Regular Session 2021-2022 Senate Bill 0623 P.N. 0695

PRINTER'S NO. 695

THE GENERAL ASSEMBLY OF PENNSYLVANIA

SENATE BILL

No.

623

Session of

2021

INTRODUCED BY LAUGHLIN, STREET, J. WARD, BAKER, MENSCH, BOSCOLA,

COLLETT, AUMENT, A. WILLIAMS, SANTARSIERO, SCHWANK,

L. WILLIAMS, VOGEL, CAPPELLETTI AND ARGALL, MAY 3, 2021

REFERRED TO LAW AND JUSTICE, MAY 3, 2021

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, liquor, alcohol and malt and brewed

beverages, further providing for malt and brewed beverages

manufacturers', distributors' and importing distributors'

licenses, for unlawful acts relative to liquor, alcohol and

liquor licensees and for unlawful acts relative to malt or

brewed beverages and licensees.

The General Assembly of the Commonwealth of Pennsylvania

hereby enacts as follows:

Section 1. The definition of "malt or brewed beverages" in

section 102 of the act of April 12, 1951 (P.L.90, No.21), known

as the Liquor Code, amended November 25, 2020 (P.L.1222,

No.125), is amended 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:

* * *

"Malt or Brewed Beverages" shall mean any beer, lager beer,

ale, porter or similar fermented malt beverage containing one-

half of one per centum or more of alcohol by volume, by whatever

name such beverage may be called, and shall mean alcoholic

cider, fermented fruit beverage and mead. The label, product

packaging and marketing materials for alcoholic cider, fermented

fruit beverages and mead that are used in connection with the

sale and distribution of alcoholic cider, fermented fruit

beverages and mead may refer to the product as "wine based" or

as a "wine product" or in a similar manner or by a similar name

with the product still treated as a malt or brewed beverage if

the product is registered with the board as a malt or brewed

beverage as set forth in section 445, the product is carbonated

and the product contains not more than eight and one-half per

centum of alcohol by volume. No product that has previously been

sold under section 305, including any product that would be

identical except for a change in a container or package, may be

identified as a malt or brewed beverage.

* * *

Section 2. Section 431(b)and (d) of the act, amended June 5,

2020 (P.L.213, No.29), are 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

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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. The board shall have the

discretion to refuse a license to any person or to any

corporation, partnership or association if such person, or any

officer or director of such corporation, or any member or

partner of such partnership or association shall have been

convicted or found guilty of a felony within a period of five

years immediately preceding the date of application for the said

license: And provided further, That, in the case of any new

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

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

or transfer if such place proposed to be licensed is within

three hundred feet of any church, hospital, charitable

institution, school or public playground, or if such new license

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

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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

new agreement rescinding those restrictions. The board shall

require notice to be posted on the property or premises upon

which the licensee or proposed licensee will engage in sales of

malt or brewed beverages. This notice shall be similar to the

notice required of hotel, restaurant and club liquor licensees.

Except as hereinafter provided, such license shall authorize

the holder thereof to sell or deliver malt or brewed beverages

in quantities above specified anywhere within the Commonwealth

of Pennsylvania, which, in the case of distributors, have been

purchased only from persons licensed under this act as

manufacturers or importing distributors, and in the case of

importing distributors, have been purchased from manufacturers,

liquor importers or persons outside this Commonwealth engaged in

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the legal sale of malt or brewed beverages 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 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 produced by that manufacturer for sale

by that manufacturer to importing distributors to whom that

manufacturer has given distribution rights pursuant to this

subsection or to purchasers outside this Commonwealth for

delivery outside this Commonwealth; or to ship to that

manufacturer's storage facilities outside this Commonwealth. The

bailee for hire shall be permitted to receive a fee from the

manufacturer for any related storage, repackaging or delivery

services. The bailee for hire shall, as required in Article V of

this act, keep complete and accurate records of all

transactions, inventory, receipts and shipments and make all

records and the licensed areas available for inspection by the

board and for the Pennsylvania State Police, Bureau of Liquor

Control Enforcement, during normal business hours.

