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| PRIOR PRINTER'S NOS. 311, 2074 | PRINTER'S NO. 2326 |
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| THE GENERAL ASSEMBLY OF PENNSYLVANIA |
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| HOUSE BILL |
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| INTRODUCED BY DONATUCCI, J. TAYLOR, BELFANTI, BEYER, BRENNAN, CARROLL, DALEY, DeLUCA, EVERETT, FRANKEL, HALUSKA, HARHAI, JOSEPHS, MARSHALL, MELIO, MILLER, M. O'BRIEN, PAYNE, PETRI, PYLE, REICHLEY, SIPTROTH, K. SMITH, WATSON, W. KELLER, DENLINGER, FABRIZIO, GOODMAN, HARKINS AND PHILLIPS, FEBRUARY 6, 2009 |
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| AS RE-REPORTED FROM COMMITTEE ON APPROPRIATIONS, HOUSE OF REPRESENTATIVES, AS AMENDED, JUNE 29, 2009 |
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| AN ACT |
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1 | Amending the act of April 12, 1951 (P.L.90, No.21), entitled, as |
2 | reenacted, "An act relating to alcoholic liquors, alcohol and |
3 | malt and brewed beverages; amending, revising, consolidating |
4 | and changing the laws relating thereto; regulating and |
5 | restricting the manufacture, purchase, sale, possession, |
6 | consumption, importation, transportation, furnishing, holding |
7 | in bond, holding in storage, traffic in and use of alcoholic |
8 | liquors, alcohol and malt and brewed beverages and the |
9 | persons engaged or employed therein; defining the powers and |
10 | duties of the Pennsylvania Liquor Control Board; providing |
11 | for the establishment and operation of State liquor stores, |
12 | for the payment of certain license fees to the respective |
13 | municipalities and townships, for the abatement of certain |
14 | nuisances and, in certain cases, for search and seizure |
15 | without warrant; prescribing penalties and forfeitures; |
16 | providing for local option, and repealing existing laws," |
17 | further providing for definitions, for malt and brewed |
18 | beverages manufacturers', distributors' and importing |
19 | distributors' licenses, for malt and brewed beverages |
20 | alternating brewers' licenses, for distributors' and |
21 | importing distributors' restrictions on sales, storage, etc., |
22 | and for breweries. |
23 | This act shall be construed as an enactment of the General |
24 | Assembly's support for the 3-tier system for alcoholic beverages |
25 | production, distribution and sale that, through uniform |
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1 | Statewide regulation, provides this Commonwealth regulatory |
2 | authority over the production, storage, distribution, |
3 | transportation, sale and consumption of alcoholic beverages by |
4 | and to its citizens, for the benefit of the public health and |
5 | welfare and this Commonwealth's economic stability. The General |
6 | Assembly intends that the liquor laws shall be enforced in order |
7 | to restrict sales to minors, collect all State and local taxes |
8 | due on the commerce in alcoholic beverages, establish open, |
9 | transparent and accountable distribution systems for alcoholic |
10 | beverages and the intent to exercise, to the fullest extent |
11 | allowed, all the authority granted a state under the Twenty- |
12 | first Amendment. |
13 | The General Assembly of the Commonwealth of Pennsylvania |
14 | hereby enacts as follows: |
15 | Section 1. The definition of "distributor" in section 102 of |
16 | the act of April 12, 1951 (P.L.90, No.21), known as the Liquor |
17 | Code, reenacted and amended June 29, 1987 (P.L.32, No.14) and |
18 | amended May 31, 1996 (P.L.312, No.49), is amended and the |
19 | section is amended by adding definitions to read: |
20 | Section 102. Definitions.--The following words or phrases, |
21 | unless the context clearly indicates otherwise, shall have the |
22 | meanings ascribed to them in this section: |
23 | * * * |
24 | "Distributor" shall mean any person licensed by the board to |
25 | engage in the purchase only from [Pennsylvania] small |
26 | manufacturers and from importing distributors and the resale of |
27 | malt or brewed beverages, except to importing distributors and |
28 | distributors, in the original sealed containers as prepared for |
29 | the market by the manufacturer at the place of manufacture, but |
30 | not for consumption on the premises where sold, and in |
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1 | quantities of not less than a case or original containers |
2 | containing one hundred twenty-eight ounces or more which may be |
3 | sold separately. |
4 | * * * |
5 | "Out-of-State small "Small manufacturer" shall mean a small | <-- |
6 | manufacturer located outside this Commonwealth with a maximum | <-- |
7 | production of seventy-five thousand barrels of malt or brewed |
8 | beverages per year. In determining the annual production, the |
9 | out-of-State small manufacturer shall include a portion of the | <-- |
10 | production of any other manufacturer who holds, directly or |
11 | indirectly, an ownership interest in it or with whom it has a |
12 | distribution agreement in this Commonwealth. If another |
13 | manufacturer holds, directly or indirectly, an ownership |
14 | interest in the out-of-State small manufacturer, the percentage | <-- |
15 | of that interest shall be applied to the manufacturer's total |
16 | production of malt or brewed beverage products to determine the |
17 | amount that shall be included in determining the maximum |
18 | production for the out-of-State small manufacturer. If the out- | <-- |
19 | of-State small manufacturer has a distribution agreement with a |
