Trial Engrossment of Amendment A07700 to House Bill 1617 P.N. 2737, Regular Session 2019-2020

A07700

THE GENERAL ASSEMBLY OF PENNSYLVANIA

HOUSE BILL

No.

1617

Session of

2019

INTRODUCED BY STAATS, CAUSER, ROTHMAN, YOUNGBLOOD, STEPHENS,

DOWLING, RADER, JAMES, PYLE, OTTEN, MALAGARI, EVERETT,

MACKENZIE, SAINATO, GAYDOS, JOZWIAK, FARRY, IRVIN, STRUZZI

AND WHEELAND, JUNE 11, 2019

AS REPORTED FROM COMMITTEE ON LIQUOR CONTROL, HOUSE OF

REPRESENTATIVES, AS AMENDED, OCTOBER 21, 2019

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

general provisions applying to both liquor and malt and

brewed beverages, further providing for interlocking business

prohibited, for limiting number of retail licenses to be

issued in each county. and for unlawful acts relative to

liquor, malt and brewed beverages and licensees.

The General Assembly of the Commonwealth of Pennsylvania

hereby enacts as follows:

Section 1. Section 461(c) of the act of April 12, 1951

(P.L.90, No.21), known as the Liquor Code, is amended by adding

a clause to read:

Section 1. Section 411(e) of the act of April 12, 1951

(P.L.90, No.21), known as the Liquor Code, is amended and the

section is amended by adding a subsection to read:

Section 411. Interlocking Business Prohibited.--* * *

(e) Except as herein provided, no hotel, restaurant, retail

dispenser or club licensee, and no officer, director or

stockholder, agent or employe of any such licensee shall in any

wise be interested, directly or indirectly, in the ownership or

leasehold of any property or the equipment of any property or

any mortgage lien against the same, used by a distributor,

importing distributor, or by an importer or sacramental wine

licensee, in the conduct of his business; nor shall any hotel,

restaurant, retail dispenser or club licensee, or any officer,

director, stockholder, agent or employe of any such licensee,

either directly or indirectly, lend any moneys, credit, or give

anything of value or the equivalent thereof, to any distributor,

importing distributor, importer or sacramental wine licensee,

for equipping, fitting out, or maintaining and conducting,

either in whole or in part, an establishment used in the conduct

of his business.

The purpose of this section is to require a separation of the

financial and business interests between manufacturers and

holders of hotel or restaurant liquor licenses and, as herein

provided, of club licenses, issued under this article, and no

person shall, by any device whatsoever, directly or indirectly,

evade the provisions of the section. But in view of existing

economic conditions, nothing contained in this section shall be

construed to prohibit the ownership of property or conflicting

interest by a manufacturer of any place occupied by a licensee

under this article after the manufacturer has continuously owned

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and had a conflicting interest in such place for a period of at

least five years prior to July eighteenth, one thousand nine

hundred thirty-five: Provided, however, That this clause shall

not prohibit any hotel, restaurant or club liquor licensee, or

any officer, director or stockholder of any such licensee, from

owning land or buildings which are leased to a holder of a

retail dispenser's license or a manufacturer's license: And,

provided further, That nothing contained in this section shall

be construed to prohibit any hotel, restaurant, retail dispenser

or club licensee or any officer, director or stockholder, agent

or employe of any such licensee from having a financial or other

interest, directly or indirectly in the ownership or leasehold

of any property or the equipment of any property or any mortgage

lien against same, used, leased by an importer or sacramental

wine licensee for the exclusive purpose of maintaining

commercial offices and on the condition that said property is

not used for the storage or sale of liquor or malt or brewed

beverages in any quantity: And, provided further, That nothing

contained in this section shall prohibit an officer or member of

a licensed privately owned private golf course catering club

from having an interest in a limited winery license: And,

provided further, That nothing contained in this section shall

be construed to prohibit a member of the governing board of a

public authority created under subdivision (n) of Article XXIII

of the act of August 9, 1955 (P.L.323, No.130), known as "The

County Code," from having an interest in a distributor or

importing distributor license notwithstanding the fact that the

public authority has an interest in one or more retail licenses

or acts as a landlord for one or more retail licenses: And,

provided further, That, nothing in this section may prohibit an

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employe of a hotel or restaurant licensee from guaranteeing any

loans, or lending any moneys, providing credit or giving

anything of value to a limited winery licensee or its officers,

directors and shareholders, provided that the person also is not

an officer of or does not have any interest in or exercise any

control over any other licensed entity that engages in any sales

to or from the licensee: And, provided further, That,

notwithstanding any other provision of this section, an entity

may acquire both a manufacturer's license or a limited winery

license and a hotel, restaurant or retail dispenser license for

use at the same location and more than one location may be so

licensed. And, provided further, That, notwithstanding any other

provision of this section, an entity licensed as a limited

winery may hold and operate a restaurant liquor license at one

of its additional, board-approved locations instead of at its

primary location where manufacturing occurs. The licenses and a

person's interest in the licenses or in the entity holding the

licenses shall not be subject to this section. Provided further,

That, a person who is a holder of ten per centum (10%) or less

of securities or other interests in a publicly or privately held

domestic or foreign corporation, partnership, limited liability

company or other form of legal entity owning a retail license

shall not be deemed to possess a financial interest and is not

subject to the provisions of this section, provided that the

person is not an officer of, employe of or does not have any

interest in or exercise any control over any other licensed

entity that engages in any sales to or from the retail licensee

in which the person holds the ten per centum (10%) or less

interest.[: And, provided further, That nothing in this section

shall prohibit a person who has an ownership interest in a

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limited winery license from being employed by an entity that

holds a hotel, restaurant, eating place or club license if the

person is not employed as alcohol service personnel or as

manager.]

