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House Co-Sponsorship Memoranda
House of Representatives
Session of 2013 - 2014
Regular Session
MEMORANDUM
| Posted: | February 5, 2013 04:24 PM |
|---|---|
| From: | Representative Mark Mustio |
| To: | All House members |
| Subject: | Common Sense Liquor Legislation and Privatization |
| Common Sense Liquor Legislation that creates more opportunity for the current retail State Store system while bringing in competition. This legislation acknowledges and has as its goals the following issues that were raised during the debate last session: Consumer and Public Protection Consumer Choice Taxpayer Protection Job Protection Job Creation Consumer and Public Protection Wine, beer and spirits are only to be sold by those having a valid license. Wine, beer and spirits cannot be sold at convenience stores or any location selling gasoline. All employees at a location selling wine, beer and spirits must be trained biannually by an independent training firm certified in training to prohibit sales of wine, beer, and liquor to minors and those visibly intoxicated. $20,000,000 per year from fees and tax revenue from the sale of wine, beer, and spirits will be transferred to fund the Department of Drug and Alcohol Programs. Consumer Choice The Pennsylvania Liquor Control Board currently operates approximately 608 Wine and Spirits stores. All Wine and Spirits stores may choose to open on Sunday, be permitted to use coupon marketing, and have pricing flexibility. All Wine and Spirits stores will be able to sell beer with the purchase of a license at a fee of $50,000 per store. Pennsylvania consumers have demanded improved selection, lower price and competition in the purchase of their wine, beer and spirits. All D licenses will have the opportunity to purchase a license to sell wine for $50,000 and the opportunity to sell spirits for an additional fee of $50,000. All D licensees will be able to sell beer in growlers. All D licensees will have 90 days after this legislation is signed into law to purchase these licenses. These new licenses will be known as a Combined License. Any licenses not purchased during that time period will be added to 200 additional licenses and sold at auction by DGS. The minimum price per license at auction will be $250,000. No retailers that charge a membership fee and that are not open to the public may own a license. All grocery stores that currently have a restaurant license will have those licenses grandfathered and cannot sell the license. Any future grocery store wishing to sell wine, beer or spirits may purchase at auction or in a private transaction a Combined License. Multiple licenses up to a total of 40 may be owned under common ownership. Restaurants and Tavern licensees may for a fee expand their license to sell up to a case of beer, four bottles of wine and one bottle of liquor. Taxpayer Protection Other states, like Washington, have successfully privatized their wine and spirit stores and have seen an increase in their tax revenues. The PLCB will no longer control the wholesale sale of wine and spirits. The Department of General Services will sell the brands that are being sold at the PLCB Wine & Spirits stores to wholesalers interested in a Tier 1 license using a formula of cost of goods sold times 20% times 2.50. All wine and spirits brands currently not being sold in the PLCB Wine and Spirits stores will be able to be sold at wholesale with no upfront license fee. This license will be called a Tier 2 license. Beer wholesalers holding an ID license in good standing may operate as a Tier 2 licensee. All Tier 1 and Tier 2 license holders will pay an annual renewal fee of 1% of their prior year sales. All revenue generated by the sale of Tier 1 and Tier 2 initial and renewal licenses will be deposited in the Public Education Legislative Initiative Fund. All wine, beer, and spirits sold for off premises consumption will be charged a sales tax at the time of purchase. All other taxes will be paid at the wholesale level. The tax rate for wine and spirits will be the same rate charged by the PLCB as of their 2011 fiscal year end plus the percentage of the mark up that generated the revenue that was transferred to the profit line and transferred to the general fund. A five year average may also be used if it generates more revenue for the taxpayers of Pennsylvania. Job Protection The fact that the current 608 PLCB Wine and Spirits stores are not being privatized creates an opportunity for these stores and their employees to thrive under competition. The market tools provided under this legislation along with the option of extended operating hours will enable current employees to make more money and for more workers to be hired. Tier 1 wholesale license holders shall utilize the same organized labor union that is currently organized at the PLCB wholesale operation. It is estimated that this legislation will create 5,000 new jobs at private operations. Agriculture and Tourism are Pennsylvania's number one and two industries. Pennsylvania farmers grow the crops that make our Pennsylvania wines, beers and distilled spirits. Many tourists visit our wine trails and soon to be craft brew and distilled spirit trails. |
Introduced as HB867