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