PRINTER'S NO.  2343

  

THE GENERAL ASSEMBLY OF PENNSYLVANIA

  

HOUSE BILL

 

No.

11

Session of

2011

  

  

INTRODUCED BY TURZAI, KILLION, MUSTIO, SAYLOR, CHRISTIANA, AUMENT, BEAR, BLOOM, CREIGHTON, DAY, DUNBAR, ELLIS, EVANKOVICH, GABLER, GILLEN, GILLESPIE, GINGRICH, GROVE, HARRIS, HELM, KNOWLES, KRIEGER, LAWRENCE, MALONEY, MARSICO, METCALFE, MILLER, MOUL, OBERLANDER, PERRY, QUIGLEY, RAPP, REESE, ROAE, ROCK, SACCONE, SCHRODER, SIMMONS, SONNEY, STEVENSON, SWANGER, TALLMAN AND VULAKOVICH, SEPTEMBER 13, 2011

  

  

REFERRED TO COMMITTEE ON LIQUOR CONTROL, SEPTEMBER 13, 2011  

  

  

  

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 enforcement; providing for the

18

privatization of sales of wine and spirits in this

19

Commonwealth through abolition of the State Liquor Stores,

20

through establishment of a franchise and license system for

21

sale of wine and spirits and through imposition of a tax on

22

wine, spirits and beer; and making a related repeal.

23

The General Assembly of the Commonwealth of Pennsylvania

24

hereby enacts as follows:

25

Section 1.  Section 102 of the act of April 12, 1951 (P.L.90,

 


1

No.21), known as the Liquor Code, reenacted and amended June 29,

2

1987 (P.L.32, No.14), is amended by adding a definition to read:

3

Section 102.  Definitions.--The following words or phrases,

4

unless the context clearly indicates otherwise, shall have the

5

meanings ascribed to them in this section:

6

* * *

7

"Municipal police department" shall mean a police department

8

of a county, city, borough, town or township.

9

* * *

10

Section 2.  Section 104(c) and (d) of the act, amended

11

December 7, 1990 (P.L.662, No.160) and December 20, 1996

12

(P.L.1513, No.196), are amended to read:

13

Section 104.  Interpretation of Act.--* * *

14

(c)  Except as otherwise expressly provided, the purpose of

15

this act is to prohibit the manufacture of and transactions in

16

liquor, alcohol and malt or brewed beverages which take place in

17

this Commonwealth, except by and under the control of the board

18

as herein specifically provided, and every section and provision

19

of the act shall be construed accordingly; to provide a

20

structure in this Commonwealth for a distribution system,

21

including the [establishment of Pennsylvania liquor stores and]

22

licensing of wine and spirits wholesalers, wine and spirits

23

retailers, importing distributors and distributors; and to

24

preserve manufacturers of liquor and alcohol and malt and brewed

25

beverages selling those products within this Commonwealth. The

26

provisions of this act dealing with the manufacture,

27

importation, sale, distribution and disposition of liquor,

28

alcohol and malt or brewed beverages within the Commonwealth

29

through [the instrumentality of the board,] licensees and

30

otherwise, provide the means by which such control shall be made

- 2 -

 


1

effective. This act shall not be construed as forbidding,

2

affecting or regulating any transaction which is not subject to

3

the legislative authority of this Commonwealth.

4

(d)  The provisions of this act are intended to create a

5

system for distribution [that shall include the fixing of prices

6

for] of liquor and alcohol and controls placed on prices for

7

malt and brewed beverages, and each of which shall be construed

8

as integral to the preservation of the system, without which

9

system the Commonwealth's control of the sale of liquor and

10

alcohol and malt and brewed beverages and the Commonwealth's

11

promotion of its policy of temperance and responsible conduct

12

with respect to alcoholic beverages would not be possible.

13

* * *

14

Section 3.  Section 207(a), (b), (c) and (j) of the act,

15

amended November 30, 2004 (P.L.1727, No.221) and December 8,

16

2004 (P.L.1810, No.239), are amended to read:

17

Section 207.  General Powers of Board.--Under this act, the

18

board shall have the power and its duty shall be:

19

[(a)  To buy, import or have in its possession for sale and

20

sell liquor, alcohol, corkscrews, wine and liquor accessories,

21

trade publications, gift cards, gift certificates, wine- or

22

liquor-scented candles and wine glasses in the manner set forth

23

in this act: Provided, however, That all purchases shall be made

24

subject to the approval of the State Treasurer, or his

25

designated deputy. The board shall buy liquor and alcohol at the

26

lowest price and in the greatest variety reasonably obtainable.]

27

(b)  To control the manufacture, possession, sale,

28

consumption, importation, use, storage, transportation and

29

delivery of liquor, alcohol and malt or brewed beverages in

30

accordance with the provisions of this act[, and to fix the

- 3 -

 


1

wholesale and retail prices at which liquors and alcohol shall

2

be sold at Pennsylvania Liquor Stores. Prices shall be

3

proportional with prices paid by the board to its suppliers and

4

shall reflect any advantage obtained through volume purchases by

5

the board. The board may establish a preferential price

6

structure for wines produced within this Commonwealth for the

7

promotion of such wines, as long as the price structure is

8

uniform within each class of wine purchased by the board. The

9

board shall require each Pennsylvania manufacturer and each

10

nonresident manufacturer of liquors, other than wine, selling

11

such liquors to the board, which are not manufactured in this

12

Commonwealth, to make application for and be granted a permit by

13

the board before such liquors not manufactured in this

14

Commonwealth shall be purchased from such manufacturer. Each

15

such manufacturer shall pay for such permit a fee which, in the

16

case of a manufacturer of this Commonwealth, shall be equal to

17

that required to be paid, if any, by a manufacturer or

18

wholesaler of the state, territory or country of origin of the

19

liquors, for selling liquors manufactured in Pennsylvania, and

20

in the case of a nonresident manufacturer, shall be equal to

21

that required to be paid, if any, in such state, territory or

22

country by Pennsylvania manufacturers doing business in such

23

state, territory or country. In the event that any such

24

manufacturer shall, in the opinion of the board, sell or attempt

25

to sell liquors to the board through another person for the

26

purpose of evading this provision relating to permits, the board

27

shall require such person, before purchasing liquors from him or

28

it, to take out a permit and pay the same fee as hereinbefore

29

required to be paid by such manufacturer. All permit fees so

30

collected shall be paid into the State Stores Fund. The board

- 4 -

 


1

shall not purchase any alcohol or liquor fermented, distilled,

2

rectified, compounded or bottled in any state, territory or

3

country, the laws of which result in prohibiting the importation

4

therein of alcohol or liquor, fermented, distilled, rectified,

5

compounded or bottled in Pennsylvania.

6

(c)  To determine the municipalities within which

7

Pennsylvania Liquor Stores shall be established and the

8

locations of the stores within such municipalities].

9

* * *

10

[(j)  By regulation, to provide for the use of a computerized

11

referral system to assist consumers in locating special items at

12

Pennsylvania Liquor Stores and for the use of electronic

13

transfer of funds and credit cards for the purchase of liquor

14

and alcohol at Pennsylvania Liquor Stores.]

15

* * *

16

Section 4.  Section 208 of the act is amended to read:

17

Section 208.  Specific Subjects on Which Board May Adopt

18

Regulations.--Subject to the provisions of this act and without

19

limiting the general power conferred by the preceding section,

20

the board may make regulations regarding:

21

[(a)  The equipment and management of Pennsylvania Liquor

22

Stores and warehouses in which liquor and alcohol are kept or

23

sold, and the books and records to be kept therein.]

24

(b)  The duties and conduct of the officers and employes of

25

the board.

26

[(c)  The purchase, as provided in this act, of liquor and

27

alcohol, and its supply to Pennsylvania Liquor Stores.

28

(d)  The classes, varieties and brands of liquor and alcohol

29

to be kept and sold in Pennsylvania Liquor Stores. In making

30

this determination the board shall meet not less than twice a

- 5 -

 


1

year.

2

(e)  The issuing and distribution of price lists for the

3

various classes, varieties or brands of liquor and alcohol kept

4

for sale by the board under this act.]

5

(f)  The labeling of liquor and alcohol sold under this act

6

and of liquor and alcohol lawfully acquired by any person prior

7

to January first, one thousand nine hundred thirty-four.

8

(g)  Forms to be used for the purposes of this act.

9

(h)  The issuance of licenses and permits and the conduct,

10

management, sanitation and equipment of places licensed or

11

included in permits.

12

[(i)  The place and manner of depositing the receipts of

13

Pennsylvania Liquor Stores and the transmission of balances to

14

the Treasury Department through the Department of Revenue.

15

(j)  The solicitation by resident or nonresident vendors of

16

liquor from Pennsylvania licensees and other persons of orders

17

for liquor to be sold through the Pennsylvania Liquor Stores

18

and, in the case of nonresident vendors, the collection

19

therefrom of license fees for such privilege at the same rate as

20

provided herein for importers' licenses.]

21

Section 4.1.  Section 211(a) of the act, amended October 5,

22

1994 (P.L.537, No.80), is amended to read:

23

Section 211.  Enforcement.--(a)  There is created within the

24

Pennsylvania State Police a Bureau of Liquor Control Enforcement

25

[which]. The enforcement bureau and municipal police departments 

26

shall be responsible for enforcing this act and any regulations

27

promulgated pursuant thereto. Officers and investigators

28

assigned to the bureau or a municipal police department shall

29

have the power and their duty shall be:

30

(1)  To investigate whenever there are reasonable grounds to

- 6 -

 


1

believe liquor, alcohol or malt or brewed beverages are being

2

sold on premises not licensed under the provisions of this act.

3

If the investigation produces evidence of the unlawful sale of

4

liquor or malt or brewed beverages or any other violation of the

5

provisions of this act, the officer involved in the

6

investigation shall institute criminal proceedings against the

7

person or persons believed to have been criminally liable, as

8

otherwise provided by law or rule of court.

9

(2)  To arrest on view, except in private homes, without

10

warrant, any person actually engaged in the unlawful sale,

11

importation, manufacture or transportation or having unlawful

12

possession of liquor, alcohol or malt or brewed beverages

13

contrary to the provisions of this act or any other law of this

14

Commonwealth or any person whom the officer/investigator, while

15

in the performance of his assigned duties under and pursuant to

16

this act and any regulations promulgated under this act,

17

observes to be in violation of any of the following provisions:

18

18 Pa.C.S. § 3302 (relating to causing or risking

19

catastrophe).

20

18 Pa.C.S. § 3304 (relating to criminal mischief).

21

18 Pa.C.S. § 4101 (relating to forgery).

22

18 Pa.C.S. § 5503 (relating to disorderly conduct).

23

18 Pa.C.S. § 5505 (relating to public drunkenness and

24

similar misconduct).

25

18 Pa.C.S. § 5512 (relating to lotteries, etc.).

26

18 Pa.C.S. § 5513 (relating to gambling devices,

27

gambling, etc.).

28

18 Pa.C.S. § 5514 (relating to pool selling and

29

bookmaking).

30

18 Pa.C.S. § 6307 (relating to misrepresentation of age

- 7 -

 


1

to secure liquor or malt or brewed beverages).

2

18 Pa.C.S. § 6308 (relating to purchase, consumption,

3

possession or transportation of liquor or malt or brewed

4

beverages).

5

18 Pa.C.S. § 6309 (relating to representing that minor is

6

of age).

7

18 Pa.C.S. § 6310.1 (relating to selling or furnishing

8

liquor or malt or brewed beverages to minors).

9

18 Pa.C.S. § 6310.3 (relating to carrying a false

10

identification card).

11

(3)  Upon reasonable and probable cause, to search for and to

12

seize, without warrant or process, except in private homes, any

13

liquor, alcohol or malt or brewed beverages unlawfully

14

possessed, manufactured, sold, imported or transported and any

15

stills, equipment, materials, utensils, vehicles, boats,

16

vessels, animals, aircraft, or any of them, which are or have

17

been used in the unlawful manufacture, sale, importation or

18

transportation of the same. Such liquor, alcohol, malt or brewed

19

beverages, stills, equipment, materials, utensils, vehicles,

20

boats, vessels, animals or aircraft so seized shall be disposed

21

of as hereinafter provided.

22

(4)  To investigate and issue citations for any violations of

23

this act or any laws of this Commonwealth relating to liquor,

24

alcohol or malt or brewed beverages, or any regulations of the

25

board adopted pursuant to such laws or any violation of any laws

26

of this Commonwealth or of the Federal Government, relating to

27

the payment of taxes on liquor, alcohol or malt or brewed

28

beverages by any licensee, his officers, servants, agents or

29

employes.

30

(5)  To arrest any person who engages in the following

- 8 -

 


1

offenses when the said offenses are committed against the

2

officer/investigator or any person accompanying and assisting

3

the officer/investigator while the said officer/investigator is

4

performing assigned duties under and pursuant to this act and

5

any regulations promulgated under this act:

6

18 Pa.C.S. § 2701 (relating to simple assault).

7

18 Pa.C.S. § 2702 (relating to aggravated assault).

8

18 Pa.C.S. § 2705 (relating to recklessly endangering

9

another person).

10

18 Pa.C.S. § 2706 (relating to terroristic threats).

11

18 Pa.C.S. § 2709 (relating to harassment [and

12

stalking]).

13

18 Pa.C.S. § 5104 (relating to resisting arrest or other

14

law enforcement).

15

18 Pa.C.S. § 5501 (relating to riot).

16

(6)  To serve and execute warrants issued by the proper

17

authorities for offenses referred to in this subsection and to

18

serve subpoenas.

19

(7)  To arrange for the administration of chemical tests of

20

breath, blood or urine, including preliminary breath tests, to

21

persons for the purpose of determining the alcoholic content of

22

blood or the presence of a controlled substance by qualified

23

personnel of a State or local police department or qualified

24

personnel of a clinical laboratory licensed and approved by the

25

Department of Health.

26

* * *

27

Section 5.  Section 213 of the act, amended April 29, 1994

28

(P.L.212, No.30), is repealed:

29

[Section 213.  Bureau of Consumer Relations.--The board shall

30

establish a Bureau of Consumer Relations which shall be

- 9 -

 


1

responsible for handling all consumer complaints and

2

suggestions. The bureau shall develop a system-wide program for

3

investigating all complaints and suggestions and implementing

4

improvements into the State store system. The management of the

5

bureau shall be vested in a director, who shall be assisted by

6

such other personnel as the board deems necessary.]

7

Section 6.  Section 215 of the act, amended June 25, 2010

8

(P.L.217, No.35), is repealed:

9

[Section 215.  Wine and Spirits Marketing.--(e)  The board is

10

authorized to participate in or sponsor wine and spirits events

11

for the purpose of educating consumers as to the wines and

12

spirits available in this Commonwealth. The wine and spirits to

13

be used for the event may be acquired through the State store

14

system or may be donated from outside this Commonwealth.

15

Participation in the tastings may be conditioned on the purchase

16

of a ticket to the event. The event may include events occurring

17

on premises licensed by the board, and the board may sell wine

18

and spirits for off-premises consumption in an area designated

19

by the board for such sale.] 

20

Section 7.  Section 301 of the act, amended July 9, 1976

21

(P.L.527, No.125), is repealed:

22

[Section 301.  Board to Establish State Liquor Stores.--(a)

23

The board shall establish, operate and maintain at such places

24

throughout the Commonwealth as it shall deem essential and

25

advisable, stores to be known as "Pennsylvania Liquor Stores,"

26

for the sale of liquor and alcohol in accordance with the

27

provisions of and the regulations made under this act; except

28

that no store not so already located shall be located within

29

three hundred feet of any elementary or secondary school, nor

30

within a dry municipality without there first having been a

- 10 -

 


1

referendum approving such location. When the board shall have

2

determined upon the location of a liquor store in any

3

municipality, it shall give notice of such location by public

4

advertisement in two newspapers of general circulation. In

5

cities of the first class, the location shall also be posted for

6

a period of at least fifteen days following its determination by

7

the board as required in section 403(g) of this act. The notice

8

shall be posted in a conspicuous place on the outside of the

9

premises in which the proposed store is to operate or, in the

10

event that a new structure is to be built in a similarly visible

11

location. If, within five days after the appearance of such

12

advertisement, or of the last day upon which the notice was

13

posted, fifteen or more taxpayers residing within a quarter of a

14

mile of such location, or the City Solicitor of the city of the

15

first class, shall file a protest with the court of common pleas

16

of the county averring that the location is objectionable

17

because of its proximity to a church, a school, or to private

18

residences, the court shall forthwith hold a hearing affording

19

an opportunity to the protestants and to the board to present

20

evidence. The court shall render its decision immediately upon

21

the conclusion of the testimony and from the decision there

22

shall be no appeal. If the court shall determine that the

23

proposed location is undesirable for the reasons set forth in

24

the protest, the board shall abandon it and find another

25

location. The board may establish, operate and maintain such

26

establishments for storing and testing liquors as it shall deem

27

expedient to carry out its powers and duties under this act.

28

(b)  The board may lease the necessary premises for such

29

stores or establishments, but all such leases shall be made

30

through the Department of General Services as agent of the

- 11 -

 


1

board. The board, through the Department of General Services,

2

shall have authority to purchase such equipment and appointments

3

as may be required in the operation of such stores or

4

establishments.]

5

Section 7.1.  Sections 302 and 303 of the act are repealed:

6

[Section 302.  Selection of Personnel.--Officers and employes

7

of the board, except as herein otherwise provided, shall be

8

appointed and employed subject to the provisions of the Civil

9

Service Act.

10

Section 303.  Management of Pennsylvania Liquor Stores.--

11

Every Pennsylvania Liquor Store shall be conducted by a person

12

appointed in the manner provided in the Civil Service Act who

13

shall be known as the "manager" and who shall, under the

14

directions of the board, be responsible for carrying out the

15

provisions of this act and the regulations adopted by the board

16

under this act as far as they relate to the conduct of such

17

stores.]

