PRINTER'S NO. 1745
No. 1273 Session of 2008
INTRODUCED BY WONDERLING, M. WHITE, ARMSTRONG, PICCOLA, EARLL AND FOLMER, FEBRUARY 8, 2008
REFERRED TO LAW AND JUSTICE, FEBRUARY 8, 2008
AN ACT 1 Amending the act of April 12, 1951 (P.L.90, No.21), entitled, as 2 reenacted, "An act relating to alcoholic liquors, alcohol and 3 malt and brewed beverages; amending, revising, consolidating 4 and changing the laws relating thereto; regulating and 5 restricting the manufacture, purchase, sale, possession, 6 consumption, importation, transportation, furnishing, holding 7 in bond, holding in storage, traffic in and use of alcoholic 8 liquors, alcohol and malt and brewed beverages and the 9 persons engaged or employed therein; defining the powers and 10 duties of the Pennsylvania Liquor Control Board; providing 11 for the establishment and operation of State liquor stores, 12 for the payment of certain license fees to the respective 13 municipalities and townships, for the abatement of certain 14 nuisances and, in certain cases, for search and seizure 15 without warrant; prescribing penalties and forfeitures; 16 providing for local option, and repealing existing laws," 17 further providing for the retail sale of wine and liquor; 18 regulating service of alcoholic beverages; conferring powers 19 and duties on the Pennsylvania Liquor Control Board and the 20 Legislative Reference Bureau; establishing an advisory 21 committee; imposing penalties; providing for a request for 22 proposal concerning recommendations on the sale of State 23 liquor stores to private investors; and making an 24 appropriation. 25 The General Assembly of the Commonwealth of Pennsylvania 26 hereby enacts as follows: 27 Section 1. The act of April 12, 1951 (P.L.90, No.21), known 28 as the Liquor Code, reenacted and amended June 29, 1987 (P.L.32,
1 No.14), is amended by adding articles to read: 2 ARTICLE VIII-A. 3 RETAIL SALE OF WINE AND LIQUOR. 4 Section 801-A. Legislative intent. 5 (a) Declaration.--The General Assembly hereby finds and 6 declares that: 7 (1) the sale of liquor and wine at retail should no 8 longer be by the Commonwealth, but rather by retail 9 licensees; 10 (2) the health and welfare of the citizens of this 11 Commonwealth will be adequately protected by the regulation 12 of private licensees through strict enforcement of laws and 13 rules relating to the sale of liquor and wine; 14 (3) the sale of liquor and wine through retail licenses 15 will improve customer service, selection and price; and 16 (4) the operation and efficiency of State government 17 will be improved. 18 (b) Purpose.--It is the purpose of the General Assembly to: 19 (1) continue and increase revenue to the Commonwealth; 20 (2) provide a system of controls, including limitations 21 on the number of retail applications and enforcement 22 procedures to discourage the intemperate use of liquor; 23 (3) create incentives and facilitate the transition of 24 employees to other employment; 25 (4) minimize disruption of services to the public; and 26 (5) enhance alcohol education efforts for the benefit of 27 the children of this Commonwealth. 28 Section 802-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 20080S1273B1745 - 2 -
1 context clearly indicates otherwise: 2 "Franchise." A written agreement between the board and a 3 successful bidder in which the board agrees to issue a wine and 4 spirits store license to the successful bidder for a period of 5 30 years within a specified geographic area for the 6 establishment and operation of a wine and spirits store 7 consistent with the provisions of this act. 8 "Licensee." Any person who successfully bids for a franchise 9 and who applies for and receives a license for the operation of 10 a wine and spirits store for the retail sale of wine and liquor 11 for off-premises consumption. 12 Section 803-A. Closure of State stores and initial franchises. 13 (a) Powers and duties.--It shall be the power and duty of 14 the board to carry out an orderly transition to a wine and 15 spirits store system in a manner which is consistent with this 16 article and other laws of this Commonwealth and which maintains 17 a continuous level of service to the public. 18 (b) Franchise zones.--Subject to the provisions of this 19 article, the board shall establish 428 franchise zones within 20 this Commonwealth for the issuance of wine and spirit store 21 licenses granting to a licensee the exclusive authority to sell 22 liquor and wine at retail for off-premises consumption within 23 each franchise zone. The board in establishing each franchise 24 zone shall ensure the delivery of services currently provided by 25 State stores. At a minimum there shall be a wine and spirits 26 store located in each county. 27 (c) Sale.-- 28 (1) The board shall establish a schedule for the sale of 29 exclusive wine and spirits store franchises within the 30 franchise zones established under to subsection (b) by sale 20080S1273B1745 - 3 -
1 to the highest responsible bidder in accordance with this 2 article. The board may establish a staggered schedule for the 3 sale of wine and spirits store franchises in order to 4 maintain a continuous level of service to the public. 5 (2) The minimum bid for a franchise shall be $50,000. 6 (3) The franchise shall be valid for a period of 30 7 years from the date of issuance unless sooner forfeited, 8 abandoned or revoked pursuant to the provisions of this act. 9 (4) No applicant may hold, directly or indirectly: 10 (i) more than 10% of the franchises within this 11 Commonwealth; 12 (ii) more than 40% of the franchises in any one 13 county which has five or more franchises; and 14 (iii) all the franchises in any one county which has 15 less than five franchises. 16 (d) Implementation.--In implementing the provisions of this 17 article, the board shall have the following additional powers 18 and duties: 19 (1) Prescribe application forms for persons desiring to 20 acquire a wine and spirits store license. 21 (2) Adopt an orderly procedure for the investigation, 22 processing and approval of applications for franchises and 23 wine and spirits store licenses. 24 (3) Develop the form of the wine and spirits store 25 license. 26 (4) Disseminate information to the public relating to 27 the sale of franchises and the issuance of wine and spirits 28 store licenses. 29 (5) Make available for public inspection the most recent 30 inventory of the stock, equipment and other assets of each 20080S1273B1745 - 4 -
