Regular Session 2015-2016 House Bill 1690 P.N. 2516

PRINTER'S NO. 2516

THE GENERAL ASSEMBLY OF PENNSYLVANIA

HOUSE BILL

No.

1690

Session of

2015

INTRODUCED BY TURZAI, BLOOM, CUTLER, PAYNE, HICKERNELL, GREINER,

A. HARRIS, MILNE, MOUL, SAYLOR, SANKEY, CORBIN, ROAE,

EVERETT, LAWRENCE, DUNBAR, TRUITT, QUIGLEY, LEWIS AND

MACKENZIE, NOVEMBER 12, 2015

REFERRED TO COMMITTEE ON LIQUOR CONTROL, NOVEMBER 12, 2015

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," as

follows:

In preliminary provisions, further providing for definitions.

In Pennsylvania Liquor Control Board, further providing for

general powers of board.

In licenses and regulations, liquor, alcohol and malt and

brewed beverages, further providing for license districts,

license period and hearings and for issuance, transfer or

extension of hotel, restaurant and club liquor licenses,

providing for wholesale permit, for wholesale licenses, for wine

or liquor expanded permits, for wine or liquor enhanced permits

and for grocery store retail permits; further providing for malt

and brewed beverages manufacturers', distributors' and importing

distributors' licenses, for malt and brewed beverages retail

licenses, for application for distributors', importing

distributors' and retail dispensers' licenses, for prohibitions

against the grant of licenses, for interlocking business

prohibited, for licenses not assignable and transfers, for

surrender of restaurant, eating place retail dispenser, hotel,

importing distributor and distributor license for benefit of

licensee and for unlawful acts relative to malt or brewed

beverages and licensees.

In miscellaneous provisions, providing for transition

assistance committee, for preference in public employment

hiring, career training and post-secondary education grant

eligibility, for reemployment tax credit and for protection of

existing benefits.

The General Assembly finds and declares as follows:

(1) It is the purpose of this act to reform and

privatize the system by which alcohol is dispensed and

controlled within this Commonwealth to reflect changes in the

marketplace while continuing to protect the welfare, health,

peace and morals of the citizens of this Commonwealth.

(2) The 21st amendment to the Constitution of the United

States dictates that the laws of the states shall govern the

transportation and importation of intoxicating liquors into

the state for delivery and use within the state.

(3) Further, the United States Supreme Court has opined

in interpreting the 21st amendment that "the states'

regulatory power over this segment of commerce is largely

unfettered by the Constitution's commerce clause."

(4) Revenues derived from the operation of a system for

the manufacture, transportation, distribution and sale of

alcohol are necessary to implement and sustain a regulated

marketplace to continue to protect the welfare, health, peace

and morals of the citizens of this Commonwealth and to

contribute to the overall economic stability of the

Commonwealth.

(5) In order to adapt to the changing marketplace, this

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act will:

(i) Permit private industry to offer additional

products for sale while ensuring that the laws of this

Commonwealth are thoroughly enforced.

(ii) Ensure that the value of licenses held by small

businesses are not devalued, but are enhanced through the

opportunity to expand operations and sales.

(iii) Provide for the operation of a retail system

that promotes competition and convenience to ensure that

the residents of this Commonwealth purchase products

within this Commonwealth.

(iv) Establish a system by which these increased

opportunities will continue to contribute to overall

fiscal stability of the Commonwealth.

(6) Recognizing the benefits of allowing the private

market to offer products directly to licensees and retailers,

the General Assembly intends to fully divest of the

Commonwealth's wholesale liquor business in order to allow

additional products into the marketplace, establish a more

reliable system for the distribution of products and provide

additional convenience for licensees and retailers.

(7) Recognition and furtherance of all these elements is

essential to the welfare, health, peace and morals of the

citizens of this Commonwealth.

The General Assembly of the Commonwealth of Pennsylvania

hereby enacts as follows:

Section 1. The definitions of "distributor," "importing

distributor" and "liquor" in section 102 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) and amended May 31, 1996

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(P.L.312, No.49), are amended and the section is amended by

adding definitions to read:

Section 102. Definitions.--The following words or phrases,

unless the context clearly indicates otherwise, shall have the

meanings ascribed to them in this section:

* * *

"Displaced employee" shall mean a salaried employee of the

board whose employment is terminated as a sole and direct result

of the implementation of section 207. The term shall not include

a person who is terminated for cause or who retires or resigns,

is furloughed or is otherwise separated from employment for any

other reason. The term shall not include intermittent liquor

store clerks and seasonal liquor store clerks.

* * *

"Distributor" shall mean any person licensed or holding a

permit authorized by the board to sell wine, sell liquor or to

engage in the purchase only from Pennsylvania manufacturers and

from importing distributors and the resale of malt or brewed

beverages, except to importing distributors and distributors, in

the original sealed containers as prepared for the market by the

manufacturer at the place of manufacture, but 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.

* * *

"Grocery store" shall mean a reputable place operated by

persons of good repute, which primarily sells food, supplies for

the table and food products for human consumption off the

premises and which has an area under one roof of ten thousand

square feet or more.

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* * *

"Importing distributor" shall mean any person licensed or

holding a permit authorized by the board to sell wine, sell

liquor and to engage in the purchase from manufacturers and

other persons located outside this Commonwealth and from persons

licensed as manufacturers of malt or brewed beverages and

importing distributors under this act, and the resale of malt or

brewed beverages in the original sealed containers as prepared

for the market by the manufacturer at the place of manufacture,

but 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.

"Licensed premises" shall mean the premises covered by the

license as approved by the board and shall include the term

"location" as used in sections 404, 431(b) and 432(d).

* * *

"Liquor" except as provided in sections 207(a.1), 410.1(c),

415(f) and 416(l), shall mean and include any alcoholic,

spirituous, vinous, fermented or other alcoholic beverage, or

combination of liquors and mixed liquor a part of which is

spirituous, vinous, fermented or otherwise alcoholic, including

all drinks or drinkable liquids, preparations or mixtures, and

reused, recovered or redistilled denatured alcohol usable or

taxable for beverage purposes which contain more than one-half

of one per cent of alcohol by volume, except pure ethyl alcohol

and malt or brewed beverages.

* * *

"Unlicensed entity" shall mean a person not holding a license

issued pursuant to this act that possesses a valid wine enhanced

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permit or liquor enhanced permit under section 416(f).

Section 2. Section 207(b) of the act is amended and the

section 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:

* * *

(a.1) (1) To close Pennsylvania Liquor Stores. Before

making a determination to close a Pennsylvania Liquor Store, the

board shall take into consideration the availability and

accessibility of liquor to the public through the private retail

market, the pricing of liquor in the area and the profitability

of the store.

(2) Availability and accessibility of liquor shall be

determined by the proximity of the closest holder of a wine and

liquor enhanced permit under section 416. The board shall

identify the two closest distributors or importing distributors.

If one of the distributors or importing distributors is selling

wine and liquor under section 416 or, if there is an unlicensed

entity selling wine and liquor under section 416 within the same

proximity of the two closest distributors or importing

distributors, then the board shall close the store.

(3) A Pennsylvania Liquor Store designated for closure shall

cease operations within sixty days.