20 | larger manufacturer for distribution in this Commonwealth, the |
21 | distributing manufacturer's total distribution in this |
22 | Commonwealth shall be added to the out-of-State small | <-- |
23 | manufacturer's production to determine whether the seventy-five |
24 | thousand barrel mark has been reached. Only malt or brewed | <-- |
25 | beverages for which the small manufacturer is responsible for |
26 | paying the malt beverage tax shall be considered in calculating |
27 | the total number of barrels produced per year by the small |
28 | manufacturer. |
29 | * * * |
30 | "Small manufacturer" shall mean a manufacturer of malt or | <-- |
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1 | brewed beverages that produces no more than seventy-five |
2 | thousand barrels of malt or brewed beverages per year. Only malt |
3 | or brewed beverages for which the manufacturer is responsible |
4 | for paying the malt beverage tax shall be considered in |
5 | calculating the total number of barrels produced per year for a |
6 | manufacturer. |
7 | * * * |
8 | Section 2. Section 431 of the act, amended December 20, 1996 |
9 | (P.L.1513, No.196), December 21, 1998 (P.L.1202, No.155) and |
10 | December 8, 2004 (P.L.1810, No.239), is amended to read: |
11 | Section 431. Malt and Brewed Beverages Manufacturers', |
12 | Distributors' and Importing Distributors' Licenses.--(a) The |
13 | board shall issue to any person a resident of this Commonwealth |
14 | of good repute who applies therefor, and pays the license fee |
15 | hereinafter prescribed, a manufacturer's license to produce and |
16 | manufacture malt or brewed beverages, and to transport, sell and |
17 | deliver malt or brewed beverages from the place of manufacture |
18 | only in original containers, in quantities of not less than a |
19 | case or original containers containing one hundred twenty-eight |
20 | ounces or more which may be sold separately anywhere within the |
21 | Commonwealth. The application for such license shall be in such |
22 | form and contain such information as the board shall require. |
23 | All such licenses shall be granted for a license period to be |
24 | determined by the board. Every manufacturer shall keep at his or |
25 | its principal place of business, within the Commonwealth daily |
26 | permanent records which shall show, (1) the quantities of raw |
27 | materials received and used in the manufacture of malt or brewed |
28 | beverages and the quantities of malt or brewed beverages |
29 | manufactured and stored, (2) the sales of malt or brewed |
30 | beverages, (3) the quantities of malt or brewed beverages stored |
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1 | for hire or transported for hire by or for the licensee, and (4) |
2 | the names and addresses of the purchasers or other recipients |
3 | thereof. Every place licensed as a manufacturer shall be subject |
4 | to inspection by members of the board or by persons duly |
5 | authorized and designated by the board, at any and all times of |
6 | the day or night, as they may deem necessary, for the detection |
7 | of violations of this act or of the rules and regulations of the |
8 | board, or for the purpose of ascertaining the correctness of the |
9 | records required to be kept by licensees. The books and records |
10 | of such licensees shall at all times be open to inspection by |
11 | members of the board or by persons duly authorized and |
12 | designated by the board. Members of the board and its duly |
13 | authorized agents shall have the right, without hindrance, to |
14 | enter any place which is subject to inspection hereunder or any |
15 | place where such records are kept for the purpose of making such |
16 | inspections and making transcripts thereof. Whenever any checks |
17 | issued in payment of filing and/or license fees shall be |
18 | returned to the board as dishonored, the board shall charge a |
19 | fee of five dollars ($5.00) per hundred dollars or fractional |
20 | part thereof, plus all protest fees, to the maker of such check |
21 | submitted to the board. Failure to make full payment or pay the |
22 | face amount of the check in full and all charges thereon as |
23 | herein required within ten days after demand has been made by |
24 | the board upon the maker of the check or upon notification to |
25 | the board by the Department of Revenue or the Department of |
26 | Labor and Industry of its objection, the license of such person |
27 | shall immediately become invalid and shall remain invalid until |
28 | payment and all charges are received by the board. |
29 | (a.1) Any [out of State] manufacturer whose products are |
30 | sold and delivered within this Commonwealth shall be authorized: |
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1 | to rent, lease or otherwise acquire space from an importing |
2 | distributor or bailee for hire authorized by this act at no more |
3 | than two locations per manufacturer for use of a segregated |
4 | portion of a warehouse or other storage facility owned or |
5 | operated by the importing distributor or bailee for hire at |
6 | which the [out of State] manufacturer may store, repackage and |
7 | sell malt or brewed beverages to any importing distributor to |
8 | whom the [out of State] manufacturer has granted distribution |
9 | rights pursuant to subsection (b) or to any purchaser outside |
10 | this Commonwealth for delivery outside this Commonwealth; or to |
11 | ship to its storage facility outside this Commonwealth. Such |
12 | manufacturer may compensate the importing distributor or bailee |