18

Section 7.2.  Section 304 of the act, amended December 8,

19

2004 (P.L.1810, No.239), is repealed:

20

[Section 304.  When Sales May Be Made at Pennsylvania Liquor

21

Stores.--(a)  Except as provided for in subsection (b), every

22

Pennsylvania Liquor Store shall be open for business week days,

23

except holidays as that term is defined in section 102. The

24

board may, with the approval of the Governor, temporarily close

25

any store in any municipality.

26

(b)  Certain Pennsylvania Liquor Stores operated by the board

27

shall be open for Sunday retail sales between the hours of noon

28

and five o'clock postmeridian, except that no Sunday sales shall

29

occur on Easter Sunday or Christmas day. The board shall open up

30

to twenty-five per centum of the total number of Pennsylvania

- 12 -

 


1

Liquor Stores at its discretion for Sunday sales as provided for

2

in this subsection. The board shall submit yearly reports to the

3

Appropriations and the Law and Justice Committees of the Senate

4

and the Appropriations and the Liquor Control Committees of the

5

House of Representatives summarizing the total dollar value of

6

sales under this section.]

7

Section 7.3.  Section 305 of the act, amended May 8, 2003

8

(P.L.1, No.1), July 17, 2003 (P.L.63, No.15), November 30, 2004

9

(P.L.1727, No.221), December 8, 2004 (P.L.1810, No.239) and July

10

6, 2005 (P.L.135, No.39), is repealed:

11

[Section 305.  Sales by Pennsylvania Liquor Stores.--(a)  The

12

board shall in its discretion determine where and what classes,

13

varieties and brands of liquor and alcohol it shall make

14

available to the public and where such liquor and alcohol will

15

be sold. Every Pennsylvania Liquor Store shall be authorized to

16

sell combination packages. If a person desires to purchase a

17

class, variety or brand of liquor or alcohol not currently

18

available from the board, he or she may place a special order

19

for such item so long as the order is for two or more bottles.

20

The board may require a reasonable deposit from the purchaser as

21

a condition for accepting the order. The customer shall be

22

notified immediately upon the arrival of the goods.

23

In computing the retail price of such special orders for

24

liquor or alcohol, the board shall not include the cost of

25

freight or shipping before applying the mark-up and taxes but

26

shall add the freight or shipping charges to the price after the

27

mark-up and taxes have been applied.

28

Unless the customer pays for and accepts delivery of any such

29

special order within ten days after notice of arrival, the store

30

may place it in stock for general sale and the customer's

- 13 -

 


1

deposit shall be forfeited.

2

(b)  Every Pennsylvania Liquor Store shall sell liquors at

3

wholesale to hotels, restaurants, clubs, and railroad, pullman

4

and steamship companies licensed under this act; and, under the

5

regulations of the board, to pharmacists duly licensed and

6

registered under the laws of the Commonwealth, and to

7

manufacturing pharmacists, and to reputable hospitals approved

8

by the board, or chemists. Sales to licensees shall be made at a

9

price that includes a discount of ten per centum from the retail

10

price. The board may sell to registered pharmacists only such

11

liquors as conform to the Pharmacopoeia of the United States,

12

the National Formulary, or the American Homeopathic

13

Pharmacopoeia. The board may sell at special prices under the

14

regulations of the board, to United States Armed Forces

15

facilities which are located on United States Armed Forces

16

installations and are conducted pursuant to the authority and

17

regulations of the United States Armed Forces. All other sales

18

by such stores shall be at retail. A person entitled to purchase

19

liquor at wholesale prices may purchase the liquor at any

20

Pennsylvania Liquor Store upon tendering cash, check or credit

21

card for the full amount of the purchase. For this purpose, the

22

board shall issue a discount card to each licensee identifying

23

such licensee as a person authorized to purchase liquor at

24

wholesale prices. Such discount card shall be retained by the

25

licensee. The board may contract through the Commonwealth

26

bidding process for delivery to wholesale licensees at the

27

expense of the licensee receiving the delivery.

28

(c)  Whenever any checks issued in payment of liquor or

29

alcohol purchased from State Liquor Stores by persons holding

30

wholesale purchase permit cards issued by the board shall be

- 14 -

 


1

returned to the board as dishonored, the board shall charge a

2

fee of five dollars per hundred dollars or fractional part

3

thereof, plus all protest fees, to the maker of such check

4

submitted to the board. Failure to pay the face amount of the

5

check in full and all charges thereon as herein required within

6

ten days after demand has been made by the board upon the maker

7

of the check shall be cause for revocation or suspension of any

8

license issued by the board to the person who issued such check

9

and the cancellation of the wholesale purchase permit card held

10

by such person.

11

(d)  No liquor or alcohol package shall be opened on the

12

premises of a Pennsylvania Liquor Store. No manager or other

13

employe of the board employed in a Pennsylvania Liquor Store

14

shall allow any liquor or alcohol to be consumed on the store

15

premises, nor shall any person consume any liquor or alcohol on

16

such premises, except liquor and alcohol which is part of a

17

tasting conducted pursuant to the board's regulations. Such

18

tastings may also be conducted in the board's headquarters or

19

regional offices.

20

(e)  The board may sell tax exempt alcohol to the

21

Commonwealth of Pennsylvania and to persons to whom the board

22

shall, by regulation to be promulgated by it, issue special

23

permits for the purchase of such tax exempt alcohol.

24

Such permits may be issued to the United States or any

25

governmental agency thereof, to any university or college of

26

learning, any laboratory for use exclusively in scientific

27

research, any hospital, sanitorium, eleemosynary institution or

28

dispensary; to physicians, dentists, veterinarians and

29

pharmacists duly licensed and registered under the laws of the

30

Commonwealth of Pennsylvania; to manufacturing chemists and

- 15 -

 


1

pharmacists or other persons for use in the manufacture or

2

compounding of preparations unfit for beverage purposes.

3

(f)  Every purchaser of liquor, alcohol, corkscrews, wine or

4

liquor accessories, trade publications, gift cards, gift

5

certificates, wine- or liquor-scented candles or wine glasses

6

from a Pennsylvania Liquor Store shall receive a numbered

7

receipt which shall show the price paid therefor and such other

8

information as the board may prescribe. Copies of all receipts

9

issued by a Pennsylvania Liquor Store shall be retained by and

10

shall form part of the records of such store.

11

(g)  The board is hereby authorized and empowered to adopt

12

and enforce appropriate rules and regulations to insure the

13

equitable wholesale and retail sale and distribution, through

14

the Pennsylvania Liquor Stores, of available liquor and alcohol

15

at any time when the demand therefor is greater than the supply.

16

(h)  Every Pennsylvania Liquor Store shall sell gift

17

certificates and gift cards which may be redeemed for any

18

product sold by the board. In addition, the board may sell

19

corkscrews, wine and liquor accessories, wine- or liquor-scented

20

candles, trade publications and wine sleeves at Pennsylvania

21

Liquor Stores.

22

(i)  Notwithstanding any other provision of law to the

23

contrary, the board may sell wine in containers having a

24

capacity of six liters or less.]

25

Section 7.4.  Section 306 of the act is repealed:

26

[Section 306.  Audits by Auditor General.--(a)  It shall be

27

the duty of the Department of the Auditor General to make all

28

audits which may be necessary in connection with the

29

administration of the financial affairs of the board and the

30

Pennsylvania Liquor Stores operated and maintained by the board.

- 16 -

 


1

Such audits shall be conducted in accordance with generally

2

accepted accounting principles. Nothing herein shall be

3

construed to require the Auditor General to conduct biannual

4

inventories.

5

(b)  At least one audit shall be made each year of the

6

affairs of the board, and all collections made by the

7

Pennsylvania Liquor Stores shall be audited quarterly. A copy of

8

the annual audit of the affairs of the board shall be submitted

9

to each member of the General Assembly.

10

(c)  Special audits of the affairs of the board and the

11

Pennsylvania Liquor Stores maintained and operated by the board

12

may be made whenever they may, in the judgment of the Auditor

13

General, appear necessary, and shall be made whenever the

14

Governor shall call upon the Auditor General to make them.

15

(d)  Copies of all audits made by the Department of the

16

Auditor General shall be promptly submitted to the board and to

17

the Governor.

18

(e)  Unless the Department of the Auditor General shall

19

neglect or refuse to make annual, quarterly or special Audits,

20

as hereinabove required, it shall be unlawful for the board to

21

expend any money appropriated to it by the General Assembly for

22

any audit of its affairs, except for the payment of the

23

compensation and expenses of such auditors as are regularly

24

employed as part of the administrative staff of the board.]

25

Section 8.  The act is amended by adding an article to read:

26

ARTICLE III-A

27

WINE AND SPIRITS DISTRIBUTION

28

SUBARTICLE A

29

GENERAL PROVISIONS

30

Section 301-A.  Scope of article.

- 17 -

 


1

This article relates to liquor distribution privatization.

2

Section 302-A.  Legislative intent.

3

(a)  Declaration.--The General Assembly finds and declares

4

that:

5

(1)  The sale of liquor at wholesale or retail should no

6

longer be by the Commonwealth, but rather by private persons

7

licensed and regulated by the Commonwealth.

8

(2)  The health and welfare of the citizens of this

9

Commonwealth will be adequately protected by the regulation

10

of private licensees through strict enforcement of laws and

11

rules relating to the purchase and sale of liquor.

12

(3)  The sale of liquor through wholesale and retail

13

licensees will improve customer service, selection and price.

14

(4)  The operation and efficiency of State government

15

will be improved.

16

(b)  Purpose.--The General Assembly recognizes the following

17

public policy purposes and declares that the following

18

objectives of the Commonwealth are to be served by this article:

19

(1)  The authorization of wine and spirits wholesale and

20

retail licenses is intended to continue and enhance the

21

generation of revenue to the Commonwealth related to the

22

wholesale and retail sale of liquor.

23

(2)  The transition to a privately owned and operated

24

wholesale and retail liquor distribution system shall be

25

accomplished in a manner that protects the public through

26

regulation and policing of all activities involved in the

27

wholesale and retail sale of liquor.

28

(3)  The establishment of wine and spirits wholesale and

29

retail licenses is intended to provide broad economic

30

opportunities to the citizens of this Commonwealth and shall

- 18 -

 


1

be implemented in such a manner as to prevent monopolization

2

by establishing reasonable restrictions on the control of

3

wholesale and retail licensees.

4

(4)  The transition to a privately owned and operated

5

wholesale and retail liquor distribution system shall be

6

accomplished in a manner that creates incentives and

7

facilitates the transition of Pennsylvania Liquor Store and

8

other effected employees to other employment.

9

(5)  The transition to a privately owned and operated

10

wholesale and retail liquor distribution system shall be

11

accomplished in a manner that minimizes disruption of

12

services to the public.

13

(6)  With the transition to a privately owned and

14

operated wholesale and retail liquor distribution system, it

15

is necessary to enhance alcohol education efforts to ensure

16

against the illegal sale of alcohol, prevent and combat the

17

illegal consumption of alcohol by minors and visibly

18

intoxicated persons, and discourage the intemperate use of

19

alcohol.

20

(7)  Participation in the wholesale and retail sale of

21

liquor by any wholesale or retail licensee shall be deemed a

22

privilege, conditioned upon the proper and continued

23

qualification of the licensee and upon the discharge of the

24

affirmative responsibility of each licensee to provide the

25

department and the board with assistance and information

26

necessary to assure that the policies declared by this

27

article are achieved.

28

Section 303-A.  Definitions.

29

The following words and phrases when used in this article

30

shall have the meanings given to them in this section unless the

- 19 -

 


1

context clearly indicates otherwise:

2

"Adjusted store net profit factor."  The net profit factor

3

for each Pennsylvania Liquor Store divided by the number of

4

retail zones which the department assigns to each Pennsylvania

5

Liquor Store for purposes of determining the minimum bid.

6

"Affiliate" or "person affiliated with."  A person that

7

directly or indirectly, through one or more intermediaries,

8

controls, is controlled by or is under common control with a

9

specified person.

10

"Agency."  The Pennsylvania Higher Education Assistance

11

Agency.

12

"Bid-rigging."  The concerted activity of two or more persons

13

to determine in advance, or attempt to influence, the selected

14

bidder for a wine and spirits retail license. The term includes

15

any of the following:

16

(1)  Conspiring or cooperating in the preparation of

17

bids, including the determination of bid amounts.

18

(2)  Submitting prearranged bids, agreed-upon higher or

19

lower bids or other complementary bids.

20

(3)  Agreeing to submit identical bids.

21

(4)  Agreeing to coordinate the retail zones in which a

22

person will or will not submit a bid.

23

(5)  Agreeing to share profits with or give an equity

24

interest to a person who does not submit the high bid.

25

(6)  Agreeing to set up territories to restrict

26

competition.

27

(7)  Agreeing not to submit a bid.

28

"Blended brand valuation."  For any particular brand of

29

liquor, the sum of the wholesale profit margin on each product

30

of a brand.

- 20 -

 


1

"Brand of liquor."  A liquor product or series of liquor

2

products produced by a single manufacturer.

3

"Change in control."  For purposes of wholesale or retail

4

licensees, the acquisition by a person or group of persons

5

acting in concert of more than 20% of a licensee's securities or

6

other ownership interests, with the exception of any ownership

7

interest of the person that existed at the time of initial

8

licensing, or more than 20% of the securities or other ownership

9

interests of a corporation or other legal entity which owns,

10

directly or indirectly, at least 20% of the securities or other

11

ownership interests of the licensee.

12

"Commission."  The State Civil Service Commission.

13

"Controlling interest."  As follows:

14

(1)  For a publicly traded legal entity, an interest in a

15

legal entity, applicant or licensee whereby a person's sole

16

voting rights under State law or corporate articles or bylaws

17

entitles the person to elect or appoint one or more of the

18

members of the board of directors or other governing board or

19

the ownership, directly or indirectly, of 5% or more of the

20

securities of the publicly traded corporation.

21

(2)  For a privately held corporation, partnership,

22

limited liability company or other form of privately held

23

legal entity, the holding of any securities in the legal

24

entity.

25

"Countywide adjusted net profit factor."  Fifty percent of

26

the sales to unlicensed customers minus the taxes and cost of

27

goods sold for all existing Pennsylvania Liquor Stores located

28

in a given county divided by the existing number of Pennsylvania

29

Liquor Stores located in that county.

30

"Department."  The Department of General Services of the

- 21 -

 


1

Commonwealth.

2

"Displaced employee."  A full-time employee of the board

3

whose employment is terminated as a sole and direct result of

4

the board's decision to cease wholesale and retail operations

5

under this article. The term shall not include a person who is

6

terminated for cause or who resigns, is furloughed or is

7

otherwise separated from employment for any other reason.

8

"Institution of higher education."  A public or private

9

institution within this Commonwealth authorized by the

10

Department of Education to grant a certificate, associate degree

11

or higher degree. The term includes a branch or satellite campus

12

of the institution.

13

"Licensed premises" or "controlled area."  The areas approved

14

by the department or the board to be utilized by a wholesale or

15

retail licensee for the distribution of liquor.

16

"Net profit factor."  Fifty percent of the sales to

17

unlicensed customers minus taxes and cost of goods sold for each

18

existing Pennsylvania Liquor Store for the most recent available

19

12-month period.

20

"Retail acquisition factor."  As follows:

21

(1)  For Class A wine and spirits retail licenses, the

22

term shall mean a factor of five applied to the adjusted

23

store net profit factor for each retail zone.

24

(2)  For Class B wine and spirits retail licenses, the

25

term shall mean a factor of 2.25 applied to the Statewide

26

adjusted net profit factor of each retail zone.

27

"Retail licensee."  A person that holds a wine and spirits

28

retail license under this article.

29

"Retail zone."  An area, as established by the department,

30

for which a wine and spirits retail license authorizes the

- 22 -

 


1

distribution of wine and spirits. The location of each

2

Pennsylvania Liquor Store shall be in a separate zone.

3

"Variable pricing."  For purposes of the wholesale sale of

4

liquor, any disparity in the price of an item sold to one

5

licensee as compared to the price of the same item to another

6

licensee or a licensee of a different classification. The term

7

shall not include discounts for volume purchases.

8

"Wholesale acquisition factor."  A factor of 2.5 applied to

9

the wholesale profit margin of a brand of liquor in determining

10

the wholesale license fee.

11

"Wholesale licensee."  A person that holds a wine and spirits

12

wholesale license under this article.

13

"Wholesale profit margin."  For any particular liquor

14

product, 20% of the total of costs of goods sold of the product

15

over the most recent 12-month period for which information is

16

available.

17

"Wine and spirits retail license."  A license issued by the

18

department or the board authorizing a person to sell and

19

distribute wine and spirits to the public for off-premises

20

consumption.

21

"Wine and spirits wholesale license."  A license issued by

22

the department or the board authorizing a person to sell and

23

distribute liquor on a wholesale basis to retail licensees and

24

other licensees under this act.

25

Section 304-A.  Reports to General Assembly.

26

(a)  Annual report.--One year after the effective date of

27

this section, and each year thereafter, the board, in

28

cooperation with the department, shall submit to the General

29

Assembly an annual report on wholesale and retail alcohol sales

30

in this Commonwealth and the implementation of this article,

- 23 -

 


1

including the total revenue earned by the issuance of licenses

2

under this article for the wholesale and retail sale of liquor

3

in this Commonwealth.

4

(b)  Review.--Five years following the effective date of this

5

section, the board, in cooperation with the department, shall

6

conduct a thorough review of the operations of wholesale

7

licensees and retail licensees. The board, in cooperation with

8

the department, shall submit a copy of this review and any

9

recommendations relating to the expansion of existing retail

10

zones to the General Assembly. The same review shall be

11

conducted ten years following the effective date of this

12

section.

13

Section 305-A.  Powers and duties of the department and the

14

board.

15

(a)  Orderly transition.--It shall be the power and duty of

16

the department and the board to implement this article and

17

effect an orderly transition to a privately owned and operated

18

wholesale and retail liquor distribution system in this

19

Commonwealth in a manner that is consistent with this article

20

and the laws of this Commonwealth and which maintains a

21

continuous level of service to the public. The department shall

22

be primarily responsible to administer the transition to a

23

privately owned wholesale and retail liquor distribution system.

