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PRINTER'S NO. 4431
THE GENERAL ASSEMBLY OF PENNSYLVANIA
HOUSE BILL
No.
2890
Session of
2020
INTRODUCED BY ROTHMAN, KAUFFMAN, BERNSTINE, MILLARD, DAVANZO,
STAATS, KEEFER, POLINCHOCK, JONES, O'NEAL, ROWE AND SAYLOR,
SEPTEMBER 28, 2020
REFERRED TO COMMITTEE ON LIQUOR CONTROL, SEPTEMBER 28, 2020
AN ACT
Amending the act of April 12, 1951 (P.L.90, No.21), entitled "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
preliminary provisions, further providing for definitions; in
licenses and regulations and liquor, alcohol and malt and
brewed beverages, providing for limited spirit expanded
permits and further providing for malt and brewed beverages
manufacturers', distributors' and importing distributors'
licenses; and, in distilleries, wineries, bonded warehouses,
bailees for hire and transporters for hire, further providing
for limited distilleries and distilleries.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. Section 102 of the act of April 12, 1951 (P.L.90,
No.21), known as the Liquor Code, is amended by adding
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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:
* * *
"Mixed drink or cocktail" shall mean an alcoholic beverage,
composed in whole or in part of liquor, that is combined with
other alcoholic beverages, nonalcoholic beverages or
ingredients, including, but not limited to, ice, water, soft
drinks or flavorings.
* * *
"Ready-to-drink cocktail" shall mean a mixed drink or
cocktail that is premixed and packaged in an original container
for sale and not mixed or adulterated on a premises of a retail
licensee or distributor licensee.
* * *
"Spirits" shall mean a beverage that contains alcohol
obtained by distillation and mixed with water or other
substances in a solution, including brandy, rum, whiskey, gin or
other spirituous liquors and brandy, rum, whiskey, gin or other
spirituous liquors when rectified, blended or otherwise mixed
with alcohol or other substances. The term includes a ready-to-
drink cocktail.
* * *
Section 2. The act is amended by adding a section to read:
Section 415.1. Limited Spirit Expanded Permit s .--(a) The
following shall apply:
(1) The board shall issue a limited spirit expanded permit
to a person who holds and possesses a valid restaurant liquor
license or hotel liquor license and also holds and possesses a
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wine expanded permit.
(2) Nothing in this section shall affect the ability of an
existing licensee to operate within the scope of its current
license as authorized under this act, except that no sales of
ready-to-drink cocktails for off-premises consumption may take
place by a limited spirit expanded permit holder after two
o'clock antemeridian of any day until the licensee's permitted
hours of operation of the next day under section 406 , including
Sundays if the licensee has a permit authorized under section
406(a)(3) or 432(f).
(3) A limited spirit expanded permit may not 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, so
long as the underlying license is authorized to operate.
Notwithstanding any other provision of law, a holder of a
limited spirit expanded permit may continue to operate under the
permit if the holder's 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 ready-to-drink
cocktails 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 ready-to-drink cocktails for
off-premises consumption, a holder of a limited spirit expanded
permit is not subject to section 493(14).
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(6) A limited spirit expanded permit holder shall comply
with the responsible alcohol management provisions under section
471.1.
(7) A limited spirit expanded permit holder may store ready-
to-drink cocktails 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' employes; and
(ii) not accessible to employes under eighteen (18) years of
age .
(8) A limited spirit expanded 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 ready-to-drink cocktails. A limited spirit expanded
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 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 ready-to-drink cocktails by a limited spirit
expanded permit holder shall be made through a register that is
well designated with signage, is staffed at all times by a sales
clerk who is at least eighteen (18) years of age, has been
trained under section 471.1 and utilizes a transaction scan
device for the sale. The sale of ready-to-drink cocktails may
not occur at a point of sale where the customer scans the
customer's own purchases.
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(b) The application and renewal fee for a limited spirit
expanded permit shall be as follows:
(1) For a limited spirit expanded permit issued to a
licensee, an initial application fee of two thousand dollars
($2,000).
(2) An annual renewal fee of either one thousand dollars
($ 1,0 00) or two per centum of the cost of ready-to-drink
cocktails purchased from the distributor for off-premises
consumption, whichever is less .
(c) Notwithstanding the provisions of section 802, all fees
paid to the board under this section shall be paid into the
State Treasury for deposit as follows:
(1) All moneys shall be deposited in the State Stores Fund.
(2) Every June 1, all moneys deposited under paragraph (1)
shall be transferred to the General Fund.