13 | for hire for any related storage, repackaging or delivery |
14 | services. The [out of State] manufacturer must file with the |
15 | Liquor Control Board the rate of compensation to be paid. A |
16 | separate written application must be filed to acquire storage |
17 | licenses, and the board may establish the information that must |
18 | be provided on the application. The initial filing must be made |
19 | prior to any payments being made, and any subsequent changes in |
20 | the rate of compensation must be filed within thirty days of any |
21 | such change. Nothing in this act authorizing storage facilities |
22 | for [out of State] manufacturers is intended to make any change |
23 | in the manner malt or brewed beverages are distributed through |
24 | the three-tier system. |
25 | (a.2) The board shall issue to [a holder of a manufacturer's |
26 | license] a manufacturer no more than two storage licenses per |
27 | manufacturer to cover storage facilities separate from the |
28 | location of the manufacturing facility. A manufacturer may use |
29 | its storage facilities to receive, store, repackage, sell to an | <-- |
30 | importing distributor or distributor and distribute malt or |
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1 | brewed beverages in the same manner as it can at its place of |
2 | manufacture or it may rent, lease or otherwise acquire space |
3 | from an importing distributor or bailee for hire authorized by |
4 | this act in the same manner as [an out of State] a manufacturer |
5 | as set forth in subsection (a.1). No manufacturer may rent, |
6 | lease or otherwise acquire space for more than two storage |
7 | facilities under subsection (a.1) or this subsection. A separate |
8 | written application must be filed to acquire storage licenses, |
9 | and the board is empowered to establish what information must be |
10 | provided on that application. Nothing in this act authorizing |
11 | off-site storage facilities for manufacturers is intended to |
12 | make any change in the manner malt or brewed beverages are |
13 | distributed through the three-tier system. |
14 | (a.3) An applicant for an out-of-State small manufacturer | <-- |
15 | license shall file a written application with the board in such |
16 | form and containing such information as the board shall from |
17 | time to time prescribe. The application and license fees and the |
18 | restrictions on who may apply for the license shall be the same |
19 | as the fees and restrictions imposed on in-State small |
20 | manufacturer applicants. In addition, the out-of-State small |
21 | manufacturer must obtain a sales tax license from the department |
22 | prior to submitting the application to the board. The |
23 | information contained in the application shall be provided by |
24 | the board to the department upon request. In order to continue |
25 | to be eligible to hold an out-of-State small manufacturer |
26 | license, the out-of-State small manufacturer may not produce in |
27 | excess of seventy-five thousand barrels of malt or brewed |
28 | beverages per year, as that calculation is defined in section |
29 | 102. No out-of-State small manufacturer licensee or its |
30 | officers, directors, shareholders or members shall hold any |
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1 | interest in any other license issued by the board; nor shall any |
2 | out-of-State manufacturer licensee or its officers, directors, |
3 | shareholders or members, either directly or indirectly, lend |
4 | moneys, credit or equivalent thereof, to any other licensee; nor |
5 | shall any out-of-State manufacturer licensee or it officers, |
6 | directors, shareholders or members guarantee the payment of any |
7 | bond, mortgage, note or other obligations of any other licensee; |
8 | nor shall any out-of-State manufacturer licensee or its |
9 | officers, directors, shareholders or members be the owner, |
10 | proprietor or lessor of any place for which any other license |
11 | has been issued by the board. Out-of-State small manufacturer |
12 | licensees are deemed to have submitted to the jurisdiction of |
13 | the board, any other Commonwealth agency and the courts of this |
14 | Commonwealth for purposes of enforcement of this section and any |
15 | related laws, rules or regulations. Out-of-State small |
16 | manufacturer licensees are subject to citation by the |
17 | enforcement bureau under section 471 and nonrenewal by the board |
18 | under section 470. The department may promulgate regulations |
19 | requiring the filing of periodic reports by out-of-State small |
20 | manufacturers to ensure compliance with the provisions of this |
21 | section. A holder of an out-of-State small manufacturer license |
22 | may deliver malt or brewed beverages it has manufactured to any |
23 | holder of any retail license issued by the board. In doing so, |
24 | the out-of-State small manufacturer must use its own vehicles |
25 | and may not, in the Commonwealth, use the services of a |
26 | transporter-for-hire or other commercial carrier. If the out-of- |
27 | State small manufacturer chooses to self-distribute in this |
28 | Commonwealth, it is not permitted to utilize storage services or |
29 | facilities otherwise available under section 431(a.1). |
30 | (a.3) In order to continue to be eligible as a small | <-- |
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1 | manufacturer, the small manufacturer may not produce in excess |
2 | of seventy-five thousand barrels of malt or brewed beverages per |
3 | year, as calculated under section 102. The board shall certify |