24

The board shall be primarily responsible for enforcement of this

25

article and this act on the liquor distribution operations of

26

private wholesale and retail licensees and the administration of

27

this article once the privatization transition is completed.

28

(b)  Specific duties.--Within 180 days of the effective date

29

of this section, the department shall utilize the authority

30

provided for under section 306-A and any other powers of the  

- 24 -

 


1

department and with the full cooperation and assistance of the

2

board, shall, at a minimum, have completed all of the following

3

duties:

4

(1)  Establishment of an application process and schedule

5

for the investigation and award of wine and spirits wholesale

6

licenses under this article.

7

(2)  Establishment of a blended brand valuation for each

8

brand of liquor sold by Pennsylvania Liquor Stores in this

9

Commonwealth.

10

(3)  Establishment of retail zones to be utilized by the

11

department in conducting the auction of Class A wine and

12

spirits retail licenses under this article.

13

(4)  Assignment of the 500 Class B wine and spirits

14

retail licenses to counties across this Commonwealth,

15

excluding counties of the first class, to be utilized by the

16

department in conducting Class B auctions.

17

(5)  Establishment of a process for the auction of wine

18

and spirits retail licenses under this article.

19

(6)  Establishment of minimum bid amounts for each wine

20

and spirits retail license to be auctioned under this

21

article.

22

(7)  Establishment of procedures and standards governing

23

the relationship between wholesale licensees and

24

manufacturers and the ability and terms upon which that

25

relationship may be terminated.

26

Section 306-A.  Temporary regulations.

27

(a)  Promulgation.--In order to facilitate the prompt

28

implementation of this article, regulations promulgated by the

29

department shall be deemed temporary regulations which shall

30

expire no later than three years following the effective date of

- 25 -

 


1

this section. The department may promulgate temporary

2

regulations not subject to:

3

(1)  Sections 201, 202 and 203 of the act of July 31,

4

1968 (P.L.769, No.240), referred to as the Commonwealth

5

Documents Law.

6

(2)  The act of June 25, 1982 (P.L.633, No.181), known as

7

the Regulatory Review Act.

8

(b)  Expiration.--The authority provided to the department to

9

adopt temporary regulations under subsection (a) shall expire on

10

January 1, 2014. Regulations adopted after this period shall be

11

promulgated as provided by law.

12

Section 307-A.  Order of transition to private distribution

13

system.

14

(a)  Wholesale transition.--The department shall transition

15

the board's wholesale distribution function to privately owned

16

and operated wholesale licensees before divesting the board's

17

retail operations. The transition must substantially divest the

18

board of all operations relating to the wholesale distribution

19

of alcohol in this Commonwealth within one year of the effective

20

date of this section.

21

(b)  Retail transition.--Twenty-four months following the

22

effective date of this section, the department shall

23

substantially divest the board of all operations relating to the

24

retail sale of alcohol in this Commonwealth. The department may

25

extend this transition period by up to six months by certifying

26

to the President pro tempore of the Senate, the Minority Leader

27

of the Senate, the Speaker of the House of Representatives and

28

the Minority Leader of the House of Representatives that, due to

29

circumstances beyond its control, the department cannot complete

30

the retail transition in the 24-month period. The department

- 26 -

 


1

shall provide a detailed explanation of the circumstances which

2

cause the delay with its certification to the General Assembly.

3

(c)  Prohibition.--Except as necessary to ensure a continuous

4

level of service to the public and subject to section 328-A, the

5

board shall not engage in any wholesale or retail distribution

6

of alcohol within this Commonwealth following completion of the

7

wholesale and retail transitions.

8

(d)  Cooperation required.--The board shall fully cooperate

9

with the department in all aspects of implementation of this

10

article and shall provide the department with all records in the

11

possession of the board upon request.

12

SUBARTICLE B

13

PRIVATIZATION OF WHOLESALE LIQUOR DISTRIBUTION

14

Section 308-A.  Wholesale divestiture.

15

(a)  Authorized wine and spirits wholesale licenses.--

16

(1)  One wine and spirits wholesale license may be issued

17

by the department to each successful applicant. The license

18

shall authorize the distribution of the brands of liquor to

19

retail licensees and other licensees authorized to sell or

20

distribute liquor under this act, as proposed by an applicant

21

and approved by the department.

22

(2)  Subject to the restrictions enumerated under section

23

313-A, wholesale licensees may distribute more than one brand

24

of liquor under the same wine and spirits wholesale license.

25

(3)  Upon application by a wholesale licensee, the board

26

may amend the authorization under a wine and spirits

27

wholesale license to include or exclude additional brands of

28

liquor.

29

(b)  Wholesale license fee.--

30

(1)  At the time of license issuance, the department

- 27 -

 


1

shall impose a one-time license fee to be paid by each

2

successful applicant for a wine and spirits wholesale license

3

in an amount equal to the blended brand valuation for each

4

brand of liquor authorized by the license multiplied by the

5

wholesale acquisition factor.

6

(2)  (i)  Within the time prescribed under section 305-A,

7

the department shall determine and publish as a notice in

8

the Pennsylvania Bulletin the license fee for each brand

9

of liquor sold at Pennsylvania Liquor Stores for a

10

continuous period of at least one year prior to the

11

effective date of this section.

12

(ii)  For any brand of liquor that is not sold at

13

Pennsylvania Liquor Stores for a continuous period of one

14

year prior to the effective date of this section and is

15

proposed to be distributed by an applicant for a wine and

16

spirits wholesale license, the department shall determine

17

and publish the applicable license fee by considering the

18

blended brand valuation for the brand from a comparable

19

jurisdiction and applying the wholesale acquisition

20

factor.

21

(iii)  In the event that data is not available from a

22

comparable jurisdiction to establish the blended brand

23

valuation for the brand, the department shall determine

24

the license fee by utilizing the license fee from a

25

comparable brand sold at Pennsylvania Liquor Stores.

26

(3)  If, at any time during the term of a wine and

27

spirits wholesale license, the wholesale licensee proposes to

28

sell and distribute a new brand of liquor not previously sold

29

in this Commonwealth, the wholesale licensee shall apply to

30

the board for permission to sell the brand and pay an

- 28 -

 


1

additional license fee determined in accordance with this

2

section.

3

(c)  Term.--

4

(1)  A wine and spirits wholesale license, after payment

5

of the license fee, shall be in effect unless suspended,

6

revoked or not renewed by the board upon good cause

7

consistent with the license requirements as provided for

8

under this article.

9

(2)  The license of a wholesale licensee in good standing

10

shall be renewed every two years consistent with this

11

article.

12

(3)  Nothing under this subsection shall be construed to

13

relieve a wholesale licensee of the affirmative duty to

14

notify the board of any changes relating to the status of its

15

license or to any other information contained in the

16

application materials on file with the department or the

17

board.

18

Section 309-A.  (Reserved).

19

Section 310-A.  Application for wine and spirits wholesale

20

license.

21

(a)  Applications.--An application for a wine and spirits

22

wholesale license shall be submitted on a form and in a manner

23

as shall be required by the department.

24

(b)  Eligibility.--A person may be eligible to apply for a

25

wine and spirits wholesale license if the person satisfies all

26

of the following:

27

(1)  Neither the applicant nor any affiliate of the

28

applicant has applied for or holds a wine and spirits retail

29

license.

30

(2)  The applicant, if a corporation, a limited liability

- 29 -

 


1

company, limited partnership, partnership, association or

2

other legal entity, is organized under the laws of this

3

Commonwealth.

4

(3)  The applicant, if a natural person, is a citizen of

5

the United States and a resident of this Commonwealth.

6

(4)  Neither the applicant nor any affiliate of the

7

applicant, executive officer, director or general or limited

8

partner of the applicant, or person holding, directly or

9

indirectly, a controlling interest in the applicant has been

10

convicted of a felony or crime identified in subsection

11

(d)(9).

12

(c)  Other licenses.--Nothing under this article or act shall

13

be construed to prohibit a properly licensed importing

14

distributor of malt and brewed beverages from applying for and,

15

if approved, being issued a wine and spirits wholesale license.

16

(d)  General requirements.--In addition to any other

17

information required under this article or as may be required by

18

the department, the applicant for a wine and spirits wholesale

19

license shall include, at a minimum, the following:

20

(1)  The name and address of the applicant.

21

(2)  A statement as to whether the applicant is an

22

individual, corporation, limited liability company, limited

23

partnership, partnership or association and the state of

24

incorporation or organization.

25

(3)  The names and residence addresses of each executive

26

officer, director, general or limited partner and person

27

holding a controlling interest in the applicant.

28

(4)  If the applicant is an association, the names and

29

residence addresses of the persons constituting the

30

association.

- 30 -

 


1

(5)  A statement of the brands of liquor the applicant

2

proposes to distribute and, for each brand, whether the

3

applicant proposes to engage in wholesale distribution on a

4

Statewide or regional basis.

5

(6)  The proposed location and proof of ownership or

6

lease for the wholesale operation, including any proposed

7

warehouses, if available.

8

(7)  Floor plans for any facility proposed to be used in

9

wholesale operations and existing design plans for any

10

facility that is planned, but not yet constructed, to the

11

extent they are available.

12

(8)  Information disclosing all arrests of the applicant

13

and any affiliate of the applicant, executive officer,

14

director or general or limited partner of the applicant or

15

person holding a controlling interest in the applicant and

16

all citations issued to the same for nonsummary offenses.

17

The information shall include:

18

(i)  A brief description of the circumstances

19

surrounding the arrest or issuance of the citation.

20

(ii)  The specific offense charged or cited.

21

(iii)  The ultimate disposition of the charge or

22

citation, including the details of any dismissal, plea

23

bargain, conviction, sentence, pardon, expungement or

24

order of accelerated rehabilitative disposition.

25

(9)  A sworn statement that the applicant and any

26

affiliate of the applicant, executive officer, director or

27

general or limited partner of the applicant or person holding

28

a controlling interest in the applicant have never been

29

convicted:

30

(i)  of any crime involving fraud, moral turpitude or

- 31 -

 


1

racketeering within a period of ten years immediately

2

preceding the date of the application;

3

(ii)  of any felony or equivalent crime; or

4

(iii)  in any Federal or state jurisdiction,

5

including this Commonwealth, of the violation of any

6

Federal or state liquor law.

7

(10)  A statement that the applicant intends to

8

continuously operate as a wholesale licensee for the duration

9

of the license term and to provide a level of service,

10

including product availability, reasonably equivalent to the

11

level of service currently provided by the Commonwealth.

12

(11)  A financial statement in a form and containing such

13

information as the department shall prescribe to indicate the

14

applicant's financial capability to operate the wholesale

15

operation and the estimated volume of wholesale business to

16

be conducted annually.

17

(12)  (i)  A current tax lien certificate issued by the

18

Department of Revenue for the applicant and any affiliate

19

of the applicant, executive officer, director or general

20

or limited partner of the applicant or person holding a

21

controlling interest in the applicant.

22

(ii)  Any unpaid taxes identified on a tax lien

23

certificate required to be filed with the application

24

must be paid before the application is considered

25

complete and reviewed by the department.

26

(13)  A signature and verification by oath or

27

affirmation, or under penalty of unsworn falsification to

28

authorities, by the applicant, if a natural person, or, when

29

the applicant is a legal entity, a person specifically

30

authorized by the legal entity to sign the application, to

- 32 -

 


1

which shall be attached written evidence of that authority.

2

(e)  Additional information.--An applicant shall have a

3

continuing duty during the application process to provide any

4

other information determined to be appropriate by the

5

department.

6

(f)  Amended application.--When a change occurs in any

7

information provided to the department as part of the

8

application process, the applicant shall immediately notify the

9

department of the change and timely provide amended information

10

to the department in a form and manner determined by the

11

department.

12

(g)  Application fees and investigative costs.--

13

(1)  An application filing fee of $10,000 shall be due

14

upon application for a wine and spirits wholesale license.

15

(2)  The department shall establish, charge and collect

16

fees from an applicant to recover the costs directly related

17

to the department's review and investigation of that

18

applicant's application for a wine and spirits wholesale

19

license. The board shall have the same duty relating to fees

20

as to applications for renewal.

21

Section 311-A.  Review and investigation of application.

22

(a)  Completeness of application.--

23

(1)  (i)  The department may not consider an incomplete

24

application and shall notify the applicant in writing if

25

an application is incomplete.

26

(ii)  An application shall be considered incomplete

27

if it does not include all applicable fees and all

28

information and accompanying documentation required by

29

the department, including the payment of any unpaid taxes

30

identified on any tax lien certificate required to be

- 33 -

 


1

filed with the application.

2

(2)  A notification of incompleteness shall state the

3

deficiencies in the application that must be corrected prior

4

to consideration of the merits of the application.

5

(3)  The applicant shall be afforded a reasonable period

6

of time, as determined by the department, to cure the

7

deficiencies.

8

(4)  If the applicant fails to timely cure noticed

9

deficiencies, the application shall be deemed denied by the

10

department without further action.

11

(b)  Investigation.--After receipt of an application for a

12

wine and spirits wholesale license and a determination that the

13

application is complete, the department shall conduct an

14

investigation of the application as deemed necessary or

15

desirable. The investigation shall include, and the applicant

16

shall have the burden of demonstrating, at a minimum, the

17

following:

18

(1)  The truth and veracity of the information provided

19

in the application.

20

(2)  The applicant's cooperation and the cooperation of

21

any affiliate of the applicant, executive officer, director

22

or general or limited partner of the applicant or person

23

holding a controlling interest in the applicant in the

24

application process and with any request by the department or

25

the board for any information deemed necessary for licensure.

26

(3)  The good character, integrity and suitability of the

27

applicant and any affiliate of the applicant, executive

28

officer, director or general or limited partner of the

29

applicant or person holding a controlling interest in the

30

applicant.

- 34 -

 


1

(4)  The applicant possesses sufficient financial

2

resources to:

3

(i)  Operate as a wholesale licensee.

4

(ii)  Pay all taxes due and owing to the

5

Commonwealth.

6

(iii)  Assume liability for the safe operation of the

7

wholesale operations.

8

(5)  The applicant possesses sufficient business ability

9

and experience to create and maintain a successful and

10

efficient wholesale operation that provides service at a

11

level that is reasonably equivalent to the level of service

12

currently provided in this Commonwealth at the time of

13

enactment of this article.

14

(6)  The physical facilities proposed to be used in the

15

applicant's wholesale operations are located and designed in

16

such a manner as to:

17

(i)  Assure that all warehouses are located within

18

this Commonwealth.

19

(ii)  Exist as a self-contained unit, with limited

20

customer access.

21

(iii)  Not have any interior connection with any

22

other business or with any residential building without

23

prior board approval.

24

(iv)  Provide adequate security to protect the

25

applicant's inventory from unauthorized sale or

26

diversion.

27

(v)  Protect the public interest.

28

(c)  Assistance with investigations.--The department may

29

enter into an agreement with the Pennsylvania State Police or

30

the Office of Inspector General to assist the department in the

- 35 -

 


1

conduct of investigations under this section and to provide for

2

the reimbursement of actual costs incurred for providing the

3

assistance.

4

Section 312-A.  Issuance of licenses.

5

(a)  Notification.--Upon completion of the investigation

6

under section 311-A, the department shall inform the applicant

7

in writing of its decision to approve or deny the application.

8

(b)  Approval.--

9

(1)  If the application is approved, the department shall

10

also notify the successful applicant of the licensing fee

11

due, as required by section 308-A(b)(1), based on the brand

12

licensing fees established under section 308-A(b)(2) for the

13

brands of liquor approved for the applicant.

14

(2)  If wholesale distribution of a brand of liquor for

15

an applicant is approved for a region of this Commonwealth,

16

and on less than a Statewide basis, the department shall

17

calculate the licensing fee for that brand through a pro rata

18

allocation of the wholesale profit margin for that brand

19

associated with the region for which wholesale distribution

20

is approved.

21

(c)  Denial.--

22

(1)  If an application is denied, the department shall

23

provide the applicant with the specific reasons for the

24

denial in the written notification required under subsection

25

(a).

26

(2)  The applicant shall be entitled to a hearing on the

27

denial, if a hearing is requested within ten days of the

28

department's notification. An applicant requesting a hearing

29

must do so in writing on a form and in a manner prescribed by

30

the department.

- 36 -

 


1

(3)  Any hearing conducted under this section shall

2

comply with 2 Pa.C.S. § 505 (relating to evidence and cross-

3

examination).

4

(d)  Issuance.--After approval of an application, the

5

department shall issue a wine and spirits wholesale license to

6

the applicant, if the applicant has completed all of the

7

following acts:

8

(1)  Paid the license fee required under this article.

9

Payment shall be made by certified check or wire transfer to

10

a designated restricted account in the State Stores Fund.

11

(2)  Paid any outstanding application or investigation

12

fees.

13

(3)  Executed and delivered to the department the

14

statement of conditions required under section 313-A.

15

(4)  Purchased the board's existing and marketable

16

warehouse inventory of all brands of liquor the applicant is

17

being authorized to distribute at the board's original cost,

18

subject to the excise tax provided for under section 336-A,

19

plus an administrative fee to be determined by the board.

20

(5)  Fulfilled any other conditions required by the

21

department or the board or provided for by this article.

22

(e)  License as privilege.--

23

(1)  Nothing contained under this article is intended or

24

shall be construed to create an entitlement to a wine and

25

spirits wholesale license.

26

(2)  The authorization to participate in the distribution

27

and sale of liquor as a wholesale licensee is a privilege

28

conditioned upon this article.

29

(f)  Other licenses.--Nothing under this article or this act

30

shall be construed to prohibit a wholesale licensee from

- 37 -

 


1

applying for and, if approved, being issued a license as an

2

importing distributor of malt and brewed beverages.

3

Section 313-A.  Wholesale licensee statement of conditions.