(4) The board shall arrange for the disposition of the

liquor remaining in inventory at a designated store. In order to

effectuate this subsection, the board may, in consultation with

the Department of General Services, do any of the following:

(i) Coordinate with the vendor of record for the repurchase

of products by the vendor of record.

(ii) Sell products to holders of wine or liquor expanded or

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enhanced permits or an unlicensed wine or liquor enhanced permit

holder.

(iii) Transport products for sale at another operating

Pennsylvania Liquor Store.

(5) The Department of General Services, in consultation with

the board, shall establish a procedure for the sale of the

nonliquor inventory, property and fixtures of all Pennsylvania

Liquor Stores consistent with 62 Pa.C.S. Ch. 15 (relating to

supply management). The holders of wine or liquor enhanced

permits shall have the opportunity to bid on the items to be

sold or otherwise participate in the sale. All proceeds from the

sales shall be deposited into the State Store Fund.

(6) The board shall provide immediate notice to the lessor

upon receipt of notice to close a designated Pennsylvania Liquor

Store issued by the Department of General Services. The board

shall reimburse the lessor for any outstanding renovation costs

that were incurred during the term of the current lease as of

the effective date of the act.

(b) To control the manufacture, possession, sale,

consumption, importation, use, storage, transportation and

delivery of liquor, alcohol and malt or brewed beverages in

accordance with the provisions of this act, and to fix the

wholesale and retail prices at which liquors and alcohol shall

be sold at Pennsylvania Liquor Stores.

(1) Prices shall be proportional with prices paid by the

board to its suppliers and shall reflect any advantage obtained

through volume purchases by the board.

(2) The board may establish a preferential price structure

for wines produced within this Commonwealth for the promotion of

such wines, as long as the price structure is uniform within

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each class of wine purchased by the board.

(3) The board shall require each Pennsylvania manufacturer

and each nonresident manufacturer of liquors, other than wine,

selling such liquors to the board, which are not manufactured in

this Commonwealth, to make application for and be granted a

permit by the board before such liquors not manufactured in this

Commonwealth shall be purchased from such manufacturer. Each

such manufacturer shall pay for such permit a fee which, in the

case of a manufacturer of this Commonwealth, shall be equal to

that required to be paid, if any, by a manufacturer or

wholesaler of the state, territory or country of origin of the

liquors, for selling liquors manufactured in Pennsylvania, and

in the case of a nonresident manufacturer, shall be equal to

that required to be paid, if any, in such state, territory or

country by Pennsylvania manufacturers doing business in such

state, territory or country. In the event that any such

manufacturer shall, in the opinion of the board, sell or attempt

to sell liquors to the board through another person for the

purpose of evading this provision relating to permits, the board

shall require such person, before purchasing liquors from him or

it, to take out a permit and pay the same fee as hereinbefore

required to be paid by such manufacturer. All permit fees so

collected shall be paid into the State Stores Fund.

(4) The board shall not purchase any alcohol or liquor

fermented, distilled, rectified, compounded or bottled in any

state, territory or country, the laws of which result in

prohibiting the importation therein of alcohol or liquor,

fermented, distilled, rectified, compounded or bottled in

Pennsylvania.

(5) The board's authority to exercise the powers granted

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pursuant to this subsection is subject to the limitations set

forth in sections 207(a.1), 410.1 and 410.2.

* * *

Section 3. Section 402 of the act is amended by adding a

subsection to read:

Section 402. License Districts; License Period; Hearings.--*

* *

(d) This section shall not apply to permit holders holding a

valid wine or liquor expanded or wine or liquor enhanced permit

or grocery store retail permit under section 415, 416 or 417.

Section 4. Section 404 of the act, amended January 6, 2006

(P.L.1, No.1), is amended to read:

Section 404. Issuance, Transfer or Extension of Hotel,

Restaurant and Club Liquor Licenses.--Upon receipt of the

application and the proper fees, and upon being satisfied of the

truth of the statements in the application that the applicant is

the only person in any manner pecuniarily interested in the

business so asked to be licensed and that no other person will

be in any manner pecuniarily interested therein during the

continuance of the license, except as hereinafter permitted, and

that the applicant is a person of good repute, that the premises

applied for meet all the requirements of this act and the

regulations of the board, that the applicant seeks a license for

a hotel, restaurant or club, as defined in this act, and that

the issuance of such license is not prohibited by any of the

provisions of this act, the board shall, in the case of a hotel

or restaurant, grant and issue to the applicant a liquor

license, and in the case of a club may, in its discretion, issue

or refuse a license: Provided, however, That in the case of any

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

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the extension of an existing license to cover an additional area

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

license, transfer or extension 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, transfer or extension 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's

authority to refuse to grant a license because of its proximity

to a church, hospital, charitable institution, public playground

or other licensed premises shall not be applicable to license

applications submitted for public venues or performing arts

facilities: And provided further, That the board shall refuse

any application for a new license, the transfer of any license

to a new location or the extension of an existing license to

cover an additional area if, in the board's opinion, such new

license, transfer or extension 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: And provided further, That 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. [The board shall refuse any application for a new

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

extension of any license to cover an additional area where the

sale of liquid fuels or oil is conducted.] The board shall not

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license the area where liquid fuels or oil is sold. No sales of

liquid fuels or oil may be made from a licensee's licensed

premises. A licensed premises may not have an interior

connection with a location that sells liquid fuels or oils

unless it first receives permission from the board for the

interior connection. The approval shall be required regardless

of whether the licensee or another party is the entity selling

the liquid fuels or oils. 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 may, in its discretion,

refuse an application for an economic development license under

section 461(b.1) or an application for an intermunicipal

transfer of a license if the board receives a protest from the

governing body of the receiving municipality. The receiving

municipality of an intermunicipal transfer or an economic

development license under section 461(b.1) may file a protest

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against the transfer of a license into its municipality, and the

receiving municipality shall have standing in a hearing to

present testimony in support of or against the issuance or

transfer of a license. Upon any opening in any quota, an

application for a new license shall only be filed with the board

for a period of six months following said opening.

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

Section 410.1. Wholesale Permit.--(a) Notwithstanding any

other provision of law, an importer licensed under Article V may

make application to the board on forms prescribed by the board

for a wholesale permit for the purpose of selling and

distributing wholesale wine or liquor to licensees, unlicensed

wine or liquor enhanced permit holders and to United States

Armed Forces facilities located on United States Armed Forces

installations within this Commonwealth. Within 30 days of the

effective date of this section, the board shall accept

applications, and the board shall approve the issuance of a

wholesale permit within 60 days of receipt of the application if

the applicant meets the requirements under this section.

Applicants shall submit the initial permit fee with their

application to the board. The Department of Revenue shall audit

retailers to determine whether wholesale permit holders,

licensees or unlicensed wine or liquor enhanced permit holders

are remitting the tax imposed under sections 415 and 416 and

Article II of the act of March 4, 1971 (P.L.6, No.2), known as

the "Tax Reform Code of 1971," for products sold for consumption

on and off the premises. The following shall apply:

(1) The wholesale permit holder shall:

(i) Provide to the board a list of the brands of wine or

liquor it will distribute.

20150HB1690PN2516 - 12 -

(ii) Serve all licensees or unlicensed wine or liquor

enhanced permit holders authorized to purchase and resell wine

or liquor under this act and make wine or liquor available for

sale to those licensees or unlicensed wine or liquor enhanced

permit holders under the same pricing structure.