1 State store as well as a history of sales by product code and 2 State store location for the last five years. 3 (6) Enforce the provisions of this article. 4 Section 804-A. Application for wine and spirits store 5 franchises and licenses. 6 (a) Bid.--No person may bid upon, purchase or otherwise 7 acquire a wine and spirits store franchise unless the applicant 8 has satisfied all the prescribed requirements of this article 9 and the board has approved the applicant's qualification to hold 10 a wine and spirits store franchise and license under this 11 article. 12 (b) Written application.--Prior to the submission of a bid 13 for a retail liquor store franchise, each applicant shall file a 14 written application, with any required application fee, in such 15 form and containing such information as the board shall from 16 time to time prescribe. The application shall contain, at a 17 minimum, the following: 18 (1) The name and address of the applicant. 19 (2) Whether the applicant is an individual, corporation, 20 limited liability company, limited partnership, partnership 21 or association; the state of incorporation or organization, 22 the names and residence addresses of each executive officer, 23 director or general or limited partner; and the names and 24 residence addresses of any person or interested individual 25 owning, directly or indirectly, any legal or equitable 26 interest in the operations of the licensed wine and spirits 27 store proposed to be operated by the applicants, including 28 all stockholders of any closed corporation and all 29 stockholders having an ownership interest of 5% or more of 30 the voting stock of a public corporation. As provided under 20080S1273B1745 - 5 -
1 section 404, parties not listed on the application, or any 2 amendment thereof, can have no ownership interest in a 3 licensed business. 4 (3) If the applicant is an association, the application 5 shall set forth the names and addresses of the persons 6 constituting the association. 7 (4) If the applicant is a corporation, the application 8 must show that: 9 (i) the corporation was incorporated under the laws 10 of Pennsylvania or holds a certificate of authority to 11 transact business in Pennsylvania; and 12 (ii) all officers, directors and stockholders with 13 an interest of 5% or more in the stock of the corporation 14 are citizens of the United States. 15 (5) If the applicant is a natural person, the 16 application must show that the applicant is a citizen of the 17 United States and has been a resident of this Commonwealth 18 for at least one year immediately preceding the application 19 and that the applicant is not acting as an agent for any 20 other person, partnership, association or group of persons 21 beneficially interested in the license. 22 (6) The proposed location and ownership of the site for 23 the wine and spirits store, if available. 24 (7) A sworn statement that the applicant and all parties 25 with any direct or indirect interests in the operation of a 26 wine and spirits store have never been convicted in this 27 Commonwealth of any crime involving fraud, moral turpitude or 28 racketeering or within a period of ten years immediately 29 preceding the date of the application or have been convicted 30 of any felony or of an equivalent crime in another state or 20080S1273B1745 - 6 -
1 of any crime in this or any other Federal or state court for 2 a violation of any Federal or state liquor law. If the 3 applicant is a corporation, limited partnership, partnership 4 or association, the application shall contain a sworn 5 statement that none of the executive officers, directors or 6 general or limited partners, or any person owning, directly 7 or indirectly, at least 5% of the outstanding stock of or 8 partnership interests in such applicant has been so 9 convicted. 10 (8) A statement that the applicant will continuously 11 operate a wine and spirits store for the duration of the 30- 12 year franchise period and will provide a level of service, 13 including, but not limited to, hours of operation and product 14 availability reasonably equivalent to the level of service 15 currently provided in the same geographic area. 16 (c) Financial statement.--In addition to the application 17 filed under subsection (a), the applicant shall provide a 18 financial statement in the form and containing such information 19 as the board shall from time to time prescribe to indicate the 20 applicant's financial capability to operate the wine and spirits 21 store and the estimated volume of business to be conducted in 22 the wine and spirits store. 23 (d) Affirmation.--The application shall be signed and 24 verified by oath or affirmation by the owner, if a natural 25 person, or, in the case of an association, by a member or 26 partner thereof, or, in the case of a corporation, by an 27 executive officer thereof or any person specifically authorized 28 by the corporation to sign the application, to which shall be 29 attached written evidence of that authority. 30 (e) Additional information.--An applicant shall provide the 20080S1273B1745 - 7 -
1 board any additional information the board may request. 2 (f) Amended application.--When a change occurs in any 3 information provided to the board, an amended application shall 4 immediately be submitted to the board in the same manner as the 5 original application. 6 Section 805-A. Issuance of licenses. 7 (a) Qualifications.--Only those applicants for wine and 8 spirits store licenses issued under this section who meet all of 9 the requirements of this subsection shall be qualified to 10 participate in the sale conducted under this article. The 11 qualifications are as follows: 12 (1) applicants shall demonstrate, by submitting 13 financial statements, that the applicants possess sufficient 14 financial resources to operate a licensed wine and spirits 15 store, pay all taxes due and owing to the Commonwealth and 16 assume liability for the safe operation of the licensed 17 premises; 18 (2) applicants shall file a certificate obtained from 19 the Department of Revenue indicating whether the applicant 20 has any current tax deficiencies due and owing the 21 Commonwealth. No applicant shall be permitted to participate 22 in the sale of franchises pursuant to this article if that 23 applicant has any outstanding tax assessments or deficiencies 24 except for amounts subject to timely appeal; and 25 (3) all required bonds and letters of credit shall be 26 posted and are subject to forfeiture for violations of this 27 article in the same manner as provided by sections 465 and 28 466 of this act. 29 (b) Successful bidders.--Licenses shall be issued pursuant 30 to this section to successful bidders upon demonstration that 20080S1273B1745 - 8 -
1 the licensee will comply with all of the following terms and 2 conditions: 3 (1) notice shall be given to the board within 15 days of 4 any change in financial interests as provided by subsection 5 (a)(1); 6 (2) notice shall be given to the board within 15 days of 7 any criminal indictments or convictions as provided under 8 section 804-A(b)(7) and the ownership interest of any parties 9 subject to such convictions shall be totally divested by the 10 licensee within 30 days of the date of any conviction, guilty 11 plea or of any conviction, guilty plea or plea of nolo 12 contendere; 13 (3) licensees shall continue to maintain the bonding for 14 the operation of the wine and spirits store required by this 15 article; 16 (4) licensees shall remit to the board the emergency 17 liquor tax as provided by the act of June 9, 1936 (1st 18 Sp.Sess., P.L.13, No.4), entitled "An act imposing an 19 emergency State tax on liquor, as herein defined, sold by the 20 Pennsylvania Liquor Control Board; providing for the 21 collection and payment of such tax; and imposing duties upon 22 the Department of Revenue and the Pennsylvania Liquor Control 23 Board"; licensees shall remit to the Department of Revenue 24 the sales and use tax as provided by Article II of the act of 25 March 4, 1971 (P.L.6, No.2), known as the Tax Reform Code of 26 1971; 27 (5) licensees shall acquire wine and liquor exclusively 28 from the wholesale system as provided in this act and shall 29 keep a detailed log of all wholesale wine and liquor 30 transactions; and 20080S1273B1745 - 9 -