4

(a)  Statement of conditions.--The department shall develop a

5

statement of conditions to be executed by each wholesale

6

licensee governing the wine and spirits wholesale licensee.

7

(b)  Conditions.--In addition to any other conditions the

8

department deems necessary or appropriate for a specific

9

wholesale licensee, a statement of conditions under this section

10

shall include, at a minimum, the following conditions and impose

11

the following obligations and requirements on an ongoing basis:

12

(1)  Wholesale licensees may not under any circumstances

13

sell liquor to persons not licensed under this act.

14

(2)  Wholesale licensees shall serve all licensees

15

eligible to purchase liquor under this act and shall make

16

liquor available for sale to those licensees under the same

17

pricing structure.

18

(3)  Except for wholesale licensees that hold an

19

importing distributor license under section 431, wholesale

20

licensees may not under any circumstances sell malt or brewed

21

beverages.

22

(4)  Wholesale licensees may not under any circumstances

23

engage in variable pricing in sales of liquor to persons

24

licensed under this act.

25

(5)  Wholesale licensees shall acquire liquor exclusively

26

from a licensed manufacturer or importer of wine and spirits

27

as provided under this act and keep a detailed log of all

28

wholesale liquor transactions, both acquisitions and sales to

29

licensees under this act.

30

(6)  A wholesale licensee's licensed premises and all

- 38 -

 


1

facilities involved in its wholesale operations, including

2

any changes to those facilities during the term of the

3

license, shall be subject to the inspection, investigation

4

and approval of the department or the board.

5

(7)  Wholesale licensees shall maintain adequate security

6

to protect the licensee's inventory from unauthorized sale or

7

diversion and prevent its unauthorized distribution.

8

(8)  Wholesale licensees may engage in any separate

9

business activity upon any licensed premises, but only with

10

prior approval of the board.

11

(9)  Wholesale licensees may sell liquor between 2 a.m.

12

of any Monday and 12 midnight of the following Saturday.

13

(10)  Wholesale licensees shall collect and remit to the

14

Department of Revenue the excise tax as provided under

15

section 336-A.

16

(11)  The wholesale licensee shall be considered a

17

Pennsylvania Liquor Store for the purposes of collecting and

18

remitting taxes consistent with the act of March 4, 1971

19

(P.L.6, No.2), known as the Tax Reform Code of 1971, from

20

persons licensed to sell liquor for on-premises consumption

21

under Article IV.

22

(12)  Wholesale licensees shall notify the board within

23

15 days of any change in persons holding a controlling

24

interest in the licensee.

25

(13)  Wholesale licensees shall notify the board within

26

15 days of becoming aware of any arrest or criminal

27

indictments or convictions by the wholesale licensee or any

28

affiliate of the licensee, executive officer, director or

29

general or limited partner of the licensee or person holding

30

a controlling interest in the licensee.

- 39 -

 


1

(14)  Wholesale licensees shall notify the board within

2

15 days of becoming aware of any violation of this act by the

3

licensee or any affiliate of the licensee, executive officer,

4

director or general or limited partner of the licensee,

5

person holding a controlling interest in the licensee or

6

employee of the licensee.

7

(15)  Neither a wholesale licensee, nor any of its

8

affiliates, shall, at any time, seek to be approved or be

9

approved by the department or the board to distribute brands

10

of liquor in a manner which results in the licensee

11

controlling more than 50% of the liquor distributed in the

12

wholesale market of this Commonwealth.

13

(16)  Wholesale licensees shall make the licensed

14

premises, all of the facilities involved in the wholesale

15

operation and all of the business and financial books and

16

records of the wholesale operation available at any time for

17

inspection and audit by the department or the board.

18

(17)  Wholesale licensees shall cooperate fully in any

19

inquiry or investigation by the department or the board and

20

provide any information requested by the department or the

21

board.

22

(18)  Wholesale licensees, if a corporation, a limited

23

liability company, limited partnership, partnership,

24

association or other legal entity, shall at all times be

25

organized under the laws of this Commonwealth.

26

(19)  Wholesale licensees, if a natural person, shall at

27

all times be a citizen of the United States and a resident of

28

this Commonwealth.

29

(c)  Sanctions.--A wholesale licensee that fails to comply

30

with any condition contained in the licensee's statement of

- 40 -

 


1

conditions shall be subject to board-imposed administrative

2

sanctions or other penalties authorized under sections 471 and

3

494.

4

(d)  Transition.--Notwithstanding any law or regulation to

5

the contrary, during the period of divestiture of wine and

6

spirits wholesale operations, the following shall apply:

7

(1)  The board shall have no authority to levy or collect

8

the tax imposed under the act of June 9, 1936 (Sp.Sess.,

9

P.L.13, No.4) entitled "An act imposing an emergency State

10

tax on liquor, as herein defined, sold by the Pennsylvania

11

Liquor Control Board; providing for the collection and

12

payment of such tax; and imposing duties upon the Department

13

of Revenue and the Pennsylvania Liquor Control Board," for or

14

on any brand of liquor purchased from a wholesale licensee.

15

(2)  The board shall have no authority to apply a retail

16

mark up on any brand of liquor purchased from a wholesale

17

licensee of more than 25%.

18

Section 314-A.  Loss of rights to wholesale brands of liquor.

19

The procedures and standards established by the department

20

under section 305-A(b) to govern the relationship between

21

wholesale licensees and manufacturers shall, at a minimum,

22

incorporate the following principles:

23

(1)  A manufacturer having a contract, including all

24

agreements, understandings or other arrangements, whether

25

written or oral, with a wholesale licensee for the

26

distribution in this Commonwealth of a brand or brands of

27

liquor may terminate the distribution rights and transfer

28

such rights to another wholesale licensee upon the voluntary

29

agreement of both wholesale licensees. In the event of a

30

voluntary termination and transfer, the manufacturer shall

- 41 -

 


1

provide written notice of that fact to the board indicating

2

that affected wholesale licensees have both agreed to the

3

termination and transfer. A copy of the notification to the

4

board shall be provided to both wholesale licensees.

5

(2)  If a wholesale licensee does not agree to the

6

termination or transfer of its distribution rights, the

7

manufacturer may terminate or transfer the rights only for

8

good cause, as defined by the department or the board, or

9

upon payment to the terminated wholesale licensee of

10

reasonable compensation, as determined by the board to

11

reflect the value of the wholesale licensee's business

12

related to the terminated brand of liquor.

13

(3)  Whether voluntary or involuntary, the termination

14

and transfer of the right to distribute the brand of liquor

15

shall comply with section 327-A.

16

SUBARTICLE C

17

PRIVATIZATION OF RETAIL LIQUOR DISTRIBUTION

18

Section 315-A.  Retail divestiture through issuance of retail

19

licenses.

20

(a)  Initiation of divestiture.--No later than one year

21

following the effective date of this article, and following

22

completion of the wholesale transition, the department shall

23

initiate the divestiture of the Pennsylvania Liquor Store system

24

through the auction of wine and spirits retail licenses.

25

(b)  Authorized retail licenses.--The department shall be

26

authorized to issue 1,250 wine and spirits retail licenses to

27

successful bidders in the retail license auction process.

28

(c)  License classification.--There shall be two classes of

29

wine and spirits retail licenses as follows:

30

(1)  There shall be 750 Class A wine and spirits retail

- 42 -

 


1

licenses authorized for issuance to successful bidders

2

consistent with this article. The following shall apply:

3

(i)  Except for Class A licenses in cities of the

4

first class, Class A licenses shall authorize the

5

operation of a retail wine and spirits store in a

6

specific retail zone in an establishment that exceeds

7

15,000 square feet of retail floor space and dedicates a

8

minimum of 600 linear feet of shelf space for the sale of

9

liquor.

10

(ii)  Class A licenses located in a city of the first

11

class shall authorize the operation of a retail wine and

12

spirits store in a specific retail zone in an

13

establishment which shall not be subject to minimum

14

square feet of retail space.

15

(2)  There shall be 500 Class B wine and spirits retail

16

licenses authorized for issuance consistent with this

17

article. Class B licenses shall authorize the operation of a

18

retail wine and spirits store in an establishment that has

19

less than 15,000 square feet in retail floor space.

20

(d)  Retail licenses in cities of the first class.--The

21

following shall govern wine and spirits retail licenses for

22

cities of the first class. The following shall apply:

23

(1)  Of the 750 Class A wine and spirits retail licenses

24

authorized under subsection (c)(1), the department shall be

25

authorized to issue 60 Class A retail licenses to authorize

26

the operation of a wine and spirits store within a city of

27

the first class.

28

(2)  No Class B wine and spirits retail licenses shall be

29

authorized to operate a wine and spirits store within a city

30

of the first class.

- 43 -

 


1

(3)  The remaining 690 Class A licenses and 500 Class B

2

licenses shall authorize the operation of a wine and spirits

3

store in a location in this Commonwealth outside of a city of

4

the first class.

5

(e)  Other licenses.--Nothing under this article or this act

6

may prohibit a retail licensee from applying for and, if

7

approved, being issued a license that authorizes the licensee to

8

sell malt and brewed beverages at retail for off-premises

9

consumption.

10

Section 316-A.  Establishment of retail zones and assignment of

11

Class B licenses.

12

(a)  Establishment of retail zones.--During the initial

13

implementation period as prescribed under section 305-A(b), the

14

department, with the full cooperation and assistance of the

15

board, shall establish retail zones for the issuance of Class A

16

wine and spirits retail licenses, consistent with the following:

17

(1)  The department shall establish 750 retail zones

18

across this Commonwealth.

19

(2)  No more than 60 of these retail zones may be located

20

within a city of the first class, and the remaining 690

21

retail zones shall be located in areas outside of a city of

22

the first class.

23

(3)  Retail zones shall be determined by the department

24

based on historic liquor sales and population density, and in

25

a manner that assures that each existing liquor store

26

location is within a different retail zone.

27

(4)  The department shall establish the retail zones

28

through the promulgation of temporary regulations and shall

29

publish these temporary regulations in the Pennsylvania

30

Bulletin.

- 44 -

 


1

(b)  Assignment of Class B licenses.--During the initial

2

implementation period as prescribed under section 305-A(b), the

3

department, with the full cooperation and assistance of the

4

board, shall assign Class B wine and spirits retail licenses

5

consistent with the following:

6

(1)  The department shall assign Class B wine and spirits

7

retail licenses to counties across this Commonwealth,

8

excluding counties of the first class.

9

(2)  In assigning Class B licenses the department shall

10

balance the factor of historic sales of liquor and population

11

density with the policy objective of assuring adequate and

12

reasonable liquor distribution in all areas of this

13

Commonwealth.

14

(3)  The department shall assign Class B licenses through

15

the promulgation of temporary regulations and shall publish

16

the temporary regulations in the Pennsylvania Bulletin.

17

Section 317-A.  Conduct of retail auctions.

18

(a)  Class A and Class B auctions.--The department shall

19

conduct two retail auctions for wine and spirits retail

20

licenses. The first auction shall be limited to Class A wine and

21

spirits retail licenses and shall be commenced one year from the

22

effective date of this article. The second auction shall be

23

limited to Class B wine and spirits retail licenses and shall be

24

commenced as soon as practicable after the Class A retail

25

license auction is completed.

26

(b)  Class A auctions.--The department shall accept bids and

27

conduct an auction for a Class A retail license for each retail

28

zone.

29

(c)  Class B auctions.--The department shall conduct an

30

auction for Class B retail licenses for each county in this

- 45 -

 


1

Commonwealth to which a Class B license has been assigned.

2

Section 318-A.  Retail auction requirements.

3

(a)  Conduct of auctions.--Class A and Class B retail

4

auctions shall be conducted by the department consistent with

5

the following:

6

(1)  The department shall establish a deadline for

7

submission of bids for all auctions.

8

(2)  The department shall review the submission of timely

9

bids to determine compliance with the minimum bid

10

requirements of section 323-A. Bids that do not comply with

11

the minimum bid amount will be rejected for submission.

12

Bidder identification information and bid amount for each

13

accepted bid shall be made subject to public disclosure.

14

(3)  Except for Class B countywide auctions, the

15

department shall review the bids and identify the three

16

highest bids for each retail auction. All bidders in an

17

individual auction shall be notified of the three highest

18

bids in the auction in which they are participating.

19

(4)  For each Class B countywide auction, the department

20

shall identify the number of highest bids which equals two

21

times the number of Class B licenses assigned by the

22

department to a given county. The department shall notify all

23

bidders of the high bidders identified in each Class B

24

auction.

25

(5)  For each retail auction, the department shall

26

establish a best and final offer period in which the highest

27

bidders identified under paragraphs (3) and (4) will be

28

provided an opportunity to submit a revised bid amount that

29

will represent its best and final offer. In no case may a

30

bidder submit a best and final offer that includes a bid

- 46 -

 


1

amount which is less than the bidder's original bid.

2

(6)  For Class A retail license auctions, the department

3

shall review the best and final offers and shall select a

4

high bidder for each auction.

5

(7)  For Class B retail license auctions, the department

6

shall review the best and final offers and shall select a

7

high bidder for each Class B license assigned to a specific

8

county.

9

(b)  Other bidders.--Nothing under this article or act shall

10

prohibit a person licensed by the department to sell malt and

11

brewed beverages at retail for off-premises consumption from

12

submitting a bid and, if successful, being issued a wine and

13

spirits retail license.

14

(c)  Bidder collusion strictly prohibited.--It shall be

15

unlawful for any person to conspire, collude or combine with

16

another in order to commit or attempt to commit bid-rigging

17

involving a wine and spirits retail license.

18

(d)  Fines and imprisonment.--A person who violates

19

subsection (c) commits a felony of the third degree and shall,

20

upon conviction, be sentenced to pay a fine of not more than

21

$1,000,000, if an entity other than an individual, or a fine of

22

not more than $50,000, if an individual, or to serve a term of

23

imprisonment of not more than one year, or both.

24

(e)  Alternate civil penalty.--In lieu of criminal

25

prosecution for violation of subsection (c), the Attorney

26

General may bring an action for a civil penalty. In this action,

27

a person found by a court to have violated subsection (c) shall

28

be liable for a civil penalty of not more than $100,000.

29

(f)  Disqualification, termination and debarment.--In

30

addition to any other criminal or civil penalties imposed under

- 47 -

 


1

this section, the following shall apply in the event a person is

2

convicted or found liable of a violation of subsection (c):

3

(1)  The person shall be disqualified from bidding on or

4

holding a wine and spirits retail license or holding any

5

other license authorized under this act for a period of three

6

years.

7

(2)  If the person holds a wine and spirits retail

8

license, or any other license authorized under this act, the

9

license shall be terminated by the board immediately upon the

10

conviction or determination of liability.

11

(3)  The conviction or determination of liability may be

12

grounds for debarment or suspension under 62 Pa.C.S. § 531

13

(relating to debarment or suspension).

14

(g)  Responsibility for enforcement.--

15

(1)  The Office of Attorney General and the district

16

attorneys of the several counties shall have concurrent

17

jurisdiction for the investigation and prosecution of

18

violations of subsection (c).

19

(2)  The Office of Attorney General shall have the

20

authority to investigate and bring a civil action to enforce

21

subsection (c). In furtherance of the responsibilities under

22

this subsection, the Attorney General shall have the

23

administrative subpoena powers set forth under section 919 of

24

the act of April 9, 1929 (P.L.177, No.175), known as The

25

Administrative Code of 1929.

26

Section 319-A.  Postqualification of selected bidders.

27

(a)  Investigation.--Upon selection of a high bidder in each

28

auction, the department shall conduct an investigation of each

29

high bidder based upon the information submitted to evaluate

30

whether:

- 48 -

 


1

(1)  the selected bidder qualifies as a responsible and

2

suitable person to hold a wine and spirits retail liquor

3

license and operate a wine and spirits store location;

4

(2)  the selected bidder has proposed an acceptable

5

facility and location for a wine and spirits store; and

6

(3)  the selected bidder's planned operation is compliant

7

with this article, including the statement of conditions

8

required under section 324-A.

9

(b)  Additional information.--The department may require

10

additional information from a selected bidder and conduct onsite

11

inspections, as necessary, to complete the postqualification

12

process.

13

(c)  Assistance with investigations.--The department may

14

enter into an agreement with the Pennsylvania State Police or

15

the Office of Inspector General to assist the department in the

16

conduct of investigations under this section and that provides

17

for the reimbursement of actual costs incurred for providing

18

assistance under such an agreement.

19

(d)  Public input hearings.--During the postqualification

20

process, the department shall schedule public input hearings in

21

six regions of this Commonwealth, including one for each city of

22

the first class, at which interested members of the public will

23

be provided the opportunity to testify regarding selected bidder

24

qualifications, including the location of proposed wine and

25

spirits stores. The testimony of each public witness shall be

26

considered by the department in the postqualification

27

investigation of selected bidders to which the testimony

28

applies.

29

(e)  Investigative fees.--The department shall have the

30

authority to establish, charge and collect fees from a selected

- 49 -

 


1

bidder to recover the costs directly related to the department's

2

investigation within the postqualification process.

3

(f)  Acceptance of qualifications.--A high bidder's

4

qualifications will be accepted by the department if the

5

department's investigation reveals the following:

6

(1)  the bid information was truthful;

7

(2)  the bidder and its officers, directors and

8

principals are of good character, integrity and suitability;

9

(3)  the bidder possesses sufficient financial resources

10

to operate a wine and spirits store, pay all taxes due and

11

meet all other financial obligations;

12

(4)  the bidder possesses sufficient business ability to

13

operate a wine and spirits store; and

14

(5)  the proposed facilities are compliant with all of

15

the operational requirements of the statement of conditions

16

under section 324-A and the requirements of this article.

17

(g)  Offsets.--Within the postqualification investigation

18

process for all selected bidders the department shall take all

19

necessary steps to assure that no two wine and spirits stores

20

are located within one-quarter mile from each other.

