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PRINTER'S NO. 1069
THE GENERAL ASSEMBLY OF PENNSYLVANIA
SENATE BILL
No.
908
Session of
2015
INTRODUCED BY WAGNER, MENSCH, STEFANO, VULAKOVICH, SCARNATI,
ALLOWAY, EICHELBERGER, WHITE, BARTOLOTTA AND WARD,
JUNE 22, 2015
REFERRED TO LAW AND JUSTICE, JUNE 22, 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 and for interpretation.
In the Pennsylvania Liquor Control Board, further
providing for general powers, providing for fee adjustment by
regulation and further providing for subject of regulations,
for enforcement and for wine and spirits marketing.
In Pennsylvania Liquor Stores, further providing for
establishment and for sales.
Providing for wine and spirits distribution.
In licensing, further providing for hotels, restaurants
and clubs liquor licenses, for license fees, for liquor
license sales and restrictions, for wine auction permits, for
importers' license fees, privileges and restrictions, for
interlocking business, for application for distributors',
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importing distributors' and retail dispensers' licenses, for
prohibitions against the grant of licenses, for numbers and
kinds of licenses, for distributors and importing
distributors restrictions, for interlocking business
prohibited, for renewal and temporary provisions, for
sanctions, for responsible alcohol management, for surrender
of restaurant, eating place retail dispenser, hotel,
importing distributor and distributor licensee for benefit of
licensee, for unlawful acts relative to malt or brewed
beverages and licensees, for hours of operation relative to
manufacturers, importing distributors and distributors, for
unlawful acts relative to liquor, malt and brewed beverages
and licensees; providing for unlawful acts relative to wine
and spirits retail license holders and for licensees and
taxes; and further providing for penalties and for unlawful
advertising.
In distilleries, wineries, bonded warehouses, bailees and
transporters, further providing for limited wineries, for
distilleries and for license fees.
Providing for supplemental provisions.
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, reenacted and amended June 29,
1987 (P.L.32, No.14), 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:
"Affiliate" or "person affiliated with" shall mean a person
that directly or indirectly, through one or more intermediaries,
controls, is controlled by or is under common control with a
specified person.
* * *
"Blended brand valuation" shall mean, for any particular
brand of liquor, the sum of the wholesale profit margin on each
product of a brand.
* * *
"Brand of liquor" shall mean a liquor product or series of
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liquor products produced by a single manufacturer.
* * *
"Commission" shall mean the State Civil Service Commission.
* * *
"Controlling interest" shall mean as follows:
(1) For a publicly traded legal entity, an interest in a
legal entity, applicant or licensee whereby a person's sole
voting rights under State law or corporate articles or bylaws
entitles the person to elect or appoint one or more of the
members of the board of directors or other governing board or
the ownership, directly or indirectly, of five per centum or
more of the securities of the publicly traded corporation.
(2) For a privately held corporation, partnership, limited
liability company or other form of privately held legal entity,
the holding of any securities in the legal entity.
* * *
"Department" shall mean the Department of General Services of
the Commonwealth.
* * *
"Displaced employe" shall mean a salaried employe of the
board whose employment is terminated as a sole and direct result
of the implementation of Article III-A. 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 excludes intermittent liquor
store clerks and seasonal liquor store clerks.
* * *
"Heritage State Stores" shall mean the number of State
stores, as determined by the board, located in any given county
as of the effective date of this definition.
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* * *
"Institution of higher education" shall mean a public or
private institution within this Commonwealth authorized by the
Department of Education to grant a certificate, associate degree
or higher degree. The term includes a branch or satellite campus
of the institution.
* * *
"Variable pricing" shall mean, for purposes of the wholesale
sale of liquor, any disparity in the price of an item sold to
one licensee as compared to the price of the same item to
another licensee or a licensee of a different classification.
The term shall not include discounts for volume purchases.
* * *
"Wholesale acquisition factor" shall mean a factor of two and
one-half applied to the wholesale profit margin of a brand of
liquor in determining a wholesale license fee.
"Wholesale licensee" shall mean a person that holds a wine
and spirits wholesale license issued pursuant to section
321.1- A.
"Wholesale profit margin" shall mean, for any particular
liquor product, twenty per centum of the total of costs of goods
sold of the product in the Commonwealth over the most recent
twelve-month period for which information is available.
* * *
"Wine and spirits wholesale license" shall mean a license
issued by the department or the board authorizing a person to
sell and distribute liquor on a wholesale basis to the board
until all retail licenses have been issued in accordance with
Article III-A and to licensees under this act.
"Wine and spirits retail permit" shall mean a wine and
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spirits retail permit issued under section 311-A.
"Wine and spirits retail permit holder" shall mean a licensee
that has obtained a wine and spirits retail permit.
* * *
Section 2. Section 104(c) and (d) of the act, amended
December 7, 1990 (P.L.622, No.160) and December 20, 1996
(P.L.1513, No.196), is amended to read:
Section 104. Interpretation of Act.--* * *
(c) Except as otherwise expressly provided, the purpose of
this act is to prohibit the manufacture of and transactions in
liquor, alcohol and malt or brewed beverages which take place in
this Commonwealth, except by and under the [control] regulatory
authority of the board as herein specifically provided, and
every section and provision of the act shall be construed
accordingly; to provide a structure in this Commonwealth for a
distribution system, including the [establishment of
Pennsylvania liquor stores and] licensing of wine and spirits
wholesalers, wine and spirits retail permit holders, importing
distributors and distributors; and to preserve manufacturers of
liquor and alcohol and malt and brewed beverages selling those
products within this Commonwealth. The provisions of this act
dealing with the manufacture, importation, sale, distribution
and disposition of liquor, alcohol and malt or brewed beverages
within the Commonwealth through [the instrumentality of the
board,] licensees and otherwise, provide the means by which such
control shall be made effective. This act shall not be construed
as forbidding, affecting or regulating any transaction which is
not subject to the legislative authority of this Commonwealth.