1 (6) licensees shall establish adequate security to 2 protect their inventory from unauthorized sale or diversion 3 and prevent its unauthorized distribution. 4 Section 806-A. Disqualification. 5 (a) Board.--The board shall disqualify an applicant for a 6 franchise or a wine and spirits store license if: 7 (1) The applicant has been convicted of a crime as 8 provided under paragraph (4). 9 (2) Any executive officer, director or general or 10 limited partner of the applicant, or any person owning, 11 directly or indirectly, at least 5% of the outstanding stock 12 of or partnership interest in the applicant, has been 13 convicted of a crime as provided under paragraph (4). 14 (3) The applicant receives funds for the financing of 15 any part of the wine and spirits store from any individual 16 who has been convicted of a crime as provided under paragraph 17 (4). 18 (4) In any instance in which an applicant or persons 19 with financial interest in the license are under indictment 20 for a felony or under investigation by a legally constituted 21 grand jury, the board shall withhold approval or disapproval 22 of the license until such time as all legal proceedings 23 related to the felony are resolved. 24 (5) The applicant provides false or misleading 25 information. 26 (b) False statement.--If any false statement is 27 intentionally made in any part of the application, the affiant 28 shall be guilty of a misdemeanor of the second degree and, upon 29 conviction, shall be subject to the penalties provided by this 30 act. In addition, the applicant shall be denied a franchise and 20080S1273B1745 - 10 -
1 a license or, if already granted, the franchise and license 2 shall be revoked. 3 Section 807-A. Application procedure. 4 (a) Receipt.--Upon receipt of an application for a wine and 5 spirits store franchise and license, and any other information 6 the board may require, the board shall conduct an investigation 7 of the applicant as deemed necessary or desirable. 8 (b) Investigation.--Upon the completion of an investigation 9 under subsection (a), the board shall inform the applicant, in 10 writing, whether the application has been approved or denied and 11 shall post a copy of the decision in the office of the board. 12 (c) Denial.--If an application is denied, the board shall 13 provide the applicant with the specific reasons for the denial. 14 The applicant shall be entitled to a hearing if a hearing is 15 requested within five days of the decision. 16 (d) Posting.--Every applicant for a wine and spirits store 17 license or for the transfer of an existing license to another 18 premises not then licensed shall post, for a period of at least 19 60 days beginning with the day the application is filed with the 20 board, in a conspicuous place on the outside of the premises or 21 at the proposed new location for which the license is applied, a 22 notice of the application in the form, of the size, and 23 containing all information as the board may require by 24 regulation. 25 (e) Hearing.--The board shall hold a hearing on any 26 application for a wine and spirits store license upon the 27 request of any resident residing within a radius of 500 feet of 28 the premises, if the request is filed within 15 days of posting 29 the notice of application under subsection (d). The board and 30 any hearing examiner of the board shall give appropriate 20080S1273B1745 - 11 -
1 evidentiary weight to any testimony of such residents at the 2 hearing. The board may provide for the holding of such hearings 3 by hearing examiners as provided in this act. The board shall 4 refuse any application for a wine and spirits store license 5 which could be detrimental to the welfare, health, peace and 6 morals of the inhabitants of the neighborhood within a radius of 7 500 feet of the premises proposed to be licensed. 8 (f) Notification.--The board shall approve or disapprove the 9 location and notify the successful bidder or licensee of its 10 decision. 11 Section 808-A. Physical limitations. 12 (a) Unit.--The premises of each wine and spirits store shall 13 be a self-contained unit with limited customer access dedicated 14 solely to the sale of liquor and permitted merchandise. All 15 purchases made within the limitations of the premises shall be 16 paid for at a location within the confines of the liquor sales 17 area. 18 (b) Description.--Upon notice of a successful bid on a 19 franchise or an application to relocate, each applicant for a 20 wine and spirits store license shall submit a description of the 21 premises and any other material, information and description of 22 the plan of that premises where it is proposed to keep and sell 23 liquor as may be required by the regulations of the board. 24 (c) Detail of description.--The descriptions, information 25 and plans under subsection (b) shall show the proposed location, 26 and shall show any alterations proposed to be made to the 27 described premises, or the new building proposed to be 28 constructed after the approval by the board of the application 29 for a franchise or for the transfer of an existing license to 30 another premises not then licensed. 20080S1273B1745 - 12 -
1 Section 809-A. Denial of application. 2 Hearings on the denial of an application or on the failure to 3 renew a license shall be held in accordance with the procedures 4 established in section 464. 5 Section 810-A. Bidding. 6 (a) Process.--The granting of franchises under this article 7 shall be by sealed competitive bids to the highest responsible 8 bidder. No bid shall be considered unless the bond required 9 under this section has been submitted to the board. All bids for 10 a wine and spirits store franchise may be rejected by the board 11 if the board determines that the highest bid is inadequate. 12 Whenever the board rejects all the tendered bids, the board 13 shall begin a new bidding process for that wine and spirits 14 store franchise. The board shall notify qualified bid applicants 15 of the date and the hour of the bid openings. 16 (b) Security.--In order to participate in the bidding under 17 this section, bid applicants shall post bonds, cash, negotiable 18 securities or letters of credit equal to an amount set by the 19 board, but not less than $50,000. 20 (c) Filing.--Each person desiring to submit a bid must file 21 the bid with the board prior to the specified date and hour for 22 the bid openings. Failure to deliver a bid or nonreceipt of a 23 bid prior to the appointed date and hour shall constitute 24 sufficient reason for rejection of a bid. Following the award of 25 the exclusive wine and spirits store franchise within each 26 franchise zone, the board shall indicate the successful bidder. 27 A copy of each awarded bid and the bidder's application shall be 28 maintained as public record and open to public inspection in the 29 offices of the board. 30 (d) Issuance.--The board shall issue a franchise to a 20080S1273B1745 - 13 -
