Regular Session 2015-2016 Senate Bill 0317 P.N. 0207

PRINTER'S NO. 207

THE GENERAL ASSEMBLY OF PENNSYLVANIA

SENATE BILL

No.

317

Session of

2015

INTRODUCED BY SCARNATI, COSTA, GORDNER, WAGNER, EICHELBERGER,

BARTOLOTTA, YAW, VULAKOVICH, WARD, WHITE, BAKER, STEFANO,

FOLMER, SCAVELLO, VANCE, YUDICHAK, FONTANA AND RAFFERTY,

JANUARY 23, 2015

REFERRED TO LAW AND JUSTICE, JANUARY 23, 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," in

Pennsylvania Liquor Control Board, further providing for

powers of board; and, in licenses and regulations, further

providing for shipment of wine into Commonwealth; and

establishing the Pennsylvania Wine Industry Promotion Board.

The General Assembly of the Commonwealth of Pennsylvania

hereby enacts as follows:

Section 1. Section 207(a) 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 November 30, 2004

(P.L.1727, No.221) and December 8, 2004 (P.L.1810, No.239), is

amended to read:

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

board shall have the power and its duty shall be:

(a) To buy, import or have in its possession for sale and

sell liquor, alcohol, corkscrews, wine and liquor accessories,

trade publications, gift cards, gift certificates, wine- or

liquor-scented candles and wine glasses in the manner set forth

in this act: Provided, however, That all purchases shall be made

subject to the approval of the State Treasurer, or his

designated deputy. The board shall buy liquor and alcohol at the

lowest price and in the greatest variety reasonably obtainable.

Such sales may be to persons and entities located both in this

Commonwealth and outside this Commonwealth.

* * *

Section 2. Section 488 of the act, added February 21, 2002

(P.L.103, No.10), is amended to read:

Section 488. Shipment of Wine [into Commonwealth].--(a) The

shipment of wine [from out-of-State] to residents of this

Commonwealth [is prohibited, except as otherwise provided for

in] shall be governed by this section.

(b) Notwithstanding any other provision of this act or law

to the contrary, a person licensed by the board or another state

as a producer[, supplier, importer, wholesaler, distributor or

retailer] of wine and who obtains a direct wine shipper license

as provided for in this section may ship up to [nine] eighteen

liters per month of any wine [not included on the list provided

for in subsection (c)] on the Internet, telephone or mail order

of any resident of this Commonwealth who is at least twenty-one

(21) years of age for such resident's personal use and not for

resale.

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list of all classes, varieties and brands of wine available for

sale in the Pennsylvania Liquor Stores. [A person holding a

direct shipper license may ship only those classes, varieties

and brands of wine not included on the list at the time an

Internet order is placed.]

(c.1) Prior to issuing a direct wine shipper license, the

board shall require the person seeking the license to:

(1) File an application with the board.

(2) Pay a one hundred dollar ($100) registration fee.

(3) Provide to the board a true copy of its current

alcoholic beverage license issued by the board or another state,

if applicable.

(4) Provide the board with any other information the board

deems necessary and appropriate.

(5) Provide documentation which evidences that it has

obtained a sales tax license from the Department of Revenue.

(d) [An out-of-State] A direct wine shipper shall:

(1) Not ship more than [nine] eighteen liters per month on

the Internet, telephone or mail order of any person in this

Commonwealth.

(2) Report to the board each year the total of wine shipped

[into] to residents of this Commonwealth in the preceding

calendar year.

(3) Permit the board or the Secretary of Revenue, or their

designated representatives, to perform an audit of the [out-of-

State] direct wine shipper's records upon request.

(4) Be deemed to have submitted to the jurisdiction of the

board, any other State agency and the courts of this

Commonwealth for purposes of enforcement of this section and any

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related laws, rules or regulations.

(5) Require proof of age of the recipient, in a manner or

format approved by the board before any wine is shipped to a

resident of this Commonwealth.