(iii) Post prices with the board and give written notice of

price changes to the board at least 30 days before the effective

date of the price change. All price changes shall be effective

on the first day of the month.

(iv) Keep a detailed log of wholesale wine or liquor

transactions, including sales to licensees or unlicensed wine or

liquor enhanced permit holders under this act.

(2) The wholesale permit holder may sell and distribute more

than one brand of wine or liquor under the same permit and shall

provide any contractual agreements between the wholesale permit

holder and the licensed manufacturer to the board.

(3) The wholesale permit holder may amend the list of brands

of wine or liquor it distributes to include additional brands of

wine or liquor. The following shall apply:

(i) For brands of liquor that have not been sold by the

board at Pennsylvania Liquor Stores or through special liquor

orders, the wholesale permit holders shall apply to the board

for permission to add that brand to the permit holder's list of

brands permitted to be sold under the permit.

(ii) For each new brand of liquor, an application filing fee

of two thousand five hundred dollars ($2,500) shall be submitted

with the application.

(4) The wine or liquor products shipped into this

Commonwealth must be delivered to the wholesale permit holder's

licensed premises. Upon delivery, the products shall be

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unloaded, inventoried and remain on the licensed premises for

forty-eight hours before delivery is made to licensees or

unlicensed wine or liquor enhanced permit holders. During that

time period, the board may inspect and inventory importer

warehouses.

(5) The wholesale permit holder may not engage in conduct

that would constitute any of the following:

(i) Variable pricing.

(ii) Unfair or deceptive trade practices proscribed under

Federal or State law or regulation.

(iii) Intentional exclusion of competing brands of wine or

liquor from the marketplace.

(6) The wholesale permit holder may only sell and distribute

those products in this Commonwealth that are subject to a

contractual relationship between the wholesale permit holder and

one or more licensed manufacturers or suppliers of wine or

liquor.

(7) A wholesale permit holder shall remit to the Department

of Revenue all applicable taxes. A wholesale permit holder shall

be considered a State Liquor Store for the purpose of collecting

and remitting taxes under Article II of the "Tax Reform Code of

1971" for products sold by licensees for on-premises

consumption.

(8) The emergency State tax imposed under the act of June 9,

1936 (1st Sp.Sess., P.L.13, No.4), entitled "An act imposing an

emergency State tax on liquor, as herein defined, sold by the

Pennsylvania Liquor Control Board; providing for the collection

and payment of such tax; and imposing duties upon the Department

of Revenue and the Pennsylvania Liquor Control Board," shall be

included in the retail price of wine or liquor offered for sale

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by a wine or liquor expanded permit holder under section 415 or

by a wine or liquor enhanced permit holder under section 416.

The tax may not be assessed at the point of sale to consumers.

Licensees or unlicensed wine or liquor enhanced permit holders

selling wine or liquor at retail shall be required to remit the

taxes to the Department of Revenue.

(9) No wholesale permit holder under this section may hold a

license or permit to engage in any sales of wine or liquor at

retail to residents of this Commonwealth and no licensee or

permit holder selling wine or liquor at retail in this

Commonwealth may obtain a wholesale permit from the board. No

wholesale permit may be issued to any wine or liquor

manufacturer or producer.

(10) Any licensed importer that wishes to obtain a wholesale

permit shall do all of the following:

(i) Notify the board in writing.

(ii) Pay the permitting fees specified under paragraph (11).

(iii) Provide a statement to the board indicating that the

licensed importer plans to continuously operate under the

wholesale permit for the duration of the permit. The wholesale

permit shall be in effect for ten years from the date of

issuance and shall be renewed yearly with the board unless

suspended, revoked or not renewed.

(11) Wholesale permit fees shall be as follows:

(i) A licensed importer shall submit an initial fee equal to

fifteen per centum (15%) of the cost of goods sold with the

application. For purposes of this paragraph, "cost of goods

sold" shall be determined as the purchase price the board paid

to the licensed importer for products sold by the board in the

most recent twelve (12) month period.

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(ii) A wholesale permit holder shall pay a renewal fee equal

to fifteen per centum (15%) of its gross receipts for each

calendar quarter upon commencement of its wholesale operations.

(iii) The renewal fee shall be due and payable on the

twentieth day of April, July, October and January. The permit

holder shall file a return and remit payment on the form as

prescribed by the board.

(iv) For purposes of this paragraph, gross receipts shall be

determined as the total of all sales of wine and liquor made to

the board, licensees and unlicensed wine or liquor enhanced

permit holders.

(12) Any violation of this act or the board's regulations

for governing activity occurring under the authority of the

wholesale permit may be the basis for any of the following:

(i) A fine, suspension or wholesale permit revocation.

(ii) Nonrenewal of the importer license.

(iii) Other penalties authorized under section 471.

(13) The board shall have no authority to do any of the

following once wholesale permits have been issued and permit

holders have commenced providing wholesale products to licensees

and permit holders:

(i) Determine what wines or liquor products may be sold in

this Commonwealth.

(ii) Set the price at which products may be sold at

wholesale or retail in this Commonwealth.

(iii) Sell products at wholesale to retail licensees or

unlicensed wine or liquor enhanced permit holders.

(b) All fees paid to the board under this section shall be

deposited into the General Fund.

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shall not include wine.

Section 410.2. Wholesale Licenses.--(a) At the conclusion

of the ten-year wholesale permit under section 410.1., the

Commonwealth's wholesale wine and liquor system shall be

divested.

(b) At the conclusion of the ten-year wholesale permit, the

holder of a wholesale permit shall be granted a wholesale

license to continue operations and shall continue to operate

under the requirements of section 410.1 in addition to the

following requirements:

(1) A wholesale license shall be in effect unless suspended,

revoked or not renewed under this act. A wholesale license in

good standing shall be renewed every year as follows:

(i) Wholesale licenses issued under this section shall be

subject to renewal every year.

(ii) The application for renewal shall be submitted, on a

form prescribed by the board, at least thirty days prior to the

expiration of the wholesale license and shall include, at a

minimum, an update of the information contained in the initial

and prior renewal applications and the payment of any renewal

fee required under this section.

(iii) A renewal fee of five per centum (5%) of the wholesale

licensee's gross receipts shall be due upon application for the

renewal of a wine and spirits retail license. For the purposes

of this subparagraph, gross receipts shall be determined as the

total of all sales of wine and liquor made to licensees and

unlicensed permit holders.

(iv) The board may revoke a wholesale license issued under

this section if it finds that the licensee or any of its

affiliates, executive officers, directors or general or limited

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partners or persons holding a controlling interest in the

licensee:

(A) is in violation of any provision of this act;

(B) has furnished the board with false or misleading

information; or

(2) (Reserved).

deposited in the General Fund.

Section 415. Wine or Liquor Expanded Permits.--(a) (1) The

board shall issue a wine or liquor expanded permit to a person

holding and possessing a valid restaurant liquor license or

hotel liquor license. Nothing in this section shall be construed

to prohibit a person possessing a valid restaurant or hotel

liquor license from acquiring both a wine expanded permit and a

liquor expanded permit.

(2) Nothing in this section may affect the ability of an

existing licensee to operate within the scope of its current

license as authorized by this act, except that no sales of wine

or liquor for consumption off the premises may take place by a

wine or liquor expanded permit holder after eleven o'clock

postmeridian of any day until eight o'clock antemeridian of the

next day, including Sundays if the licensee has a permit

authorized under sections 406(a)(3) and 432(f).