1 successful bidder to operate a wine and spirits store within the 2 specified franchise zone upon satisfaction of all of the 3 following conditions: 4 (1) Execution by the successful bidder of a franchise 5 agreement. 6 (2) Payment in full by the successful bidder of the 7 amount of the successful bid. 8 (3) Approval by the board of the successful bidder's 9 proposed franchise location. 10 (4) Posting by the successful bidder of bonds in an 11 amount determined by the board to reasonably reflect the cost 12 of the bidder's initial inventory. Bonds posted pursuant to 13 this clause shall be released by the board upon payment in 14 full by the successful bidder of the amount due for initial 15 inventory or shall be forfeited in the event the amount due 16 for initial inventory is not paid in full within 15 days of 17 the date such inventory was delivered to the wine and spirits 18 store location. 19 (e) Release.--Bonds posted by unsuccessful bidders under 20 section 810-A(b) shall be released by the board upon acceptance 21 of the successful bid. 22 (f) Payment.--Bonds posted by the successful bidder under 23 section 810-A(b) shall be released by the board upon payment by 24 the successful bidder of the initial franchise fee. A successful 25 bidder's bond shall be forfeited if the initial franchise fee is 26 not paid within 90 days of the date the board accepts the bid 27 and the board shall then offer the franchise to the next highest 28 responsible bidder. The board shall then either issue the wine 29 and spirits store license to the next highest bidder for such 30 license or reject all bids and start the bidding process anew 20080S1273B1745 - 14 -
1 for such retail liquor store license. 2 Section 811-A. Closure of existing State stores. 3 (a) Grant.--An awarded franchise and license shall grant the 4 successful bidder the opportunity to bid upon the remaining 5 inventory, tangible property and fixtures of all State stores 6 owned by the Commonwealth pursuant to this article. The board 7 shall establish a procedure for the sale of the inventory, 8 property and fixtures of all State stores consistent with 9 Article XXIV-A of the act of April 9, 1929 (P.L.177, No.175), 10 known as The Administrative Code of 1929. All monetary proceeds 11 from such sales shall be deposited in the Wine and Spirits Store 12 Fund. 13 (b) Development.--The board shall develop a schedule of 14 closure for State stores. Under no circumstances shall any State 15 store remain open for retail sales beyond 18 months following 16 the initial opening date set for any wine and spirits store. 17 Section 812-A. Monthly franchise fee, initial franchise period 18 and renewal of retail liquor store licenses. 19 (a) Delivery.--On or before the tenth day of each calendar 20 month, each wine and spirits store licensee shall deliver to the 21 board a statement of the gross sales of liquor and wine from the 22 wine and spirits store location for the preceding calendar month 23 together with payment of the 1% monthly franchise fee applied to 24 such gross sales before the application of sales tax. The 25 statement shall be in the form prescribed by the board and shall 26 include separate sales figures for the wine and spirits store's 27 sales of liquor, wine and other items and a statement of total 28 sales together with the calculation of the licensee's monthly 29 franchise fee. 30 (b) Period.--The initial franchise period for each retail 20080S1273B1745 - 15 -
1 liquor store shall be 30 years from the effective date of the 2 wine and spirits store license. 3 (c) Review.--At the end of the initial 30-year franchise 4 period, the board shall conduct a review of each wine and 5 spirits store franchise and licensee to determine if each 6 licensee and each wine and spirits store has complied with the 7 provisions of this act and any regulations promulgated under 8 this act. The board shall also review the service provided by 9 each wine and spirits store to determine its adequacy. The board 10 may decline to renew the franchise and license of any wine and 11 spirits store which has substantially failed to comply with the 12 provisions of this act or which has failed to provide an 13 adequate level of service to the public. 14 (d) Fee.--At the end of the initial 30-year franchise 15 period, the board shall determine the amount of the franchise 16 renewal fee to be paid by the wine and spirits store licensee in 17 order to retain the franchise for another 30-year period. The 18 renewal fee shall be a percentage of the annual gross sales of 19 the wine and spirits store, as determined by the board, but not 20 less than the amount of the original bid for the franchise. If 21 the wine and spirits store licensee remits the franchise renewal 22 fee as herein provided and is successfully reviewed by the board 23 pursuant to subsection (c), the licensee shall retain the 24 franchise for a second 30-year period. 25 (e) Remittances.--If the wine and spirits store licensee 26 fails to remit the franchise renewal fee within 90 days of 27 notification of the fee from the board, the franchise shall be 28 rebid in the same manner as provided in section 810-A. 29 Applicants shall submit to the board the same information 30 required for the initial issuance of the exclusive franchise and 20080S1273B1745 - 16 -
1 wine and spirits store license and any additional information 2 required by the board by such dates as prescribed by the board. 3 (f) Application.--The requirements and procedures set forth 4 under this section shall apply to all franchises and licenses at 5 the end of each ten-year period. 6 Section 813-A. Sale, assignment or transfer of license. 7 (a) Prohibition.--No person may sell, assign or otherwise 8 transfer a wine and spirits store franchise and license without 9 the prior written approval of the board. 10 (b) Merger.--For purposes of this section, the merger of a 11 wine and spirits store licensee or the sale of more than 50% of 12 the outstanding stock of or partnership interests in the wine 13 and spirits store licensee shall be deemed to be a sale, 14 assignment or transfer of a wine and spirits store franchise and 15 license under this section. 16 (c) Sale.--Any person to whom a wine and spirits store 17 franchise and license is sold, transferred or reissued shall 18 comply with the provisions of this act. 19 Section 814-A. Renewal or transfer. 20 (a) Hearings.--The board shall hold hearings on renewals or 21 transfers as it deems necessary at the times as it shall fix for 22 the purpose of hearing such testimony. The board shall hold a 23 hearing on any application for a renewal of a wine and spirits 24 store license or the transfer of any such license to a new 25 location, upon the request of any person with standing to 26 testify under subsection (b), if the request is filed with the 27 board within the first 15 days of posting of the notice of 28 application pursuant to section 807-A. The board may provide for 29 the holding of such hearings by hearing examiners as provided in 30 this act. 20080S1273B1745 - 17 -