4 | that a manufacturer is eligible as a small manufacturer upon the |
5 | written request of the manufacturer, on a form prescribed by the |
6 | board, for such certification. A request for certification may |
7 | be submitted by a manufacturer that holds a manufacturer's |
8 | license and believes it is eligible as a small manufacturer or |
9 | it may be submitted by a manufacturer for a manufacturer's |
10 | license. |
11 | (a.4) A small manufacturer that is located outside of this |
12 | Commonwealth and holds a manufacturer's license is deemed to |
13 | have submitted to the jurisdiction of the board, any other |
14 | Commonwealth agency and the courts of this Commonwealth for |
15 | purposes of enforcement of this section and any related laws, |
16 | rules or regulations. The small manufacturer shall also be |
17 | subject to citation by the enforcement bureau under section 471 |
18 | and nonrenewal by the board under section 470. The Department of |
19 | Revenue may promulgate regulations requiring the filing of |
20 | periodic reports by a small manufacturer subject to the |
21 | provisions of this subsection to ensure compliance with the |
22 | provisions of this section. |
23 | (a.5) A small manufacturer that holds a valid manufacturer's |
24 | license may deliver malt or brewed beverages it has manufactured |
25 | to any holder of any retail license issued by the board if it |
26 | uses its own vehicles. A small manufacturer may not use the |
27 | services of a transporter-for-hire or other commercial carrier |
28 | to deliver malt or brewed beverages in this Commonwealth. A |
29 | small manufacturer that delivers malt or brewed beverages under |
30 | this subsection shall not be entitled to utilize storage |
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1 | services or facilities otherwise available under subsection |
2 | (a.1) or (a.2). |
3 | (b) The board shall issue to any reputable person who |
4 | applies therefor, and pays the license fee hereinafter |
5 | prescribed, a distributor's or importing distributor's license |
6 | for the place which such person desires to maintain for the sale |
7 | of malt or brewed beverages, not for consumption on the premises |
8 | where sold, and in quantities of not less than a case or |
9 | original containers containing one hundred twenty-eight ounces |
10 | or more which may be sold separately as prepared for the market |
11 | by the manufacturer at the place of manufacture. The board shall |
12 | have the discretion to refuse a license to any person or to any |
13 | corporation, partnership or association if such person, or any |
14 | officer or director of such corporation, or any member or |
15 | partner of such partnership or association shall have been |
16 | convicted or found guilty of a felony within a period of five |
17 | years immediately preceding the date of application for the said |
18 | license: And provided further, That, in the case of any new |
19 | license or the transfer of any license to a new location, the |
20 | board may, in its discretion, grant or refuse such new license |
21 | or transfer if such place proposed to be licensed is within |
22 | three hundred feet of any church, hospital, charitable |
23 | institution, school or public playground, or if such new license |
24 | or transfer is applied for a place which is within two hundred |
25 | feet of any other premises which is licensed by the board: And |
26 | provided further, That the board shall refuse any application |
27 | for a new license or the transfer of any license to a new |
28 | location if, in the board's opinion, such new license or |
29 | transfer would be detrimental to the welfare, health, peace and |
30 | morals of the inhabitants of the neighborhood within a radius of |
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1 | five hundred feet of the place proposed to be licensed. The |
2 | board shall refuse any application for a new license or the |
3 | transfer of any license to a location where the sale of liquid |
4 | fuels or oil is conducted. The board may enter into an agreement |
5 | with the applicant concerning additional restrictions on the |
6 | license in question. If the board and the applicant enter into |
7 | such an agreement, such agreement shall be binding on the |
8 | applicant. Failure by the applicant to adhere to the agreement |
9 | will be sufficient cause to form the basis for a citation under |
10 | section 471 and for the nonrenewal of the license under section |
11 | 470. If the board enters into an agreement with an applicant |
12 | concerning additional restrictions, those restrictions shall be |
13 | binding on subsequent holders of the license until the license |
14 | is transferred to a new location or until the board enters into |
15 | a subsequent agreement removing those restrictions. If the |
16 | application in question involves a location previously licensed |
17 | by the board, then any restrictions imposed by the board on the |
18 | previous license at that location shall be binding on the |
19 | applicant unless the board enters into a new agreement |
20 | rescinding those restrictions. The board shall require notice to |
21 | be posted on the property or premises upon which the licensee or |
22 | proposed licensee will engage in sales of malt or brewed |
23 | beverages. This notice shall be similar to the notice required |
24 | of hotel, restaurant and club liquor licensees. |
25 | Except as hereinafter provided, such license shall authorize |
26 | the holder thereof to sell or deliver malt or brewed beverages |