(d) A limited spirit expanded permit holder may sell for
off- premises consumption, in a single transaction, up to one
hundred ninety-two ounces of ready-to-drink cocktails.
(e) The following shall apply:
(1) The sale of ready-to-drink cocktails by a limited spirit
expanded permit holder for off-premises consumption shall be
considered a "purchase at retail" under section 201(f) of the
Tax Reform Code of 1971, a "sale at retail" under section 201(k)
of the Tax Reform Code of 1971 or a "use" under section 201(o)
of the Tax Reform Code of 1971.
(2) A limited spirit expanded permit holder may, when filing
its required returns under Article II of the Tax Reform Code of
1971, request a credit of any taxes paid in accordance with
paragraph (1) for ready-to-drink cocktails sold for off-premises
consumption and for which taxes were remitted to the department.
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(f) A limited spirit expanded permit holder may not sell a
private label product.
Section 3. Section 431(b) of the act, amended June 5, 2020
(P.L.213, No.29), 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. In addition, a
distributor license holder may sell malt or brewed beverages in
any amount to a person not licensed by the board for off-
premises consumption. The sales shall not be required to be in
the package configuration designated by the manufacturer and may
be sold in refillable growlers. In addition, a distributor
license holder may sell manufactured ready-to-drink cocktails in
an amount not to exceed one hundred ninety-two ounces to a
person not licensed by the board for off-premises consumption.
The sales shall not be required to be in the package
configuration designated by the manufacturer. 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
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years immediately preceding the date of application for the said
license: And provided further, That, in the case of any new
license or the transfer of any license to a new location, the
board may, in its discretion, grant or refuse such new license
or transfer if such place proposed to be licensed is within
three hundred feet of any church, hospital, charitable
institution, school or public playground, or if such new license
or transfer is applied for a place which is within two hundred
feet of any other premises which is licensed by the board: And
provided further, That the board shall refuse any application
for a new license or the transfer of any license to a new
location if, in the board's opinion, such new license or
transfer would be detrimental to the welfare, health, peace and
morals of the inhabitants of the neighborhood within a radius of
five hundred feet of the place proposed to be licensed. The
board 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
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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
or ready-to-drink cocktails 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 ready-to-drink cocktails or from manufacturers or
importing distributors licensed under this article. In the case
of an importing distributor, the holder of such a license shall
be authorized to store and repackage malt or brewed beverages or
ready-to-drink cocktails owned by a manufacturer at a segregated
portion of a warehouse or other storage facility authorized by
section 441(d) and operated by the importing distributor within
its appointed territory and deliver such beverages to another
importing distributor who has been granted distribution rights
by the manufacturer as provided herein. The importing
distributor shall be permitted to receive a fee from the
manufacturer for any related storage, repackaging or delivery
services. In the case of a bailee for hire hired by a
manufacturer, the holder of such a permit shall be authorized:
to receive, store and repackage malt or brewed beverages or
ready-to-drink cocktails produced by that manufacturer for sale
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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 or
ready-to-drink cocktails 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 or ready-to-drink cocktails
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. In
addition, the holder of a distributor license may not sell or
deliver malt or brewed beverages or ready-to-drink cocktails to
any licensee whose licensed premises is located within the
designated geographical area granted to an importing distributor
other than the importing distributor that sold the malt or
brewed beverages or ready-to-drink cocktails to the distributor.