1 (b) Residents.--If a hearing is held in the case of an 2 application for a license or the transfer of a license under 3 this article, the board shall permit residents residing within a 4 radius of 500 feet of the premises to testify at the hearing. 5 The board and any hearing examiner of the board shall give 6 appropriate evidentiary weight to any testimony of such 7 residents given at the hearing. 8 (c) Refusal.--The board shall refuse any application for a 9 renewal or transfer which would be detrimental to the welfare, 10 health, peace and morals of the inhabitants of the neighborhood 11 within a radius of 500 feet of the place proposed to be 12 licensed. 13 Section 815-A. Surrender, revocation or forfeiture of wine and 14 spirits store franchise or license. 15 Any wine and spirits store licensee may surrender its 16 franchise and license to the board at any time. Upon surrender, 17 revocation or forfeiture of a franchise or license, the board 18 shall proceed to reissue the exclusive wine and spirits store 19 franchise within the franchise zone by the bidding process 20 provided in this article. 21 Section 816-A. Sales by wine and spirits stores. 22 (a) Off-premises.--Every wine and spirits store may sell 23 liquor for consumption off-premises. In addition to the sale of 24 liquor, wine and spirits stores may sell related merchandise 25 within the controlled area of the store. Wine and spirits stores 26 have no authority under any circumstances to sell malt or brewed 27 beverages. The board shall promulgate regulations setting forth 28 what additional related merchandise may be offered for retail 29 sale in wine and spirits stores. 30 (b) Approval.--No licensee shall engage in any separate 20080S1273B1745 - 18 -
1 business activities upon any licensed premises without prior 2 approval of the board. 3 (c) Purchase.--All holders of licenses issued under section 4 401 shall only purchase wine and liquor from the wine and 5 spirits store in the franchise zone in which the section 401 6 licensee is located or a contiguous franchise zone thereto. 7 (d) Time of sales.--Wine and spirits store licensees may not 8 sell liquor between 11 p.m. and 8 a.m. or between the hours of 9 11 p.m. Saturday and 8 a.m. on Monday. 10 (e) Employment.--Nothing in this act, or any regulation 11 promulgated under this act, shall prohibit or prevent any wine 12 and spirits store licensee from employing any person who is at 13 least 21 years of age to directly serve the public and who is at 14 least 21 years of age to stock shelves and perform related work. 15 Section 817-A. Records. 16 All of the business and financial books and records and the 17 wine and spirits store location shall be available at any time 18 for inspection and audit by the board and the enforcement 19 bureau. The board and the enforcement bureau may audit all books 20 and records and audit the physical inventory of the wine and 21 spirits store at any time. The board shall audit each wine and 22 spirits store at least once every three years. Failure to permit 23 a review or an audit under this section is grounds for 24 revocation. 25 Section 818-A. Civil penalties. 26 (a) Assessment.--In addition to the penalties set forth 27 under sections 471 and 494, any wine and spirits store licensee 28 who violates any provision of this article or regulation 29 promulgated under this article may be assessed a civil penalty 30 by the administrative law judge of not less than $100 and not 20080S1273B1745 - 19 -
1 more than $1,000 per violation. Each violation shall constitute 2 a separate offense. In determining the amount of the penalty, 3 the administrative law judge shall consider all of the 4 following: 5 (1) the wine and spirits licensee's history of previous 6 violations; 7 (2) the appropriateness of such penalty to the size of 8 the business of the wine and spirits licensee charged; 9 (3) the gravity of the violation; and 10 (4) the demonstrated good faith of the wine and spirits 11 licensee charged in attempting to achieve compliance after 12 notification of a violation. 13 (b) Notice.--A civil penalty shall be assessed after the 14 administrative law judge has given at least ten days' notice to 15 the wine and spirits store licensee. Notice shall be in writing, 16 shall state the reason for the proposed penalty and the amount 17 thereof, and shall designate a time and place for a hearing. 18 Notice shall be sent by certified mail to the address for which 19 the wine and spirits store license was issued. 20 Section 819-A. Suspension or revocation. 21 (a) Administrative law judge.--The administrative law judge 22 shall have the power to refuse to issue and the power to suspend 23 or revoke a wine and spirits store license or impose a fine, or 24 both, when the administrative law judge finds that: 25 (1) the licensee has violated any of the provisions of 26 this article or any regulations of the board; 27 (2) the applicant or licensee has knowingly presented to 28 the board or to the enforcement bureau false, incomplete or 29 misleading information relating to licensure or to the 30 operation of a franchise; 20080S1273B1745 - 20 -
1 (3) the applicant or licensee has pleaded guilty, 2 entered a plea of nolo contendere or has been found guilty of 3 a felony by a judge or jury in any Federal or state court; 4 (4) no licensee shall operate any theater, circus, 5 museum or other place of amusement or any bowling alley, game 6 room, video arcade or other recreational area or have any 7 passageway or connection between a licensed premises and a 8 place of amusement or recreation; 9 (5) no licensee shall permit the consumption of 10 alcoholic beverages on the premises of the licensed 11 establishment, except for the sampling or tasting of products 12 as approved by the board; or 13 (6) locate a wine and spirits store within 500 feet of 14 any church, school, hospital, charitable institution or 15 playground. 16 (b) Board.--The board shall have the power to refuse to 17 issue or to suspend or revoke a wine and spirits store license 18 or franchise if the licensee failed to operate the wine and 19 spirits store or to provide a reasonable level of consumer 20 service. 21 (c) Hearings.--Suspension and revocation hearings shall be 22 held in accordance with the procedures under section 514. 23 (d) Prohibition.--No person may sell liquor at any outlet if 24 the wine and spirits store license applicable to that outlet has 25 been forfeited, suspended, revoked or has expired. 26 (e) Revocation.--In the event of the revocation, forfeiture 27 or surrender of any wine and spirits store license in accordance 28 with this act, the board shall revoke the franchise and conduct 29 a public sale to grant to the highest responsible bidder a 30 replacement license for the duration of the franchise period as 20080S1273B1745 - 21 -