(d) The provisions of this act are intended to create a
system for distribution [that shall include the fixing of prices
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for] of liquor and alcohol and controls placed on [prices for]
the sale and distribution of malt and brewed beverages, and each
of which shall be construed as integral to the preservation of
the system, without which system the Commonwealth's control of
the sale of liquor and alcohol and malt and brewed beverages and
the Commonwealth's promotion of its policy of temperance and
responsible conduct with respect to alcoholic beverages would
not be possible.
* * *
Section 3. Section 207 of the act, amended February 21, 2002
(P.L.103, No.10), 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.
The board's authority to exercise the powers granted pursuant to
this subsection is subject to the limitations set forth in
Article III-A of this 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
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be sold at Pennsylvania Liquor Stores. 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. 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 each class of wine purchased by the board. 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. The board
shall not purchase any alcohol or liquor fermented, distilled,
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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. The board's authority to
exercise the powers granted pursuant to this subsection is
subject to the limitations set forth in Article III-A of this
act.
[(c) To determine the municipalities within which
Pennsylvania Liquor Stores shall be established and the
locations of the stores within such municipalities.]
(d) To grant and issue all licenses and to grant, issue,
suspend and revoke all permits authorized to be issued under
this act.
(e) (1) Through the [Department of General Services]
department as agent, to lease and furnish and equip such
buildings, rooms and other accommodations as shall be required
for the operation of this act.
(2) The department shall not relocate a Pennsylvania Liquor
Store after the effective date of this paragraph.
(f) To appoint, fix the compensation and define the powers
and duties of such managers, officers, inspectors, examiners,
clerks and other employes as shall be required for the operation
of this act, subject to the provisions of The Administrative
Code of 1929 and the Civil Service Act.
(g) To determine the nature, form and capacity of all
packages and original containers to be used for containing
liquor, alcohol or malt or brewed beverages.
(h) Without in any way limiting or being limited by the
foregoing, to do all such things and perform all such acts as
are deemed necessary or advisable for the purpose of carrying
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into effect the provisions of this act and the regulations made
thereunder.
(i) From time to time, to make such regulations not
inconsistent with this act as it may deem necessary for the
efficient administration of this act. The board shall cause such
regulations to be published and disseminated throughout the
Commonwealth in such manner as it shall deem necessary and
advisable or as may be provided by law. Such regulations adopted
by the board shall have the same force as if they formed a part
of this act.
(j) By regulation, to provide for the use of a computerized
referral system to assist consumers in locating special items at
Pennsylvania Liquor Stores and for the use of electronic
transfer of funds and credit cards for the purchase of liquor
and alcohol at Pennsylvania Liquor Stores. The board's authority
to exercise the powers granted pursuant to this subsection is
subject to the limitations set forth in Article III-A of this
act.
(k) To issue grants to various entities for alcohol
education and prevention efforts.
(l) To close Pennsylvania Liquor Stores as directed under
Article III-A of this act.
(m) The board shall implement a delivery system as a means
of providing product to all licensees under this act.
Section 4. The act is amended by adding a section to read:
Section 207.1. Adjustment of Fees by Regulation.-- (a)
Notwithstanding any provision of this act or the act of April 9,
1929 (P.L.177, No.175), known as "The Administrative Code of
1929," to the contrary, all fees required under this act shall
be fixed by the board by regulation and shall be subject to the
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act of June 25, 1982 (P.L.633, No.181), known as the "Regulatory
Review Act."
(b) The board shall be authorized to increase license fees
by regulation under the following conditions:
(1) If the revenues raised by the fees imposed under this
act are not sufficient to meet all expenditures of the board
over a two-year period, the board shall increase the fees by
regulation, subject to the "Regulatory Review Act," so that the
projected revenues will meet projected expenditures.
(2) If the board determines that the fees established by the
board under subsection (a) are inadequate to meet the minimum
enforcement efforts required under this act, the board, after
consultation with the enforcement bureau, and subject to the
"Regulatory Review Act," shall increase the fees by regulation
in an amount so that adequate revenues are raised to meet the
required expenditures.
(c) All acts or parts of acts are repealed insofar as they
are inconsistent with this section.
Section 5. Section 208 of the act is amended to read:
Section 208. Specific Subjects on Which Board May Adopt
Regulations.--Subject to the provisions of this act and without
limiting the general power conferred by the preceding section,
the board may make regulations regarding:
[(a) The equipment and management of Pennsylvania Liquor
Stores and warehouses in which liquor and alcohol are kept or
sold, and the books and records to be kept therein.]
(b) The duties and conduct of the officers and employes of
the board.
[(c) The purchase, as provided in this act, of liquor and
alcohol, and its supply to Pennsylvania Liquor Stores.
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(d) The classes, varieties and brands of liquor and alcohol
to be kept and sold in Pennsylvania Liquor Stores. In making
this determination the board shall meet not less than twice a
year.
(e) The issuing and distribution of price lists for the
various classes, varieties or brands of liquor and alcohol kept
for sale by the board under this act.]
(f) The labeling of liquor and alcohol sold under this act
and of liquor and alcohol lawfully acquired by any person prior
to January first, one thousand nine hundred thirty-four.
(g) Forms to be used for the purposes of this act.
(h) The issuance of licenses and permits and the conduct,
management, sanitation and equipment of places licensed or
included in permits.
[(i) The place and manner of depositing the receipts of
Pennsylvania Liquor Stores and the transmission of balances to
the Treasury Department through the Department of Revenue.
(j) The solicitation by resident or nonresident vendors of
liquor from Pennsylvania licensees and other persons of orders
for liquor to be sold through the Pennsylvania Liquor Stores
and, in the case of nonresident vendors, the collection
therefrom of license fees for such privilege at the same rate as
provided herein for importers' licenses.]
Section 6. Section 211(c) of the act, amended October 5,
1994 (P.L.537, No.80), is amended to read:
Section 211. Enforcement.--* * *
(c) The Pennsylvania State Police Commissioner shall assign
State Police Officers to such [supervisory and other] capacities
in the enforcement bureau as he deems necessary. All other
personnel of the enforcement bureau shall be civilians.
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Notwithstanding any other provision of law, a State Police
officer assigned to the enforcement bureau may not be counted
against the complement of officers as prescribed in section 205
of the act of April 9, 1929 (P.L.177, No.175), known as "The
Administrative Code of 1929."
