET, THE BOARD MAY APPROVE THE 22 APPLICATION AND AWARD A GRANT. 23 (2) PRIOR TO PROVIDING GRANT FUNDS TO THE APPLICANT, THE 24 BOARD SHALL ENTER INTO A CONTRACT WITH THE APPLICANT. THE 25 CONTRACT SHALL INCLUDE PROVISIONS REQUIRING THE APPLICANT TO USE 26 THE ENTIRE GRANT TO PAY THE COSTS OF THE PROJECT. 27 (3) THE BOARD MAY IMPOSE ANY OTHER TERMS AND CONDITIONS ON 28 THE GRANTS AUTHORIZED BY THIS SECTION AS THE BOARD DETERMINES IS 29 IN THE BEST INTERESTS OF THE COMMONWEALTH. 30 (D) (1) GRANT AWARDS SHALL BE IN THE FOLLOWING AMOUNTS: 20070H1420B2602 - 53 -
1 (I) FOR AN APPLICANT THAT MANUFACTURERS LESS THAN OR EQUAL 2 TO NINE THOUSAND NINE HUNDRED AND NINETY-NINE BARRELS OF MALT OR 3 BREWED BEVERAGES PER YEAR WITHIN THIS COMMONWEALTH, FIFTY 4 THOUSAND DOLLARS ($50,000). 5 (II) FOR AN APPLICANT THAT MANUFACTURERS AT LEAST TEN 6 THOUSAND BARRELS BUT NOT MORE THAN TWENTY-FOUR THOUSAND NINE 7 HUNDRED AND NINETY-NINE BARRELS OF MALT OR BREWED BEVERAGES PER 8 YEAR WITHIN THIS COMMONWEALTH, ONE HUNDRED THOUSAND DOLLARS 9 ($100,000). 10 (III) FOR AN APPLICANT THAT MANUFACTURERS AT LEAST TWENTY- 11 FIVE THOUSAND BARRELS BUT NOT MORE THAN NINETY-NINE THOUSAND 12 NINE HUNDRED AND NINETY-NINE BARRELS OF MALT OR BREWED BEVERAGES 13 PER YEAR WITHIN THIS COMMONWEALTH, TWO HUNDRED AND FIFTY 14 THOUSAND DOLLARS ($250,000). 15 (IV) FOR AN APPLICANT THAT MANUFACTURERS AT LEAST ONE 16 HUNDRED THOUSAND BARRELS BUT NOT MORE THAN FOUR HUNDRED AND 17 NINETY-NINE THOUSAND NINE HUNDRED AND NINETY-NINE BARRELS OF 18 MALT OR BREWED BEVERAGES PER YEAR WITHIN THIS COMMONWEALTH, FIVE 19 HUNDRED THOUSAND DOLLARS ($500,000). 20 (V) FOR AN APPLICANT THAT MANUFACTURERS AT LEAST FIVE 21 HUNDRED THOUSAND BARRELS OR MORE OF MALT OR BREWED BEVERAGES PER 22 YEAR WITHIN THIS COMMONWEALTH, ONE MILLION DOLLARS ($1,000,000). 23 (2) THE AGGREGATE AMOUNT OF MANUFACTURER'S GRANTS AWARDED 24 SHALL NOT EXCEED FIVE MILLION DOLLARS ($5,000,000). 25 (D) FOR PURPOSES OF THIS SECTION, THE FOLLOWING TERMS SHALL 26 HAVE THE MEANINGS SET FORTH IN THIS SUBSECTION: 27 "MANUFACTURER" SHALL MEAN ANY PERSON, ASSOCIATION OR 28 CORPORATION ENGAGED IN THE PRODUCING OR MANUFACTURING OF MALT OR 29 BREWED BEVERAGES IN THIS COMMONWEALTH. 30 "PROJECT" SHALL MEAN THE PURCHASE OF UPGRADING OF MALT OR 20070H1420B2602 - 54 -
1 BREWED BEVERAGE PACKAGING EQUIPMENT. 2 SECTION 449. PRODUCT ROTATION.--MALT BEVERAGE MANUFACTURERS 3 AND IMPORTING DISTRIBUTORS MAY, UPON CONSENT OF THE LICENSEE, 4 ENGAGE IN REGULAR ROTATION OF THEIR OWN MALT BEVERAGES AS 5 NECESSARY TO ENSURE THE FRESHNESS OF SUCH PRODUCT DUE TO THEIR 6 LIMITED SHELF LIFE, INCLUDING MOVING THEIR OWN MALT BEVERAGES 7 FROM STORAGE AREAS TO STORE SHELVES, DISPLAY AREAS AND COOLERS 8 WHEN NECESSARY TO ENSURE FRESHNESS. 9 SECTION 11. SECTION 472.3 OF THE ACT, AMENDED DECEMBER 9, 10 2002 (P.L.1653, NO.212), IS AMENDED TO READ: 11 SECTION 472.3. EXCHANGE OF CERTAIN LICENSES.--(A) THE BOARD 12 MAY ISSUE TO A CLUB AS DEFINED IN THIS ACT, A CLUB LIQUOR 13 LICENSE IN EXCHANGE FOR A CLUB RETAIL DISPENSER LICENSE IN ANY 14 MUNICIPALITY WHICH HAS APPROVED THE GRANTING OF LIQUOR LICENSES. 