1 prescribed by the board. 2 Section 820-A. Reemployment tax credit. 3 (a) Termination.--A full-time employee of a Pennsylvania 4 State store whose employment is terminated as a result of the 5 closing of a State store shall be eligible for a two-year 6 reemployment tax credit voucher in the amount of $1,000 per 7 taxable year. The voucher shall be made available to each 8 qualified employee of a Pennsylvania State store upon 9 termination of employment by the Liquor Control Board. Each 10 voucher shall be certified by the Liquor Control Board before 11 the voucher is provided to the qualified employee, and the 12 Department of Revenue shall be informed of each qualified 13 employee to whom a voucher has been provided. 14 (b) Transfer.--Any employer in this Commonwealth who employs 15 such a former employee of a Pennsylvania State store may, upon 16 transfer of the voucher from the employee to the employer, use 17 the voucher as a credit against the State tax liability of the 18 business, provided that the employer can demonstrate the 19 following: 20 (1) That the employee for which the tax credit is being 21 sought was terminated from a Pennsylvania State store within 22 12 months of being employed by the employer. 23 (2) That the former State store employee has been 24 employed by the employer seeking the tax credit for a period 25 not less than one year. 26 (c) Submittal.--The employer shall submit the tax credit 27 voucher to the Department of Revenue along with the information 28 required under subsection (b)(1) and (2) in conjunction with the 29 filing of a State business tax identified under subsection 30 (d)(2). 20080S1273B1745 - 22 -
1 (d) Claim.-- 2 (1) An employer may claim a reemployment tax credit for 3 every job filled by a former Pennsylvania State store 4 employee of $1,000 per taxable year for a maximum of two 5 taxable years. 6 (2) An employer may apply the reemployment tax credit to 7 100% of the employer's State corporate net income tax, 8 capital stock and franchise tax or the personal tax of a 9 shareholder of the company if the company is a Pennsylvania S 10 corporation, gross premiums tax, gross receipts tax, bank and 11 trust company shares tax, mutual thrift institution tax, 12 title insurance company shares tax, personal income tax or 13 the personal income tax of a shareholder of a Pennsylvania S 14 corporation or any combination thereof. 15 (3) A former Pennsylvania State store employee whose 16 employment is terminated with an employer who has utilized 17 the reemployment tax credit voucher to claim a one-year 18 $1,000 tax credit, may transfer the voucher to a new employer 19 who may use the remaining $1,000 tax credit as a claim 20 against the business tax liability identified under paragraph 21 (2). 22 (4) The term of the reemployment tax credit voucher may 23 not exceed three years from the date the voucher is provided 24 to the qualified former Pennsylvania State store employee. 25 Section 821-A. Annual reports. 26 On or before October 31, 2017, and each year thereafter, the 27 board shall submit to the General Assembly an annual report on 28 retail alcohol sales in this Commonwealth and the implementation 29 of this article, including the total revenue earned by the 30 issuance of wine and spirits store license. 20080S1273B1745 - 23 -
1 Section 822-A. Review. 2 Five years following the effective date of this section, the 3 board shall conduct a thorough review of the operations of the 4 wine and spirits stores. The board shall submit a copy of this 5 review and any recommendations relating to the expansion of 6 existing franchise zones to the General Assembly. The same 7 review shall be conducted ten years following the sale of the 8 first wine and spirits store franchise. 9 Section 823-A. Disposition of proceeds. 10 All proceeds from initial franchise sales, wholesale sales, 11 monthly franchise fees, bid forfeitures and other moneys 12 designated for deposit in the Wine and Spirits Stores Fund under 13 this article and all other proceeds which are deposited in the 14 Wine and Spirits Stores Fund are appropriated and shall be 15 allocated as provided in this section. Proceeds shall mean all 16 revenues and receipts less all costs of administration and 17 operation of the board, including enforcement costs and 18 including the costs attributable to the operations of the 19 Pennsylvania State Police as certified by the Governor, and any 20 other expenses related to the operation of the liquor system. 21 The proceeds shall be allocated as follows: 22 (1) Proceeds from the auction of 428 franchise zones 23 shall be allocated as follows: 24 (i) Three hundred fifty million dollars shall be 25 paid once to Medicaid. 26 (ii) An amount to be appropriated to the 27 Pennsylvania State Police. 28 (iii) An amount to be appropriated for alcohol 29 education. 30 (iv) The balance of the proceeds under this 20080S1273B1745 - 24 -
1 paragraph shall be used for the unfunded Medicaid 2 obligation and long-term living expenditures. 3 (2) The proceeds from private equity shall be allocated 4 as follows: 5 (i) Ten percent of the proceeds under this paragraph 6 shall be paid to the Pennsylvania State Police. 7 (ii) Ten percent of the proceeds under this 8 paragraph shall be paid to Mothers Against Drunk Driving. 9 (iii) Eighty percent of the proceeds under this 10 paragraph shall be paid to the General Fund. 11 ARTICLE VIII-B 12 PROFESSIONALISM IN SERVICE OF ALCOHOLIC BEVERAGES 13 Section 801-B. Declaration of policy. 14 The General Assembly finds and declares as follows: 15 (1) There is a need to further enhance the 16 professionalism of persons employed in the retail sale of 17 alcohol. 18 (2) A program must be established to include the study 19 of the following: 20 (i) The effect alcohol has on the body and behavior, 21 including the effect on an individual's ability to 22 operate a motor vehicle when intoxicated. 23 (ii) The laws of this Commonwealth concerning 24 alcoholic beverages licensure and liability and driving 25 under the influence of alcoholic beverages. 26 (iii) Methods of recognizing problem drinkers and 27 techniques for intervening with problem drinkers. 28 (iv) Methods of identifying false driver's licenses 29 and other documents used as evidence of age and identity 30 to prevent the sale of alcohol to minors. 20080S1273B1745 - 25 -