(6) Ensure that all boxes or exterior containers of wine

shipped directly to a resident in this Commonwealth are

conspicuously labeled with the words "CONTAINS ALCOHOL:

SIGNATURE OF PERSON 21 YEARS OF AGE OR OLDER REQUIRED FOR

DELIVERY."

(7) Pay to the Department of Revenue all taxes due on sales

to residents of this Commonwealth. The amount of such taxes

shall be calculated as if the sales were in this Commonwealth at

the locations where delivery is made. The wine delivered under

the authority of this subsection shall be subject to the sales

and use tax imposed by section 202 of the act of March 4, 1971

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

and use tax imposed by Article XXXI-B of the act of July 28,

1953 (P.L.723, No.230), known as the "Second Class County Code,"

and the sales and use tax imposed by the act of June 5, 1991

(P.L.9, No.6), known as the "Pennsylvania Intergovernmental

Cooperation Authority Act for Cities of the First Class," and

the direct wine shipment tax imposed under this section.

(8) Annually renew its license by paying a renewal fee

established by the board.

(e) A direct shipper may ship wine on the Internet,

telephone or mail order of a resident into this Commonwealth

provided that the wine [is shipped to a Pennsylvania Liquor

Store selected by the resident. The wine will be subject to

taxes in the same manner as wine sold directly by the board. The

wine will not be released by the State store until all moneys

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due, including all taxes and fees, have been paid by the

resident.] will be subject to all taxes due on sales to

residents of this Commonwealth with the amount of such taxes to

be calculated as if the sale were in this Commonwealth at the

location where delivery is made. The wine delivered under the

authority of this subsection shall be subject to the sales and

use tax imposed by section 202 of the "Tax Reform Code of 1971,"

the sales and use tax imposed by Article XXXI-B of the "Second

Class County Code," and the sales and use tax imposed by the

"Pennsylvania Intergovernmental Cooperation Authority Act for

Cities of the First Class," and the direct wine shipment tax

imposed under this section.

(f) [A person shall sign an affidavit provided by the

Pennsylvania Liquor Store where the wine was delivered to

stating that the wine will only be used for the person's

personal use.] Any person who resells wine obtained under this

section commits a misdemeanor of the second degree.

(g) The board may promulgate such rules and regulations as

are necessary to implement and enforce the provisions of this

section. [The board may charge the resident a fee to cover the

cost associated with processing the Internet order.]

(h) The board shall submit [monthly] annual reports to the

Appropriations Committee and the Law and Justice Committee of

the Senate and to the Appropriations Committee and the Liquor

Control Committee of the House of Representatives summarizing

the number of direct shipper licenses issued by the board[,] and

the quantity of wine sold by direct wine shippers pursuant to

this section [and the total dollar value of sales under this

section].

(i) The term "wine" as used in this section shall mean

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liquor which is fermented from grapes and other fruits, having

alcoholic content of twenty-four per centum or less. The term

"wine" shall not include malt or brewed beverages nor shall wine

include any products containing alcohol derived from malt,

grain, cereal, molasses or cactus.

(j) The term "direct wine shipper" as used in this section

shall mean a wine producer who holds a direct wine shipper

license as provided in this section and includes a limited

winery.

(k) A direct wine shipment tax is hereby imposed and

assessed at the rate of twelve per centum of the net price of

all wines sold and delivered under the authority of this

section, which tax shall be collected by the direct wine shipper

from the purchaser and shall be paid over to the Department of

Revenue as provided in this section. Unless otherwise specified,

the tax shall be assessed, collected and enforced by the

Department of Revenue under the provisions of Article II of the

"Tax Reform Code of 1971."