27 | in quantities above specified anywhere within the Commonwealth |
28 | of Pennsylvania, which, in the case of distributors, have been |
29 | purchased only from persons licensed under this act as small |
30 | manufacturers or importing distributors, and in the case of |
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1 | importing distributors, have been purchased from manufacturers |
2 | or persons outside this Commonwealth engaged in the legal sale |
3 | of malt or brewed beverages or from manufacturers or importing |
4 | distributors licensed under this article. In the case of an |
5 | importing distributor, the holder of such a license shall be |
6 | authorized to store and repackage malt or brewed beverages owned |
7 | by a manufacturer at a segregated portion of a warehouse or |
8 | other storage facility authorized by section 441(d) and operated |
9 | by the importing distributor within its appointed territory and |
10 | deliver such beverages to another importing distributor who has |
11 | been granted distribution rights by the manufacturer as provided |
12 | herein. The importing distributor shall be permitted to receive |
13 | a fee from the manufacturer for any related storage, repackaging |
14 | or delivery services. In the case of a bailee for hire hired by |
15 | a manufacturer, the holder of such a permit shall be authorized: |
16 | to receive, store and repackage malt or brewed beverages |
17 | produced by that manufacturer for sale by that manufacturer to |
18 | importing distributors to whom that manufacturer has given |
19 | distribution rights pursuant to this subsection or to purchasers |
20 | outside this Commonwealth for delivery outside this |
21 | Commonwealth; or to ship to that manufacturer's storage |
22 | facilities outside this Commonwealth. The bailee for hire shall |
23 | be permitted to receive a fee from the manufacturer for any |
24 | related storage, repackaging or delivery services. The bailee |
25 | for hire shall, as required in Article V of this act, keep |
26 | complete and accurate records of all transactions, inventory, |
27 | receipts and shipments and make all records and the licensed |
28 | areas available for inspection by the board and for the |
29 | Pennsylvania State Police, Bureau of Liquor Control Enforcement, |
30 | during normal business hours. |
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1 | Each [out of State] manufacturer of malt or brewed beverages, |
2 | excluding small manufacturers, whose products are sold and |
3 | delivered in this Commonwealth shall give distributing rights |
4 | for such products in designated geographical areas to specific |
5 | importing distributors, and such importing distributor shall not |
6 | sell or deliver malt or brewed beverages manufactured by the |
7 | [out of State] manufacturer to any person issued a license under |
8 | the provisions of this act whose licensed premises are not |
9 | located within the geographical area for which he has been given |
10 | distributing rights by such manufacturer. Should a licensee |
11 | accept the delivery of such malt or brewed beverages in |
12 | violation of this section, said licensee shall be subject to a |
13 | suspension of his license for at least thirty days: Provided, |
14 | That the importing distributor holding such distributing rights |
15 | for such product shall not sell or deliver the same to another |
16 | importing distributor without first having entered into a |
17 | written agreement with the said secondary importing distributor |
18 | setting forth the terms and conditions under which such products |
19 | are to be resold within the territory granted to the primary |
20 | importing distributor by the manufacturer. |
21 | When a [Pennsylvania] small manufacturer of malt or brewed |
22 | beverages licensed under this article names or constitutes a |
23 | distributor or importing distributor as the primary or original |
24 | supplier of his product, he shall also designate the specific |
25 | geographical area for which the said distributor or importing |
26 | distributor is given distributing rights, and such distributor |
27 | or importing distributor shall not sell or deliver the products |
28 | of such manufacturer to any person issued a license under the |
29 | provisions of this act whose licensed premises are not located |
30 | within the geographical area for which distributing rights have |
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1 | been given to the distributor and importing distributor by the |
2 | said manufacturer: Provided, That the importing distributor |
3 | holding such distributing rights for such product shall not sell |
4 | or deliver the same to another importing distributor without |
5 | first having entered into a written agreement with the said |
6 | secondary importing distributor setting forth the terms and |
7 | conditions under which such products are to be resold within the |
8 | territory granted to the primary importing distributor by the |
9 | manufacturer. Nothing herein contained shall be construed to |
10 | prevent any manufacturer from authorizing the importing |
11 | distributor holding the distributing rights for a designated |
12 | geographical area from selling the products of such manufacturer |
13 | to another importing distributor also holding distributing |
14 | rights from the same manufacturer for another geographical area, |
15 | providing such authority be contained in writing and a copy |
16 | thereof be given to each of the importing distributors so |
17 | affected. |
18 | (b.1) (1) Any person in this Commonwealth or elsewhere who |