Each out of State manufacturer of malt or brewed beverages

whose products are sold and delivered in this Commonwealth shall

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give distributing rights for such products in designated

geographical areas to specific importing distributors, and such

importing distributor shall not sell or deliver malt or brewed

beverages manufactured by the out of State manufacturer to any

person issued a license under the provisions of this act whose

licensed premises are not located within the geographical area

for which he has been given distributing rights by such

manufacturer. In addition, the holder of a distributor license

may not sell or deliver malt or brewed beverages 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

to the distributor. If the licensee purchasing the malt or

brewed beverages from the distributor license holder holds

multiple licenses or operates at more than one location, then

the malt or brewed beverages 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 to

the distributor. Should a licensee accept the delivery of malt

or brewed beverages or transfer malt or brewed beverages in

violation of this section, said licensee shall be subject to a

suspension of his license for at least thirty days: Provided,

That the importing distributor holding such distributing rights

for such product shall not sell or deliver the same to another

importing distributor without first having entered into a

written agreement with the said secondary importing distributor

setting forth the terms and conditions under which such products

are to be resold within the territory granted to the primary

importing distributor by the manufacturer.

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When a Pennsylvania manufacturer of malt or brewed beverages

licensed under this article names or constitutes a distributor

or importing distributor as the primary or original supplier of

his product, he shall also designate the specific geographical

area for which the said distributor or importing distributor is

given distributing rights, and such distributor or importing

distributor shall not sell or deliver the products of such

manufacturer to any person issued a license under the provisions

of this act whose licensed premises are not located within the

geographical area for which distributing rights have been given

to the distributor and importing distributor by the said

manufacturer. In addition, the holder of a distributor license

may not sell or deliver malt or brewed beverages 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

to the distributor. If the licensee purchasing the malt or

brewed beverages from the distributor license holder holds

multiple licenses or operates at more than one location, the

malt or brewed beverages 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 to the distributor. If a

licensee accepts the delivery of malt or brewed beverages or

transfers malt or brewed beverages 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

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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

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.

* * *

(d) (1) All distributing rights as hereinabove required

shall be in writing, shall be equitable in their provisions,

shall include all territorial assignments, shall be renegotiated

in good faith by the fifth anniversary of a written agreement

and shall be substantially similar as to terms and conditions

with all other distributing rights agreements between the

manufacturer giving such agreement and its other importing

distributors and distributors shall not be modified, cancelled,

terminated or rescinded by the manufacturer without good cause,

and shall contain a provision in substance or effect as follows:

"The manufacturer recognizes that the importing distributor and

distributor are free to manage their business in the manner the

importing distributor and distributor deem best and that this

prerogative vests in the importing distributor and distributor

the exclusive right to establish a selling price, to select the

brands of malt or brewed beverages they wish to handle and to

determine the efforts and resources which the importing

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distributor and distributor will exert to develop and promote

the same of the manufacturer's products handled by the importing

distributor and distributor. However, the manufacturer expects

that the importing distributor and distributor will price

competitively the products handled by them, devote reasonable

effort and resources to the sale of such products and maintain a

reasonable sales level." "Good cause" shall mean the failure by

any party to an agreement, without reasonable excuse or

justification, to comply substantially with an essential,

reasonable and commercially acceptable requirement imposed by

the other party under the terms of an agreement[.] and the

giving of notice and the opportunity to rectify any claimed

deficiency in accordance with section 492(19), unless otherwise

expressly provided for. The term, for the purposes of

modification, cancellation, termination or rescission, may also

include fraudulent conduct by the importing distributor in its

dealings with the manufacturer or the manufacturer's products,

fraudulent conduct by a manufacturer in its dealings with the

importing distributor, the failure to negotiate any primary

distributor agreement in good faith and to accept any material

and commercially reasonable term being offered which is

substantially similar to terms and conditions offered in the

normal course of business. In the event the manufacturer or

importing distributor cannot renegotiate the written agreement

by the fifth anniversary despite good faith efforts, the parties

shall submit to binding mediation to establish the written

agreement between them. The parties shall agree on a single

mediator. In the event the parties do not agree on a mediator,

either party may petition a court of competent jurisdiction to

appoint a mediator. All mediation fees and expenses shall be

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equally divided among the parties.