15 (A.1) THE BOARD MAY ISSUE TO A HOLDER OF AN EATING PLACE 16 RETAIL DISPENSER LICENSE A DISTRIBUTOR LICENSE IN EXCHANGE FOR 17 THE EATING PLACE RETAIL DISPENSER LICENSE IN ANY MUNICIPALITY 18 WHICH HAS APPROVED THE GRANTING OF DISTRIBUTOR LICENSES, 19 PROVIDED THE APPLICANT HAS USED THE RETAIL DISPENSER LICENSE IN 20 A LICENSED PREMISES CONTAINING AT LEAST TWO THOUSAND SQUARE FEET 21 FOR A CONTINUOUS PERIOD OF AT LEAST FIVE YEARS IMMEDIATELY 22 PRECEDING THE EFFECTIVE DATE OF THIS SUBSECTION. AN APPLICANT 23 UNDER THIS SUBSECTION SHALL SURRENDER HIS EATING PLACE RETAIL 24 DISPENSER LICENSE FOR CANCELLATION PRIOR TO THE ISSUANCE OF THE 25 NEW DISTRIBUTOR LICENSE. THE AUTHORITY OF THE BOARD TO EXCHANGE 26 AN EATING PLACE RETAIL DISPENSER LICENSE FOR A DISTRIBUTOR 27 LICENSE UNDER THIS SUBSECTION AND THIS SUBSECTION SHALL EXPIRE 28 DECEMBER 1, 2008. 29 (B) AN APPLICANT UNDER [THIS SECTION] SUBSECTION (A) SHALL 30 SURRENDER HIS CLUB RETAIL DISPENSER LICENSE FOR CANCELLATION 20070H1420B2602 - 55 -
1 PRIOR TO THE ISSUANCE OF THE NEW CLUB LIQUOR LICENSE. 2 (C) THE APPLICANT FOR SUCH EXCHANGE OF LICENSE UNDER 3 SUBSECTION (A) SHALL FILE AN APPLICATION FOR A CLUB LIQUOR 4 LICENSE AND SHALL POST A NOTICE OF SUCH APPLICATION IN THE 5 MANNER PROVIDED IN SECTION 403. [IN DETERMINING WHETHER THE 6 EXCHANGE SHALL BE GRANTED THE BOARD SHALL HAVE THE SAME 7 DISCRETION AS PROVIDED IN SECTION 404 IN THE CASE OF ANY NEW 8 LICENSE.] 9 (C.1) THE APPLICANT FOR SUCH EXCHANGE OF LICENSE UNDER 10 SUBSECTION (A.1) SHALL FILE AN APPLICATION FOR A DISTRIBUTOR 11 LICENSE, WHICH SHALL BE ACCOMPANIED BY AN EXCHANGE FEE OF TEN 12 THOUSAND DOLLARS ($10,000). THE APPLICATION SHALL BE EXEMPT FROM 13 THE POSTING REQUIREMENTS PROVIDED IN SECTION 403. THIS 14 SUBSECTION SHALL EXPIRE DECEMBER 1, 2008. 15 (D) THE PROVISIONS OF SECTION 461 PERTAINING TO QUOTA SHALL 16 NOT PERTAIN TO THIS SECTION FOR EXCHANGE PURPOSES. 17 (E) IN DETERMINING WHETHER THE EXCHANGE SHALL BE GRANTED THE 18 BOARD SHALL HAVE THE SAME DISCRETION AS PROVIDED IN SECTION 404 19 IN THE CASE OF ANY NEW LICENSE. 20 SECTION 12. SECTION 802 OF THE ACT IS AMENDED BY ADDING A 21 SUBSECTION TO READ: 22 SECTION 802. MONEYS PAID INTO THE STATE STORES FUND FOR USE 23 OF THE COMMONWEALTH.--* * * 24 (H) WITHIN THIRTY (30) DAYS AFTER THE EFFECTIVE DATE OF THIS 25 ACT, THE SUM OF FIVE MILLION DOLLARS ($5,000,000) SHALL BE 26 TRANSFERRED FROM THE STATE STORES FUND TO THE FUND ESTABLISHED 27 UNDER SECTION 218. 28 SECTION 13. THE PROVISIONS OF THIS ACT ARE SEVERABLE. IF ANY 29 PROVISION OF THIS ACT OR ITS APPLICATION TO ANY PERSON OR 30 CIRCUMSTANCE IS HELD INVALID, THE INVALIDITY SHALL NOT AFFECT 20070H1420B2602 - 56 -
1 OTHER PROVISIONS OR APPLICATIONS OF THIS ACT WHICH CAN BE GIVEN 2 EFFECT WITHOUT THE INVALID PROVISION OR APPLICATION. 3 SECTION 14. THIS ACT SHALL TAKE EFFECT AS FOLLOWS: 4 (1) THE AMENDMENT OF SECTION 431(B.2) OF THE ACT SHALL 5 TAKE EFFECT JULY 1, 2008. 6 (2) THE REMAINDER OF THIS ACT SHALL TAKE EFFECT 7 IMMEDIATELY. E8L47MSP/20070H1420B2602 - 57 -