* * *
Section 7. Section 215 of the act is repealed:
[Section 215. Wine and Spirits Marketing.--
(e) The board is authorized to participate in or sponsor
wine and spirits events for the purpose of educating consumers
as to the wines and spirits available in this Commonwealth. The
wine and spirits to be used for the event may be acquired
through the State store system or may be donated from outside
this Commonwealth. Participation in the tastings may be
conditioned on the purchase of a ticket to the event. The event
may include events occurring on premises licensed by the board,
and the board may sell wine and spirits for off-premises
consumption in an area designated by the board for such sale.]
Section 8. Section 301 of the act is amended to read:
Section 301. Board to Establish State Liquor Stores.--(a)
The board shall [establish,] operate and maintain at such places
throughout the Commonwealth as it shall deem essential and
advisable, stores to be known as "Pennsylvania Liquor Stores,"
for the sale of liquor and alcohol in accordance with the
provisions of and the regulations made under this act[; except
that no store not so already located shall be located within
three hundred feet of any elementary or secondary school, nor
within a dry municipality without there first having been a
referendum approving such location. When the board shall have
determined upon the location of a liquor store in any
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municipality, it shall give notice of such location by public
advertisement in two newspapers of general circulation. In
cities of the first class, the location shall also be posted for
a period of at least fifteen days following its determination by
the board as required in section 403(g) of this act. The notice
shall be posted in a conspicuous place on the outside of the
premises in which the proposed store is to operate or, in the
event that a new structure is to be built in a similarly visible
location. If, within five days after the appearance of such
advertisement, or of the last day upon which the notice was
posted, fifteen or more taxpayers residing within a quarter of a
mile of such location, or the City Solicitor of the city of the
first class, shall file a protest with the court of common pleas
of the county averring that the location is objectionable
because of its proximity to a church, a school, or to private
residences, the court shall forthwith hold a hearing affording
an opportunity to the protestants and to the board to present
evidence. The court shall render its decision immediately upon
the conclusion of the testimony and from the decision there
shall be no appeal. If the court shall determine that the
proposed location is undesirable for the reasons set forth in
the protest, the board shall abandon it and find another
location. The board may establish, operate and maintain such
establishments for storing and testing liquors as it shall deem
expedient to carry out its powers and duties under this act],
and subject to the limitations set forth in Article III-A of
this act.
(b) The board may lease the necessary premises for such
stores or establishments, but all such leases shall be made
through the [Department of General Services] department as agent
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of the board. The board, through the [Department of General
Services] department, shall have authority to purchase such
equipment and appointments as may be required in the operation
of such stores or establishments.
Section 9. Section 305 of the act, amended May 8, 2003
(P.L.1, No.1), July 17, 2003 (P.L.63, No.15), November 30, 2004
(P.L.1727, No.221), December 8, 2004 (P.L.1810, No.239), July 6,
2005 (P.L.135, No.39) and July 5, 2012 (P.L.1007, No.116), is
amended to read:
Section 305. Sales by Pennsylvania Liquor Stores.--(a) The
board shall in its discretion determine where and what classes,
varieties and brands of liquor and alcohol it shall make
available to the public and where such liquor and alcohol will
be sold. Every Pennsylvania Liquor Store shall be authorized to
sell combination packages. If a person desires to purchase a
class, variety or brand of liquor or alcohol not currently
available from the board, he or she may place a special order
for such item so long as the order is for two or more bottles.
The board may require a reasonable deposit from the purchaser as
a condition for accepting the order. The customer shall be
notified immediately upon the arrival of the goods.
In computing the retail price of such special orders for
liquor or alcohol, the board shall not include the cost of
freight or shipping before applying the mark-up and taxes but
shall add the freight or shipping charges to the price after the
mark-up and taxes have been applied.
Unless the customer pays for and accepts delivery of any such
special order within ten days after notice of arrival, the store
may place it in stock for general sale and the customer's
deposit shall be forfeited.
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During the retail divestiture process as provided in Article
III-A, the board shall continue to take and process special
liquor orders for residents and licensees of the board, and may
establish a protocol by which prepaid orders may be picked up at
either a Pennsylvania Liquor Store or from the licensed premises
of a wine and spirits retail permit holder. A wine and spirits
retail permit holder is authorized to assess a handling fee for
this purpose. Any product not claimed at the premises of a wine
and spirits retail permit holder by the purchaser shall be
returned to the board after ten days' notice of arrival was sent
to the purchaser.
(b) [Every] Until the wholesale divestiture process as
provided in Article III-A is complete, every Pennsylvania Liquor
Store shall sell liquors at wholesale to wine and spirits retail
permit holders, hotels, restaurants, clubs, and railroad,
pullman and steamship companies licensed under this act; and,
under the regulations of the board, to pharmacists duly licensed
and registered under the laws of the Commonwealth, and to
manufacturing pharmacists, and to reputable hospitals approved
by the board, or chemists. Sales to licensees shall be made at a
price that includes a discount of [ten] fourteen per centum from
the retail price. The board may sell to registered pharmacists
only such liquors as conform to the Pharmacopoeia of the United
States, the National Formulary, or the American Homeopathic
Pharmacopoeia. The board may sell at special prices under the
regulations of the board, to United States Armed Forces
facilities which are located on United States Armed Forces
installations and are conducted pursuant to the authority and
regulations of the United States Armed Forces. All other sales
by such stores shall be at retail. A person entitled to purchase
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liquor at wholesale prices may purchase the liquor at any
Pennsylvania Liquor Store upon tendering cash, check or credit
card for the full amount of the purchase. For this purpose, the
board shall issue a discount card to each licensee identifying
such licensee as a person authorized to purchase liquor at
wholesale prices. Such discount card shall be retained by the
licensee. The board may contract through the Commonwealth
bidding process for delivery to wholesale licensees at the
expense of the licensee receiving the delivery.