1 (v) Prevention of fetal alcohol syndrome. 2 (3) It is necessary to reduce the number of individuals 3 who drive while under the influence of intoxicating liquor 4 and mitigate the physical and property damage caused by that 5 behavior. 6 (4) It is necessary to reduce the frequency of alcohol- 7 related birth defects. 8 Section 802-B. Definitions. 9 The following words and phrases when used in this article 10 shall have the meanings given to them in this section unless the 11 context clearly indicates otherwise: 12 "Alcoholic beverage." Any of the following: 13 (1) Liquor. 14 (2) Malt or brewed beverages. 15 (3) Wine. 16 "Certificate." An authorization under section 804-B to 17 provide a program. 18 "Chairman." The chairman of the Pennsylvania Liquor Control 19 Board. 20 "Committee." The Alcohol Server Education Advisory 21 Committee. 22 "License." A license issued under Article IV to sell, serve 23 or dispense alcoholic beverages for consumption and not for 24 resale. 25 "Licensee." A person that holds a license. The term shall 26 include only State liquor stores, not restaurants, taverns and 27 clubs. 28 "Permit." An authorization under section 805-B to serve 29 alcoholic beverages. 30 "Program." An alcohol seller education course and 20080S1273B1745 - 26 -
1 examination. 2 "Provider." A person that provides a program. 3 "Seller." An individual who sells alcoholic beverages for a 4 licensee. 5 Section 803-B. Administration. 6 (a) Board.-- 7 (1) The board has the following powers: 8 (i) Approve programs and accept security under 9 section 804-B(b) and (c). 10 (ii) Impose sanctions under section 807-B. 11 (iii) Promulgate regulations to implement this 12 article in accordance with section 801-B. 13 (2) The board has the following duties: 14 (i) Implement this article in accordance with 15 section 801-B. 16 (ii) Issue certifications under section 804-B(d). 17 (iii) Establish its own program if no other programs 18 are certified under section 804-B. 19 (iv) Transmit to the Legislative Reference Bureau 20 for publication in the Pennsylvania Bulletin a notice 21 which: 22 (A) lists certified programs for the initial 23 implementation of this article; or 24 (B) states that the board has its own program. 25 (v) Issue permits under section 805-B(b). 26 (b) Committee.-- 27 (1) The Alcohol Seller Education Advisory Committee is 28 established. The committee shall consist of the following 29 members: 30 (i) The chairman. 20080S1273B1745 - 27 -
1 (ii) The Secretary of Health or a designee. 2 (iii) The Secretary of Transportation or a designee. 3 (iv) The following individuals appointed by the 4 chairman: 5 (A) Three representatives of the retail liquor 6 industry. 7 (B) A representative of the wholesale liquor 8 industry. 9 (C) A representative of the insurance industry. 10 (D) A representative of a nonprofit organization 11 the primary purpose of which is to reduce driving 12 under the influence in this Commonwealth. 13 (2) A member under paragraph (1)(i), (ii) or (iii) shall 14 serve ex officio. A member under paragraph (1)(iv) shall 15 serve a term of four years. 16 (3) The chairman shall serve as chair of the committee. 17 (4) Five members constitute a quorum. 18 (5) Members under paragraph (1)(iv) shall serve without 19 compensation but shall be reimbursed for reasonable and 20 necessary expenses in discharging their functions. 21 (6) The committee shall meet as often as necessary, but 22 at least two times per year, to assist the board with the 23 development of all of the following: 24 (i) Standards, course requirements and materials for 25 programs. 26 (ii) Procedures attendant to the programs. 27 (iii) Certification standards for providers and 28 instructors. 29 Section 804-B. Programs. 30 (a) Authorization.--The board may certify programs. 20080S1273B1745 - 28 -
1 (b) Standards.--To be approved, a program curriculum must 2 include the following subjects: 3 (1) The effect alcohol has on the body and behavior, 4 including the effect on an individual's ability to operate a 5 motor vehicle when intoxicated. 6 (2) The effect alcohol has on an individual when used in 7 combination with drugs. 8 (3) The laws of this Commonwealth concerning alcoholic 9 beverages licensure and liability and driving under the 10 influence of alcoholic beverages. 11 (4) Methods of recognizing problem drinkers and 12 techniques for intervening with problem drinkers. 13 (5) Methods of identifying false driver's licenses and 14 other documents used as evidence of age and identity to 15 prevent the sale of alcohol to minors. 16 (6) The incidence of alcohol-related birth defects. 17 (c) Security.--If a program is approved under subsection 18 (b), the provider must furnish security acceptable to the board 19 in the amount of $5,000 to guarantee satisfactory provision of 20 the program in accordance with section 801-B over a period of 21 five years. 22 (d) Certification.-- 23 (1) The board shall certify a program if all of the 24 following apply: 25 (i) The program is approved under subsection (b). 26 (ii) Security is accepted under subsection (c). 27 (2) Certification is valid for five years and is subject 28 to renewal in accordance with this section. 29 Section 805-B. Permits. 30 (a) Requirements.--To receive a permit, a seller must do all 20080S1273B1745 - 29 -
1 of the following: 2 (1) Complete within the immediately preceding year a 3 program which is: 4 (i) certified under section 804-B; or 5 (ii) conducted by the board. 6 (2) Pay a fee set by regulation of the board. 7 (b) Issuance.--The board shall issue a permit to a seller 8 who complies with subsection (a). No person shall be employed as 9 a seller in a licensed premises unless that person obtains 10 alcohol seller training within 30 days of employment. 11 (c) Term.--A permit is valid for five years and is subject 12 to renewal in accordance with this section. 13 Section 806-B. Permit required. 14 (a) Prohibition.--A licensee may not employ a seller unless 15 all of the following apply: 16 (1) The seller has a valid permit. 17 (2) The seller's permit is on the premises of the 18 licensee where the seller is employed. 19 (b) Penalty.-- 20 (1) A licensee that violates subsection (a)(1) commits a 21 misdemeanor of the first degree. 22 (2) A licensee that violates subsection (a)(2) commits a 23 summary offense. 24 Section 807-B. Sanctions. 25 (a) Certificates.--If the board determines that a provider 26 is not providing its program in a manner satisfactory to the 27 board in accordance with section 801-B, the board may do all of 28 the following: 29 (1) Suspend the certificate. 30 (2) Revoke the certificate. 20080S1273B1745 - 30 -