(1.1) Upon sixty days' written notice, a manufacturer may

terminate or rescind, in whole or in part, an agreement

pertaining to the distribution of the manufacturer's brands with

an existing importing distributor without good cause as long as

the termination does not cause irrevocable loss and the

manufacturer pays to the importing distributor an agreed to fair

market value of the importing distributor's business with

respect to the terminated or rescinded brand or brands. The

termination or rescission under this paragraph shall not be

permitted, and shall be enjoined by a competent court of common

pleas in this Commonwealth under paragraph (4) where the

termination causes irrevocable loss. For purposes of this

paragraph, "irrevocable loss" means the loss of volume of such

brand or brands accounting for more than ten per centum of the

entire liquid volume of malt or brewed beverages or gross sales

amount distributed by the importing distributor in the twelve

months preceding the written notice, whichever is less. Any and

all disputes concerning the fair market value shall be submitted

to a neutral arbitrator to be selected by the parties. In the

event the parties do not agree on a neutral arbitrator, either

party may petition a court of competent jurisdiction to appoint

a neutral arbitrator. Arbitration shall be conducted in

accordance with the commercial arbitration rules of the American

Arbitration Association. The neutral arbitrator shall decide

whether the payment made by the manufacturer to the importing

distributor is equal to the fair market value of the

distribution rights to be terminated. In the event the

arbitrator rules that the manufacturer's payment does not equal

fair market value, the neutral arbitrator will set an

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appropriate award for the appropriate difference. All

arbitration fees and expenses shall be equally divided among the

parties except if the neutral arbitrator determines that the

manufacturer's payment on termination was not a good faith

estimate of the fair market value or the importing distributor's

contest of the fair market value was not in good faith, then the

neutral arbitrator may award up to one hundred per centum of the

arbitration costs, including attorney fees to the prevailing

party. For purposes of this section, "fair market value" means

the amount as may be defined in the written agreement, except

that, if not defined in the written agreement, the term shall

mean the amount a willing seller, under no compulsion to sell,

would be willing to accept, and a willing buyer, under no

compulsion to purchase, where both have knowledge of the

relevant facts would be willing to pay for the importing

distributor's business with respect to the brand or brands.

(1.2) Any importing distributor who is assigning, selling or

transferring all or any controlling interest of the importing

distributor's business, when the assignment, sale or transfer

involves distributing rights of a manufacturer, must seek the

consent of the manufacturer. A manufacturer may not unreasonably

withhold or delay consent to an importing distributor's request

for assignment, sale or transfer of a manufacturer's

distributing rights or selling of any controlling interest in

the importing distributor concerning the manufacturer's

distributing rights. A manufacturer may deny any request for

assignment, sale or transfer if the manufacturer, in the

exercise of the manufacturer's commercially reasonable judgment,

decides assignment, sale or transfer is not in the commercial

interests of the manufacturer. In the event that the

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manufacturer does not approve the assignment, sale or transfer,

the manufacturer or its designee shall pay the importing

distributor or controlling interest seeking the consent an

amount equal to the fair market value of the manufacturer's

distributing rights as defined in this section. Any and all

disputes concerning fair market value shall be submitted to a

neutral arbitrator consistent with paragraph (1.1).

(2) After January 1, 1980, no manufacturer shall enter into

any agreement with more than one distributor or importing

distributor for the purpose of establishing more than one

agreement for designated brand or brands of malt or brewed

beverages in any one territory. Each franchise territory which

is granted by a manufacturer shall be geographically contiguous

or in counties which are contiguous with one another. All

importing distributors shall maintain sufficient records to

evidence compliance of this section. With regard to any

territorial distribution authority granted to an importing

distributor by a manufacturer of malt or brewed beverages after

January 1, 1996, the records shall establish that each and every

case of a brand of malt or brewed beverages for which the

importing distributor is assigned was sold, resold, stored,

delivered or transported by the importing distributor, either

from a point or to a point with the assigned geographically

contiguous territory or in counties which are contiguous with

one another, to any person or persons, whether such person or

persons are licensed by this act or not licensed by this act.

(3) Except for discontinuance of a brand [or], a valid

termination for good cause[,] or a valid termination without

cause under paragraph (1.1), the purchaser of the assets of the

manufacturer as defined in this act shall become obligated to

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all the territorial and brand designations of the agreement in

effect on the date of purchase. Purchase of assets as defined

for the purposes of this act shall include, but not be limited

to, the sale of stock, sale of assets, merger, lease, transfer

or consolidation.

(4) The court of common pleas of the county wherein the

licensed premises of the importing distributor or distributor

are located is hereby vested with jurisdiction and power to

enjoin the modification, rescission, cancellation or termination

of a franchise or agreement between a manufacturer and an

importing distributor or distributor at the instance of such

importing distributor or distributor who is or might be

adversely affected by such modification, rescission,

cancellation or termination, and in granting an injunction the

court shall provide that no manufacturer shall supply the

customers or territory of the importing distributor or

distributor by servicing the territory or customers through

other importing distributors or distributors or any other means

while the injunction is in effect: Provided, however, That any

injunction issued under this subsection shall require the

posting of sufficient bond against damages arising from an

injunction improvidently granted and a showing that the danger

of irrevocable loss or damage is immediate, except as set forth

in paragraph (1.1), and that during the pendency of such

injunction the importing distributor or distributor shall

continue to service the accounts of the manufacturer in good

faith.