19 | shall purchase or in any manner whatsoever acquire or otherwise |
20 | succeed to the business of a manufacturer, assets or rights to |
21 | import, market, ship into this Commonwealth or distribute a |
22 | brand of beer, or to use and exploit any trademark incorporated |
23 | as part of a brand of beer produced by such a manufacturer shall |
24 | be obligated to all terms of the manufacturer's franchise |
25 | agreements in effect on the effective date of the purchase, |
26 | acquisition or succession, or, if earlier, at the time the |
27 | agreement contemplating the purchase, acquisition or succession |
28 | is actually made. |
29 | (2) "Purchase" or "acquisition," for purposes of this |
30 | section, includes, but is not limited to, a purchase, |
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1 | acquisition, lease, license or assignment of all or a |
2 | controlling interest in the capital stock or operating assets, |
3 | including brand trademarks rights; merger; any corporate |
4 | reorganization or consolidation; and also, without limitation, |
5 | any license, cross-license, joint venture or other agreement or |
6 | arrangement, directly or indirectly, transferring, substituting |
7 | or materially changing the person or persons authorized by the |
8 | one owning or controlling a brand or any trademark as part of a |
9 | brand, to produce, import, ship, market or distribute the brand |
10 | of beer into or within this Commonwealth. |
11 | (3) "Manufacturer," as used in this subsection, shall mean |
12 | any person, including any agent of such person, who (i) is |
13 | licensed as a manufacturer of malt or brewed beverages located |
14 | within the Commonwealth of Pennsylvania, (ii) holds a |
15 | distributor or importing distributor license, or (iii) |
16 | manufactures any malt beverage, has title to any malt beverage |
17 | products or has the contractual right to distribute any malt |
18 | beverage product, whether licensed in this Commonwealth or not, |
19 | who enters into an "agreement" with any importing distributor |
20 | licensed to do business in this Commonwealth. |
21 | (c) The aforesaid licenses shall be issued only to reputable |
22 | individuals, partnerships and associations who are, or whose |
23 | members are, citizens of the United States and [have for two | <-- |
24 | years prior to the date of their applications been] are | <-- |
25 | residents of the Commonwealth of Pennsylvania or to reputable |
26 | corporations organized or duly registered under the laws of the |
27 | Commonwealth of Pennsylvania. Such licenses shall be issued to |
28 | corporations duly organized or registered under the laws of the |
29 | Commonwealth of Pennsylvania only when it appears that all of |
30 | the officers and directors of the corporation are citizens of |
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1 | the United States and [have been] are residents of the |
2 | Commonwealth of Pennsylvania [for a period of at least two years |
3 | prior to the date of application], and that at least fifty-one |
4 | per centum of the capital stock of such corporation is actually |
5 | owned by individuals who are citizens of the United States and |
6 | [have been] are residents of the Commonwealth of Pennsylvania |
7 | [for a period of at least two years prior to the date of |
8 | application]: Provided, That the provisions of this subsection |
9 | with respect to residence requirements shall not apply to |
10 | individuals, partners, officers, directors and owners of capital |
11 | stock, of corporations licensed or applying for licenses as |
12 | manufacturers of malt or brewed beverages, nor shall the |
13 | provisions of this subsection with respect to stockholder |
14 | requirements apply to corporations licensed or applying for |
15 | licenses as manufacturers of malt or brewed beverages. |
16 | (d) (1) All distributing rights as hereinabove required |
17 | shall be in writing, shall be equitable in their provisions and |
18 | shall be substantially similar as to terms and conditions with |
19 | all other distributing rights agreements between the |
20 | manufacturer giving such agreement and its other importing |
21 | distributors and distributors shall not be modified, cancelled, |
22 | terminated or rescinded by the manufacturer without good cause, |
23 | and shall contain a provision in substance or effect as follows: |
24 | "The manufacturer recognizes that the importing distributor and |
25 | distributor are free to manage their business in the manner the |
26 | importing distributor and distributor deem best and that this |
27 | prerogative vests in the importing distributor and distributor |
28 | the exclusive right to establish a selling price, to select the |
29 | brands of malt or brewed beverages they wish to handle and to |
30 | determine the efforts and resources which the importing |
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1 | distributor and distributor will exert to develop and promote |
2 | the same of the manufacturer's products handled by the importing |
3 | distributor and distributor. However, the manufacturer expects |
4 | that the importing distributor and distributor will price |
5 | competitively the products handled by them, devote reasonable |
6 | effort and resources to the sale of such products and maintain a |
7 | reasonable sales level." "Good cause" shall mean the failure by |
8 | any party to an agreement, without reasonable excuse or |
9 | justification, to comply substantially with an essential, |
10 | reasonable and commercially acceptable requirement imposed by |
11 | the other party under the terms of an agreement. |
