THE GENERAL ASSEMBLY OF PENNSYLVANIA

HOUSE BILL

INTRODUCED BY MUSTIO, PAYNE, TAYLOR, EVERETT, F. KELLER, KILLION, KOTIK AND PICKETT, OCTOBER 6, 2011

REFERRED TO COMMITTEE ON LIQUOR CONTROL, OCTOBER 6, 2011  

AN ACT

Amending the act of April 12, 1951 (P.L.90, No.21), entitled, as

reenacted, "An act relating to alcoholic liquors, alcohol and

malt and brewed beverages; amending, revising, consolidating

and changing the laws relating thereto; regulating and

restricting the manufacture, purchase, sale, possession,

consumption, importation, transportation, furnishing, holding

in bond, holding in storage, traffic in and use of alcoholic

liquors, alcohol and malt and brewed beverages and the

persons engaged or employed therein; defining the powers and

duties of the Pennsylvania Liquor Control Board; providing

for the establishment and operation of State liquor stores,

for the payment of certain license fees to the respective

municipalities and townships, for the abatement of certain

nuisances and, in certain cases, for search and seizure

without warrant; prescribing penalties and forfeitures;

providing for local option, and repealing existing laws,"

further providing for general powers of board, for sales by

Pennsylvania liquor stores, for sales by liquor licensees and

restrictions and for malt and brewed beverages

manufacturers', distributors' and importing distributors'

licenses; providing for wine and spirits sales permits for

malt or brewed beverage distributors, for application for

wine and spirits sales permits for malt and brewed beverage

distributor licensees and for enhanced distributor's license,

fees, privileges and restrictions; and further providing for

distributors' and importing distributors' restrictions on

sales and storage, for interlocking business prohibited and

for unlawful acts relative to malt or brewed beverages and

licensees.

The General Assembly of the Commonwealth of Pennsylvania

hereby enacts as follows:

Section 1.  Section 207 of the act of April 12, 1951 (P.L.90,

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

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

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

board shall have the power and its duty shall be:

* * *

(l)  To determine, in conjunction with the chairman and

minority chairman of the Appropriations Committee of the Senate

and the chairman and minority chairman of the Appropriations

Committee of the House of Representatives, a five-year plan for

returning profits from the sale of wine and spirits to the

General Fund. The board shall meet with the chairman and

minority chairman of the Appropriations Committee of the Senate

and the chairman and minority chairman of the Appropriations

Committee of the House of Representatives once each year to

first determine a five-year plan for returning profits to the

General Fund and each consecutive year to revisit this plan to

ensure its viability.

Section 2.  Section 305(b) of the act, amended July 6, 2005

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

Section 305.  Sales by Pennsylvania Liquor Stores.--* * *

(b)  Every Pennsylvania Liquor Store shall sell liquors at

wholesale to hotels, restaurants, clubs, wine and spirits

permittees, and railroad, pullman and steamship companies

licensed under this act; and, under the regulations of the

board, to pharmacists duly licensed and registered under the

laws of the Commonwealth, and to manufacturing pharmacists, and

to reputable hospitals approved by the board, or chemists. Sales

to licensees shall be made at a price that includes a discount

of [ten] twelve per centum from the retail price and the board

shall not charge the licensees a markup. The board may sell to

registered pharmacists only such liquors as conform to the

Pharmacopoeia of the United States, the National Formulary, or

the American Homeopathic Pharmacopoeia. The board may sell at

special prices under the regulations of the board, to United

States Armed Forces facilities which are located on United

States Armed Forces installations and are conducted pursuant to

the authority and regulations of the United States Armed Forces.

All other sales by such stores shall be at retail. A person

entitled to purchase liquor at wholesale prices may purchase the

liquor at any Pennsylvania Liquor Store upon tendering cash,

check or credit card for the full amount of the purchase. For

this purpose, the board shall issue a discount card to each

licensee identifying such licensee as a person authorized to

purchase liquor at wholesale prices. Such discount card shall be

retained by the licensee. The board may contract through the

Commonwealth bidding process for delivery to wholesale licensees

at the expense of the licensee receiving the delivery. 

* * *

Section 3.  Section 406 of the act is amended by adding a

subsection to read:

Section 406.  Sales by Liquor Licensees; Restrictions.--* * *

(h)  (1)  The holder of a hotel license or a restaurant

license may sell up to five bottles of wine for consumption off

the licensed premises so long as the bottles of wine remain

sealed.