(3) No wine or liquor expanded permit may be issued to a

license holder whose underlying license is subject to a pending

objection by the director of the Bureau of Licensing or the

board under section 470(a.1), until the matter is decided.

Notwithstanding any other provision of law, a holder of a wine

or liquor expanded permit may continue to operate under the

20150HB1690PN2516 - 18 -

permit if its underlying license is objected to by the director

of the Bureau of Licensing or the board under section 470(a.1),

until the matter is decided.

(4) If the board has approved the operation of another

business which has an inside passage or communication to or with

the licensed premises, the sale and purchase of wine and liquor

shall be confined strictly to the premises, in a specifically

designated area covered by the license. The purchase of goods

obtained from the unlicensed area of the premises shall be

permitted in the licensed area.

(5) For purposes of selling wine or liquor for off-premises

consumption, a holder of a wine or liquor expanded permit is not

subject to section 493(14).

(6) A wine or liquor expanded permit holder shall comply

with the responsible alcohol management provisions under section

471.1.

(7) A wine or liquor expanded permit holder may store wine

or liquor in a noncontiguous area that is not accessible to the

public and is:

(i) locked at all times when not being accessed by the

licensees' employees;

(ii) not accessible to employees eighteen years of age or

younger ; and

(iii) identified by dimensions and locations on forms

submitted to the board.

(8) A wine or liquor expanded permit holder shall utilize a

transaction scan device to verify the age of an individual who

appears to be under thirty-five years of age before making a

sale of wine or liquor. A wine or liquor expanded permit holder

may not sell or share data from the use of a transaction scan

20150HB1690PN2516 - 19 -

device, provided that the licensee may use the data to show the

enforcement bureau of the board that the licensee is in

compliance with this act. As used in this paragraph, the term

"transaction scan device" means a device capable of deciphering,

in an electronically readable format, the information encoded on

the magnetic strip or bar code of an identification card under

section 495(a).

(9) A sale of wine or liquor by a wine or liquor expanded

permit holder shall be made through a register which is well

designated with signage, which is staffed at all times, which is

staffed by a sales clerk who is at least eighteen years of age

and has been trained under section 471.1 and which utilizes a

transaction scan device for the sale. The sale of wine or liquor

may not occur at a point of sale where the customer scans the

customer's own purchases.

(b) The application and renewal fee for a wine expanded

permit shall be as follows:

(1) For a wine expanded permit issued to licensees, an

initial application fee of two thousand five hundred dollars

($2,500) and annual renewal fees as follows:

(i) One thousand dollars ($1,000) for a licensee whose total

annual wine sales are less than one hundred thousand dollars

($100,000) in the prior calendar year.

(ii) Two thousand dollars ($2,000) for a licensee whose

total annual wine sales are equal to or greater than one hundred

thousand dollars ($100,000) but less than two hundred thousand

dollars ($200,000) in the prior calendar year.

(iii) Three thousand dollars ($3,000) for a licensee whose

total annual wine sales are equal to or greater than two hundred

thousand ($200,000) in the prior calendar year.

20150HB1690PN2516 - 20 -

(2) (Reserved).

permit shall be as follows:

(1) For a liquor expanded permit issued to licensees, an

initial application fee of two thousand five hundred dollars

($2,500) and annual renewal fees as follows:

(i) One thousand dollars ($1,000) for a licensee whose total

annual liquor sales are less than one hundred thousand dollars

($100,000) in the prior calendar year.

(ii) Two thousand dollars ($2,000) for a licensee whose

total annual liquor sales are equal to or greater than one

hundred thousand dollars ($100,000) but less than two hundred

thousand dollars ($200,000) in the prior calendar year.

(iii) Three thousand dollars ($3,000) for a licensee whose

total annual liquor sales are equal to or greater than two

hundred thousand dollars ($200,000) in the prior calendar year.

(2) (Reserved).

(d) All fees paid to the board under this section shall be

deposited into the General Fund.

(e) A wine or liquor expanded permit holder may sell for

consumption off the premises, in a single transaction, up to:

(1) one hundred ninety-two ounces of wine; and

(2) one and seventy-five one hundredths liters of liquor.

(f) A wine or liquor expanded permit holder selling wine or

liquor for consumption off the premises shall be considered a

Pennsylvania Liquor Store for purposes of collecting and

remitting taxes under Article II of the act of March 4, 1971

(P.L.6, No.2), known as the "Tax Reform Code of 1971."

(g) For the purposes of this section, the term "liquor"

shall not include wine.

20150HB1690PN2516 - 21 -

Section 416. Wine or Liquor Enhanced Permits.--(a) (1) The

board shall issue a wine or liquor enhanced permit to a person

holding and possessing a valid distributor or importing

distributor license or to an unlicensed entity. Nothing in this

section shall be construed to prohibit a person possessing a

valid distributor or importing distributor license or an

unlicensed entity from acquiring both a wine enhanced permit and

a liquor enhanced permit.

(2) Nothing in this section may affect the ability of an

existing licensee to operate within the scope of its current

license as authorized by this act, except that no sales of wine

or liquor for consumption off the premises may take place by a

wine enhanced permit holder after eleven o'clock postmeridian of

any day until eight o'clock antemeridian of the next day.

(3) No wine or liquor enhanced permit may be issued to a

license holder whose underlying license is subject to a pending

objection by the director of the Bureau of Licensing or the

board under section 470(a.1), until the matter is decided.

Notwithstanding any other provision of law, a holder of a wine

or liquor enhanced permit may continue to operate under the

permit if its underlying license is objected to by the director

of the Bureau of Licensing or the board under section 470(a.1),

until the matter is decided.

(4) If the board has approved the operation of another

business which has an inside passage or communication to or with

the licensed premises, the sale and purchase of wine or liquor

shall be confined strictly to the premises, in a specifically

designated area covered by the license. The purchase of a good

obtained from the unlicensed area of the premises shall be

permitted in the licensed area. Notwithstanding this paragraph,

20150HB1690PN2516 - 22 -

a distributor or importing distributor with a valid wine or

liquor enhanced permit may sell wine or liquor at a location not

covered by the distributor's or importing distributor's license

as approved by the board.

(5) A wine or liquor enhanced permit holder must be in

compliance with the responsible alcohol management provisions

under section 471.1.

(6) A wine or liquor enhanced permit holder shall utilize a

transaction scan device to verify the age of an individual who

appears to be under thirty-five years of age before making a

sale of liquor. A wine or liquor enhanced permit holder may not

sell or share data from the use of a transaction scan device,

provided that the licensee may use the data to show the

enforcement bureau of the board that the licensee is in

compliance with this act. As used in this paragraph, the term

"transaction scan device" means a device capable of deciphering,

in an electronically readable format, the information encoded on

the magnetic strip or bar code of an identification card under

section 495(a).

(b) The initial application fee and renewal fees shall be as

follows:

(1) The initial application fee for a wine enhanced permit

issued to a licensee:

(i) For a county of the first class or second class, thirty

thousand dollars ($30,000).

(ii) For a county of the second class A or third class,

thirty-seven thousand five hundred dollars ($37,500).