12 | (2) After January 1, 1980, no manufacturer shall enter into |
13 | any agreement with more than one distributor or importing |
14 | distributor for the purpose of establishing more than one |
15 | agreement for designated brand or brands of malt or brewed |
16 | beverages in any one territory. Each franchise territory which |
17 | is granted by a manufacturer shall be geographically contiguous. |
18 | All importing distributors shall maintain sufficient records to |
19 | evidence compliance of this section. With regard to any |
20 | territorial distribution authority granted to an importing |
21 | distributor by a manufacturer of malt or brewed beverages after |
22 | January 1, 1996, the records shall establish that each and every |
23 | case of a brand of malt or brewed beverages for which the |
24 | importing distributor is assigned was sold, resold, stored, |
25 | delivered or transported by the importing distributor, either |
26 | from a point or to a point with the assigned geographically |
27 | contiguous territory, to any person or persons, whether such |
28 | person or persons are licensed by this act or not licensed by |
29 | this act. |
30 | (3) Except for discontinuance of a brand or a valid |
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1 | termination for good cause, the purchaser of the assets of the |
2 | manufacturer as defined in this act shall become obligated to |
3 | all the territorial and brand designations of the agreement in |
4 | effect on the date of purchase. Purchase of assets as defined |
5 | for the purposes of this act shall include, but not be limited |
6 | to, the sale of stock, sale of assets, merger, lease, transfer |
7 | or consolidation. |
8 | (4) The court of common pleas of the county wherein the |
9 | licensed premises of the importing distributor or distributor |
10 | are located is hereby vested with jurisdiction and power to |
11 | enjoin the modification, rescission, cancellation or termination |
12 | of a franchise or agreement between a manufacturer and an |
13 | importing distributor or distributor at the instance of such |
14 | importing distributor or distributor who is or might be |
15 | adversely affected by such modification, rescission, |
16 | cancellation or termination, and in granting an injunction the |
17 | court shall provide that no manufacturer shall supply the |
18 | customers or territory of the importing distributor or |
19 | distributor by servicing the territory or customers through |
20 | other importing distributors or distributors or any other means |
21 | while the injunction is in effect: Provided, however, That any |
22 | injunction issued under this subsection shall require the |
23 | posting of sufficient bond against damages arising from an |
24 | injunction improvidently granted and a showing that the danger |
25 | of irrevocable loss or damage is immediate and that during the |
26 | pendency of such injunction the importing distributor or |
27 | distributor shall continue to service the accounts of the |
28 | manufacturer in good faith. |
29 | (5) The provisions of this subsection shall not apply to |
30 | [Pennsylvania] small manufacturers [whose principal place of |
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1 | business is located in Pennsylvania] unless they name or |
2 | constitute a distributor or importing distributor as a primary |
3 | or original supplier of their products subsequent to the |
4 | effective date of this act, or unless such [Pennsylvania] small |
5 | manufacturers have named or constituted a distributor or |
6 | importing distributor as a primary or original supplier of their |
7 | products prior to the effective date of this act, and which |
8 | status is continuing when this act becomes effective. |
9 | (e) In addition to the fees under section 614-A of the act |
10 | of April 9, 1929 (P.L.177, No.175), known as "The Administrative |
11 | Code of 1929," the board shall assess a fee surcharge of ninety- |
12 | five dollars ($95.00) for a distributor's license and a fee |
13 | surcharge of four hundred seventy dollars ($470.00) for an |
14 | importing distributor's license and a fee surcharge of seventy- |
15 | five dollars ($75.00) for brand registration. Money collected |
16 | under this subsection shall be placed in a restricted account in |
17 | The State Stores Fund. The board may use the money in this |
18 | account to implement section 216. In the event the provisions of |
19 | section 447(a)(2) and/or (c) are held invalid, then this |
20 | subsection shall be void and shall not apply. |
21 | (f) (1) Any malt or brewed beverage produced outside this |
22 | Commonwealth that is repackaged by a bailee for hire or |
23 | importing distributor on behalf of an out of State manufacturer |
24 | must be returned to the out of State manufacturer and come to |
25 | rest out of State before it may reenter this Commonwealth. Such |
26 | repackaged malt or brewed beverages must be distributed through |
27 | the three-tier system. Any malt or brewed beverage that is |
28 | repackaged by a bailee for hire or importing distributor on |
29 | behalf of an in State manufacturer must be returned to the in |
30 | State manufacturer and come to rest at the in State |
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1 | manufacturer's licensed facility. |
2 | (2) For purposes of this section, "repackage" shall mean any |
3 | change or alteration to the containers or container |
4 | configuration of a case. |
5 | Section 3. Section 431.1(d) of the act, added February 21, |
6 | 2002 (P.L.103, No.10), is amended to read: |