(l) Receipts from the tax imposed under subsection (k) shall

be deposited into the General Fund. Annually, on January 15 and

July 15, the amount of two hundred fifty thousand dollars

($250,000) shall be transferred from the General Fund to a

restricted account within the General Fund. The moneys of the

restricted account are hereby appropriated on a continuing basis

to the Pennsylvania Wine Industry Promotion Board for the

purpose of awarding grants under section 488.1.

Section 3. The act is amended by adding a section to read:

Section 488.1. Pennsylvania Wine Industry Promotion Board.--

(a) There is established a board to be known as the

Pennsylvania Wine Industry Promotion Board.

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(b) The Pennsylvania Wine Industry Promotion Board shall be

composed of the following members:

(1) Four members appointed by the General Assembly under

subsection (c).

(2) One member appointed by the Governor under subsection

(d).

made as follows:

(1) One individual appointed by the president pro tempore of

the Senate.

(2) One individual appointed by the minority leader of the

Senate.

(3) One individual appointed by the speaker of the House of

Representatives.

(4) One individual appointed by the minority leader of the

House of Representatives.

(5) Legislative appointees must be residents of this

Commonwealth, have substantial experience or expertise in the

Pennsylvania wine industry and serve at the pleasure of the

appointing authority.

(d) One gubernatorial appointee must be a resident of this

Commonwealth, have substantial experience or expertise in the

Pennsylvania wine industry and serve at the pleasure of the

Governor.

(e) Three members of the Pennsylvania Wine Industry

Promotion Board shall constitute a quorum. The adoption of a

resolution, awarding of a grant or other action of the

Pennsylvania Wine Industry Promotion Board shall require a

majority vote of the members of the Pennsylvania Wine Industry

Promotion Board.

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(f) The members of the Pennsylvania Wine Industry Promotion

Board shall not be entitled to compensation for their services

as members of the board.

(g) Appointing authorities shall appoint initial

Pennsylvania Wine Industry Promotion Board members within thirty

(30) days of the effective date of this section. Whenever a

vacancy occurs on the Pennsylvania Wine Industry Promotion

Board, the appointing authority shall appoint a successor member

within 30 days of the vacancy.

(h) The act of July 19, 1957 (P.L.1017, No.451), known as

the "State Adverse Interest Act," shall apply to the

Pennsylvania Wine Industry Promotion Board.

(i) The Pennsylvania Wine Industry Promotion Board shall do

all of the following:

(1) Meet as often as necessary but at least annually.

(2) Adopt guidelines establishing the procedure by which an

entity may submit an application for grant funding under this

section to the Pennsylvania Wine Industry Promotion Board.

(3) The Pennsylvania Wine Industry Promotion Board shall

have the following duties as to awarding grants:

(i) Award grants to entities for the purpose of increasing

the production of Pennsylvania made wines and enhancing the

Pennsylvania wine industry through promotion, marketing and

research-based programs and projects.

(ii) Allocate grants through a competitive grant review

process established by the Pennsylvania Wine Industry Promotion

Board. The application for a grant shall include:

(A) the purpose for which the grant shall be utilized;

(B) information indicating need for the grant;

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(D) methods for measuring outcomes; and

(E) any other criteria as the office may require.

(iii) Require grant recipients to provide the Pennsylvania

Wine Industry Promotion Board with full and complete access to

all records relating to the performance of the grant and to

submit at such time and in such form as may be prescribed

truthful and accurate information that the Pennsylvania Wine

Industry Promotion Board may require.

(iv) Conduct a thorough annual evaluation of each program

for which a grant under this section is made. The Pennsylvania

Wine Industry Promotion Board shall seek repayment of funds if

it determines that funds are not utilized for the original

stated purpose.

(v) Submit an annual report to the General Assembly

detailing all actions of the Pennsylvania Wine Industry

Promotion Board and grants awarded under this section.

(j) The Department of Agriculture shall supply all necessary

assistance to assist the Pennsylvania Wine Industry Promotion

Board in carrying out its duties and responsibilities.

Section 4. This act shall take effect in 60 days.

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