21

(h)  Issuance of license.--If a selected bidder's

22

qualifications are accepted by the department, the department

23

shall qualify the bidder and shall issue a wine and spirits

24

retail license upon the occurrence of the following:

25

(1)  The execution and deliverance to the department and

26

the board of the statement of conditions required under

27

section 324-A.

28

(2)  The payment of the bid amount. The bid amount shall

29

be paid by certified check or wire transfer to a designated

30

restricted account established in the State Stores Fund.

- 50 -

 


1

(3)  Payment of any outstanding bid or investigation

2

fees.

3

(4)  Fulfillment of any other conditions required by the

4

department.

5

(i)  Qualifications unacceptable.--If a selected bidder's

6

qualifications are not accepted by the department, the

7

department shall identify the next highest bidder that was not

8

selected in that auction and conduct a postqualification

9

investigation of that bidder, consistent with subsection (a).

10

(j)  Approval of qualifications.--If the qualifications of

11

the bidder selected are approved by the department under

12

subsection (f), the department shall issue a license to the

13

successful bidder consistent with the requirements of subsection

14

(h).

15

(k)  Repeat of process.--If the second highest bidder is not

16

approved, the department shall repeat the postqualification

17

process for the next highest unselected bidder in that auction.

18

(l)  Additional procedures.--If the second highest bidder in

19

an auction is not approved by the department, the department

20

shall determine whether to proceed with a new auction or conduct

21

an additional best and final offer period to consider additional

22

bids from the original auction.

23

(m)  License is a privilege.--Nothing contained under this

24

article is intended or may be construed to create an entitlement

25

to a wine and spirits retail license. The authorization to

26

participate in the distribution and sale of liquor as a retail

27

licensee is a privilege conditioned upon this article.

28

(n)  Terms of licensure.--A wine and spirits retail license,

29

after payment of the license fee, shall be in effect unless

30

suspended, revoked or not renewed by the board upon good cause

- 51 -

 


1

consistent with the license requirements as provided for under

2

this article. The license of a retail licensee in good standing

3

shall be subject to renewal every two years consistent with this

4

article. Nothing under this subsection may relieve a retail

5

licensee of the affirmative duty to notify the board of any

6

changes relating to the status of its license or to any other

7

information contained in the application materials on file with

8

the department or the board.

9

Section 320-A.  Auctions with no or insufficient minimum bids.

10

(a)  Reconduct of Class A auctions with modified bid.--If the

11

department conducts a Class A retail auction and no bid is

12

submitted that is equal to or greater than the minimum bid

13

established under section 323-A, the department shall reconduct

14

the auction. Taking into consideration the bids received and

15

rejected in the initial auction, if any, the department, in its

16

discretion, shall establish a modified minimum bid for the

17

reconduct of the auction.

18

(b)  Insufficient number of minimum bids.--As to the Class B

19

auctions, if an insufficient number of bids that meet or exceed

20

the minimum bid are submitted, the department shall select the

21

bids that meet or exceed the minimum bid subject to

22

postqualification and, in its discretion, may conduct a new

23

auction for the remaining Class B licenses without a minimum bid

24

or with a modified minimum bid.

25

Section 321-A.  Protest of bid selection.

26

(a)  Protest.--Within five days of the selection of a bidder

27

in an auction conducted under sections 317-A and 318-A, a bidder

28

that is not selected by the department for the wine and spirits

29

retail license for a particular zone may file a protest in

30

writing with the department. An unselected bidder that fails to

- 52 -

 


1

submit a timely protest as required by this section shall waive

2

its opportunity to challenge or appeal the selection of the

3

department.

4

(b)  Requirements for protests.--A protest filed under this

5

section shall comply with the following requirements:

6

(1)  For Class A auctions and Class B auctions, the

7

subject matter of a protest is restricted to the conduct of

8

the auction for the specific retail zone in which the

9

protester participated. No person may protest an auction in

10

which that person did not participate as a bidder.

11

(2)  An unselected bidder that files a protest must be

12

represented by an attorney at law.

13

(3)  A bidder that files a protest under this section

14

waives its right to, and is disqualified from, being selected

15

by the department as the next highest bidder for

16

postqualification under section 319-A.

17

(4)  As a prerequisite to the filing of a protest, and at

18

the time of the filing of a protest, the protester shall

19

provide the department with a bond, letter of credit or other

20

form of security acceptable to the department in an amount

21

equal to the amount of the selected bid. For protests

22

involving the Statewide Class B auction, the accepted

23

security shall be in an amount equal to the highest bid

24

received from any bidder. If the bid protest does not result

25

in the overturning of the department's bid selection for the

26

specific retail zone protested, and the selected bidder does

27

not pay the bid amount for any reason, the protester shall

28

forfeit its security to the department.

29

Section 322-A.  Content of bids.

30

Each bid submitted to participate in a retail auction shall

- 53 -

 


1

meet the following requirements:

2

(1)  The bid shall include a summary page which clearly

3

identifies:

4

(i)  The name, address and tax identification number

5

of the bidder.

6

(ii)  The class of license for which the bid is being

7

submitted.

8

(iii)  The retail zone for which the bid is being

9

submitted.

10

(iv)  Whether the bidding is being submitted for a

11

retail zone within a city of the first class.

12

(v)  The amount of the bid.

13

(vi)  The amount of the minimum bid for the retail

14

auction in which the bidder is participating.

15

(2)  A general description of the bid and the location of

16

the proposed wine and spirits store.

17

(3)  Whether the applicant is an individual, corporation,

18

limited liability company, limited partnership, partnership

19

or association or other legal entity and the state of

20

incorporation or organization and the names and residence

21

addresses of each executive officer, director, general or

22

limited partner and person holding a controlling interest in

23

the applicant.

24

(4)  If the bidder is an association, the bid shall set

25

forth the names and addresses of the persons constituting the

26

association.

27

(5)  If the bidder is a corporation, limited liability

28

company, limited partnership, partnership, association or

29

other legal entity, the bid must show that the entity is

30

organized under the laws of this Commonwealth.

- 54 -

 


1

(6)  If the bidder is a natural person, the bid must show

2

that the bidder is a citizen of the United States and a

3

resident of this Commonwealth and that the bidder is not

4

acting as an agent for any other person, partnership,

5

association or group of persons beneficially interested in

6

the license.

7

(7)  The proposed location and ownership of the site for

8

the wine and spirits store, as well as floor plans of

9

existing facilities to be utilized in the bidder's retail

10

operation and design plans for any facilities not yet

11

constructed, to the extent they are available.

12

(8)  Information disclosing all arrests of the applicant

13

and any affiliate of the applicant, executive officer,

14

director or general or limited partner of the applicant or

15

person holding a controlling interest in the applicant and

16

all citations issued to the same for nonsummary offenses.

17

The information shall include:

18

(i)  A brief description of the circumstances

19

surrounding the arrest or issuance of the citation.

20

(ii)  The specific offense charged or cited.

21

(iii)  The ultimate disposition of the charge or

22

citation, including the details of any dismissal, plea

23

bargain, conviction, sentence, pardon, expungement or

24

order of accelerated rehabilitative disposition.

25

(9)  A sworn statement that the bidder and any affiliate

26

of the bidder, executive officer, director or general or

27

limited partner of the bidder or person holding a controlling

28

interest in the bidder have never been convicted of any crime

29

involving fraud, moral turpitude or racketeering within a

30

period of ten years immediately preceding the date of the

- 55 -

 


1

bid, been convicted of any felony or equivalent crime, or

2

been convicted in any Federal or state jurisdiction,

3

including this Commonwealth, of the violation of any Federal

4

or state liquor law.

5

(10)  A statement that the bidder will continuously

6

operate a wine and spirits store for the duration of the

7

two-year license period and will provide a level of service,

8

including hours of operation and product availability

9

reasonably equivalent to the level of service currently

10

provided in the same geographic area.

11

(11)  The bidder shall provide a financial statement,

12

consistent with the requirements prescribed by the

13

department, which demonstrates the financial capability to

14

operate the wine and spirits store and the estimated volume

15

of business to be conducted.

16

(12)  A current tax lien certificate issued by the

17

Department of Revenue for the bidder and any affiliate of the

18

bidder, executive officer, director or general or limited

19

partner of the bidder, or person holding a controlling

20

interest in the bidder. Any unpaid taxes identified on a tax

21

lien certificate required to be filed with the bid shall be

22

paid before the bid is accepted for submission by the

23

department.

24

(13)  There shall be a bid filing fee of $10,000 which

25

will be submitted by certified check with the bid.

26

(14)  The bid shall be signed and verified by oath or

27

affirmation by the owner, if a natural person or, in the case

28

of an association, by a member or partner thereof or, in the

29

case of a corporation or limited liability company, by an

30

executive officer thereof or any person specifically

- 56 -

 


1

authorized by the corporation to sign the bid, to which shall

2

be attached written evidence of that authority.

3

(15)  A noncollusion affidavit, executed by the bidder,

4

if a natural person, or a person specifically authorized by

5

bidder, if a legal entity, to sign the affidavit, certifying

6

that neither the bidder, nor any affiliate of the bidder,

7

executive officer, director or general or limited partner of

8

the bidder, or person holding a controlling interest in the

9

bidder has engaged in collusion, bid-rigging or other

10

prohibited activity in relation to the bid. The form and

11

content of the noncollusion affidavit shall be determined by

12

the department. Failure of any bidder to provide the required

13

noncollusion affidavit shall disqualify the bid unless cured

14

within a time period determined by the department. Any

15

required noncollusion affidavit shall state whether or not

16

the bidder and any affiliate of the bidder, executive

17

officer, director or general or limited partner of the

18

bidder, or person holding a controlling interest in the

19

bidder has been convicted or found liable for any act

20

prohibited by Federal or state law in any jurisdiction

21

involving conspiracy or collusion with respect to bidding on

22

any public contract or in relation to the sale or lease of

23

any public asset within the last three years. An affirmative

24

statement by the bidder that the bidder, or any affiliate of

25

the bidder, executive officer, director or general or limited

26

partner of the bidder, or person holding a controlling

27

interest in the bidder, has been convicted or found liable on

28

such grounds may be grounds for the department to find the

29

bidder not suitable.

30

(16)  A bidder shall have a continuing duty during the

- 57 -

 


1

auction process to update information in the bid and provide

2

any other information determined to be appropriate by the

3

department.

4

Section 323-A.  Minimum bid for retail auctions.

5

During the initial implementation period as provided for by

6

section 305-A(b), the department shall establish minimum bid

7

amounts for each retail auction consistent with the following

8

requirements:

9

(1)  For Class A retail auctions, the department shall

10

establish the minimum bid for each retail zone by first

11

identifying each retail zone that does not have an existing

12

Pennsylvania Liquor Store located in that zone and assigning

13

each retail zone to the existing Pennsylvania Liquor Store

14

closest in proximity to that retail zone. The department

15

shall then establish the minimum bid for each retail zone by

16

calculating the adjusted store net profit factor for that

17

zone and multiplying it by the retail acquisition factor for

18

Class A retail licenses.

19

(2)  For all Class B retail auctions, the department

20

shall calculate one minimum bid for each county auction by

21

dividing the countywide adjusted net profit factor by the sum

22

of the number of Class A licenses located in a specific

23

county and the number of Class B licenses assigned by the

24

department to that county and then multiplying that sum by

25

the retail acquisition factor for Class B licenses.

26

(3)  The department shall establish minimum bids for all

27

retail auctions through promulgation of temporary regulations

28

under section 306-A and shall publish the temporary

29

regulations in the Pennsylvania Bulletin.

30

Section 324-A.  Retail licensee statement of conditions.

- 58 -

 


1

(a)  Statement of conditions.--The department shall develop a

2

statement of conditions to be executed by each retail licensee

3

governing the wine and spirits retail licensee.

4

(b)  Conditions.--In addition to any other conditions the

5

department, in consultation with the board, deems necessary or

6

appropriate for a specific retail licensee, a statement of

7

conditions under this section shall include, at a minimum, the

8

following conditions, and impose the following obligations and

9

requirements on an ongoing basis:

10

(1)  Retail licensees shall be strictly prohibited from

11

selling or distributing liquor to persons under 21 years of

12

age or persons that are visibly intoxicated.

13

(2)  No retail licensee shall operate a retail wine and

14

spirits store located within one-quarter mile of another wine

15

and spirits store.

16

(3)  A retail licensee's wine and spirits store and all

17

facilities involved in its retail operations, including any

18

changes to those facilities during the term of the license,

19

shall be subject to the inspection, investigation and

20

approval of the department or the board.

21

(4)  Retail licensees shall maintain adequate security to

22

protect the licensee's inventory from unauthorized sale or

23

diversion and prevent its unauthorized distribution.

24

(5)  No retail licensee shall engage in any separate

25

business activity upon any licensed premises without prior

26

approval of the board and under no circumstances shall any

27

retail licensee operate a wine and spirits store at a

28

location that sells or distributes fuel.

29

(6)  Wine and spirits retail licensees may not sell wine

30

or spirits to Article IV licensees and other wine and spirits

- 59 -

 


1

retail licensees except in an emergency, as defined by

2

regulation by the board.

3

(7)  (Reserved).

4

(8)  Retail licensees shall notify the board within 15

5

days of any change in persons holding a controlling interest

6

in the licensee.

7

(9)  Retail licensees shall notify the board within 15

8

days of becoming aware of any arrest or criminal indictments

9

or convictions by the retail licensee or any affiliate of the

10

licensee, executive officer, director or general or limited

11

partner of the licensee or person holding a controlling

12

interest in the licensee.

13

(10)  Retail licensees shall notify the board within 15

14

days of becoming aware of any violation of this act by the

15

licensee or any affiliate of the licensee, executive officer,

16

director or general or limited partner of the licensee,

17

person holding a controlling interest in the licensee or

18

employee of the licensee.

19

(11)  With the exception of retail licensees which

20

operate a distributor of malt and brewed beverages, the

21

premises of each wine and spirits store shall be a self-

22

contained unit with limited customer access dedicated solely

23

to the sale of liquor and permitted merchandise. Purchases

24

made within the limitations of the premises shall be paid for

25

at a location within the confines of the liquor sales area.

26

With the exception of wine and spirits retail licensees that

27

also hold a license under section 401, no wine and spirits

28

store shall have any interior connection with any other

29

business or with any residential building except as approved

30

by the board.

- 60 -

 


1

(12)  Each retail licensee shall design its controlled

2

area in a manner and with adequate safeguards to ensure that

3

its liquor products are secure and that the area may not be

4

accessed during prohibited hours of operation.

5

(13)  No retail licensee may hold, directly or

6

indirectly:

7

(i)  More than 40 of the Class A wine and spirits

8

retail licenses within this Commonwealth.

9

(ii)  More than five Class B licenses within this

10

Commonwealth. Any Class B license held by a retail

11

licensee shall count against the limitations under

12

subparagraph (i) for Class A licenses.

13

(iii)  More than 10% of the wine and spirits retail

14

licenses in any one county which has ten or more wine and

15

spirits retail licenses.

16

(iv)  More than one wine and spirits retail license

17

in any one county which has less than ten wine and

18

spirits retail licenses.

19

(14)  Every wine and spirits store may sell liquor for

20

consumption off-premises. In addition to the sale of liquor,

21

wine and spirits stores may sell related merchandise within

22

the controlled area of the store. Sales of related

23

merchandise shall not exceed 30% of the gross annual sales of

24

any wine and spirits store. Unless the retail licensee also

25

has a license to sell malt and brewed beverages, no wine and

26

spirits store shall have authority under any circumstances to

27

sell malt or brewed beverages. The board shall promulgate

28

regulations setting forth what additional related merchandise

29

may be offered for retail sale in wine and spirits stores.

30

(15)  Retail licensees shall make the licensed premises,

- 61 -

 


1

all of the facilities involved in the retail operation and

2

all of the business and financial books and records of the

3

retail operation available at any time for inspection and

4

audit by the board.

5

(16)  Wine and spirits store licensees may sell wine or

6

spirits between 8 a.m. and 11 p.m. of any day except Sunday

7

to persons not licensed under this act.

8

(17)  In addition to the hours authorized under paragraph

9

(16), wine and spirits store licensees may, upon purchasing a

10

permit from the board at an annual fee of $1,000, sell wine

11

or spirits to persons not licensed under this act or to a

12

holder of a special occasion permit on Sunday between the

13

hours of 12 noon and 9 p.m.

14

(18)  No wine and spirits licensee shall employ a person

15

under 18 years of age to work in the controlled area, and no

16

employee under 21 years of age shall be permitted to engage

17

in the sale of liquor.

18

(19)  Neither the licensee nor any affiliate of the

19

licensee, at any time, may hold a wine and spirits wholesale

20

license.

21

(20)  The licensee, if a corporation, a limited liability

22

company, limited partnership, partnership, association or

23

other legal entity, shall at all times be organized under the

24

laws of this Commonwealth.

25

(21)  The licensee, if a natural person, shall at all

26

times be a citizen of the United States and a resident of

27

this Commonwealth.

28

(22)  Each licensee shall assure that all wine and

29

spirits store managers and at least 75% of the employees of a

30

wine and spirits store shall complete Responsible Alcohol

- 62 -

 


1

Management Control Program training in accordance with

2

section 471.1.

3

(23)  A retail licensee shall not be permitted by the

4

board to keep its wine and spirits retail license in

5

safekeeping for a period which exceeds two years.

6

(24)  Except for employees permitted under paragraph

7

(18), a retail licensee shall ensure that no person under 21

8

years of age is permitted to enter the controlled area unless

9

accompanied by an adult.

10

(25)  In addition to section 495(b) and (c), a wine and

11

spirits retail licensee shall assure the use of swipe

12

identification card technology to verify the age of any

13

person who appears to be under 30 years of age. The board

14

shall promulgate regulations as are necessary for the

15

implementation of swipe identification card technology.

16

(26)  The retail licensee is strictly prohibited from

17

selling a liquor product at a price less than the underlying

18

cost of the product.