(5) The provisions of this subsection shall not apply to

Pennsylvania manufacturers whose principal place of business is

located in Pennsylvania unless they name or constitute a

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distributor or importing distributor as a primary or original

supplier of their products subsequent to the effective date of

this act, or unless such Pennsylvania manufacturers have named

or constituted a distributor or importing distributor as a

primary or original supplier of their products prior to the

effective date of this act, and which status is continuing when

this act becomes effective.

* * *

Section 3. Sections 491(2) and (7) and 492(19) and (20) of

the act are amended to read:

Section 491. Unlawful Acts Relative to Liquor, Alcohol and

Liquor Licensees.--

It shall be unlawful--

* * *

(2) Possession or Transportation of Liquor or Alcohol. For

any person [, except a manufacturer or the board or the holder

of a sacramental wine license or of an importer's license], or

licensee, to possess or transport any liquor or alcohol within

this Commonwealth which was not lawfully acquired prior to

January first, one thousand nine hundred and thirty-four, or has

not been purchased from a Pennsylvania Liquor Store or a

licensed limited winery, distillery or manufacturer in

Pennsylvania, except in accordance with section 488 [or], the

board's regulations or as otherwise provided in this act. In

addition, it shall be lawful for anyone to possess miniatures

totaling less than one gallon purchased in another state or a

foreign country. The burden shall be upon the person possessing

or transporting such malt or brewed beverages, liquor or alcohol

to prove that it was so acquired. Notwithstanding this section

or any other provision of the law, wine may be produced by any

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person without a license if the wine is not produced for sale

and total production does not exceed two hundred gallons per

calendar year. Wine produced in accordance with this clause may

be used at organized affairs, exhibitions, competitions,

contests, tastings or judgings if it is not sold or offered for

sale.

None of the provisions herein contained shall prohibit nor

shall it be unlawful for any person to import into Pennsylvania,

transport or have in his possession, an amount of liquor not

exceeding one gallon in volume upon which a State tax has not

been paid, if it can be shown to the satisfaction of the board

that such person purchased the liquor in a foreign country or

United States territory and was allowed to bring it into the

United States. Neither shall the provisions contained herein

prohibit nor make it unlawful for (i) any member of the armed

forces on active duty, or (ii) any retired member of the armed

forces, or (iii) any totally disabled veteran, or (iv) the

spouse of any person included in the foregoing classes of

persons to import into Pennsylvania, transport or have in his

possession an amount of liquor not exceeding one gallon per

month in volume upon which the State tax has not been paid, so

long as such liquor has been lawfully purchased from a package

store established and maintained under the authority of the

United States and is in containers identified in accordance with

regulations issued by the Department of Defense. Such liquor

shall not be possessed, offered for sale or sold on any licensed

premises. The term "package store" as used in this clause shall

mean those retail operations located on any of the United States

military installations, including an installation of the Army,

Navy, Air Force, Marine Corps [or], Coast Guard or Space Force.

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None of the provisions herein contained shall prohibit nor

shall it be unlawful for any consul general, consul or other

diplomatic officer of a foreign government to import into

Pennsylvania, transport or have in his possession liquor upon

which a State tax has not been paid, if it can be shown to the

satisfaction of the board that such person acquired the liquor

in a foreign country and was allowed to bring it into the United

States. Such liquor shall not be possessed, offered for sale or

sold on any licensed premises.

Any person violating the provisions of this clause for a

first offense involving the possession or transportation in

Pennsylvania of any liquor in a package (bottle or other

receptacle) or wine not purchased from a Pennsylvania Liquor

Store or from a licensed limited winery in Pennsylvania, with

respect to which satisfactory proof is produced that the

required Federal tax has been paid and which was purchased,

procured or acquired legally outside of Pennsylvania shall upon

conviction thereof in a summary proceeding be sentenced to pay a

fine of twenty-five dollars ($25) for each such package, plus

costs of prosecution, or undergo imprisonment for a term not

exceeding ninety (90) days. Each full quart or major fraction

thereof shall be considered a separate package (bottle or other

receptacle) for the purposes of this clause. Such packages of

liquor shall be forfeited to the Commonwealth in the manner

prescribed in Article VI of this act but the vehicle, boat,

vessel, animal or aircraft used in the illegal transportation of

such packages shall not be subject to forfeiture: Provided,

however, That if it is a second or subsequent offense or if it

is established that the illegal possession or transportation was

in connection with a commercial transaction, then the other

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provisions of this act providing for prosecution as a

misdemeanor and for the forfeiture of the vehicle, boat, vessel,

animal or aircraft shall apply.