(2)  For purposes of this subsection, "wine" shall have the

meaning given to it under section 488(i).

Section 4.  Section 431(b) of the act, amended December 8,

2004 (P.L.1810, No.239), is amended and the section is amended

by adding a subsection to read:

Section 431.  Malt and Brewed Beverages Manufacturers',

Distributors' and Importing Distributors' Licenses.--* * *

(b)  (1)  The board shall issue to any reputable person who

applies therefor, and pays the license fee hereinafter

prescribed, a distributor's or importing distributor's license

for the place which such person desires to maintain for the sale

of malt or brewed beverages, not for consumption on the premises

where sold, and in quantities of not less than a case or

original containers containing one hundred twenty-eight ounces

or more which may be sold separately as prepared for the market

by the manufacturer at the place of manufacture. The board shall

have the discretion to refuse a license to any person or to any

corporation, partnership or association if such person, or any

officer or director of such corporation, or any member or

partner of such partnership or association shall have been

convicted or found guilty of a felony within a period of five

years immediately preceding the date of application for the said

license: And provided further, That, in the case of any new

license or the transfer of any license to a new location, the

board may, in its discretion, grant or refuse such new license

or transfer if such place proposed to be licensed is within

three hundred feet of any church, hospital, charitable

institution, school or public playground, or if such new license

or transfer is applied for a place which is within two hundred

feet of any other premises which is licensed by the board: And

provided further, That the board shall refuse any application

for a new license or the transfer of any license to a new

location if, in the board's opinion, such new license or

transfer would be detrimental to the welfare, health, peace and

morals of the inhabitants of the neighborhood within a radius of

five hundred feet of the place proposed to be licensed. The

board shall refuse any application for a new license or the

transfer of any license to a location where the sale of liquid

fuels or oil is conducted. The board may enter into an agreement

with the applicant concerning additional restrictions on the

license in question. If the board and the applicant enter into

such an agreement, such agreement shall be binding on the

applicant. Failure by the applicant to adhere to the agreement

will be sufficient cause to form the basis for a citation under

section 471 and for the nonrenewal of the license under section

470. If the board enters into an agreement with an applicant

concerning additional restrictions, those restrictions shall be

binding on subsequent holders of the license until the license

is transferred to a new location or until the board enters into

a subsequent agreement removing those restrictions. If the

application in question involves a location previously licensed

by the board, then any restrictions imposed by the board on the

previous license at that location shall be binding on the

applicant unless the board enters into a new agreement

rescinding those restrictions. The board shall require notice to

be posted on the property or premises upon which the licensee or

proposed licensee will engage in sales of malt or brewed

beverages. This notice shall be similar to the notice required

of hotel, restaurant and club liquor licensees.

(2)  Except as hereinafter provided, such license shall

authorize the holder thereof to sell or deliver malt or brewed

beverages in quantities above specified anywhere within the

Commonwealth of Pennsylvania, which, in the case of

distributors, have been purchased only from persons licensed

under this act as manufacturers or importing distributors, and

in the case of importing distributors, have been purchased from

manufacturers or persons outside this Commonwealth engaged in

the legal sale of malt or brewed beverages or from manufacturers

or importing distributors licensed under this article. Should a

distributor licensee apply for and receive a wine and spirits

permit under section 431.2, that distributor will also be

allowed to sell wine and spirits on the same premises where malt

or brewed beverages are sold and to deliver such wine and

spirits anywhere within this Commonwealth. In the case of an

importing distributor, the holder of such a license shall be

authorized to store and repackage malt or brewed beverages owned

by a manufacturer at a segregated portion of a warehouse or

other storage facility authorized by section 441(d) and operated

by the importing distributor within its appointed territory and

deliver such beverages to another importing distributor who has

been granted distribution rights by the manufacturer as provided

herein. The importing distributor shall be permitted to receive

a fee from the manufacturer for any related storage, repackaging

or delivery services. In the case of a bailee for hire hired by

a manufacturer, the holder of such a permit shall be authorized:

to receive, store and repackage malt or brewed beverages

produced by that manufacturer for sale by that manufacturer to

importing distributors to whom that manufacturer has given

distribution rights pursuant to this subsection or to purchasers

outside this Commonwealth for delivery outside this

Commonwealth; or to ship to that manufacturer's storage

facilities outside this Commonwealth. The bailee for hire shall

be permitted to receive a fee from the manufacturer for any

related storage, repackaging or delivery services. The bailee

for hire shall, as required in Article V of this act, keep

complete and accurate records of all transactions, inventory,

receipts and shipments and make all records and the licensed

areas available for inspection by the board and for the

Pennsylvania State Police, Bureau of Liquor Control Enforcement,

during normal business hours.

