PRINTER'S NO. 1835
No. 1526 Session of 1977
INTRODUCED BY GARZIA AND MORRIS, JULY 25, 1977
REFERRED TO COMMITTEE ON FINANCE, JULY 25, 1977
AN ACT
1 Amending the act of May 20, 1949 (P.L.1584, No.478), entitled
2 "An act defining and prohibiting unfair sales of cigarettes;
3 conferring powers and imposing duties on the Department of
4 Revenue and on persons, as herein defined, engaged in the
5 sale of cigarettes at retail or wholesale; providing for the
6 suspension and revocation of Cigarette Tax Permits; and
7 providing remedies and penalties for violations," further
8 defining the phrase "cost to retailer," providing for
9 determining the cost to a retailer and restricting the powers
10 of the Department of Revenue.
11 The General Assembly of the Commonwealth of Pennsylvania
12 hereby enacts as follows:
13 Section 1. Subsection (j) of section 2, subsection (b) of
14 section 3, subsection (b) of section 7, subsection (a) of
15 section 9, sections 11, 13 and 14, act of May 20, 1949
16 (P.L.1584, No.478), known as the "Unfair Cigarette Sales Act,"
17 are amended to read:
18 Section 2. Definitions.--The following words, terms and
19 phrases, when used in this act, shall have the meaning ascribed
20 to them in this section, except where the context clearly
21 indicates a different meaning.
22 * * *
1 (j) "Cost to the retailer" shall mean the "basic cost of
2 cigarettes" to the retailer [plus the cost of doing business by
3 the retailer and must include, without limitation, labor costs
4 (including salaries of executives and officers), rent,
5 depreciation, selling costs, maintenance of equipment, delivery
6 costs, all types of licenses, taxes, insurance, and advertising.
7 In the absence of proof of a lesser or higher cost of doing
8 business by the retailer making the sale, the cost of doing
9 business by the retailer shall be presumed to be six per centum
10 (6%) of the "basic cost of cigarettes" to the retailer].
11 In the case of any person who purchases cigarettes for sale
12 at retail from any manufacturer of cigarettes without resort to
13 a wholesaler as such, such person shall be deemed, for the
14 purposes of this act, to be engaged in the sale of cigarettes
15 both as a wholesaler and retailer and as such, shall be subject
16 [both] to the wholesale [and retail] mark-up provisions of this
17 act[, in the order named].
18 Section 3. Sales at Less Than Cost.--
19 * * *
20 (b) Evidence of [advertisement,] offering to sell or sale of
21 cigarettes by any retailer or wholesaler at less than cost to
22 him shall be prima facie evidence of intent to injure
23 competitors and to destroy or substantially lessen competition.
24 Section 7. Advertising of Certain Sales; Good Faith.--* * *
25 (b) In the absence of proof of the cost of a competitor
26 under this section, the lowest ["cost to the retailer" or the
27 lowest] "cost to the wholesaler," [as the case may be,]
28 determined by any cost survey made in the same trading area
29 pursuant to section eleven of this act, may be deemed the cost
30 of such competitor, within the meaning of this section.
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1 Section 9. Admissible Evidence.--(a) In determining ["cost
2 to the retailer" and] "cost to the wholesaler," the court shall
3 receive and consider, as bearing on the bona fides of such cost,
4 evidence tending to show that any person complained against
5 under any of the provisions of this act purchased cigarettes
6 with respect to the sale of which complaint is made at a
7 fictitious price or upon terms or in such a manner or under such
8 invoices as to conceal the true cost, discounts, or terms of
9 purchase, and shall also receive and consider, as bearing on the
10 bona fides of such cost, evidence of the normal, customary and
11 prevailing terms and discounts in connection with other sales of
12 a similar nature in the trade area or state.
13 * * *
14 Section 11. Cost Survey; Admissibility.--Where a cost survey
15 pursuant to recognized statistical and cost accounting practices
16 has been made for the trading area in which a violation of this
17 act is committed or charged to determine and establish on the
18 basis of actual existing conditions the lowest cost to
19 wholesalers [or the lowest cost to retailers] within the said
20 area, such cost survey shall be deemed competent evidence in any
21 action or proceeding under this act as tending to prove actual
22 cost to the wholesaler [or actual cost to the retailer]
23 complained against, but any party against whom any such cost
24 survey may be introduced in evidence shall have the right to
25 offer evidence tending to prove any inaccuracy of such cost
26 survey or any state of facts which would impair its probative
27 value.
28 Section 13. Department of Revenue; Powers and Duties.--The
29 administration of this act is hereby vested in the Department of
30 Revenue of this Commonwealth. Such department may adopt rules
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1 and regulations for the enforcement of this act and may from
2 time to time make or cause to be made one or more cost surveys
3 to establish the lowest ["cost to the retailer" and the lowest]
4 "cost to the wholesaler," as defined in this act, for the State
5 or such trading area or areas therein as it shall define. Any
6 such survey made or caused to be made by the department may be
7 used for the purposes specified in section eleven of this act.
8 The Department of Revenue may, upon notice and after hearing,
9 suspend or revoke any permit issued under the provisions of the
10 Cigarette Tax Act (Act of March 24, 1949, Pamphlet Laws 336),
11 for failure of the permittee to comply with any of the
12 provisions of this Unfair Cigarette Sales Act. Any person
13 aggrieved by any decision or order of the department suspending
14 or revoking any such permit may appeal from such decision or
15 order, as provided in the Administrative Agency Law (Act of June
16 4, 1945, Pamphlet Laws 1388), as amended.
17 Section 14. Penalty.--Any retailer or wholesaler who shall
18 advertise, offer to sell or sell cigarettes at retail or
19 wholesale in violation of the provisions of this act shall, for
20 a first offense, upon summary conviction thereof, be sentenced
21 to pay a fine not exceeding two hundred dollars ($200), and, in
22 default thereof, shall be sentenced to undergo imprisonment for
23 not more than sixty (60) days; and for a second or subsequent
24 offense, be guilty of a misdemeanor, and, upon conviction
25 thereof, be sentenced to pay a fine not exceeding five hundred
26 dollars ($500), or to undergo imprisonment not exceeding six
27 months, or both. Each [advertisement,] offer for sale or sale of
28 cigarettes in violation of the provisions of this act shall
29 constitute a separate violation of the provisions of this act
30 and shall subject the offender to the penalties hereby
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1 prescribed. Proof of any such [advertisement,] offer to sell or
2 sale by any retailer or wholesaler in contravention of the
3 policy of this act shall be prima facie evidence of a violation
4 of this act.
5 Section 2. This act shall take effect immediately.
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