(iii) For a county of the fourth class or fifth class,

twenty-two thousand five hundred dollars ($22,500).

(iv) For a county of the sixth class or seventh class,

20150HB1690PN2516 - 23 -

fifteen thousand dollars ($15,000).

(v) For a county of the eighth class, seven thousand five

hundred dollars ($7,500).

(2) The annual renewal fee for a wine enhanced permit shall

be as follows:

(i) Two thousand dollars ($2,000) for licensees whose total

annual wine sales are less than one hundred thousand dollars

($100,000) in the prior calendar year.

(ii) Four thousand dollars ($4,000) for licensees whose

total annual wine sales are equal to or greater than one hundred

thousand dollars ($100,000) but less than two hundred thousand

dollars ($200,000) in the prior calendar year.

(iii) Six thousand dollars ($6,000) for licensees whose

total annual wine sales are equal to or greater than two hundred

thousand dollars ($200,000) in the prior calendar year.

(3) The initial application fee for a liquor enhanced permit

issued to a licensee:

(i) For a county of the first class or second class, fifty-

two thousand five hundred dollars ($52,500).

(ii) For a county of the second class A or third class,

sixty thousand dollars ($60,000).

(iii) For a county of the fourth class or fifth class,

forty-five thousand dollars ($45,000).

(iv) For a county of the sixth class or seventh class,

thirty-seven thousand five hundred dollars ($37,500).

(v) For a county of the eighth class, thirty thousand

dollars ($30,000).

(4) The annual renewal fee for a liquor enhanced permit

shall be as follows:

(i) Two thousand dollars ($2,000) for licensees whose total

20150HB1690PN2516 - 24 -

annual liquor sales are less than one hundred thousand dollars

($100,000) in the prior calendar year.

(ii) Four thousand dollars ($4,000) for licensees whose

total annual liquor sales are equal to or greater than one

hundred thousand dollars ($100,000) but less than two hundred

thousand dollars ($200,000) in the prior calendar year.

(iii) Six thousand dollars ($6,000) for licensees whose

total annual liquor sales are equal to or greater than two

hundred thousand ($200,000) in the prior calendar year.

(d) A wine or liquor enhanced permit holder may sell

unlimited quantities of wine or liquor for consumption off the

premises.

(e) (Reserved).

(f) The board shall issue wine enhanced permits and liquor

enhanced permits in a number equal to the number of licensed

distributors and importing distributors in a county and in

existence on the effective date of this section. If there are

wine or liquor enhanced permits remaining six months after the

effective date of this section, the board shall auction permits

to a person who does not possess a distributor or importing

distributor license. The permitted facility shall meet all of

the conditions imposed on a licensed distributor under this act,

including the provisions in section 436 relating to the issuance

of a distributor or importing distributor license. The issuance

of a wine or liquor enhanced permit shall be subject to the

quota and county restrictions under section 437(f).

(f.1) For the purposes of auctioning wine and liquor

enhanced permits, the board shall post a listing of all

remaining permits on the board's Internet website within sixty

20150HB1690PN2516 - 25 -

days after the close of the six-month period in subsection (f).

The board shall accept applications from persons interested in

bidding at an auction for all remaining permits. The application

shall contain information as the board prescribes. The auction

shall occur sixty days following the date a permit was posted on

the board's Internet website. An applicant, who would be

precluded from acquiring a license under section 443, shall not

be eligible to participate in an auction or acquire a wine or

liquor enhanced permit. An auction shall be conducted in the

manner set forth by the board and at a date and time set by the

board. The minimum bid for a wine or liquor enhanced permit

shall be $150,000. Following an auction, the board shall

provisionally award a wine or liquor enhanced permit to a person

making the highest bid for that permit. The highest bidder shall

then submit to the board information required by the board,

including the information required under section 436 relating to

the issuance of a distributor or importing distributor license.

Payment shall be made to the board within fourteen days of the

auction and in a manner prescribed by the board. If the highest

bidder does not make payment to the board within fourteen days

of the auction, the second highest bidder shall be awarded the

right to file an application for the wine or liquor enhanced

permit.

(g) The annual renewal fee for a wine or liquor enhanced

permit for unlicensed entities shall be as follows:

(1) For a wine enhanced permit, as follows:

(i) Two thousand dollars ($2,000) for permit holders whose

total annual wine sales are less than one hundred thousand

dollars ($100,000) in the prior calendar year.

(ii) Four thousand dollars ($4,000) for permit holders whose

20150HB1690PN2516 - 26 -

total wine sales are equal to or greater than one hundred

thousand dollars ($100,000) but less than two hundred thousand

dollars ($200,000) in the prior calendar year.

(iii) Six thousand dollars ($6,000) for permit holders whose

total annual wine sales are equal to or greater than two hundred

thousand dollars ($200,000) in the prior calendar year.

(2) For a liquor enhanced permit, as follows:

(i) Two thousand dollars ($2,000) for permit holders whose

total annual liquor sales are less than one hundred thousand

dollars ($100,000) in the prior calendar year.

(ii) Four thousand dollars ($4,000) for permit holders whose

total annual liquor sales are equal to or greater than one

hundred thousand dollars ($100,000) but less than two hundred

thousand dollars ($200,000) in the prior calendar year.

(iii) Six thousand dollars ($6,000) for permit holders whose

total annual liquor sales are equal to or greater than two

hundred thousand dollars ($200,000) in the prior calendar year.

(h) A wine or liquor enhanced permit holder selling wine or

liquor for consumption off the premises shall be required to

obtain a sales tax permit from the Department of Revenue.

(i) All fees paid to the board under this section shall be

deposited into the General Fund.

(j) An unlicensed entity may not hold, directly or

indirectly, more than three wine enhanced permits or three

liquor enhanced permits within this Commonwealth or more than

one wine enhanced permit or one liquor enhanced permit per

county.

(k) A wine or liquor enhanced permit holder selling wine or

liquor for consumption off the premises shall be considered a

Pennsylvania Liquor Store for purposes of collecting and

20150HB1690PN2516 - 27 -

remitting the taxes under Article II of the "Tax Reform Code of

1971."

(l) For the purposes of this section, the term "liquor," as

defined in section 102, shall not include wine.

Section 417. Grocery Store Retail Permits.--(a) The board

shall issue a retail permit to any premises kept or operated by

a grocery store for the premises specified in the permit.

(a.1) An additional grocery store retail permit may not be

issued within a county if the total number of grocery store

retail permits is greater than one permit for every fifteen

thousand inhabitants in the county, except that a total of two

grocery store retail permits may be granted in a county in this

Commonwealth.

(b) Every applicant for a grocery store retail permit shall

file a written application containing information as the board

prescribes which shall include, but not be limited to, the

following:

(1) A description of the part of the grocery store for which

the applicant proposes to keep and sell wine.

(2) Descriptions, information and plans showing the grocery

store and any alterations proposed to be made to the grocery

store or any proposed construction to be completed after

approval of the permit.

initial application fee as follows:

(1) For grocery stores located in counties of the first

class or second class, one hundred sixty-five thousand dollars

($165,000).

(2) For grocery stores located in counties of the second

class A or third class, one hundred eighty-seven thousand five

20150HB1690PN2516 - 28 -

hundred dollars ($187,500).

(3) For grocery stores located in counties of the fourth

class or fifth class, one hundred forty-two thousand five

hundred dollars ($142,500).