19

(27)  The retail licensee shall be considered a

20

Pennsylvania Liquor Store for the purposes of collecting and

21

remitting taxes consistent with the act of March 4, 1971

22

(P.L.6, No.2), known as the Tax Reform Code of 1971, from a

23

person other than a person licensed to sell liquor for on-

24

premises consumption under Article IV.

25

(c)  Sanctions.--A retail licensee that fails to abide by any

26

condition contained in the licensee's statement of conditions

27

shall be subject to board-imposed administrative sanctions or

28

other penalties authorized under sections 471 and 494.

29

SUBARTICLE D

30

MISCELLANEOUS PROVISIONS AND CLOSING OF STATE STORES

- 63 -

 


1

Section 325-A.  License renewals.

2

(a)  Renewal.--Licenses issued under this article shall be

3

subject to renewal every two years. The application for renewal

4

shall be submitted on a form as directed by the board at least

5

30 days prior to the expiration of the license and shall

6

include, at a minimum, an update of the information contained in

7

the initial and any prior renewal applications and the payment

8

of any renewal application filing fee required by this article.

9

A license for which a completed renewal application and fee has

10

been received by the board will continue in effect unless and

11

until the board sends written notification to the licensee that

12

the board has denied the renewal of the license.

13

(b)  Renewal fee.--An application filing fee of $1,000 shall

14

be due upon application for the renewal of a wine and spirits

15

wholesale license. The board shall have the authority, from time

16

to time, to adjust the renewal application filing fee to ensure

17

that the fee adequately recovers the costs associated with

18

licensure renewal. In addition, the board shall collect fees

19

from a renewal applicant to recover the costs of a renewal

20

investigation.

21

(c)  Renewal hearings.--The board may hold hearings on

22

renewal applications as it deems necessary at a time and in a

23

format as it shall fix. A licensee whose renewal application is

24

denied shall be entitled to a hearing before the board in

25

accordance with section 464.

26

(d)  Revocation or failure to renew.--In addition to any

27

other sanctions the board may impose, the board may, at its

28

discretion, suspend, revoke or deny renewal of any license

29

issued under this article if it finds that the applicant, or any

30

of its affiliates, executive officers, directors or general or

- 64 -

 


1

limited partners, or persons holding a controlling interest in

2

the applicant is in violation of any provision of this act, have

3

furnished the board with false or misleading information or are

4

no longer suitable for licensure. In the event of a revocation

5

or failure to renew, the applicant's authorization to conduct

6

business as a wholesale or retail licensee shall immediately

7

cease and all fees paid in connection with it shall be deemed

8

forfeited. In the event of a suspension, the applicant's

9

authorization to conduct business shall immediately cease until

10

the board notifies the applicant that the suspension is no

11

longer in effect.

12

(e)  Affirmative duty.--Nothing under this section shall

13

relieve a licensee of the affirmative duty to notify the board

14

of any changes relating to the status of its license or to any

15

other information contained in the application materials filed

16

with the board.

17

Section 326-A.  Sale, assignment or transfer of license.

18

(a)  Prohibition.--No person may sell, assign or otherwise

19

transfer a wine and spirits wholesale or retail license granted

20

under this article without the prior written approval of the

21

board and payment of the fee under subsection (d).

22

(b)  Change of control.--For the purposes of this section, a

23

change of control of a wholesale or retail licensee shall be

24

deemed to be a sale, assignment or transfer of a wine and

25

spirits wholesale or retail license. A licensee shall notify the

26

board immediately upon becoming aware of any proposed or

27

contemplated change of control.

28

(c)  Compliance.--Any person to whom a wine and spirits

29

wholesale or retail license is sold, assigned or transferred

30

shall qualify under and comply with this article prior to the

- 65 -

 


1

sale, assignment or transfer of said license.

2

(d)  Transfer fee.--The transfer of a wine and spirits

3

wholesale or retail license shall be subject to a transfer fee

4

equal to 1% of the license fee paid for that license and shall

5

be paid as a condition of the transfer of the license. The

6

transfer fee applicable to the transfer of brands of liquor

7

under section 327-A(b) shall not apply to the transfer of a wine

8

and spirits wholesale license.

9

Section 327-A.  Transfer of brands of liquor.

10

(a)  Prohibition.--No brand of liquor offered for sale in

11

this Commonwealth may be transferred to a different wholesale

12

licensee without prior approval from the board.

13

(b)  Transfer fee.--An application to the board to transfer

14

the right to distribute a brand of liquor shall be subject to an

15

application fee equal to 1% of the initial license fee

16

attributable to that brand of liquor.

17

Section 328-A.  Suspension or revocation.

18

(a)  Authority of board.--The board shall have the authority

19

to suspend or revoke a license issued under this article when

20

the board finds that any of the following apply:

21

(1)  The licensee has violated this act or any

22

regulations of the board.

23

(2)  The licensee has knowingly presented to the board

24

false, incomplete or misleading information.

25

(3)  The licensee has pleaded guilty, entered a plea of

26

nolo contendere or has been found guilty of a felony by a

27

judge or jury in a Federal or state court.

28

(4)  The licensee failed to operate the business or to

29

provide a reasonable level of consumer service.

30

(b)  Hearings.--Suspension and revocation hearings shall be

- 66 -

 


1

held in accordance with the procedures under section 514.

2

(c)  Sales prohibited.--No person may sell liquor at any

3

premises if the license applicable to that premises has been

4

forfeited, suspended or revoked or has expired.

5

(d)  Public sale.--In the event of the revocation, forfeiture

6

or surrender of any retail license in accordance with this

7

article, the board shall conduct an auction to replace the

8

licensee, consistent with the procedures and requirements under

9

this article.

10

Section 329-A.  Closure of Pennsylvania Liquor Stores.

11

(a)  Schedule of closure.--The department, in consultation

12

with the board, shall develop a schedule of closure for the

13

Pennsylvania Liquor Stores that is designed to ensure continuous

14

service to the public during the transition to the private

15

wholesale and retail distribution of liquor. The following shall

16

apply:

17

(1)  Each retail licensee shall provide the department

18

and the board with 30 days' notice of the anticipated date of

19

the licensee's start of retail operations.

20

(2)  Upon receipt of the notice under paragraph (1), the

21

department and the board shall take all necessary steps to

22

enable any Pennsylvania Liquor Store located within the

23

retail zone for that retail licensee to close within five

24

days of the commencement of the retail licensee's operations.

25

(b)  Sale of State store inventory.--The department, in

26

consultation with the board, shall establish a procedure for the

27

sale of the inventory, property and fixtures of all Pennsylvania

28

Liquor Stores consistent with Article XXIV-A of the act of April

29

9, 1929 (P.L.177, No.175), known as The Administrative Code of

30

1929. Wholesale and retail licensees shall have the opportunity

- 67 -

 


1

to bid on the items to be sold or otherwise participate in the

2

sale. All proceeds from the sales shall be deposited into the

3

State Stores Fund.

4

Section 330-A.  State Stores Fund.

5

All fees, assessments, bid amounts or other charges paid by

6

wholesale or retail applicants, bidders or licensees shall be

7

paid or transferred into a restricted account in the State

8

Stores Fund.

9

Section 331-A.  Return of fee or bid.

10

(a)  Wholesale license fee.--The entire wholesale license fee

11

paid by a wholesale licensee under section 312-A(d)(1) shall be

12

returned if this article is amended or otherwise altered by an

13

act of the General Assembly within five years of the effective

14

date of this section to change provisions relating to the loss

15

of rights to wholesale brands of liquors under section 314-A.

16

(b)  Retail bid amount.--The entire retail bid amount paid by

17

a retail licensee under section 319-A(h)(2) shall be returned if

18

this article is amended or otherwise altered by an act of the

19

General Assembly within five years of the effective date of this

20

section to change the authorization of additional retail

21

licenses under section 315-A.

22

SUBARTICLE E

23

REEMPLOYMENT AND RETRAINING OF

24

DISPLACED BOARD EMPLOYEES

25

Section 332-A.  Preference in public employment hiring.

26

(a)  Commonwealth examinations.--A displaced employee who

27

successfully passes a civil service appointment examination for

28

a paid position administered under the act of August 5, 1941

29

(P.L.752, No.286), known as the Civil Service Act, and in the

30

classified service existing under the commission's jurisdiction  

- 68 -

 


1

and who further establishes the qualifications required by law

2

for appointment to the position, shall be marked or graded an

3

additional three points above the mark or grade credited for the

4

examination. The total mark or grade obtained by the displaced

5

employee shall represent the final mark or grade of the

6

employee and shall determine his standing on any eligibility

7

list certified or furnished to the appointing power.

8

(b)  Certification.--The commission shall require the board

9

to certify a list of displaced employees under subsection (a)

10

and placement on that list by the board shall establish

11

eligibility for the preference granted under subsection (a).

12

(c)  Noncivil service positions.--If a paid State position

13

does not require a civil service examination, a displaced

14

employee who possesses the requisite qualifications and is

15

eligible to appointment in a paid State position shall be given

16

a preference in the appointment by the appointing authority.

17

(d)  Eligibility.--

18

(1)  A displaced employee's eligibility for the mark-up

19

provided under subsection (a) and for the preference for

20

noncivil service positions provided under subsection (c)

21

shall cease upon the occurrence of one of the following:

22

(i)  The displaced employee's appointment or hiring

23

into a position in the classified service existing under

24

the commission's jurisdiction or into a paid State

25

position where no civil service examination is required.

26

(ii)  Two years from the board's implementation of

27

its decision to cease wholesale and retail operations

28

under this article.

29

(2)  In order to be eligible for the mark-up provided

30

under subsection (a) and for the preference for noncivil

- 69 -

 


1

service positions provided under subsection (c), a displaced

2

worker must be terminated as a sole and direct result of the

3

decision to cease wholesale and retail operations under this

4

article and must work until the final day set by the board

5

for that employee's job function.

6

Section 333-A.  Educational grant eligibility.

7

(a)  Eligibility.--A displaced employee shall be eligible for

8

a two-year educational grant for attending a program of

9

instruction at an institution of higher education in the

10

following amount:

11

(1)  $1,000 per year for attendance on a full-time basis;

12

or

13

(2)  $500 per year for attendance on a part-time basis.

14

(b)  Certification.--The board shall certify the list of

15

displaced employees to the agency.

16

(c)  Grant award.--The agency shall make a determination of

17

grant eligibility and shall pay the grant directly to the

18

institution of higher education attended by the displaced

19

employee in a manner consistent with the agency's regulations.

20

Section 334-A.  Reemployment tax credit.

21

(a)  Eligibility.--A displaced employee shall be eligible for

22

a two-year reemployment tax credit voucher in the amount of

23

$1,000 per taxable year. The voucher shall be made available to

24

each displaced employee upon termination of employment. Each

25

voucher shall be certified by the board before the voucher is

26

provided to the displaced employee and the Department of Revenue

27

shall be informed of each displaced employee to whom a voucher

28

has been provided.

29

(b)  Transfer of voucher.--An employer in this Commonwealth

30

who employs a displaced employee on a full-time basis may, upon

- 70 -

 


1

transfer of the voucher from the employee to the employer, use

2

the voucher as a credit against the State tax liability of the

3

business, if the employer can demonstrate the following:

4

(1)  That the employee for whom the tax credit is being

5

sought was terminated from a State store within 12 months of

6

being employed by the employer.

7

(2)  That the former board employee has been employed by

8

the employer seeking the tax credit on a full-time basis for

9

a period not less than one year.

10

(c)  Voucher submittal.--The employer shall submit the tax

11

credit voucher to the Department of Revenue along with the

12

information required under subsection (b)(1) and (2) in

13

conjunction with the filing of a State business tax identified

14

under subsection (d)(2).

15

(d)  Amount of credit.--

16

(1)  An employer may claim a reemployment tax credit for

17

every job filled by a displaced employee of $1,000 per

18

taxable year for a maximum of two taxable years.

19

(2)  An employer may apply the reemployment tax credit to

20

100% of the employer's:

21

(i)  State corporate net income tax, capital stock

22

and franchise tax or the personal tax of a shareholder of

23

the company if the company is a Pennsylvania S

24

corporation.

25

(ii)  Gross premium tax, gross receipts tax, bank and

26

trust company shares tax, mutual thrift institution tax

27

or title insurance company shares tax.

28

(iii)  Any combination of the taxes under

29

subparagraphs (i) and (ii).

30

(3)  A displaced employee whose subsequent employment is

- 71 -

 


1

terminated with an employer who has utilized the reemployment

2

tax credit voucher to claim a one-year $1,000 tax credit may

3

transfer the voucher to a new employer who may use the

4

remaining $1,000 tax credit as a claim against the business

5

tax liability identified under paragraph (2).

6

(4)  The term of the reemployment tax credit voucher may

7

not exceed two years from the date the voucher is provided to

8

the qualified former board employee.

9

Section 335-A.  Protection of existing benefits.

10

(a)  Contract benefits.--Nothing under this section shall be

11

deemed to affect:

12

(1)  Pension benefits accrued prior to the date of

13

separation occurring as a sole and direct result of the

14

decision to cease wholesale and retail operations under this

15

article.

16

(2)  Payment of any accrued benefit derived from the

17

terms of a preexisting collective bargaining agreement

18

payable upon separation from employment.

19

(b)  Effects bargaining.--As a result of the preferential

20

hiring benefits, the tax credit for subsequent employers and the

21

protection of benefits arising from an employee's pension or

22

from a preexisting collective bargaining agreement under this

23

section, the board is deemed to have satisfied all obligations

24

to bargain over the effects of its decision to cease wholesale

25

and retail operations under this article which may arise under

26

the act of June 1, 1937 (P.L.1168, No.294), known as the

27

Pennsylvania Labor Relations Act, or the act of July 23, 1970

28

(P.L.563, No.195), known as the Public Employe Relations Act.

29

(c)  Affect of local regulations.--As a result of the

30

preferential hiring benefits, the tax credit for subsequent

- 72 -

 


1

employers and the protection of benefits arising from an

2

employee's pension or a preexisting collective bargaining

3

agreement under this section, any local regulations, ordinances

4

or resolutions enacted by a political subdivision regarding

5

notice to displaced workers shall be deemed to be superseded by

6

this article.

7

SUBARTICLE F

8

WINE AND SPIRITS TAXES

9

Section 336-A.  Excise tax on wine and spirits.

10

(a)  Duty to collect taxes.--Except as provided under

11

subsection (f), a wine and spirits wholesale licensee shall have

12

the duty to collect from every manufacturer and importer of wine

13

and spirits an excise tax for wine and spirits sold in this

14

Commonwealth at a rate prescribed under subsections (b) and (c).

15

(b)  Excise tax for wines.--The excise tax rate for wine and

16

natural sparkling wine shall be as follows:

17

(1)  For wines, except natural sparkling wines,

18

containing 0.5% or more alcohol by volume and less than

19

17.259% alcohol by volume, all manufacturers and distributors

20

shall pay a tax at the rate of $8.25 per gallon.

21

(2)  For wines, except natural sparkling wines,

22

containing 17.259% or more alcohol by volume, all

23

manufacturers and distributors shall pay a tax at the rate of

24

$8.75 per gallon.

25

(3)  For natural sparkling wines, all manufacturers and

26

distributors shall pay a tax at the rate of $9 per gallon.

27

(c)  Excise tax for liquors.--Except for the taxes imposed

28

under subsection (b), the excise tax rate for liquors shall be

29

as follows:

30

(1)  For liquor containing less than 17.259% of alcohol

- 73 -

 


1

by volume, all manufacturers and distributors shall pay a tax

2

at the rate of $11 per gallon.

3

(2)  For liquor containing 17.259% or more of alcohol by

4

volume and not more than 55.780% of alcohol by volume, all

5

manufacturers and distributors shall pay a tax at the rate of

6

$11.50 per gallon.

7

(3)  For liquor containing more than 55.780% of alcohol

8

by volume, all manufacturers and distributors shall pay a tax

9

at the rate of $12 per gallon.

10

(d)  Inflation index.--Beginning five years from the

11

effective date of this section, the excise tax rates prescribed

12

under subsections (b) and (c) shall be increased on an annual

13

basis in an amount equal to the Consumer Price Index – Gross

14

Domestic Products.

15

(e)  Remittance of excise tax.--Every wine and spirits

16

wholesale licensee within this Commonwealth shall remit taxes

17

imposed and collected under this section to the Department of

18

Revenue monthly on or before the 10th day of the month following

19

collection of the excise tax.

20

(f)  Exemptions.--The taxes imposed under this section shall

21

not apply to:

22

(1)  Malt or brewed beverages.

23

(2)  Liquor sold to a post exchange, ship service store

24

or base exchange located in a military, naval or air force

25

reservation within this Commonwealth.

26

Section 9.  Section 401(a) of the act, amended July 6, 2005

27

(P.L.135, No.39), is amended to read:

28

Section 401.  Authority to Issue Liquor Licenses to Hotels,

29

Restaurants and Clubs.--(a)  Subject to the provisions of this

30

act and regulations promulgated under this act, the board shall

- 74 -

 


1

have authority to issue a retail liquor license for any premises

2

kept or operated by a hotel, restaurant or club and specified in

3

the license entitling the hotel, restaurant or club to purchase

4

liquor from a [Pennsylvania Liquor Store] licensee under Article

5

III-A and to keep on the premises such liquor and, subject to

6

the provisions of this act and the regulations made thereunder,

7

to sell the same and also malt or brewed beverages to guests,

8

patrons or members for consumption on the hotel, restaurant or

9

club premises. Such licensees, other than clubs, shall be

10

permitted to sell malt or brewed beverages for consumption off

11

the premises where sold in quantities of not more than one

12

hundred ninety-two fluid ounces in a single sale to one person

13

as provided for in section 407. Such licenses shall be known as

14

hotel liquor licenses, restaurant liquor licenses and club

15

liquor licenses, respectively. No person who holds, either by

16

appointment or election, any public office which involves the

17

duty to enforce any of the penal laws of the United States of

18

America or the penal laws of the Commonwealth of Pennsylvania or

19

any penal ordinance or resolution of any political subdivision

20

of this Commonwealth shall be issued any hotel or restaurant

21

liquor license, nor shall such a person have any interest,

22

directly or indirectly, in any such license.