7 | Section 431.1. Malt and Brewed Beverages Alternating |
8 | Brewers' Licenses.--* * * |
9 | (d) Malt and brewed beverages manufactured under the |
10 | authority of an alternating brewer's license must be distributed |
11 | in this Commonwealth only through specific importing |
12 | distributors who shall first have been given distributor rights |
13 | for such products in designated geographical areas through the |
14 | distribution system required for [out-of-State] manufacturers |
15 | under section 431(b) as well as all other pertinent sections of |
16 | this act. The alternating brewer must comply with section 444. |
17 | * * * |
18 | Section 4. Section 441(g) of the act, added December 20, |
19 | 1996 (P.L.1513, No.196), is amended to read: |
20 | Section 441. Distributors' and Importing Distributors' |
21 | Restrictions on Sales, Storage, Etc.--* * * |
22 | (g) All malt or brewed beverages purchased by an importing |
23 | distributor from a [Pennsylvania] manufacturer of malt or brewed |
24 | beverages [or from any person located outside this Commonwealth] |
25 | for resale shall be invoiced to the importing distributor, shall |
26 | come physically into the possession of such importing |
27 | distributor and shall be unloaded into and distributed from the |
28 | licensed premises of such importing distributor. The board may |
29 | act to further define and control the storage and distribution |
30 | of malt or brewed beverages in conformity with this section and |
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1 | this act. |
2 | Section 5. Section 446 of the act, amended June 30, 1992 |
3 | (P.L.327, No.66), May 31, 1996 (P.L.312, No.49) and January 6, |
4 | 2006 (P.L.1, No.1), is amended to read: |
5 | Section 446. Breweries.--Holders of a brewery license may: |
6 | (1) Sell malt or brewed beverages produced and owned by the |
7 | brewery on the licensed premises under such conditions and |
8 | regulations as the board may enforce, to individuals for |
9 | consumption on the premises [and]. Additionally, a small |
10 | manufacturer may sell malt or brewed beverages produced and |
11 | owned by the brewery on the licensed premises under such |
12 | conditions and regulations as the board may enforce to hotel, |
13 | restaurant, club and public service liquor licensees. |
14 | (2) Operate a restaurant or brewery pub on the licensed |
15 | premises under such conditions and regulations as the board may |
16 | enforce: Provided, however, That sales on Sunday may be made |
17 | irrespective of the volume of food sales if the licensed |
18 | premises are at a public venue location. The holder of a brewery |
19 | license may sell at its brewery pub premises Pennsylvania wines |
20 | it has purchased from either the holder of a Pennsylvania |
21 | limited winery license or from the board: Provided, however, |
22 | That said wines must be consumed at the licensed brewery pub |
23 | premises. |
24 | (3) Use brewery storage and distribution facilities for the |
25 | purpose of receiving, storing and distributing malt or brewed |
26 | beverages manufactured outside this Commonwealth if the |
27 | beverages are distributed in this Commonwealth only through |
28 | specific importing distributors who shall have first been given |
29 | distributing rights for such products in designated geographical |
30 | areas through the distribution system required for [out-of- |
|
1 | State] manufacturers under section 431(b) as well as all other |
2 | pertinent sections of this act. The manufacturer of the |
3 | beverages must comply with section 444. |
4 | (4) Apply for and hold a hotel liquor license, a restaurant |
5 | liquor license or a malt and brewed beverages retail license to |
6 | sell for consumption at the restaurant or brewery pub on the |
7 | licensed brewery premises, liquor, wine and malt or brewed |
8 | beverages regardless of the place of manufacture, under the same |
9 | conditions and regulations as any other hotel liquor license, |
10 | restaurant liquor license or malt and brewed beverages retail |
11 | license, but must brew at least two hundred fifty barrels per |
12 | year. Each holder of a brewery license who receives a hotel |
13 | liquor license, a restaurant liquor license or a malt or brewed |
14 | beverages retail license to operate a brew pub shall not sell |
15 | directly to any person licensed by this act, except if any malt |
16 | or brewed beverage is to be distributed in this Commonwealth it |
17 | shall be only through specific importing distributors who shall |
18 | have first been given distributing rights for such products in |
19 | designated geographical areas through the distribution system |
20 | required for [out-of-State] manufacturers under section 431(b) |
21 | as well as all other pertinent sections of this act. |
22 | Section 6. The provisions of this act are severable. If any |
23 | provision of this act or its application to any person or |
24 | circumstance is held invalid, the invalidity shall not affect |
25 | other provisions or applications of this act which can be given |
26 | effect without the invalid provision or application. |
27 | Section 7. This act shall take effect December 31, 2009. as | <-- |
28 | follows: |
29 | (1) The requirement in section 431(b) that certain |
30 | manufacturers are required to give distribution rights for |
|
1 | their products in this Commonwealth shall take effect in 150 |
2 | days. |
3 | (2) This section shall take effect immediately. |
4 | (3) The remainder of this act shall take effect in 60 |
5 | days. |
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