(4) For grocery stores located in counties of the sixth

class or seventh class, one hundred twenty thousand dollars

($120,000).

(5) For grocery stores located in counties of the eighth

class, ninety-seven thousand five hundred dollars ($97,500).

(d) The annual renewal fee for a grocery store retail permit

shall be as follows:

(1) Two thousand dollars ($2,000) for a grocery store retail

permit holder whose total annual wine sales are less than one

hundred thousand dollars ($100,000) in the prior calendar year.

(2) Four thousand dollars ($4,000) for a grocery store

retail permit holder whose total annual wine sales are equal to

or greater than one hundred thousand ($100,000) but less than

two hundred thousand dollars ($200,000) in the prior calendar

year.

(3) Six thousand dollars ($6,000) for a grocery store retail

permit holder whose total annual wine sales are equal to or

greater than two hundred thousand ($200,000) in the prior

calendar year.

(e) A grocery store retail permit holder may sell for

consumption off the premises, in a single transaction, up to

twelve (12) bottles of wine.

(f) Every applicant for a permit shall post, for a period of

at least thirty days beginning with the day the application is

filed with the board, in a conspicuous place on the outside of

the premises, a notice of the application. The notice shall be

20150HB1690PN2516 - 29 -

in the form, size and contain provisions as required by the

board by regulation. Proof of the posting of the notice shall be

filed with the board.

(g) Upon receipt of an application for a permit under this

section, the board shall immediately notify, in writing, the

municipality in which the premises proposed to be licensed are

located.

(h) Every grocery store retail permit holder may sell wine

for consumption off the licensed premises from any location

within the licensed premises. Educational information regarding

the types of products sold by the grocery store retail permit

holder and regarding the responsible consumption of alcohol

shall be displayed and readily available wherever alcohol is

displayed. Permit holders under this section may display the

alcohol products the permit holders offer for sale on shelving

units and systems, and in or on refrigerated cases and

equipment, within the discretion of the grocery store retail

permit holder, if the displays are not designed to attract

minors and the manner and method of display allows access by all

customers, including the physically dependent.

(i) Grocery store retail permit holders may not charge a

membership fee in order for customers to make purchases from the

grocery store.

(j) A grocery store retail permit holder shall utilize a

transaction scan device to verify the age of an individual who

appears to be under thirty-five (35) years of age before making

a sale of wine. A grocery store retail permit holder may not

sell or share data from the use of a transaction scan device,

provided that the grocery store retail permit holder may use the

data to show the enforcement bureau of the board that the permit

20150HB1690PN2516 - 30 -

holder is in compliance with this act. As used in this

paragraph, the term "transaction scan device" means a device

capable of deciphering, in an electronically readable format,

the information encoded on the magnetic strip or bar code of an

identification card under section 495(a).

(k) A sale of wine shall be made through a register which is

well designated with signage, which is staffed at all times,

which is staffed by a sales clerk who is at least eighteen years

of age (18) and has been trained under section 471.1 and which

utilizes a transaction scan device for the sale. The sale of

wine may not occur at a point of sale where the customer scans

the customer's own purchases.

(l) Grocery store retail permit holders may store alcohol in

a storage area or storage areas not accessible to the public,

provided such storage areas are:

(1) locked at all times when not being accessed by the

grocery store retail permit holder's employees;

(2) not accessible to employees eighteen years of age (18)

or younger; and

(3) identified by dimensions and location on forms submitted

in advance to the board.

(m) Grocery store retail permit holders may sell wine from

eight o'clock antemeridian until eleven o'clock postmeridian

every day except Sunday.

(n) Grocery store retail permit holders may sell wine from

nine o'clock antemeridian until eleven o'clock postmeridian on

Sundays upon submission to the board of a Sunday sales permit

application and fee of one thousand five hundred dollars

($1,500) per year.

(o) Grocery store retail permit holders shall be permitted

20150HB1690PN2516 - 31 -

to hold:

(1) Tastings at any location in the grocery store, if the

tastings are in compliance with the provisions and regulations

regarding tastings held on restaurant licensed premises.

(2) Educational classes, including cooking classes, how-to

classes, seminars and similar classes, regarding the proper or

recommended use, consumption, identification, pairing,

appellation, aging, storage, characteristics, service,

presentation and similar subjects, of the alcohol products that

the grocery store permit holder offers for sale, during which

the incidental consumption of alcohol by registered participants

of lawful age shall be permitted. The classes may be free of

charge to participants or may be at a fee.

(p) Grocery store retail permit holders shall be permitted

to hold restaurant licenses issued for areas within the same

building for which the grocery store retail permit has been

issued or for a different building. Grocery store retail permits

and restaurant licenses issued for areas within the same grocery

stores may be issued for areas that are adjacent, abutting and

contiguous and the board shall approve interior connections

between the areas. If a grocery store retail permit and a

restaurant license are issued for the same grocery store, wine

may only be sold for off-premises consumption in the area

licensed for grocery store retail sales.

(q) Grocery store retail permit holders may not sell wine at

a price less than the wine's underlying cost.

(r) All fees paid to the board under this section shall be

deposited into the General Fund.

(s) A grocery store retail permit holder selling wine and

liquor for off-premises consumption shall be considered a

20150HB1690PN2516 - 32 -

Pennsylvania Liquor Store for purposes of collecting and

remitting taxes under Article II of the act of March 4, 1971

(P.L.6, No.2), known as the "Tax Reform Code of 1971."

(r) For the purposes of this section, the term "liquor"

shall not include wine.

Section 6. Section 431(b) of the act, amended December 8,

2004 (P.L.1810, No.239), is amended to read:

Section 431. Malt and Brewed Beverages Manufacturers',

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

(b) 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

20150HB1690PN2516 - 33 -

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 shall not license the area

where liquid fuels or oil is sold. No sales of liquid fuels or

oil may be made from a licensee's licensed premises. A licensed

premises may not have an interior connection with a location

that sells liquid fuels or oils unless it first receives

permission from the board for the interior connection. The

approval shall be required regardless of whether the licensee or

another party is the entity selling the liquid fuels or oils.

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

20150HB1690PN2516 - 34 -

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.

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. If the holder of a

distributor or importing distributor license has applied for and

received a wine or liquor enhanced permit pursuant to section

416, that distributor or importing distributor may sell liquor

on the same premises where malt or brewed beverages are sold. 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

20150HB1690PN2516 - 35 -

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.

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

20150HB1690PN2516 - 36 -

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.

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

20150HB1690PN2516 - 37 -

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.

* * *

Section 6.1. Section 432(d) of the act, amended January 6,

2006 (P.L.1, No.1), is amended to read:

Section 432. Malt and Brewed Beverages Retail Licenses.--* *

(d) The board shall, in its discretion, grant or refuse any

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

the extension of an existing license to cover an additional area

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, transfer or extension

is applied for a place which is within two hundred feet of any

other premises which is licensed by the board. The board shall

refuse any application for a new license, the transfer of any

license to a new location or the extension of an existing

license to cover an additional area if, in the board's opinion,

such new license, transfer or extension 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

to be licensed. 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.