23

* * *

24

Section 10.  Section 408.12(g), (h) and (i) of the act, added

25

July 1, 1994 (P.L.402, No.61), are amended to read:

26

Section 408.12.  Wine Auction Permits.--* * *

27

(g)  Any wine sold under this section shall be purchased from

28

a [Pennsylvania Liquor Store] licensee under Article III-A, a

29

Pennsylvania limited winery or any seller authorized to sell

30

wine by the bottle or case in this Commonwealth or shall be

- 75 -

 


1

donated by a person who is neither a licensee nor a permittee

2

who has legally acquired the wine and legally possesses it in

3

this Commonwealth.

4

(h)  If any wine sold under this section is purchased from a

5

seller other than a [Pennsylvania Liquor Store] licensee under

6

Article III-A or a Pennsylvania limited winery, the permittee

7

shall provide thirty days' notice to the board of its intent to

8

purchase such wine. The notice shall include a description of

9

the wine to be purchased, the quantity to be purchased, the name

10

of the seller and any other information which the board may

11

require. The permittee shall comply with all board regulations

12

regarding taxes and fees.

13

(i)  The permittee shall be responsible for paying to the

14

board an amount equal to all taxes which would have been paid on

15

such wine if it had been purchased from a [Pennsylvania Liquor

16

Store] licensee under Article III-A, together with a processing

17

fee to be determined by the board.

18

* * *

19

Section 11.  Section 410(e) of the act is amended to read:

20

Section 410.  Liquor Importers' Licenses; Fees; Privileges;

21

Restrictions.--* * *

22

(e)  Importers' licenses shall permit the holders thereof to

23

bring or import liquor from other states, foreign countries, or

24

insular possessions of the United States, and purchase liquor

25

from manufacturers located within this Commonwealth, to be sold

26

outside of this Commonwealth or to [Pennsylvania Liquor Stores]

27

wholesale licensees under Article III-A within this

28

Commonwealth, or when in original containers of ten gallons or

29

greater capacity, to licensed manufacturers within this

30

Commonwealth.

- 76 -

 


1

All importations of liquor into Pennsylvania by the licensed

2

importer shall be consigned to [the board or] the principal

3

place of business or authorized place of storage maintained by

4

the licensee.

5

* * *

6

Section 12.  Section 438 of the act, amended June 25, 2010

7

(P.L.217, No.35), is amended to read:

8

Section 438.  Number and Kinds of Licenses Allowed Same

9

Licensee.--(a)  Any retail dispenser may be granted licenses to

10

maintain, operate or conduct any number of places for the sale

11

of malt or brewed beverages, but a separate license must be

12

secured for each place where malt or brewed beverages are sold.

13

(b)  No person shall possess or be issued more than [one]

14

five distributor's licenses or one importing distributor's

15

license.

16

(c)  No person shall possess more than one class of license,

17

except that a holder of a retail dispenser's license may also be

18

a holder of a retail liquor license: Provided, however, That

19

nothing contained in this section shall be construed to prohibit

20

a member of the governing board of a public authority created

21

under subdivision (n) of Article XXIII of the act of August 9,

22

1955 (P.L.323, No.130), known as "The County Code," from having

23

an interest in a distributor or importing distributor license

24

notwithstanding the fact that the public authority has an

25

interest in one or more retail licenses or acts as a landlord

26

for one or more retail licenses: And, provided further, That,

27

notwithstanding any other provision of this section, an entity

28

may acquire both a manufacturer's license or a limited winery

29

license and a hotel, restaurant or retail dispenser license for

30

use at the same location and more than one location may be so

- 77 -

 


1

licensed. The licenses and a person's interest in the licenses

2

or in the entity holding the licenses shall not be subject to

3

this section.

4

Section 13.  Section 472(a) of the act, amended February 21,

5

2002 (P.L.103, No.10), is amended to read:

6

Section 472.  Local Option.--(a)  In any municipality or any

7

part of a municipality where such municipality is split so that

8

each part thereof is separated by another municipality, an

9

election may be held, subject to subsection (c), on the date of

10

the primary election immediately preceding any municipal

11

election, but not oftener than once in four years, to determine

12

the will of the electors with respect to the granting of liquor

13

licenses to hotels, restaurants, resort facilities and clubs,

14

not oftener than once in four years, to determine the will of

15

the electors with respect to the granting of liquor licenses to

16

public venues, to performing arts facilities, to continuing care

17

retirement communities, to hotels located on property owned by

18

an accredited college or university, to privately-owned private

19

golf courses or to privately-owned public golf courses, not

20

oftener than once in four years, to determine the will of the

21

electors with respect to the granting of licenses to retail

22

dispensers of malt and brewed beverages, not oftener than once

23

in four years, to determine the will of the electors with

24

respect to granting of licenses to wholesale distributors and

25

importing distributors, not more than once in two years, to

26

determine the will of the electors with respect to the granting

27

of club liquor licenses or club retail dispenser licenses to

28

incorporated units of national veterans' organizations, not

29

oftener than once in two years to determine the will of the

30

electors with respect to the granting of special occasion

- 78 -

 


1

permits to qualified organizations, or not more than once in

2

four years, to determine the will of the electors with respect

3

to the establishment[, operation and maintenance by the board of

4

Pennsylvania liquor stores] of wine and spirits retail

5

licensees, within the limits of such municipality or part of a

6

split municipality, under the provisions of this act: Provided,

7

however, Where an election shall have been held at the primary

8

preceding a municipal election in any year, another election may

9

be held under the provisions of this act at the primary

10

occurring the fourth year after such prior election: And

11

provided further, That an election on the question of

12

establishing and operating a State liquor store shall be

13

initiated only in those municipalities, or that part of a split

14

municipality that shall have voted against the granting of

15

liquor licenses; and that an election on the question of

16

granting wholesale distributor and importing distributor

17

licenses shall be initiated only in those municipalities or

18

parts of split municipalities that shall have at a previous

19

election voted against the granting of dispenser's licenses.

20

Whenever electors equal to at least twenty-five per centum of

21

the highest vote cast for any office in the municipality or part

22

of a split municipality at the last preceding general election

23

shall file a petition with the county board of elections of the

24

county for a referendum on the question of granting any of said

25

classes of licenses [or the establishment of Pennsylvania liquor

26

stores], the said county board of elections shall cause a

27

question to be placed on the ballots or on the voting machine

28

board and submitted at the primary immediately preceding the

29

municipal election. Separate petitions must be filed for each

30

question to be voted on. Said proceedings shall be in the manner

- 79 -

 


1

and subject to the provisions of the election laws which relate

2

to the signing, filing and adjudication of nomination petitions,

3

insofar as such provisions are applicable.

4

When the question is in respect to the granting of liquor

5

licenses, it shall be in the following form:

6

7

8

Do you favor the granting of liquor licenses for the

sale of liquor in.......................................

of.....................................................?

Yes

No

9

When the question is in respect to the granting of liquor

10

licenses to resort facilities in those municipalities that do

11

not already allow the retail sale of liquor, it shall be in the

12

following form:

13

14

15

Do you favor the granting of liquor licenses to resort

facilities for the sale of liquor in the................

of.....................................................?

Yes

No

16

When the question is in respect to the granting of restaurant

17

liquor licenses for use at public venues in those municipalities

18

that do not already allow the retail sale of liquor, it shall be

19

in the following form:

20

21

22

Do you favor the granting of liquor licenses to public

venues for the sale of liquor in the....................

of.....................................................?

Yes

No

23

When the question is in respect to the granting of restaurant

24

liquor licenses for use at performing arts facilities in those

25

municipalities that do not already allow the retail sale of

26

alcohol, it shall be in the following form:

27

Do you favor the granting of liquor licenses to performing arts facilities for the sale of liquor in the..................................................... of.....................................................?

Yes

No

- 80 -

 


1

When the question is in respect to the granting of liquor

2

licenses for hotels located on property owned by an accredited

3

college or university in those municipalities that do not

4

already allow the granting of liquor licenses, it shall be in

5

the following form:

6

7

8

9

Do you favor the granting of liquor licenses to hotels

on property owned by an accredited college or university

in the..................................................

of.....................................................?

Yes

No

10

When the question is in respect to the granting of liquor

11

licenses, for privately-owned private golf courses, it shall be

12

in the following form:

13

14

15

16

Do you favor the granting of liquor licenses for

privately-owned private golf courses for the sale of

liquor in....................by.........................

of.....................................................?

Yes

No

17

When the question is in respect to the granting of liquor

18

licenses, for privately-owned public golf courses, it shall be

19

in the following form:

20

21

22

23

Do you favor the granting of liquor licenses for

privately-owned public golf courses for the sale of

liquor in....................by.........................

of.....................................................?

Yes

No

24

When the question is in respect to the granting of liquor

25

licenses to continuing care retirement communities in those

26

municipalities that have not already approved the granting of

27

liquor licenses, it shall be in the following form:

28

29

30

Do you favor the granting of liquor licenses for

continuing care retirement communities

in...........................by.........................

Yes

No

- 81 -

 


1

of.....................................................?

2

When the question is in respect to the granting of licenses

3

to retail dispensers of malt and brewed beverages, it shall be

4

in the following form:

5

6

7

8

Do you favor the granting of malt and brewed beverage

retail dispenser licenses for consumption on premises

where sold in the.......................................

of.....................................................?

Yes

No

9

When the question is in respect to the granting of licenses

10

to wholesale distributors of malt or brewed beverages and

11

importing distributors, it shall be in the following form:

12

13

14

15

16

Do you favor the granting of malt and brewed beverage

wholesale distributor's and importing distributor's

licenses not for consumption on premises where sold in

the.....................................................

of.....................................................?

Yes

No

17

When the question is in respect to the granting of club

18

liquor licenses to incorporated units of national veterans'

19

organizations, it shall be in the following form:

20

21

22

23

Do you favor the granting of club liquor licenses to

incorporated units of national veterans' organizations

in the..................................................

of.....................................................?

Yes

No

24

When the question is in respect to the granting of club

25

retail dispenser licenses to incorporated units of national

26

veterans' organizations, it shall be in the following form:

27

Do you favor the granting of club retail dispenser licenses to incorporated units of national veterans' organizations in the.................................... of.....................................................?

Yes

No

- 82 -

 


1

When the question is in respect to the granting of special

2

occasion permits allowing the sale of liquor by qualified

3

organizations in municipalities that do not already allow the

4

retail sale of liquor, it shall be in the following form:

5

6

7

8

Do you favor the granting of special occasion permits to

allow the sale of liquor by qualified organizations in

the.....................................................

of.....................................................?

Yes

No

9

When the question is in respect to the granting of special

10

occasion permits allowing the sale of malt or brewed beverages

11

only by qualified organizations in municipalities that do not

12

already allow the retail sale of malt or brewed beverages, it

13

shall be in the following form:

14

15

16

17

Do you favor the granting of special occasion permits to

allow the sale of malt or brewed beverages only by

qualified organizations in the..........................

of.....................................................?

Yes

No

18

When the question is in respect to the [establishment,

19

operation and maintenance of Pennsylvania liquor stores]

20

granting of licenses to wine and spirits retail operators it

21

shall be in the following form:

22

23

24

25

26

Do you favor the [establishment, operation and

maintenance of Pennsylvania liquor stores] granting of

wine and spirits retail licenses in 

the.....................................................

of.....................................................?

Yes

No

27

In case of a tie vote, the status quo shall obtain. If a

28

majority of the voting electors on any such question vote "yes,"

29

then liquor licenses shall be granted by the board to hotels,

30

restaurants, resort facilities and clubs, or liquor licenses

- 83 -

 


1

shall be granted by the board to public venues, to performing

2

arts facilities, to continuing care retirement communities, to

3

hotels located on property owned by an accredited college or

4

university, to privately-owned private golf courses or to

5

privately-owned public golf courses, or malt and brewed beverage

6

retail dispenser licenses or wholesale distributor's and

7

importing distributor's license for the sale of malt or brewed

8

beverages shall be granted by the board, or club liquor licenses

9

or club retail dispenser licenses shall be granted by the board

10

to incorporated units of national veterans' organizations, or

11

special occasion permits may be issued to qualified

12

organizations, or [the board may establish, operate and maintain

13

Pennsylvania liquor stores] to wine and spirits retail licensees

14

under Article III-A, as the case may be, in such municipality or

15

part of a split municipality, as provided by this act; but if a

16

majority of the electors voting on any such question vote "no,"

17

then the board shall have no power to grant or to renew upon

18

their expiration any licenses of the class so voted upon in such

19

municipality or part of a split municipality[; or if the

20

negative vote is on the question in respect to the

21

establishment, operation and maintenance of Pennsylvania liquor

22

stores, the board shall not open and operate a Pennsylvania

23

liquor store in such municipality or part of a split

24

municipality, nor continue to operate a then existing

25

Pennsylvania liquor store in the municipality or part of a split

26

municipality for more than two years thereafter or after the

27

expiration of the term of the lease on the premises occupied by

28

such store, whichever period is less, unless and until at a

29

later election a majority of the voting electors vote "yes" on

30

such question].

- 84 -

 


1

* * *

2

Section 14.  Section 488 of the act, added February 21, 2002

3

(P.L.103, No.10), is amended to read:

4

Section 488.  Shipment of Wine into Commonwealth.--(a)  The

5

shipment of wine from out-of-State to residents of this

6

Commonwealth is prohibited, except as otherwise provided for in

7

this section.

8

(b)  Notwithstanding any other provision of this act or law

9

to the contrary, a person licensed by another state as a

10

producer, supplier, importer, wholesaler, distributor or

11

retailer of wine and who obtains a direct wine shipper license

12

as provided for in this section may ship up to nine liters per

13

month of any wine not included on the list provided for in

14

subsection (c) on the Internet order of any resident of this

15

Commonwealth who is at least twenty-one (21) years of age for

16

such resident's personal use and not for resale.

17

(c)  Each month, the board shall publish on the Internet a

18

list of all classes, varieties and brands of wine available for

19

sale [in the Pennsylvania Liquor Stores] by wine and spirits

20

retail licensees. A person holding a direct shipper license may

21

ship only those classes, varieties and brands of wine not

22

included on the list available for sale at the time an Internet

23

order is placed.

24

(d)  An out-of-State wine shipper shall:

25

(1)  Not ship more than nine liters per month on the Internet

26

order of any person in this Commonwealth.

27

(2)  Report to the board each year the total of wine shipped

28

into this Commonwealth in the preceding calendar year.

29

(3)  Permit the board or the Secretary of Revenue, or their

30

designated representatives, to perform an audit of the out-of-

- 85 -

 


1

State wine shipper's records upon request.

2

(4)  Be deemed to have submitted to the jurisdiction of the

3

board, any other State agency and the courts of this

4

Commonwealth for purposes of enforcement of this section and any

5

related laws, rules or regulations.

6

(e)  A direct shipper may ship wine on the Internet order of

7

a resident into this Commonwealth provided that the wine is

8

shipped to a [Pennsylvania Liquor Store] wine and spirits retail

9

licensee's premises selected by the resident. The wine will be

10

subject to taxes in the same manner as wine sold [directly by

11

the board] by the wine and spirits retail licensee. The wine

12

will not be released by the [State store] wine and spirits

13

retail licensee until all moneys due, including all taxes and

14

fees, have been paid by the resident.

15

(f)  A person shall sign an affidavit provided by the

16

[Pennsylvania Liquor Store] wine and spirits retail licensee 

17

where the wine was delivered to stating that the wine will only

18

be used for the person's personal use. Any person who resells

19

wine obtained under this section commits a misdemeanor of the

20

second degree.

21

(g)  The board may promulgate such rules and regulations as

22

are necessary to implement and enforce the provisions of this

23

section. The [board] wine and spirits retail licensee may charge

24

the resident a fee to cover the cost associated with processing

25

the Internet order.

26

(h)  The board shall submit monthly reports to the

27

Appropriations Committee and the Law and Justice Committee of

28

the Senate and to the Appropriations Committee and the Liquor

29

Control Committee of the House of Representatives summarizing

30

the number of direct shipper licenses issued by the board, the

- 86 -

 


1

quantity of wine sold pursuant to this section and the total

2

dollar value of sales under this section.

3

(i)  The term "wine" as used in this section shall mean

4

liquor which is fermented from grapes and other fruits, having

5

alcoholic content of twenty-four per centum or less. The term

6

"wine" shall not include malt or brewed beverages nor shall wine

7

include any products containing alcohol derived from malt,

8

grain, cereal, molasses or cactus.

9

Section 15.  Section 491 of the act, amended October 5, 1994

10

(P.L.522, No.77), February 21, 2002 (P.L.103, No.10), December

11

9, 2002 (P.L.1653, No.212), July 17, 2003 (P.L.63, No.15) and

12

July 7, 2006 (P.L.584, No.84), is amended to read:

13

Section 491.  Unlawful Acts Relative to Liquor, Alcohol and

14

Liquor Licensees.--

15

It shall be unlawful--

16

(1)  Sales of Liquor. For any person, by himself or by an

17

employe or agent, to expose or keep for sale, or directly or

18

indirectly, or upon any pretense or upon any device, to sell or

19

offer to sell any liquor within this Commonwealth, except in

20

accordance with the provisions of this act and the regulations

21

of the board. This clause shall not be construed to prohibit

22

hospitals, physicians, dentists or veterinarians who are

23

licensed and registered under the laws of this Commonwealth from

24

administering liquor in the regular course of their professional

25

work and taking into account the cost of the liquor so

26

administered in making charges for their professional service,

27

or a pharmacist duly licensed and registered under the laws of

28

this Commonwealth from dispensing liquor on a prescription of a

29

duly licensed physician, dentist or veterinarian, or selling

30

medical preparations containing alcohol, or using liquor in

- 87 -

 


1

compounding prescriptions or medicines and making a charge for

2

the liquor used in such medicines, or a manufacturing pharmacist

3

or chemist from using liquor in manufacturing preparations unfit

4

for beverage purposes and making a charge for the liquor so

5

used. All such liquors so administered or sold by hospitals,

6

physicians, dentists, veterinarians, pharmacists or chemists

7

shall conform to the Pharmacopoeia of the United States, the

8

National Formulary, or the American Homeopathic Pharmacopoeia.