(c) Whenever any checks issued in payment of liquor or
alcohol purchased from State Liquor Stores by persons holding
wholesale purchase permit cards issued by the board shall be
returned to the board as dishonored, the board shall charge a
fee of five dollars per hundred dollars or fractional part
thereof, plus all protest fees, to the maker of such check
submitted to the board. Failure to pay the face amount of the
check in full and all charges thereon as herein required within
ten days after demand has been made by the board upon the maker
of the check shall be cause for revocation or suspension of any
license issued by the board to the person who issued such check
and the cancellation of the wholesale purchase permit card held
by such person.
(d) No liquor or alcohol package shall be opened on the
premises of a Pennsylvania Liquor Store. No manager or other
employe of the board employed in a Pennsylvania Liquor Store
shall allow any liquor or alcohol to be consumed on the store
premises, nor shall any person consume any liquor or alcohol on
such premises, except liquor and alcohol which is part of a
tasting conducted pursuant to the board's regulations. Such
tastings may also be conducted in the board's headquarters or
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regional offices or at the premises of a wine and spirits retail
permit holder.
(e) The board may sell tax exempt alcohol to the
Commonwealth of Pennsylvania and to persons to whom the board
shall, by regulation to be promulgated by it, issue special
permits for the purchase of such tax exempt alcohol.
Such permits may be issued to the United States or any
governmental agency thereof, to any university or college of
learning, any laboratory for use exclusively in scientific
research, any hospital, sanitorium, eleemosynary institution or
dispensary; to physicians, dentists, veterinarians and
pharmacists duly licensed and registered under the laws of the
Commonwealth of Pennsylvania; to manufacturing chemists and
pharmacists or other persons for use in the manufacture or
compounding of preparations unfit for beverage purposes.
(f) Every purchaser of liquor, alcohol, corkscrews, wine or
liquor accessories, trade publications, gift cards, gift
certificates, wine- or liquor-scented candles or wine glasses
from a Pennsylvania Liquor Store shall receive a numbered
receipt which shall show the price paid therefor and such other
information as the board may prescribe. Copies of all receipts
issued by a Pennsylvania Liquor Store shall be retained by and
shall form part of the records of such store.
[(g) The board is hereby authorized and empowered to adopt
and enforce appropriate rules and regulations to insure the
equitable wholesale and retail sale and distribution, through
the Pennsylvania Liquor Stores, of available liquor and alcohol
at any time when the demand therefor is greater than the
supply.]
(h) Every Pennsylvania Liquor Store shall sell gift
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certificates and gift cards which may be redeemed for any
product sold by the board. In addition, the board may sell
corkscrews, wine and liquor accessories, wine- or liquor-scented
candles, trade publications and wine sleeves at Pennsylvania
Liquor Stores.
(i) Notwithstanding any other provision of law to the
contrary, the board may sell wine in containers having a
capacity of sixty liters or less.
Section 10. The act is amended by adding an article to read:
ARTICLE III-A
WINE AND SPIRITS DISTRIBUTION
SUBARTICLE A
GENERAL PROVISIONS
Section 301-A. Scope of article.
This article relates to the privatization of liquor
distribution in this Commonwealth.
Section 302-A. Transition to private distribution system,
powers and duties of the department and the board.
(a) Orderly transition.--The department and the board have
the power and duty to implement this article and effect an
orderly transition to a privately-owned and privately-operated
wholesale and retail liquor distribution system in this
Commonwealth in a manner which is consistent with this article
and the laws of this Commonwealth and which seeks to maintain
uninterrupted service to the public.
(b) Wholesale transition.--
(1) Six months after the effective date of this section ,
in consultation with its advisors and the board, the
department shall transition the board's wholesale
distribution of liquor to privately-owned and privately-
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operated wholesale licensees.
(2) The divestiture of the board's wholesale operations
shall be accomplished through the issuance of wine and
spirits wholesale licenses by brand of liquor, which shall be
subject to an application process as set forth in this
article. The transition must fully divest the board of all
operations relating to the wholesale distribution of liquor
within six months of the commencement of wholesale
divestiture.
(c) Cooperation required.--
(1) The board shall fully cooperate with the department
or its advisors in all aspects of implementation of this
article and shall provide the department or its consultant
with all records and information in the possession of the
board upon request.
(2) The board shall devote sufficient resources to
planning and preparation for the divestiture of its wholesale
and retail functions.
(3) The board shall use its best efforts in coordinating
with the department or its advisors , wine and spirits retail
permit holders and wine and spirits wholesale licensees so as
to maintain uninterrupted service to the residents of this
Commonwealth during divestiture.
(d) Prohibition.--The board shall not engage in wholesale
distribution of liquor following completion of the wholesale
transition to a private distribution system.
Section 303-A. Reports to the General Assembly.
One year after the effective date of this section, and each
year thereafter until the board has been fully divested of its
wholesale and retail operations, the board, in cooperation with
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the department, shall submit to the Secretary of the Senate and
the Chief Clerk of the House of Representatives, a report on
wholesale and retail alcohol sales in this Commonwealth and the
implementation of this article, including:
(1) the total revenue earned by the issuance of licenses
or permits under this article;
(2) the distribution and sale of brands through private
wholesalers;
(3) the net profit or loss of each wine and spirits
retail permitted premise and State liquor store in this
Commonwealth; and
(4) the status of the ongoing transition, including
store closures and employee displacement.
Section 304-A. Temporary regulations.
(a) Promulgation.--In order to facilitate the prompt
implementation of this article, regulations promulgated by the
department shall be deemed temporary regulations which shall
expire no later than five years following the effective date of
this section. The department may promulgate temporary
regulations not subject to:
(1) sections 201, 202 and 203 of the act of July 31,
1968 (P.L.769, No.240), referred to as the Commonwealth
Documents Law; or
(2) the act of June 25, 1982 (P.L.633, No.181), known as
the Regulatory Review Act.
(b) Expiration.--The authority provided to the department to
adopt temporary regulations under subsection (a) shall expire on
January 1, 2018.
SUBARTICLE B
WINE AND SPIRITS RETAIL PERMITS
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Section 311-A. Issuance of retail permits.
(a) General rule.--On the effective date of this section,
the department may issue to licensees holding a hotel or
restaurant license or a distributor's license a wine and spirits
retail permit as provided under this section.