If the licensee purchasing the malt or brewed beverages or
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ready-to-drink cocktails from the distributor license holder
holds multiple licenses or operates at more than one location,
then the malt or brewed beverages or ready-to-drink cocktails
may not be consumed or sold at licensed premises located within
the designated geographical area granted to an importing
distributor other than the importing distributor that sold the
malt or brewed beverages or ready-to-drink cocktails to the
distributor. Should a licensee accept the delivery of malt or
brewed beverages or ready-to-drink cocktails or transfer malt or
brewed beverages or ready-to-drink cocktails 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
or ready-to-drink cocktails 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
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importing distributor by the said manufacturer. In addition, the
holder of a distributor license may not sell or deliver malt or
brewed beverages or ready-to-drink cocktails to a licensee whose
licensed premises is located within the designated geographical
area granted to an importing distributor other than the
importing distributor that sold the malt or brewed beverages or
ready-to-drink cocktails to the distributor. If the licensee
purchasing the malt or brewed beverages or ready-to-drink
cocktails from the distributor license holder holds multiple
licenses or operates at more than one location, the malt or
brewed beverages or ready-to-drink cocktails may not be consumed
or sold at licensed premises located within the designated
geographical area granted to an importing distributor other than
the importing distributor that sold the malt or brewed beverages
or ready-to-drink cocktails to the distributor. If a licensee
accepts the delivery of malt or brewed beverages or ready-to-
drink cocktails or transfers malt or brewed beverages or ready-
to-drink cocktails in violation of this section, the licensee
shall be subject to 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. Nothing herein contained shall be construed to
prevent any manufacturer from authorizing the importing
distributor holding the distributing rights for a designated
geographical area from selling the products of such manufacturer
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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 4. Section 505.4(b)(1) and (c)(1) of the act,
amended July 2, 2019 (P.L.324, No.45) and November 21, 2019
(P.L.635, No.86), are amended to read:
Section 505.4. Limited Distilleries and Distilleries.--
(b) (1) The board may issue a limited distillery license
that will allow the holder thereof to operate a distillery that
shall not exceed production of one hundred thousand (100,000)
gallons of distilled liquor per year. The holder of the license
may manufacture and sell bottled liquors or ready-to-drink
cocktails in original containers produced on the licensed
premises to the board, to entities licensed by the board and to
the public between the hours of nine o'clock antemeridian and
twelve o'clock antemeridian Monday through Saturday and Sunday
between the hours of nine o'clock antemeridian through eleven
o'clock postmeridian so long as a specific code of distilled
liquor, excluding ready-to-drink cocktails, which is listed for
sale as a stock item by the board in State liquor stores may not
be offered for sale at a licensed limited distillery location at
a price which is lower than that charged by the board and under
such conditions and regulations as the board may enforce. The
holder of a limited distillery license may not sell a product or
a substantially similar product which is listed for sale as a
stock item by the board in State Liquor Stores to a licensee at
a price which is lower than that charged by the board and under
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such conditions and regulations as the board may enforce. The
holder of a limited distillery license may also sell wine,
alcoholic cider and fermented fruit beverages produced by a
licensed limited winery, liquor or ready-to-drink cocktails
produced by a licensed distillery or limited distillery and malt
or brewed beverages produced by a licensed brewery for on-
premises consumption. The combined sales of wine, malt or brewed
beverages and liquor or ready-to-drink cocktails produced by
another licensed distillery or limited distillery may not, on a
yearly basis, exceed fifty per centum of the on-premises sales
of the limited distillery's own sales of liquor or ready-to-
drink cocktails for the preceding calendar year: however, if a
limited distillery did not operate for an entire calendar year
during the preceding year, then its combined sales of wine, malt
or brewed beverages and liquor or ready-to-drink cocktails
produced by another licensed distillery or limited distillery
may not, on a yearly basis, exceed fifty per centum of the on-
premises sales of the limited distillery's own liquor or ready-
to-drink cocktails for that year.
* * *
(c) (1) The holder of a distillery license as issued under
section 505 may sell bottled liquors or ready-to-drink cocktails
in original containers produced on the licensed premises to the
board, to entities licensed by the board and to the public
between the hours of nine o'clock antemeridian and twelve
o'clock antemeridian Monday through Saturday and Sunday between
the hours of nine o'clock antemeridian through eleven o'clock
postmeridian so long as a specific code of distilled liquor or
ready-to-drink cocktail which is listed for sale as a stock item
by the board in State liquor stores may not be offered for sale
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at a licensed distillery location at a price which is lower than
that charged by the board and under such conditions and
regulations as the board may enforce. The holder of a distillery
license may not sell a product or a substantially similar
product which is listed for sale as a stock item by the board in
State Liquor Stores to a licensee at a price which is lower than
that charged by the board and under such conditions and
regulations as the board may enforce. The holder of a distillery
license may also sell its liquor or ready-to-drink cocktails,
wine, alcoholic cider and fermented fruit beverages produced by
a licensed limited winery, liquor or ready-to-drink cocktails
produced by a licensed distillery or limited distillery and malt
or brewed beverages produced by a licensed brewery for on-
premises consumption. The combined sales of wine, malt or brewed
beverages and liquor or ready-to-drink cocktails produced by
another licensed distillery or limited distillery may not, on a
yearly basis, exceed fifty per centum of the on-premises sales
of the distillery's own sales of liquor or ready-to-drink
cocktails for the preceding calendar year: however, if a
distillery did not operate for an entire calendar year during
the preceding year, then its combined sales of wine, malt or
brewed beverages and liquor or ready-to-drink cocktails produced
by another licensed distillery or limited distillery may not, on
a yearly basis, exceed fifty per centum of the on-premises sales
of the distillery's own liquor or ready-to-drink cocktails for
that year.
* * *
Section 5. This act shall take effect in 30 days.
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