(3)  Each out of State manufacturer of malt or brewed

beverages whose products are sold and delivered in this

Commonwealth shall give distributing rights for such products in

designated geographical areas to specific importing

distributors, and such importing distributor shall not sell or

deliver malt or brewed beverages manufactured by the out of

State manufacturer to any person issued a license under the

provisions of this act whose licensed premises are not located

within the geographical area for which he has been given

distributing rights by such manufacturer. Should a licensee

accept the delivery of such malt or brewed beverages in

violation of this section, said licensee shall be subject to a

suspension of his license for at least thirty days: Provided,

That the importing distributor holding such distributing rights

for such product shall not sell or deliver the same to another

importing distributor without first having entered into a

written agreement with the said secondary importing distributor

setting forth the terms and conditions under which such products

are to be resold within the territory granted to the primary

importing distributor by the manufacturer.

(4)  When a Pennsylvania manufacturer of malt or brewed

beverages licensed under this article names or constitutes a

distributor or importing distributor as the primary or original

supplier of his product, he shall also designate the specific

geographical area for which the said distributor or importing

distributor is given distributing rights, and such distributor

or importing distributor shall not sell or deliver the products

of such manufacturer to any person issued a license under the

provisions of this act whose licensed premises are not located

within the geographical area for which distributing rights have

been given to the distributor and importing distributor by the

said manufacturer: Provided, That the importing distributor

holding such distributing rights for such product shall not sell

or deliver the same to another importing distributor without

first having entered into a written agreement with the said

secondary importing distributor setting forth the terms and

conditions under which such products are to be resold within the

territory granted to the primary importing distributor by the

manufacturer. Nothing herein contained shall be construed to

prevent any manufacturer from authorizing the importing

distributor holding the distributing rights for a designated

geographical area from selling the products of such manufacturer

to another importing distributor also holding distributing

rights from the same manufacturer for another geographical area,

providing such authority be contained in writing and a copy

thereof be given to each of the importing distributors so

affected.

* * *

(b.2)  In the case of an importing distributor, upon making

application and payment of a fifty million dollar ($50,000,000)

fee to the board, to receive an enhanced importing distributor

license that will allow the holder all the privileges of an

importing distributor in addition to the authority to buy,

import and have in its possession for sale to enhanced

distributor licensees under section 431.4, at wholesale, wine

and spirits.

* * *

Section 5.  The act is amended by adding sections to read:

Section 431.2.  Wine and Spirits Sales Permits for Malt and

Brewed Beverage Distributors.--(a)  The board shall issue to any

licensed distributor of good repute who applies therefor, and

pays the license fee hereinafter prescribed, a wine and spirits

sales permit for the same place the licensee maintains for the

sale of malt and brewed beverages. This permit shall grant the

licensee the ability to sell for consumption off the licensed

premises wine and liquor. The application for such permit shall

be in such form and contain such information as the board shall

require. All such permits shall be granted for a permit period

of one year. The board may enter into an agreement with the

applicant concerning additional restrictions on the permit in

question. If the board and the applicant enter into such an

agreement, such agreement shall be binding on the applicant.

Failure by the applicant to adhere to the agreement shall be

sufficient cause to form the basis for a citation under section

471 and for nonrenewal of the permit under section 470. If the

board enters into an agreement with an applicant concerning

additional restrictions, those restrictions shall be binding

until the board enters into a subsequent agreement removing

those restrictions. The board shall require notice to be posted

on the property or premises upon which the licensee or proposed

licensee will engage in sales of wine and liquor. This notice

shall be similar to the notice required of hotel, restaurant and

club liquor licensees.

(b)  The fee for such permit shall be ten thousand dollars

($10,000) per year due at the time the licensee makes

application for such permit to the board.