(b) Application, issuance and requirements.-- Any licensee
that wishes to obtain a wine and spirits retail permit must
apply to the board on a form prescribed by the board and pay the
applicable permitting fees by June 1 of each calendar year. Any
licensee that fails to notify the board and pay the permitting
fees by June 1 may be precluded from obtaining the permit for
that calendar year. The board may allow the issuance of the
permit after the June 1 deadline so long as the applicant is a
licensee in good standing with the board and complies with the
other requirements for the permit. A licensee applying for the
permit after the June 1 deadline shall pay the board a late fee
equal to the amount of the permit fee listed under subsection
(c). Any licensee not granted a license until after June 1 of
the calendar year shall have 60 days from the date of the
license transfer to notify the board of the licensee's intention
to use a wine and spirits retail permit and pay the permitting
fee. The servers employed by a licensee who obtains a wine and
spirits retail permit must be certified under the board's
responsible alcohol management program as required under section
471.1.
(c) Fees.--The board shall charge the following fees for a
wine and spirits retail permit, which shall be paid into The
State Stores Fund:
(1) For a licensee holding a hotel or restaurant
license, $1,500 per calendar year.
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(2) For a licensee holding a distributor's license,
$3,000 per calendar year.
(d) Violation.--Any violation of this act or the board's
regulations for governing activity occurring under the authority
of this permit may be the basis for the issuance of a citation
under section 471, the nonrenewal of the license under section
470 or the refusal by the board to issue subsequent permits. The
penalty imposed under this subsection shall be in addition to
the other remedies available to the enforcement bureau or the
board.
SUBARTICLE C
DIVESTITURE OF WHOLESALE LIQUOR DISTRIBUTION
Section 321-A. Wholesale divestiture.
(a) Utilization.--In effectuating the intent of this
article, the department shall utilize the authority provided
under section 305-A and any other powers of the department, with
the full cooperation and assistance of the board.
(b) Establishment.--On the effective date of this section,
the department shall establish all of the following:
(1) An application process and schedule for the
investigation and award of wine and spirits wholesale
licenses under this article.
(2) A blended brand valuation for each brand of liquor
available for sale in this Commonwealth.
(3) Procedures and standards governing the relationship
between wine and spirits wholesale licensees and
manufacturers and the ability and terms upon which that
relationship may be terminated.
(c) Coordination.--
(1) The department shall:
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(i) coordinate scheduling so that wine and spirits
wholesale license applications may be received, processed
and investigated by the board's Bureau of Licensing
during the retail divestiture process; and
(ii) begin a coordinated effort to allow the board
to issue licenses six months from the effective date of
this section.
(2) The department must fully divest the board of all
operations relating to the wholesale distribution of liquor
within six months of commencing wholesale divestiture.
Section 321.1-A. Issuance of wine and spirits wholesale
licenses.
(a) Authorization.--The board may issue wine and spirits
wholesale licenses under the following conditions:
(1) The following shall apply:
(i) One wine and spirits wholesale license may be
issued by the board to each qualified applicant.
(ii) A wine and spirits wholesale license shall
authorize the holder to sell and distribute brands of
liquor, as proposed by an applicant and approved by the
department, to wine and spirits retail permit holders and
other licensees of the board authorized to sell or
distribute liquor under this act, to United States Armed
Forces facilities located on United States Armed Forces
installations within this Commonwealth and to the holder
of a wholesale alcohol purchase permit issued by the
board.
(iii) The alcoholic products shipped into this
Commonwealth must be delivered to the wholesaler's
licensed premises. Upon delivery, the products shall be
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unloaded, inventoried and remain on the licensed premises
for 18 hours before delivery is made to a retailer.
During that time period, the board may inspect and
inventory wholesale warehouses to verify taxes that are
required to be paid on the products. Under certain
circumstances, the wholesaler or manufacturer may ask the
board to waive the 18-hour delivery hold.
(2) Subject to the conditions and restrictions of this
subarticle, wine and spirits wholesale licensees may sell and
distribute more than one brand of liquor under the same wine
and spirits wholesale license.
(3) Upon application by a wine and spirits wholesale
licensee, the board may amend its initial authorization under
a wine and spirits wholesale license to include additional
brands of liquor or exclude previously-approved brands of
liquor.
(b) Wine and spirits wholesale license fee.--
(1) On the effective date of this section, the
department shall determine the wine and spirits wholesale
license fee for each brand of liquor sold at wholesale by the
board through its State liquor stores or via special liquor
order for a continuous period of at least one year. The
license fee shall be equal to the blended brand valuation for
each brand of liquor authorized by the wine and spirits
wholesale license multiplied by the wholesale acquisition
factor.
(2) The department shall publish a notice on its
Internet website of the wine and spirits wholesale license
fee for each brand of liquor determined under paragraph (1).
The department shall establish deadlines within which an
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applicant must submit an application for a wine and spirits
wholesale license for the brands of liquor specified by the
applicant.
(3) The department must receive the required license fee
for the brands of liquor specified by the applicant before a
wine and spirits wholesale license is issued by the board to
a successful applicant.
(c) Brands not previously sold.-- If, during the term of a
wine and spirits wholesale license, a wine and spirits wholesale
licensee proposes to sell and distribute a new brand of liquor
not previously sold in this Commonwealth, the wine and spirits
wholesale licensee shall apply to the board for permission to
sell the brand and pay an additional license fee of $1,000.
(d) Term.--
(1) A wine and spirits wholesale license, after payment
of the required license fee, shall be in effect unless
suspended, revoked or not renewed under this article.
(2) The license of a wine and spirits wholesale licensee
in good standing shall be renewed every two years under this
article.
(3) Nothing under this subsection shall be construed to
relieve a wine and spirits wholesale licensee of the
affirmative duty to notify the board of changes relating to
any of the following:
(i) The status of its license.
(ii) Information contained in the application
materials on file with the department or the board.
Section 322-A. Application for wine and spirits wholesale
license.
(a) Applications.--An application for a wine and spirits
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wholesale license shall be submitted on a form and in a manner
as required by the board.