(e.1) Nothing in subsection (e) shall prohibit any of the

following:

(1) A person who has an ownership interest in a limited

winery license from being employed by an entity that holds a

hotel, restaurant, eating place or club license if the person is

not employed as alcohol service personnel or as manager.

(2) A person who has an ownership interest in a brewery

license from being employed by an entity that holds a hotel,

restaurant, eating place or club license if the person has no

job duties or responsibilities on, or connected with, the

licensed premises in any capacity.

* * *

Section 2. Section 461(c) of the act is amended by adding a

clause to read:

Section 461. Limiting Number of Retail Licenses To Be Issued

In Each County.--* * *

reputable place operated by a responsible person of good

reputation where the public may, for a consideration, obtain

sleeping accommodations, and which shall have the following

number of bedrooms and requirements in each case--at least one-

half of the required number of bedrooms shall be regularly

available to transient guests seven days weekly, except in

resort areas; at least one-third of such bedrooms shall be

equipped with hot and cold water, a lavatory, commode, bathtub

or shower and a clothes closet; and an additional one-third of

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the total of such required rooms shall be equipped with lavatory

and commode:

* * *

(9.2) For two years after the effective date of this clause,

upon application to the board and payment of a fee of twenty-

five THIRTY thousand dollars ($25,000) ($30,000) by a hotel

licensee, the board shall convert a hotel license under clause

(8) of this subsection for a hotel licensee that applied for an

exemption under clause (9) or (9.1) of this subsection before

January 1, 2019, to a restaurant license without regard to the

quota restrictions set forth in subsection (a). This clause

shall not apply to a hotel license with a pending objection by

the director of the Bureau of Licensing or the board under

section 470(a.1) until the application for renewal of the hotel

license is approved. This clause shall not apply to hotel

licenses in a city of the first class. An application to

transfer a restaurant license that was converted from a hotel

license under this clause in accordance with section 404 within

five years after the board received the application for the

restaurant license shall be subject to a fee of twenty-five per

centum (25%) or twenty-five THIRTY thousand dollars ($25,000)

($30,000) , whichever is greater, of the transactional cost for

the transfer of the restaurant license . TO BE PAID BY THE SELLER

OF THE LICENSE. AS USED IN THIS PARAGRAPH, THE TERM

"TRANSACTIONAL COST" SHALL MEAN THE COST OF THE RESTAURANT

LICENSE.

* * *

Section 3. Section 493(11) of the act is amended to read:

Section 493. Unlawful Acts Relative to Liquor, Malt and

Brewed Beverages and Licensees.--The term "licensee," when used

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in this section, shall mean those persons licensed under the

provisions of Article IV, unless the context clearly indicates

otherwise.

It shall be unlawful--

* * *

(11) Licensees Employed by Others. For any hotel, restaurant

or club liquor licensee, or any malt or brewed beverage

licensee, or any officer, servant, agent or employe of such

licensee, to be at the same time employed, directly or

indirectly, by any distributor, importing distributor,

manufacturer, importer or vendor licensee or any out of State

manufacturer. It shall also be unlawful for any distributor or

importing distributor, or any officer, servant, agent or employe

of such licensee, to be at the same time employed, directly or

indirectly, by any other distributor, importing distributor,

manufacturer, importer, vendor, out of State manufacturer, hotel

restaurant, malt or brewed beverage licensee, or club liquor

licensee. It shall also be unlawful for any manufacturer,

importer, or vendor licensee, or any out of State manufacturer,

or any officer, servant, agent or employe of such licensee or

manufacturer, to be at the same time employed, directly or

indirectly, by any hotel, restaurant or club liquor licensee or

any malt or brewed beverage licensee or any distributor or

importing distributor licensee. Nothing in this subsection shall

be construed to prohibit a manufacturer or limited winery

licensee, or any officer, servant, agent or employe of such

licensee, to be employed at the same time by a hotel, restaurant

or retail dispenser licensee if the hotel, restaurant or retail

dispenser licensee is located at the manufacturer or limited

winery premises pursuant to section 443. For the purposes of

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this subsection, an officer, servant, agent or employe of a

licensee or manufacturer is an individual who has either an

ownership interest in the licensee or manufacturer or who

receives compensation for his or her work on behalf of the

licensee or manufacturer: Provided further, That nothing in this

section shall prohibit a person who has an ownership interest in

a limited winery license from being employed by an entity that

holds a hotel, restaurant, eating place or club license if the

person is not employed as alcohol service personnel or as a

manager[.]: And, provided further, That nothing in this section

shall prohibit a person who has an ownership interest in a

brewery license from being employed by an entity that holds a

hotel, restaurant, eating place or club license if the person

has no job duties or responsibilities on, or connected with, the

licensed premises in any capacity.

* * *

Section 2 4. This act shall take effect in 60 days.

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