1 (3) Proceed against the provider's security under 2 section 804-B. 3 (b) Permits.-- 4 (1) A seller is subject to sanction under paragraph (2) 5 for any of the following: 6 (i) Violation of section 493. 7 (ii) Violation of 18 Pa.C.S. § 6310.1 (relating to 8 selling or furnishing liquor or malt or brewed beverages 9 to minors). 10 (2) If the board determines that a seller has committed 11 a violation specified in paragraph (1), the board may do all 12 of the following: 13 (i) Suspend the permit. 14 (ii) Revoke the permit. 15 (c) Penalties.-- 16 (1) In addition to any other penalties available, the 17 following penalties may be imposed for sales to minors or 18 intoxicated persons in violation of the provisions of this 19 article: 20 (i) The chairman may suspend a seller's seller 21 permit for a period of 30 days or fine the seller an 22 amount not less than $2,000, or both, if the chairman 23 finds that the seller is guilty of a first offense of 24 selling an alcoholic beverage to an intoxicated person or 25 to a minor. 26 (ii) The chairman may suspend a seller's seller 27 permit for a period of one year or impose a $5,000 fine, 28 or both, if the chairman finds that the seller is guilty 29 of a second offense, arising separately from the incident 30 giving rise to the first offense, of selling an alcoholic 20080S1273B1745 - 31 -
1 beverage to an intoxicated person or to a minor. 2 (iii) The chairman may permanently revoke a seller's 3 seller permit or impose a $10,000 fine, or both, if the 4 chairman finds that the seller is guilty of a third 5 offense, arising separately from the incidents giving 6 rise to the first and second offenses, of selling 7 alcoholic beverages to an intoxicated person or to a 8 minor. 9 (iv) The chairman may suspend a licensee's license 10 for a period of 30 days or fine the licensee an amount 11 not less than $2,000, or both, if the chairman finds that 12 the licensee is guilty of a first offense of selling an 13 alcoholic beverage to an intoxicated person or a minor. 14 (v) The chairman may suspend a licensee's license 15 for a period of one year or fine the licensee an amount 16 not less than $5,000, or both, if the chairman finds that 17 the licensee is guilty of a second offense, arising 18 separately from the incident giving rise to the first 19 offense of selling an alcoholic beverage to an 20 intoxicated person or a minor. 21 (vi) The chairman may permanently revoke a 22 licensee's license or fine the licensee an amount not 23 less than $10,000, or both, if the chairman finds that 24 the licensee is guilty of a third offense, arising 25 separately from the incident giving rise to the first and 26 second offenses of selling an alcoholic beverage to an 27 intoxicated person or a minor. 28 (2) No person whose seller permit is suspended or 29 revoked under this section may be a seller of alcoholic 30 beverages on a licensed premises during the period of 20080S1273B1745 - 32 -
1 suspension or revocation. 2 (3) No person whose seller permit is suspended may serve 3 alcoholic beverages on or after the date of suspension unless 4 the person obtains a new seller permit. 5 (4) Nothing in this article shall be interpreted to 6 waive any license holder's liability that may arise under 7 this article. 8 (d) Administrative agency law.--This section is subject to 2 9 Pa.C.S. Chs. 5 Subch. A (relating to practice and procedure of 10 Commonwealth agencies) and 7 Subch. A (relating to judicial 11 review of Commonwealth agency action). 12 Section 808-B. Minors in licensed premises. 13 (a) Violation by licensee.--A person licensed under this 14 article or any employee, agent or lessee of that person who 15 permits a minor to enter and remain in any area that is 16 prohibited to the use of minors commits a violation of this 17 article. 18 (b) Violation by minor.--A minor shall not enter or attempt 19 to enter any area of a licensed premises that is posted or 20 otherwise identified as being prohibited to the use of minors, 21 unless accompanied by an adult. A person who violates the 22 provisions of this subsection commits a misdemeanor. 23 Section 809-B. Age verification. 24 (a) Notwithstanding any other provision of law, a seller 25 shall ask for and receive an acceptable form of identification 26 from anyone purchasing alcoholic beverages. If an acceptable 27 form of identification is not produced, the sale shall not be 28 completed. Acceptable forms of identification shall include only 29 the following, nonexpired documents: 30 (1) A photo driver's license issued by any state or the 20080S1273B1745 - 33 -
1 District of Columbia. 2 (2) A nondriver identification card issued by any state 3 or the District of Columbia. 4 (3) A military photo identification card. 5 (4) A United States passport. 6 (5) A foreign passport, if the management of the 7 seller's establishment approves. 8 Section 810-B. Appropriation. 9 An amount, or as much thereof as may be necessary, is hereby 10 appropriated to the board for the fiscal year July 1, 2007, to 11 June 30, 2008, to carry out the provisions of this article. 12 ARTICLE VIII-C 13 STATE LIQUOR STATE SALE RECOMMENDATION 14 Section 801-C. Definitions. 15 The following words and phrases when used in this article 16 shall have the meanings given to them in this section unless the 17 context clearly indicates otherwise: 18 "Qualified investment bank." An investment bank having 19 extensive experience in similar scale sale of companies and 20 assets. 21 "Request for proposal." The term as it is defined under 62 22 Pa.C.S. § 103 (relating to definitions). 23 Section 802-C. Selection of qualified investment banker. 24 (a) Solicitation.--The board shall solicit proposals from 25 qualified investment banks to advise the Commonwealth as to the 26 best way to structure a process to sell the State liquor stores 27 to private bidders. 28 (b) Contents.--The request for proposal prepared by the 29 board shall include all of the following: 30 (1) The goals and objectives of the Commonwealth, 20080S1273B1745 - 34 -
1 including obtaining the highest possible profit for the 2 Commonwealth while at the same time observing those 3 parameters and restrictions which the Commonwealth wishes to 4 impose. 5 (2) The qualifications sought and the matters required 6 to be covered by any proposal submitted. 7 (3) A requirement that the qualified investment bank 8 analyze various ways in which the assets of the State liquor 9 stores could be sold, including performing a sensitivity 10 analysis of the impact of different restrictions and mixes of 11 assets on the range of prices likely to be received through 12 the process. 13 Section 803-C. Report. 14 The qualified investment bank selected under section 802-C 15 shall, within 180 days of its selection, issue a report to the 16 board making recommendations regarding the best process to use 17 to divest the State liquor stores. A copy of the report shall be 18 sent by the board to the chairman and minority chairman of the 19 Law and Justice Committee of the Senate and the chairman and 20 minority chairman of the Liquor Control Committee of the House 21 of Representatives. 22 Section 2. This act shall take effect as follows: 23 (1) Section 806-B of the act shall take effect 270 days 24 after publication of the notice under section 803-B(a)(2)(iv) 25 of the act. 26 (2) The remainder of this act shall take effect 27 immediately. B4L47MSP/20080S1273B1745 - 35 -