(b) Eligibility.--A person may be eligible to apply for a
wine and spirits wholesale license if the person satisfies all
of the following:
(1) Neither the applicant nor any affiliate of the
applicant has applied for or holds a wine and spirits retail
permit or other license which authorizes the retail sale of
wine and spirits to consumers.
(2) The applicant is organized under the laws of this
Commonwealth if it is any of the following:
(i) A corporation.
(ii) A limited liability company.
(iii) A limited partnership.
(iv) A partnership.
(v) An association.
(vi) A legal entity other than a legal entity listed
under this paragraph.
(3) The applicant is a citizen of the United States and
a resident of this Commonwealth if that applicant is a
natural person.
(4) Neither the applicant nor any affiliate of the
applicant, executive officer, director or general or limited
partner of the applicant or person holding, directly or
indirectly, a controlling interest in the applicant has been
convicted of a crime listed under subsection (d) (10).
(c) Other licenses.--Nothing under this act shall prohibit:
(1) A properly licensed importing distributor of malt
and brewed beverages from applying for and, if approved,
being issued a wine and spirits wholesale license.
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(2) The holder of a limited winery license, a limited
distillery license or a distillery license issued by the
board from acquiring a wine and spirits wholesale license.
(d) General requirements.--In addition to any other
information required under this article or by the department or
the board, the applicant for a wine and spirits wholesale
license shall include the following:
(1) The name, address and tax identification number of
the applicant.
(2) A statement as to whether the applicant is an
individual, corporation, limited liability company, limited
partnership, partnership or association and, if the applicant
is not an individual, the state of incorporation or
organization.
(3) If the applicant is not an individual, the name and
residence address of each executive officer, director,
general or limited partner or person holding a controlling
interest in the applicant.
(4) If the applicant is an association, the name and
residence address of each person constituting the
association.
(5) A list of the brands of liquor the applicant
proposes to engage in wholesale distribution on a Statewide
basis.
(6) A sworn statement that the applicant has entered
into a contractual relationship with one or more liquor
manufacturers, importers or vendors of record for the
distribution in this Commonwealth of a brand or brands of
liquor, regardless of whether the contractual relationship is
contingent upon the board issuing a wine and spirits
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wholesale license to the applicant.
(7) The proposed location and proof of ownership or
lease for the wholesale operation, including proposed
warehouses, if available.
(8) Floor plans for any facility proposed to be used in
wholesale operations and existing design plans for any
facility that is planned, but not yet constructed, to the
extent the floor plans are available.
(9) Information disclosing all arrests of and all
citations issued for nonsummary offenses to an applicant and
any affiliate of the applicant, executive officer, director
or general or limited partner of the applicant or person
holding a controlling interest in the applicant. The
information shall include:
(i) A brief description of the circumstances
surrounding the arrest or issuance of the citation.
(ii) The specific offense charged or cited.
(iii) The ultimate disposition of the charge or
citation, including the details of a dismissal, plea
bargain, conviction, sentence, pardon, expungement or
order of Accelerated Rehabilitative Disposition.
(10) A sworn statement that the applicant and any
affiliate of the applicant, or any executive officer,
director or general or limited partner of the applicant or
person holding a controlling interest in the applicant have
never been convicted:
(i) of a crime involving fraud, moral turpitude or
racketeering within a period of 10 years immediately
preceding the date of the application;
(ii) of a felony or equivalent crime; or
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(iii) in a Federal or state tribunal, including this
Commonwealth, of the violation of a Federal or state
liquor law.
(11) A statement that the applicant intends to
continuously operate as a wine and spirits wholesale licensee
for the duration of the license term and to use its best
efforts to provide a level of service, including product
availability, reasonably equivalent to the level of service
currently provided by the Commonwealth.
(12) A financial statement or letter of credit in a form
and containing information determined by the department to
indicate the applicant's financial capability to operate the
wholesale operation and the estimated volume of wholesale
business to be conducted annually.
(13) A current tax certificate issued by the Department
of Revenue showing the amount of taxes owed to the
Commonwealth for the applicant and any affiliate of the
applicant, executive officer, director or general or limited
partner of the applicant or person holding a controlling
interest in the applicant.
(14) A signature and verification by oath or affirmation
or under penalty of unsworn falsification to authorities by
one of the following:
(i) The applicant, if the applicant is a natural
person.
(ii) A person specifically authorized by the legal
entity to sign the application, if the applicant is a
legal entity. Written evidence of the authority to sign
must be attached to the signature and verification.
(e) Additional information.--An applicant shall, during the
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application process, provide any other information determined to
be appropriate by the department.
(f) Amended application.--If a change occurs in any
information provided to the department or the board as part of
the application process, the applicant shall immediately notify
the department or the board of the change and timely provide
amended information to the department or the board in a form and
manner determined by the department or the board.
(g) Application fees and investigative costs.--
(1) An application filing fee of $10,000 shall be due
upon application for a wine and spirits wholesale license.
The application filing fee shall be refunded if, due to no
fault of the applicant, the wine and spirits wholesale
license is not approved.
(2) The department shall establish, charge and collect
fees from an applicant to recover the costs directly related
to the board's review and investigation of the application
for a wine and spirits wholesale license. The board shall
have the same authority relating to fees as to applications
for renewal.
Section 323-A. Review and investigation of application.
(a) Completeness of application.--
(1) The following shall apply:
(i) The department may not consider an incomplete
application and shall notify the applicant in writing if
an application is incomplete.
(ii) An application shall be considered incomplete
if it does not include all applicable fees and all
information and accompanying documentation required by
the department . Unpaid taxes identified on the tax
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certificate required to be filed under section
322- A(d) (13) must be paid before the application is
considered complete.
(2) A notification of incompleteness shall state the
deficiencies in the application that must be corrected prior
to consideration of the merits of the application.
(3) The applicant must be afforded a reasonable period
of time, as determined by the department, to cure the
deficiencies.
(4) If the applicant fails to timely cure noticed
deficiencies within the time specified by the department, the
application shall be deemed denied by the department without
further action.