20150HB1690PN2516 - 38 -

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 refuse any

application for a new license, the transfer of any license to a

location where the sale of liquid fuels or oil is conducted or

the extension of an existing license to cover an additional

area] The board shall not license the area where liquid fuels or

oil is sold. No sales of liquid fuels or oil may be made from a

licensee's licensed premises. A licensed premises may not have

an interior connection with a location that sells liquid fuels

or oils unless it first receives permission from the board for

the interior connection. The approval shall be required

regardless of whether the licensee or another party is the

entity selling the liquid fuels or oils: And provided further,

That 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

20150HB1690PN2516 - 39 -

the said license. The board may, in its discretion, refuse an

application for an economic development license under section

461(b.1) or an application for an intermunicipal transfer or a

license if the board receives a protest from the governing body

of the receiving municipality. The receiving municipality of an

intermunicipal transfer or an economic development license under

section 461(b.1) may file a protest against the approval for

issuance of a license for economic development or an

intermunicipal transfer of a license into its municipality, and

such municipality shall have standing in a hearing to present

testimony in support of or against the issuance or transfer of a

license. Upon any opening in any quota, an application for a new

license shall only be filed with the board for a period of six

months following said opening.

* * *

Section 7. Sections 436(e) and 437(e) of the act are amended

to read:

Section 436. Application for Distributors', Importing

Distributors' and Retail Dispensers' Licenses.--Application for

distributors', importing distributors' and retail dispensers'

licenses, or for the transfer of an existing license to another

premises not then licensed or to another person, shall contain

or have attached thereto the following information and

statements:

* * *

(e) 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

20150HB1690PN2516 - 40 -

regulated under this article, except as hereinafter permitted.

The requirements of this section shall not prohibit a

distributor or importing distributor from holding a wine or

liquor enhanced permit pursuant to section 416.

* * *

Section 437. Prohibitions Against the Grant of Licenses.--*

* *

(e) No distributor's or importing distributor's license

shall be issued for any premises in any part of which there is

operated any retail license for the sale of liquor or malt or

brewed beverages. The requirements of this section shall not

prohibit a distributor or importing distributor from holding a

wine or liquor enhanced permit pursuant to section 416.

* * *

Section 8. Section 443(b) of the act, amended May 31, 1996

(P.L.312, No.49), is amended to read:

Section 443. Interlocking Business Prohibited.--* * *

(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.

The requirements of this section may not prohibit a distributor

or importing distributor from holding a wine or liquor enhanced

permit pursuant to section 416.

* * *

Section 8.1. Section 468(a)(3) of the act, amended December

20150HB1690PN2516 - 41 -

20, 2000 (P.L.992, No.141), is amended to read:

Section 468. Licenses Not Assignable; Transfers.--(a) * * *

[(3) No license shall be transferred to any place or

property upon which is located as a business the sale of liquid

fuels and oil. Except in cases of emergency such as death,

serious illness, or circumstances beyond the control of the

licensee, as the board may determine such circumstances to

justify its action, transfers of licenses may be made only at

times fixed by the board. In the case of the death of a

licensee, the board may transfer the license to the surviving

spouse or personal representative or to a person designated by

him. From any refusal to grant a transfer or upon the grant of

any transfer, the party aggrieved shall have the right of appeal

to the proper court in the manner hereinbefore provided.]

* * *

Section 9. Section 474.1(b), (c) and (g) of the act, amended

November 29, 2006 (P.L.1421, No.155), are amended to read:

Section 474.1. Surrender of Restaurant, Eating Place Retail

Dispenser, Hotel, Importing Distributor and Distributor License

for Benefit of Licensee.--* * *

(b) The board may hold the license in safekeeping for a

period not to exceed [three] two consecutive years. Any license

remaining in safekeeping for more than [three] two consecutive

years shall be immediately revoked by the Bureau of Licensing

unless a transfer application or request for reissue from

safekeeping has been filed prior to the expiration of the

[three-year] two-year period or unless the board has approved a

request to extend the safekeeping for an additional year as set

forth in subsection (g). In addition, the board shall extend the

period for an additional year if, at the end of the [three-year]

20150HB1690PN2516 - 42 -

two-year period, the licensed premises are unavailable due to

fire, flood or other similar natural disaster; no further

extension beyond one additional year shall be granted by the

board regardless of whether the licensed premises are

unavailable due to fire, flood or other similar natural disaster

unless an application is made as set forth in subsection (g).

expiration of the [three-year] two-year period is disapproved by

the board, then the license may remain in safekeeping so long as

the licensee has submitted and the board has approved a request

to extend the safekeeping for an additional year as set forth in

subsection (g). Such request must be submitted within thirty

days of the board's decision notwithstanding any appeal filed in

the matter; however, the fee set forth in subsection (g) shall

be refunded if the board's decision is overturned.

* * *

(g) (1) A licensee whose license is subject to this section

may, upon written request, apply to the board to allow the

license to remain in safekeeping for an additional one year. The

written request must be accompanied by a [five thousand dollar

($5,000)] ten thousand dollar ($10,000) fee for licenses placed

in safekeeping from counties of the first class, second class,

second class A, third class and fourth class and a fee of [two

thousand five hundred dollars ($2,500)] five thousand dollars

($5,000) for licenses placed in safekeeping from counties of the

fifth through eighth classes. For each subsequent year in

safekeeping, the fees set forth in this paragraph shall be

doubled over the amount charged for the previous year's fee. No

fee shall be required if the licensee can prove that he or she

is unable to use the license through no fault of his or her own,

20150HB1690PN2516 - 43 -

including a fire, flood or other event that renders the licensed

premises unusable. The board shall approve the request unless

the license or licensee no longer meets the requirements of this

act or the board's regulations. The fee collected shall be paid

into the State Treasury through the Department of Revenue into

the State Store Fund.

[(2) A licensee whose license remains in safekeeping after

the expiration of an approved additional one-year period may

submit a written request for additional one-year periods;

however, each such request must be accompanied by a five

thousand dollar ($5,000) fee for licenses placed in safekeeping

from counties of the first class, second class, second class A,

third class and fourth class and a fee of two thousand five

hundred dollars ($2,500) for licenses placed in safekeeping from

counties of the fifth through eighth classes.]

Section 10. Section 492(12), (13) and (14) of the act,

amended December 22, 2011 (P.L.530, No.113), 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, except that the sale of

the following goods shall be permitted on the licensed premises

of a distributor or importing distributor:

20150HB1690PN2516 - 44 -

(i) Any book, magazine or other publication related to malt

or brewed beverages.

(ii) Any equipment, ingredients or other supplies necessary

for the unlicensed manufacture of malt or brewed beverages as

described in paragraph (1), commonly known as "homebrewing."

(iii) If the holder of a distributor or importing

distributor license acquires a wine or liquor enhanced permit

pursuant to section 416 for use at its licensed premises, it may

engage in the sale of wine or liquor, so long as the licensee

meets all of the requirements of this act.

(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. This section shall not prohibit

a licensed distributor or importing distributor that holds a

wine or liquor enhanced permit issued pursuant to section 416

from possessing or permitting the storage of wine or liquor on

the licensed premises used in connection with the operation of

the licensed premises.

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

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

distributor or importing distributor that holds a wine or liquor

enhanced permit, manufacturer, or the servants, agents or

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

store, trade or barter in any liquor or alcohol.