* * *

(7) Sales of Liquor by Manufacturers and Licensed Importers.

[For] Except as otherwise provided, for any manufacturer or

licensed importer of liquor in this Commonwealth, [his] their

agents, servants or employes, to sell or offer to sell any

liquor in this Commonwealth except to the board for use in

Pennsylvania Liquor Stores, and in the case of a manufacturer,

to the holder of a sacramental wine license or an importer's

license. Notwithstanding any other provision of this act, a

manufacturer or licensed importer may sell or offer to sell

liquor for delivery outside of this Commonwealth.

* * *

Section 492. Unlawful Acts Relative to Malt or Brewed

Beverages and Licensees.--

It shall be unlawful--

* * *

(19) Modifying or Terminating Distributing Rights Agreement.

For any manufacturer or any officer, agent or representative of

any manufacturer to modify, cancel, terminate, rescind or not

renew[, without good cause,] any distributing rights agreement

without complying with section 431(d), and in no event shall any

modification, cancellation, termination, rescission or

nonrenewal of any distributing rights agreement become effective

for at least ninety (90) days after written notice of such

modification, cancellation, termination, rescission or intention

not to renew has been served on the affected party and board by

certified mail, return receipt requested, except by written

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consent of the parties to the agreement unless otherwise

provided under section 431(d). The notice shall state all the

reasons for the intended modification, termination,

cancellation, rescission or nonrenewal, if applicable. The

distributor or importing distributor holding such agreement

shall have ninety (90) days in which to rectify any claimed

deficiency, or challenge the alleged cause.

If the deficiency shall be rectified within ninety (90) days

of notice, then the proposed modification, termination,

cancellation, rescission or nonrenewal shall be null and void

and without legal effect.

If the notice states as one of the reasons for the intended

modification, cancellation, termination, rescission or renewal

that the importing distributor or distributor's equipment or

warehouse requires major changes or additions, then if the

distributor or importing distributor shall have taken some

positive action to comply with the required changes or

additions, the distributor or importing distributor shall have

deemed to have complied with the deficiency as set forth in the

notice. The notice provisions of this section shall not apply if

the reason for termination, cancellation or nonrenewal is

insolvency, assignment for the benefit of creditors, bankruptcy,

liquidation, fraudulent conduct in its dealings with the

manufacturer, revocation or suspension for more than a thirty

(30) day period of the importing distributor or distributor

license.

(20) Interference with Transfer of License, Business or

Franchise. (i) For any manufacturer to interfere with or prevent

any distributor or importing distributor from selling [or],

transferring [his] or assigning a license, business or

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franchise, whether before or after notice of modification,

cancellation, termination, rescission or nonrenewal has been

given, provided the proposed purchaser of the business of the

distributor or importing distributor meets the material

qualifications and standards required of the manufacturers other

distributors or importing distributors; (ii) if the proposed

transfer of the distributor or importing distributor's business

is to a surviving spouse or adult child, the manufacturer shall

not, for any reason, interfere with, or prevent, the transfer of

the distributor or importing distributor's license, business or

franchise. Any subsequent transfer by surviving spouse or adult

child shall thereafter be subject to the provisions of subclause

(i) above[.] as well as any franchise or distributing rights to

any current owner of the importing distributor or distributor.

Any surviving spouse or adult child of a current owner of the

importing distributor or distributor, a spouse or adult child of

a current owner, a trust for the benefit of a spouse or the

children of a current owner or a partnership, corporation or

other business entity of which a current owner, spouse or adult

child, or any combination thereof, owns more than fifty (50%)

percent, or unreasonably withhold or delay its written consent

to any other sale, transfer or assignment of an importing

distributor or distributor's license, business franchise or

distributing rights.

* * *

Section 4. The amendment of section 431(d) of the act shall

apply to contracts and agreements entered into on or after the

effective date of this section.

Section 5. This act shall take effect in 120 days.

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