(c)  If a distributor applies for and receives a wine and

spirits sales permit for three consecutive years, in the fourth

year the distributor shall, at the time of renewal of the

license, register for an enhanced distributor license pursuant

to section 431.4.

Section 431.3.  Application for Wine and Spirits Sales

Permits for Malt and Brewed Beverage Distributor Licensees.--

Application for a wine and spirits sales permit shall contain or

have attached thereto the following information and statements:

(1)  The name and residence of the applicant and how long the

applicant has resided there, and if an association, partnership

or corporation, the residences of the members, officers and

directors for the period of two years next preceding the date of

such application.

(2)  The particular place for which the permit is desired and

a detailed description thereof. The description, information and

plans referred to in this paragraph shall show the premises at

the time the application is made and shall show any alterations

proposed to be made thereto. No physical alterations,

improvements or changes shall be required to be made to any

distributor, nor shall any new building for any such purpose be

required to be constructed, until approval of the application

for the permit of the board. After approval of the application,

the permittee shall make the physical alterations, improvements

and changes to the licensed premises in the manner specified by

the board at the time of approval. The licensee shall not

transact any business under the permit until the board has

approved the completed physical alterations, improvements and

changes of the licensed premises as conforming to the

specifications required by the board at the time of issuance of

the permit and the board is satisfied that the premises meet the

requirements for a wine and spirits sales permit as set forth in

this act. The board may require that all such alterations or

conformity to definition be completed within six months from the

time of issuance of the permit. Failure to comply with these

requirements shall be considered cause for revocation of the

license. No such permit shall be transferrable.

(3)  Place of birth of applicant and, if a naturalized

citizen, where and when naturalized, and, if a corporation

organized or registered under the laws of this Commonwealth,

when and where incorporated, with the names and addresses of

each officer and director, all of whom must be citizens of the

United States. If the application is for a wine and spirits

sales permit and the applicant thereof is a corporation, the

application shall also contain a statement of facts showing the

qualifications of the corporation, as required in this act,

together with the names and addresses of all stockholders.

(4)  Name of owner of premises and the owner's residence.

(5)  That the applicant is not or, in case of a partnership

or association, that the members or partners are not and, in the

case of a corporation, that the officers and directors are not,

in any manner pecuniarily interested, either directly or

indirectly, in the profits of any other class of business

regulated by this article, except as otherwise permitted in this

act.

(6)  That applicant is the only person in any manner

pecuniarily interested in the business for which a wine and

spirits sales permit is sought and that no other person shall be

in any manner pecuniarily interested therein during the

continuance of the permit, except as otherwise permitted in this

act.

(7)  Whether the applicant or, in case of a partnership or

association, any member or partner thereof, or, in case of a

corporation, any officer or director thereof, has during the

three years immediately preceding the date of the application

had a license for the sale of malt or brewed beverages or

spirituous and vinous liquors revoked or has during the same

period been convicted of any criminal offense, and if so, a

detailed history thereof.

(8)  A full description of that portion of the premises for

which the permit is sought.

(9)  The application must be verified by affidavit of

applicant and, if any false statement is intentionally made in

any part of the application, the affiant shall be deemed guilty

of a misdemeanor and, upon conviction, shall be subject to the

penalties provided by this article.

Section 431.4.  Enhanced Distributor's License; Fees;

Privileges; Restrictions.--(a)  Notwithstanding any other

provision of this act to the contrary, the holder of a

distributor license who has also applied for and been granted a

wine and spirits sales permit for three consecutive years under

section 431.2 shall convert the distributor license to an

enhanced distributor license by registering with the board as an

enhanced distributor licensee and paying a one-time conversion

fee of fifty thousand dollars ($50,000).

(b)  Enhanced distributor licensees shall pay a biannual

renewal fee of five thousand dollars ($5,000) to the board. If

the renewal fee is not timely paid then the enhanced distributor

license shall be suspended until such time as the fee is paid.

(c)  Notwithstanding any other provision of this act to the

contrary, an enhanced distributor licensee may sell wine and

spirits not for consumption on the premises where sold and malt

or brewed beverages, not for consumption on the premises where

sold and in quantities of not less than a case or original

containers containing one hundred twenty-eight ounces or more

which may be sold separately as prepared for the market by the

manufacturer at the place of manufacture.