* * *

Section 11. The act is amended by adding sections to read:

20150HB1690PN2516 - 45 -

Section 1002. Transition Assistance Committee.-- (a) The

following shall apply to the transition assistance committee:

(1) On the effective date of this section, the Department of

General Services shall designate individuals to serve on a

committee for the purpose of managing the staffing transition

and displacement of employees during the divestiture process.

(2) The committee, which shall be chaired by a

representative from the department, shall involve the

participation of the Office of Administration, the Civil Service

Commission, the Department of Labor and Industry and the board's

Bureau of Human Resources, to ensure a coordinated approach to

allocating personnel and assisting displaced employees during

the transition to find an appropriate position.

(3) The department shall contract with advisors necessary to

assist the department and the board in administering the duties

under paragraph (2). The contracts shall not be subject to the

provisions of 62 Pa.C.S. Ch. 5 (relating to source selection and

contract formation).

(b) The committee shall coordinate with the Office of

Administration to provide counseling and other general

assistance to employees of the board who are displaced to

transition the employees to other employment in either the

public or private sector.

and sections 1003, 1004, 1005 and 1006 shall be transferred from

the State Stores Fund.

Section 1003. Preference in Public Employment Hiring.--(a)

The following shall apply to civil service examinations:

(1) A displaced employee who successfully passes a civil

service appointment examination shall be marked or graded an

20150HB1690PN2516 - 46 -

additional three points above the mark or grade credited for the

examination if all of the following apply:

(i) The examination is for a paid position administered

under the act of August 5, 1941 (P.L.752, No.286), known as the

Civil Service Act, and in the classified service existing under

the commission's jurisdiction.

(ii) The employee establishes the qualifications required by

law for appointment to the position.

(2) The total mark or grade, including the markup under

paragraph (1), obtained by the displaced employee shall

represent the final mark or grade of the employee and shall

determine the employee's standing on any eligibility list

certified or furnished to the appointing power.

(3) The three additional points awarded under paragraph (1)

shall be in addition to any points that shall be afforded to a

veteran meeting the requirements of 51 Pa.C.S. § 7103 (relating

to additional points in grading civil service examinations).

(b) The commission shall require the board to certify a list

of displaced employees under subsection (a). Placement on the

list by the board shall establish eligibility for the preference

granted under subsection (a).

service examination, a displaced employee, possessing the

requisite qualifications and who is eligible for appointment to

a paid State position in offices under the Governor's

jurisdiction within the executive branch shall be given a

preference in the appointment by the appointing authority over

nonveteran candidates.

(d) (Reserved).

(e) The following shall apply:

20150HB1690PN2516 - 47 -

(1) A displaced employee's eligibility for the markup

provided under subsection (a) and for the preference for

noncivil service positions provided under subsection (c) shall

cease upon the occurrence of one of the following:

(i) The displaced employee's appointment or hiring into a

position in the classified service existing under the

commission's jurisdiction or into a paid State position where no

civil service examination is required.

(ii) Four years from the effective date of this section.

(2) In order to be eligible for the markup provided under

subsection (a) and for the preference for noncivil service

positions provided under subsection (c), a displaced worker must

be terminated as a sole and direct result of the decision to

cease wholesale and retail operations under this section and

sections 1004, 1005 and 1006, and must work until the final day

set by the board for that employee's job function.

Section 1004. Career Training and Post-secondary Education

Grant Eligibility.--(a) A displaced employee shall be eligible

for a two-year grant for attending a program of instruction at

an institution of higher education, including career training

and adult education courses of study, within one year of the

date of displacement from State service in the following amount:

(1) two thousand dollars ($2,000) per year for attendance on

a full-time basis; or

(2) one thousand dollars ($1,000) per year for attendance on

a part-time basis.

(b) The board shall certify the list of displaced employees

to the Pennsylvania Higher Education Assistance Agency.

eligibility and shall pay the grant directly to the institution

20150HB1690PN2516 - 48 -

of higher education attended by the displaced employee in a

manner consistent with the Pennsylvania Higher Education

Assistance Agency's regulations.

Section 1005. Reemployment Tax Credit.--(a) The following

shall apply:

(1) A displaced employee shall be eligible for a two-year

reemployment tax credit voucher in the amount of two thousand

dollars ($2,000) per taxable year.

(2) The voucher under paragraph (1) shall be made available

to each displaced employee upon termination of employment.

(3) Each voucher under paragraph (1) shall be certified by

the board before the voucher is provided to the displaced

employee.

(4) The Department of Revenue shall be informed of each

displaced employee to whom a voucher under paragraph (1) has

been provided.

(b) An employer in this Commonwealth who employs a displaced

employee on a full-time basis may, upon transfer of the voucher

from the employee to the employer, use the voucher as a credit

against the State tax liability of the employer, if the employer

can demonstrate the following:

(1) The employee for whom the tax credit is being sought was

displaced from the board within 12 months of being employed by

the employer.

(2) The former board employee has been employed by the

employer seeking the tax credit on a full-time basis for a

period not less than one year.

Department of Revenue with the information required under

subsection (b)(1) and (2) to claim a tax credit against the

20150HB1690PN2516 - 49 -

employer's liability for a tax identified under subsection (d)

(2).

(d) The following shall apply:

(1) An employer may claim a reemployment tax credit for each

job filled by a displaced employee of two thousand dollars

($2,000) per taxable year for a maximum of two taxable years.

(2) An employer may apply the reemployment tax credit to

100% of the employer's:

(i) State corporate net income tax, capital stock and

franchise tax or the personal tax of a shareholder of the

company if the company is a Pennsylvania S corporation.

(ii) Insurance premiums tax, gross receipts tax, bank and

trust company shares tax, mutual thrift institutions tax or

title insurance companies shares tax.

(iii) Any combination of the taxes under subparagraphs (i)

and (ii).

(3) A displaced employee whose subsequent employment is

terminated with an employer and who has utilized the

reemployment tax credit voucher to claim a one-year two thousand

dollar ($2,000) tax credit may transfer the voucher to a new

employer who may use the remaining two thousand dollar ($2,000)

tax credit as a claim against the employer's tax liability for

taxes identified under paragraph (2).

(4) The term of the reemployment tax credit voucher may not

exceed two years from the date the voucher is provided to the

qualified displaced employee.

Section 1006. Protection of Existing Benefits.--(a) Nothing

under this section shall be deemed to affect:

(1) Pension benefits accrued prior to the date of separation

occurring as a sole and direct result of the divestiture of the

20150HB1690PN2516 - 50 -

board's wholesale and retail operations under this article.

(2) Payment of an accrued benefit derived from the terms of

a preexisting collective bargaining agreement payable upon

separation from employment.

(b) As a result of the preferential hiring benefits, the tax

credit for subsequent employers and the protection of benefits

arising from an employee's pension or from a preexisting

collective bargaining agreement under this section, the board

shall be deemed to have satisfied all obligations to bargain

over the impact of the decision to cease wholesale and retail

operations under this article which may arise under the act of

July 23, 1970 (P.L.563, No.195), known as the Public Employe

Relations Act.

1004 and 1005 supersedes a local regulation, ordinance or

resolution of a political subdivision regarding notice to

displaced workers.

Section 12. The regulations of the board at 40 Pa. Code §§

3.52 and 3.53 are abrogated to the extent of any inconsistency

with this act.

Section 13. This act shall take effect in 60 days.

20150HB1690PN2516 - 51 -