9

This clause shall not be construed to prohibit an executor or an

10

administrator of a decedent's estate from selling privately or

11

at public auction liquor which was an asset of the decedent. The

12

board shall establish regulations to ensure that State taxes

13

from the sales will be paid by the estate from the proceeds of

14

the sale. The board may not prohibit a sale of liquor for the

15

reason that it was not lawfully acquired prior to January 1,

16

1934 or has not been purchased [from a Pennsylvania Liquor Store

17

or] in compliance with Pennsylvania law.

18

(2)  Possession or Transportation of Liquor or Alcohol. For

19

any person, except a manufacturer or the board or the holder of

20

a sacramental wine license or of an importer's license, to

21

possess or transport any liquor or alcohol within this

22

Commonwealth which was not lawfully acquired prior to January

23

first, one thousand nine hundred and thirty-four, or has not

24

been legally purchased from a [Pennsylvania Liquor Store]

25

licensee under Article III-A or a licensed limited winery in

26

Pennsylvania, except in accordance with section 488 or the

27

board's regulations. In addition, it shall be lawful for anyone

28

to possess miniatures totaling less than one gallon purchased in

29

another state or a foreign country. The burden shall be upon the

30

person possessing or transporting such liquor or alcohol to

- 88 -

 


1

prove that it was so acquired. Notwithstanding this section or

2

any other provision of the law, wine may be produced by any

3

person without a license if the wine is not produced for sale

4

and total production does not exceed two hundred gallons per

5

calendar year. Wine produced in accordance with this clause may

6

be used at organized affairs, exhibitions, competitions,

7

contests, tastings or judgings if it is not sold or offered for

8

sale.

9

None of the provisions herein contained shall prohibit nor

10

shall it be unlawful for any person to import into Pennsylvania,

11

transport or have in his possession, an amount of liquor not

12

exceeding one gallon in volume upon which a State tax has not

13

been paid, if it can be shown to the satisfaction of the board

14

that such person purchased the liquor in a foreign country or

15

United States territory and was allowed to bring it into the

16

United States. Neither shall the provisions contained herein

17

prohibit nor make it unlawful for (i) any member of the armed

18

forces on active duty, or (ii) any retired member of the armed

19

forces, or (iii) any totally disabled veteran, or (iv) the

20

spouse of any person included in the foregoing classes of

21

persons to import into Pennsylvania, transport or have in his

22

possession an amount of liquor not exceeding one gallon per

23

month in volume upon which the State tax has not been paid, so

24

long as such liquor has been lawfully purchased from a package

25

store established and maintained under the authority of the

26

United States and is in containers identified in accordance with

27

regulations issued by the Department of Defense. Such liquor

28

shall not be possessed, offered for sale or sold on any licensed

29

premises.

30

None of the provisions herein contained shall prohibit nor

- 89 -

 


1

shall it be unlawful for any consul general, consul or other

2

diplomatic officer of a foreign government to import into

3

Pennsylvania, transport or have in his possession liquor upon

4

which a State tax has not been paid, if it can be shown to the

5

satisfaction of the board that such person acquired the liquor

6

in a foreign country and was allowed to bring it into the United

7

States. Such liquor shall not be possessed, offered for sale or

8

sold on any licensed premises.

9

Any person violating the provisions of this clause for a

10

first offense involving the possession or transportation in

11

Pennsylvania of any liquor in a package (bottle or other

12

receptacle) or wine not legally purchased from a [Pennsylvania

13

Liquor Store] licensee under Article III-A or from a licensed

14

limited winery in Pennsylvania, with respect to which

15

satisfactory proof is produced that the required Federal tax has

16

been paid and which was purchased, procured or acquired legally

17

outside of Pennsylvania shall upon conviction thereof in a

18

summary proceeding be sentenced to pay a fine of twenty-five

19

dollars ($25) for each such package, plus costs of prosecution,

20

or undergo imprisonment for a term not exceeding ninety (90)

21

days. Each full quart or major fraction thereof shall be

22

considered a separate package (bottle or other receptacle) for

23

the purposes of this clause. Such packages of liquor shall be

24

forfeited to the Commonwealth in the manner prescribed in

25

Article VI of this act but the vehicle, boat, vessel, animal or

26

aircraft used in the illegal transportation of such packages

27

shall not be subject to forfeiture: Provided, however, That if

28

it is a second or subsequent offense or if it is established

29

that the illegal possession or transportation was in connection

30

with a commercial transaction, then the other provisions of this

- 90 -

 


1

act providing for prosecution as a misdemeanor and for the

2

forfeiture of the vehicle, boat, vessel, animal or aircraft

3

shall apply.

4

(3)  Purchase of Liquor or Alcohol. For any person within

5

this Commonwealth, by himself or by an employe or agent, to

6

attempt to purchase, or directly or indirectly, or upon any

7

pretense or device whatsoever, to purchase any liquor or alcohol

8

from any person or source [other than a Pennsylvania Liquor

9

Store], except in accordance with the provisions of this act or

10

the regulations of the board.

11

(4)  Possession and Use of Decanters. For any person to use

12

decanters of alcoholic beverages except that the use of

13

decanters or other similar receptacles by licensees shall be

14

permitted in the case of wines and then only in accordance with

15

the regulations of the board, but nothing herein contained shall

16

prohibit the manufacture and possession of wine as provided in

17

clause (2) of this section.

18

(5)  Failure to Properly Dispose of Empty Liquor Containers.

19

For any restaurant, hotel or club licensee, his servants, agents

20

or employes, to fail to break any package in which liquors were

21

contained, except those decanter packages that the board

22

determines to be decorative, within twenty-four hours after the

23

original contents were removed therefrom, unless the licensee

24

participates in either a municipal recycling program, in

25

accordance with the act of July 28, 1988 (P.L.556, No.101),

26

known as the "Municipal Waste Planning, Recycling and Waste

27

Reduction Act," or a voluntary recycling program. The licensee

28

shall provide proof in writing of the participation in a

29

recycling program upon the demand of the Bureau of Liquor

30

Control Enforcement of the Pennsylvania State Police. The proof

- 91 -

 


1

of participation shall be provided in a manner as prescribed by

2

the Pennsylvania Liquor Control Board.

3

(6)  Sales by Restaurant and Hotel Liquor Licensees. For any

4

restaurant or hotel licensee, his servants, agents or employes,

5

to sell any liquor or malt or brewed beverages for consumption

6

on the licensed premises except in a room or rooms or place on

7

the licensed premises at all times accessible to the use and

8

accommodation of the general public, but this section shall not

9

be interpreted to prohibit a restaurant liquor licensee from

10

providing private affairs the primary function of which is for

11

catering only to weddings or special occasions arranged twenty-

12

four hours in advance, nor to prohibit a hotel licensee, or a

13

restaurant licensee when the restaurant is located in a hotel,

14

from selling liquor or malt or brewed beverages in any room of

15

such hotel occupied by a bona fide guest or to prohibit a

16

restaurant licensee from selling liquor or malt or brewed

17

beverages in a bowling alley where the restaurant and bowling

18

alley are immediately adjacent and under the same roof.

19

(7)  Sales of Liquor by Manufacturers and Licensed Importers.

20

For any manufacturer or licensed importer of liquor in this

21

Commonwealth, his agents, servants or employes, to sell or offer

22

to sell any liquor in this Commonwealth except to [the board for

23

use in Pennsylvania Liquor Stores] a wholesale licensee under

24

Article III-A, and in the case of a manufacturer, to the holder

25

of a sacramental wine license or an importer's license.

26

Notwithstanding any other provision of this act, a manufacturer

27

or licensed importer may sell or offer to sell liquor for

28

delivery outside of this Commonwealth.

29

(8)  Importation and Sales of Alcohol. For any person, to

30

import alcohol into this Commonwealth, or to sell alcohol to any

- 92 -

 


1

person, except in accordance with section 488 and the provisions

2

of this act or the regulations of the board.

3

(9)  Possession of Alcohol. For any person, to have alcohol

4

in his possession, except in accordance with the provisions of

5

this act and the regulations of the board.

6

(10)  Fortifying, Adulterating or Contaminating Liquor. For

7

any licensee or any employe or agent of a licensee or of the

8

board, to fortify, adulterate or contaminate any liquor, except

9

as permitted by the regulations of the board, or to refill

10

wholly or in part, with any liquid or substance whatsoever, any

11

liquor bottle or other liquor container.

12

(11)  Importation of Liquor. For any person, other than [the

13

board] a wine and spirits wholesale licensee or the holder of a

14

sacramental wine license, an importer's license or a direct

15

shipper's license, to import any liquor whatsoever into this

16

Commonwealth, but this section shall not be construed to

17

prohibit railroad and pullman companies from purchasing and

18

selling liquors purchased outside the Commonwealth in their

19

dining, club and buffet cars which are covered by public service

20

liquor licenses and which are operated in this Commonwealth.

21

(12)  Delivery of Liquor by Certain Licensees. For a liquor

22

licensee permitted to deliver liquor, to make any deliveries

23

except in his own vehicles bearing his name, address and license

24

number on each side in letters not smaller than four inches in

25

height, or in the vehicle of another person duly authorized to

26

transport liquor within this Commonwealth.

27

(13)  Violation of Certain Rules and Regulations of Board.

28

For any person, to violate any rules and regulations adopted by

29

the board [to insure the equitable] relating to wholesale and

30

retail sale and distribution of liquor and alcohol through [the

- 93 -

 


1

Pennsylvania Liquor Stores] licensees under Article III-A.

2

(14)  Offering Commission or Gift to Members of Board or

3

State Employe. For any person selling or offering to sell liquor

4

or alcohol to, or purchasing at wholesale liquor or alcohol

5

from, the board, either directly or indirectly, to pay or offer

6

to pay any commission, profit or remuneration, or to make or

7

offer to make any gift to any member or employe of the board or

8

other employe of the Commonwealth or to anyone on behalf of such

9

member or employe.

10

Section 16.  Section 493(1) of the act, amended December 8,

11

2004 (P.L.1810, No.239), is amended to read:

12

Section 493.  Unlawful Acts Relative to Liquor, Malt and

13

Brewed Beverages and Licensees.--The term "licensee," when used

14

in this section, shall mean those persons licensed under the

15

provisions of Article IV, unless the context clearly indicates

16

otherwise.

17

It shall be unlawful--

18

(1)  Furnishing Liquor or Malt or Brewed Beverages to Certain

19

Persons. For any licensee [or the board,] or any employe,

20

servant or agent of such licensee [or of the board], or any

21

other person, to sell, furnish or give any liquor or malt or

22

brewed beverages, or to permit any liquor or malt or brewed

23

beverages to be sold, furnished or given, to any person visibly

24

intoxicated, or to any minor: Provided further, That

25

notwithstanding any other provision of law, no cause of action

26

will exist against a licensee [or the board] or any employe,

27

servant or agent of such licensee [or the board] for selling,

28

furnishing or giving any liquor or malt or brewed beverages or

29

permitting any liquor or malt or brewed beverages to be sold,

30

furnished or given to any insane person, any habitual drunkard

- 94 -

 


1

or person of known intemperate habits unless the person sold,

2

furnished or given alcohol is visibly intoxicated or is a minor.

3

* * *

4

Section 17.  The act is amended by adding a section to read:

5

Section 493.2.  Unlawful Acts Relative to Wine and Spirits

6

Retail Licensee.--(a)  It shall be unlawful for any wine and

7

spirits retail licensee, or any employe, servant or agent of the

8

licensee, or any other person, to sell, furnish or give any

9

liquor or malt or brewed beverages, or to permit any liquor or

10

malt or brewed beverages to be sold, furnished or given, to any

11

minor. Notwithstanding any other provision of law, no cause of

12

action will exist against a licensee or any employe, servant or

13

agent of the licensee for selling, furnishing or giving any

14

liquor or malt or brewed beverages or permitting any liquor or

15

malt or brewed beverages to be sold, furnished or given to any

16

insane person, any habitual drunkard or person of known

17

intemperate habits unless the person sold, furnished or given

18

alcohol is a minor.

19

(b)  Any person who violates the provisions of subsection (a)

20

and shall, upon conviction, be sentenced to pay a fine of not

21

less than two thousand dollars ($2,000) nor more than ten

22

thousand dollars ($10,000) and may have the license suspended or

23

revoked.

24

Section 18.  Section 495 of the act, amended December 20,

25

1996 (P.L.1523, No.199), February 21, 2002 (P.L.103, No.10) and

26

December 16, 2002 (P.L.1806, No.221) and repealed in part March

27

25, 1988 (P.L.262, No.31), is amended to read:

28

Section 495.  Identification Cards; Licensees and [State

29

Liquor Store] Employes Saved From Prosecution.--(a)  The valid

30

photo driver's license or identification card issued by the

- 95 -

 


1

Department of Transportation or by any other state, a valid

2

armed forces of the United States identification card, a valid

3

passport or a travel visa issued by the United States or a

4

foreign country that contains the holder's photograph shall, for

5

the purpose of this act, be accepted as an identification card.

6

(b)  Such identification card shall be presented by the

7

holder thereof upon request of any [State Liquor Store or any]

8

licensee, or the servant, agent or employe thereof, for the

9

purpose of aiding such [store,] licensee, or the servant, agent

10

or employe to determine whether or not such person is twenty-one

11

years of age and upwards, when such person desires alcoholic

12

beverage at a [State Liquor Store or] licensed establishment.

13

(c)  In addition to the presentation of such identification

14

card, the agent of the [State Liquor Store or the] licensee, or

15

his servant, agent or employe, may require the person whose age

16

may be in question to fill in and sign a form containing

17

language approved by the board or containing the following:

18

............................ 19   

19

I,........................................., hereby represent

20

to ..........................................., a [State Store

21

or] licensee of the board, that I am of full age and discretion

22

and over the age of 21 years, having been born

23

on ........................ 19..... at .........................

24

This statement is made to induce said [store or] licensee above

25

named to sell or otherwise furnish alcoholic beverages to the

26

undersigned.

27

Serial Number of Identification Card:

28

29

30

I understand that I am subject to a fine of

$300.00 and sixty days imprisonment for any

misrepresentation herein.

  

- 96 -

 


1

  

  

...................

2

  

  

(Name)

3

  

  

...................

4

  

  

(Address)

5

Witness:

  

  

6

Name.............................

  

  

7

Address..........................

  

  

8

The forms shall be printed in a manner approved by the board

9

and shall be filed alphabetically by the [State Liquor Store or]

10

licensee in a file box containing a suitable alphabetical index

11

at or before the close of business on the day that the form is

12

executed, and any such form shall be subject to examination by

13

any officer, agent or employe of the enforcement bureau at any

14

and all times.

15

(e)  No penalty shall be imposed on a licensee[,] or the 

16

licensee's employe [or State Liquor Store employe] for serving

17

alcohol to a minor if the licensee or employe can establish that

18

the minor was required to produce an identification card as set

19

forth in subsection (a), the minor completed and signed the form

20

as set forth in subsection (c) and these documents were relied

21

upon in good faith. This defense shall apply to all civil and

22

criminal prosecutions.

23

(f)  In addition to the defense set forth in subsection (e),

24

no penalty shall be imposed on a licensee[,] or the licensee's

25

employe [or State Liquor Store employe] for serving alcohol to a

26

minor if the licensee or employe can establish that the minor

27

was required to produce an identification card as set forth in

28

subsection (a), a photograph, photocopy or other visual or video

29

presentation of the identification card was made and those

30

documents were relied upon in good faith. This defense shall

- 97 -

 


1

apply to all civil and criminal prosecutions.

2

(g)  In addition to the defenses set forth in subsections (e)

3

and (f), no penalty shall be imposed on a licensee[,] or a 

4

licensee's employe [or Pennsylvania Liquor Store employe] for

5

serving alcohol to a minor if the licensee or employe can

6

establish that the minor was required to produce an

7

identification card as set forth in subsection (a), the

8

identification card is identified as a valid card by a

9

transaction scan device and the identification card and

10

transaction scan results were relied upon in good faith. This

11

defense shall apply to all civil and criminal prosecutions. For

12

purposes of this section, a "transaction scan device" is a

13

device capable of deciphering in an electronically readable

14

format the information encoded on the magnetic strip or bar code

15

of an identification card set forth in subsection (a).

16

(h)  No licensee or licensee's agent or employe shall sell or

17

otherwise disseminate the information derived from a transaction

18

scan to any third party, except to the board, the bureau or

19

other law enforcement official, for any purpose, including, but

20

not limited to, any marketing, advertising or promotional

21

activities, except that a licensee or licensee's agent or

22

employe may release that information pursuant to a court order.

23

Any person who violates this subsection commits a summary

24

offense and shall, upon conviction, be sentenced to pay a fine

25

not exceeding five hundred dollars ($500) for the first offense

26

and to pay a fine not exceeding one thousand dollars ($1,000)

27

for subsequent offenses.

28

Section 19.  Repeals are as follows:

29

(1)  The General Assembly declares that the repeal under

30

paragraph (2) is necessary to effectuate the addition of

- 98 -

 


1

section 336-A of the act.

2

(2)  The act of June 9, 1936 (Sp.Sess., P.L.13, No.4)

3

entitled "An act imposing an emergency State tax on liquor,

4

as herein defined, sold by the Pennsylvania Liquor Control

5

Board; providing for the collection and payment of such tax;

6

and imposing duties upon the Department of Revenue and the

7

Pennsylvania Liquor Control Board," is repealed.

8

Section 20.  This act shall take effect as follows:

9

(1)  Section 17(3) of this act shall take effect in two

10

years.

11

(2)  The remainder of this act shall take effect

12

immediately.

- 99 -