(b) Investigation.--After receipt of an application for a
wine and spirits wholesale license and a determination that the
application is complete, the department shall provide the
application to the board's Bureau of Licensing to conduct an
investigation of the applicant. The investigation shall include
and the applicant shall have the burden of demonstrating the
following:
(1) The truth and veracity of the information provided
in the application.
(2) The applicant's cooperation and the cooperation of
any affiliate of the applicant and any executive officer,
director or general or limited partner of the applicant or
person holding a controlling interest in the applicant in the
application process and with any request by the department or
the board for any information deemed necessary for licensure.
(3) The good character, reputation and suitability of
the applicant and any affiliate of the applicant, executive
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officer, director or general or limited partner of the
applicant or person holding a controlling interest in the
applicant.
(4) The applicant possesses sufficient financial
resources to:
(i) Operate as a wine and spirits wholesale
licensee.
(ii) Pay all taxes due and owing to the
Commonwealth.
(iii) Assume liability for the safe operation of the
wholesale operations.
(5) The applicant possesses sufficient financial
resources and experience to create and maintain a successful
and efficient wholesale operation that provides service at a
level that is reasonably equivalent to the level of service
currently provided in this Commonwealth on the effective date
of this section.
(6) The applicant has entered into a contractual
relationship with one or more licensed manufacturers,
importers or vendors of record for the distribution in this
Commonwealth of a brand or brands of liquor regardless of
whether the contractual relationship is contingent upon the
board issuing a wine and spirits wholesale license to the
applicant.
(7) The physical facilities proposed to be used in the
applicant's wholesale operations are located and designed to:
(i) assure that all warehouses are located within
this Commonwealth and licensed for the storage of liquor;
(ii) function as a self-contained unit, with limited
customer access;
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(iii) not have any interior connection with any
other business or with any residential building without
prior department or board approval;
(iv) provide adequate security to protect the
applicant's inventory from unauthorized sale or
diversion; and
(v) protect the public interest.
(c) Assistance with investigations.--The board may enter
into an agreement with the Pennsylvania State Police or the
Office of Inspector General to assist the board in conducting
investigations under this section and to provide for the
reimbursement of actual costs incurred for providing the
assistance. The board may establish, charge and collect fees
from an applicant to recover the costs of investigation.
Section 324-A. Issuance of licenses.
(a) Notification.--Upon completion of the investigation
under section 323-A, the board shall inform the department of
the results of its investigation. The board shall inform the
applicant in writing of its decision to approve or deny the
application.
(b) Approval.--If the application is approved, the
department shall require the successful applicant to pay the
license fee, as required under section 321.1-A, based on the
brand licensing fees established under section 321.1-A for the
brands of liquor approved for the applicant.
(c) Denial.--
(1) If an application is denied, the board shall provide
the applicant with the specific reasons for the denial in the
written notification required under subsection (a).
(2) The applicant shall be entitled to a hearing on the
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denial, if a hearing is requested within 10 days of the
board's notification and the request is in writing on a form
and in a manner determined by the board .
(3) A hearing under this subsection shall be conducted
in accordance with 2 Pa.C.S. Ch. 5 Subch. A (relating to
practice and procedure of Commonwealth agencies).
(d) Issuance.--After approval of an application, the board
shall issue a wine and spirits wholesale license to the
applicant for the exclusive privilege to sell approved brands of
liquor in this Commonwealth, if the applicant has completed all
of the following:
(1) Paid the wine and spirits wholesale license fee
required under this article. Payment must be made by
certified check or wire transfer to a designated restricted
account in The State Stores Fund.
(2) Paid outstanding application or investigation fees.
(3) Executed and delivered to the board the statement of
conditions required under section 325-A.
(4) Repurchased from the board remaining marketable
inventory of the brands authorized under its license which
are owned by the board at the board's purchase order cost and
paid applicable taxes due and an administrative fee
determined by the board. The wine and spirits wholesale
licensee shall coordinate, at its own cost, the removal of
remaining product owned by the board.
(5) Fulfilled any other conditions required by the
department or the board or provided for under this article.
(e) License as privilege.--
(1) Nothing under this article is intended or may be
construed to create an entitlement to a wine and spirits
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wholesale license.
(2) The authorization to participate in the distribution
and sale of liquor as a wine and spirits wholesale licensee
is a privilege conditioned upon this article.
(f) Termination of board's authority.--
(1) Except as set forth in paragraph (2), if a wine and
spirits wholesale license has been issued for a particular
brand of liquor, the board may not engage in the sale or
distribution of that brand of liquor.
(2) The board may coordinate the repurchase of remaining
board inventory of brands as provided under Subarticle D.
(3) The board's Bureau of Licensing shall provide
adequate notice to the board's Bureau of Supply Chain that a
wine and spirits wholesale license application is ready for
license approval to insure that appropriate inventory
reduction can be effectuated without causing a shortage of
the brand at issue.
Section 325-A. W ine and spirits w holesale licensee statement of
conditions.
(a) Statement of conditions.--The department, in
consultation with the board, shall develop a statement of
conditions to be executed by each wine and spirits wholesale
licensee governing the operation of the wine and spirits
wholesale licensee.
(b) Conditions, restrictions and prohibited acts.--In
addition to any other conditions the department, in consultation
with the board, deems necessary or appropriate for a specific
wine and spirits wholesale licensee or which may be mandated for
all licensees through regulations of the department or the
board, the statement of conditions under subsection (a) shall
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include the following:
(1) A wine and spirits wholesale licensee may not sell
liquor to a person, except a person specified in section
321.1-A(a)(1).
(2) A wine and spirits wholesale licensee must serve all
licensees eligible to purchase and resell liquor under this
act and must make liquor available for sale to those
licensees under the same pricing structure.
(3) Except for a wine and spirits wholesale licensee
that holds an importing distributor license under section
431, a wine and spirits wholesale licensee may not sell malt
or brewed beverages.
(4) A wine and spirits wholesale licensee 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
liquor from the marketplace.
(5) A wine and spirits wholesale licensee may only sell
and distribute liquor products in this Commonwealth that are
subject to a contractual relationship between the wine and
spirits wholesale licensee and one or more licensed
manufacturers or importers of wine and spirits.