(d)  Enhanced distributor licenses shall be subject to the

same quota as distributor licenses and may be transferred from

person-to-person or place-to-place, or both.

(e)  If the holder of an enhanced distributor license has

been cited and found in violation of section 493(1), insofar as

it relates to sales to minors or sales to visibly intoxicated

persons, the administrative law judge may suspend the license or

impose a fine of not less than five thousand dollars ($5,000)

nor more than twenty thousand dollars ($20,000).

Section 6.  Section 441 of the act is amended by adding a

subsection to read:

Section 441.  Distributors' and Importing Distributors'

Restrictions on Sales, Storage, Etc.--* * *

(g.1)  No distributor shall engage in the sale of wine and

spirits without first obtaining a wine and spirits sales permit

as provided for in section 431.2 or an enhanced distributor

license as provided for in section 431.4 of this act. Sales of

wine and spirits may only be made on those premises licensed for

the sale of malt or brewed beverages sold in quantities greater

than or equal to a case.

Section 7.  Sections 443(a) and (b) of the act, amended May

31, 1996 (P.L.312, No.49), are amended to read:

Section 443.  Interlocking Business Prohibited.--(a)  No

manufacturer of malt or brewed beverages and no officer or

director of any such manufacturer shall at the same time be a

distributor, importing distributor or retail dispenser, or an

officer, director or stockholder or creditor of any distributor,

importing distributor or retail dispenser, nor, except as

hereinafter provided, be the owner, proprietor or lessor of any

place for which a license has been issued for any importing

distributor, distributor or retail dispenser, or for which a

hotel, restaurant or club liquor license has been issued:

Provided, however, That a holder of a manufacturer's license

under section 431(a) who is eligible to operate a brewery pub

under section 446(2) or a limited winery as provided for under

section 505.2 may also hold and operate under a hotel liquor

license, a restaurant liquor license or a malt and brewed

beverages retail license on the manufacturer's or limited

winery's licensed premises. The hotel liquor license or

restaurant liquor license or the malt and brewed beverages

retail license shall be acquired by the manufacturer or limited

winery subject to section 461 and shall satisfy all requirements

for each respective license; and, Provided, further, that the

holder of a distributor license may also hold and operate a wine

and spirits sales permit as provided for under section 431.2(a)

on the distributor's licensed premises.

(b)  No distributor or importing distributor and no officer

or director of any distributor or importing distributor shall at

the same time be a manufacturer, a retail dispenser or a liquor

licensee, or be an officer, director, stockholder or creditor of

a manufacturer, a retail dispenser or a liquor licensee, or,

directly or indirectly, own any stock of, or have any financial

interest in, or be the owner, proprietor or lessor of, any place

covered by any other malt or brewed beverage or liquor license,

except as provided for in section 431.2(a) or 431.4(a).

* * *

Section 8.  Section 492(12), (13) and (14) of the act are

amended to read:

Section 492.  Unlawful Acts Relative to Malt or Brewed

Beverages and Licensees.--

It shall be unlawful--

* * *

(12)  Distributors and Importing Distributors Engaging in

Other Business. For any distributor or importing distributor, or

his servants, agents or employes, without the approval of the

board, and then only in accordance with board regulations, to

engage in any other business whatsoever, except the business of

distributing malt or brewed beverages. Provided that the holder

of a distributor license who is eligible for a wine and spirits

sales permit under section 431.2(a) or an enhanced distributor  

license under section 431.4(a) may engage in the sale of liquor

and wine on the licensed premise so long as the licensee meets

all of the requirements of that section.

[(13)  Possession or Storage of Liquor or Alcohol by Certain

Licensees. For any distributor, importing distributor or retail

dispenser, or his servants, agents or employes, to have in his

possession, or to permit the storage of on the licensed premises

or in any place contiguous or adjacent thereto accessible to the

public or used in connection with the operation of the licensed

premises, any alcohol or liquor.]

(14)  Malt or Brewed Beverage Licensees Dealing in Liquor or

Alcohol. For any malt or brewed beverage licensee, other than a

distributor who holds a wine and spirits sales permit under

section 431.2(a) or an enhanced distributor license under

section 431.4(a) or a manufacturer, or the servants, agents or

employes thereof, to manufacture, import, sell, transport,

store, trade or barter in any liquor or alcohol.

* * *

Section 9.  This act shall take effect in 60 days.