(6) A wine and spirits wholesale licensee shall do all
of the following:
(i) Acquire liquor exclusively from a designated
agent of the brand owner and/or a licensed manufacturer
or importer of wine and spirits with whom the wine and
spirits wholesale licensee has the contractual authority
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to sell at wholesale as provided under this act.
(ii) Keep a detailed log of wholesale liquor
transactions, including acquisitions of liquor from an
entity listed under subparagraph (i) and sales to
licensees under this act.
(7) A wine and spirits wholesale licensee's licensed
premises and all facilities involved in its wholesale
operations, including any changes to the facilities during
the term of the license, shall be subject to the inspection,
investigation and approval of the department or the board or
the enforcement bureau.
(8) A wine and spirits wholesale licensee shall maintain
adequate security to protect the licensee's inventory from
unauthorized sale, removal or theft and prevent its
unauthorized distribution.
(9) As follows:
(i) Except as provided under paragraph (1), a wine
and spirits wholesale licensee may not engage in a
separate business activity on a premises on which
wholesale liquor operations are conducted without prior
approval of the board.
(ii) A wine and spirits wholesale licensee which
holds an importing distributor license may engage in
sales of malt or brewed beverages under this act.
(10) A wine and spirits wholesale licensee shall collect
and remit to the Department of Revenue all applicable taxes.
(11) A wine and spirits wholesale licensee shall be
considered a State liquor store for the purpose 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,
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from persons licensed to sell liquor for consumption on the
premises under Article IV.
(12) A wine and spirits wholesale licensee shall notify
the board within 15 days of a change in a person holding a
controlling interest in the licensee.
(13) A wine and spirits wholesale licensee shall notify
the board within 15 days of becoming aware of an arrest,
criminal indictment or conviction by the licensee, an
affiliate of the licensee or an executive officer, director
or general or limited partner of the licensee or person
holding a controlling interest in the licensee.
(14) A wine and spirits wholesale licensee shall notify
the board within 15 days of becoming aware of a violation of
this act by the licensee, an affiliate of the licensee or an
executive officer, director or general or limited partner of
the licensee, person holding a controlling interest in the
licensee or employee of the licensee.
(15) As follows:
(i) A wine and spirits wholesale licensee may not
operate in a manner which constitutes a violation of
Federal or State law, including antitrust or other unfair
trade practices, or creates a monopolistic liquor
distribution system in this Commonwealth.
(ii) If a wine and spirits wholesale licensee seeks
to be approved by the board to distribute additional
brands of liquor which would give the licensee a control
of more than 50% of the liquor distributed in the
wholesale market of this Commonwealth, in terms of gross
dollar sales, the board shall convene a hearing to
determine whether approval of the proposed application
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for additional brands would constitute a violation of
antitrust or other unfair trade practice laws, or would
create a monopolistic liquor distribution system in this
Commonwealth.
(iii) The board is authorized to promulgate
regulations providing for the procedure for hearings
under subparagraph (ii).
(16) A wine and spirits wholesale licensee shall make
the licensed premises, all of the facilities involved in the
wholesale operation and all of the business and financial
books and records of the wholesale operation available at any
time for inspection and audit by the department, the board or
the enforcement bureau. The board shall promulgate
regulations regarding the records that a licensee must
maintain on its premises.
(17) A wine and spirits wholesale licensee shall
cooperate fully in an inquiry or investigation by the
department or the board or the enforcement bureau and provide
information requested by the department, the board or the
enforcement bureau.
(18) A wine and spirits wholesale licensee which is a
corporation, a limited liability company, limited
partnership, partnership, association or other legal entity
must be organized under the laws of this Commonwealth.
(19) A wine and spirits wholesale licensee which is a
natural person must be a citizen of the United States and a
resident of this Commonwealth.
(c) Sanctions.--A wine and spirits wholesale licensee that
fails to abide by a condition contained in the licensee's
statement of conditions or commits a violation of this act or
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Federal or State law:
(1) shall be subject to citation by the enforcement
bureau; and
(2) may be subject to:
(i) a fine, suspension or license revocation;
(ii) nonrenewal of the license or revocation of
temporary operating authority; or
(iii) other penalties authorized under sections 471
and 494.
Section 326-A. Transfer of brands of liquor.
(a) Prohibition.--No brand of liquor offered for sale in
this Commonwealth may be transferred to a different wine and
spirits wholesale licensee without prior notice from the board.
(b) Transfer fee.--An application to the board to transfer
the right to distribute a brand of liquor shall be subject to an
application fee equal to 1% of the initial license fee
attributable to the brand of liquor or $1,000, whichever is
greater.
SUBARTICLE D
CLOSURE OF STATE LIQUOR STORES
AND ASSISTANCE FOR DISPLACED EMPLOYEES
Section 331-A. Closure of State liquor stores.
(a) Process for closure.--
(1) The board shall review the viability of a store
located within a county where the number of privately owned
and privately operated wine and spirits retail permits equal
the number of Heritage State Stores.
(2) Where the number of Heritage State Stores equals the
number of privately owned and privately operated wine and
spirits retail permits, the board shall provide a rationale
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to the department for the continued operation or closure of a
store located in a county.
(3) A Heritage State Store designated for closure shall
cease operations within 60 days.
(4) Where the number of privately owned and privately
operated wine and spirits retail permits exceed the number of
Heritage State Stores by a factor of two, the Heritage State
Stores within a county must close within six months.
(5) Once the board is operating fewer than 100 Heritage
State Stores within this Commonwealth, the board must
immediately begin the process of closing all of them.
(b) Disposition of liquor.--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, do any of the following:
(1) Coordinate with the vendor of record for the
repurchase products by the vendor of record.
(2) Sell products to a newly licensed wine and spirits
retail permit holder.
(3) Transport products for sale at another operating
State liquor store.
(c) Disposition of nonliquor State-owned property.--The
department, in consultation with the board, shall establish a
procedure for the sale of the nonliquor inventory, property and
fixtures of all State liquor stores consistent with 62 Pa.C.S.
Ch. 15 (relating to supply management). Wine and spirits retail
permit holders 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 Stores Fund.
(d) Pennsylvania Liquor Store leases.--The board shall
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