2023-2024 Regular Session SB 688 PN 1800 Bill Text (HTM)

HOUSE AMENDED

PRIOR PRINTER'S NOS. 710, 1775, 1791

PRINTER'S NO. 1800

THE GENERAL ASSEMBLY OF PENNSYLVANIA

SENATE BILL

No.

688

Session of

2023

INTRODUCED BY REGAN, ROBINSON, DiSANTO, ROTHMAN, STEFANO,

PHILLIPS-HILL, YAW, COLEMAN, AUMENT, BAKER, PENNYCUICK AND

BROWN, MAY 5, 2023

AS RE-REPORTED FROM COMMITTEE ON APPROPRIATIONS, HOUSE OF

REPRESENTATIVES, AS AMENDED, JULY 2, 2024

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

Pennsylvania Liquor Stores, further providing for sales by

Pennsylvania Liquor Stores; and, in licenses and regulations

relating to liquor, alcohol and malt and brewed beverages,

further providing for liquor importers' licenses, fees,

privileges and restrictions, providing for ready-to-drink

cocktail permit and for authority to acquire ready-to-drink

cocktail permits and further providing for distributors' and

importing distributors' restrictions on sales, storage, etc,

for unlawful acts relative to malt or brewed beverages and

licensees, for unlawful acts relative to liquor, malt and

brewed beverages and licensees.; AND, IN DISTILLERIES,

WINERIES, BONDED WAREHOUSES, BAILEES FOR HIRE AND

TRANSPORTERS FOR HIRE, FURTHER PROVIDING FOR LIMITED

DISTILLERIES AND DISTILLERIES.

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The General Assembly of the Commonwealth of Pennsylvania

hereby enacts as follows:

Section 1. Section 102 of the act of April 12, 1951 (P.L.90,

No.21), known as the Liquor Code, is amended by adding

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:

* * *

"Ready-to-drink cocktail" shall mean a beverage, composed in

part of distilled liquor, combined with other nonalcoholic

ingredients, carbonated or still, by whatever name the beverage

may be called, premixed and packaged in original containers by

the manufacturer, containing not more than sixteen ounces that

is not mixed or adulterated on the licensed premises of a

licensee. The term shall include any beverage consisting of at

least one-half of one per centum, but not greater than twelve

and one-half per centum, alcohol by volume. The term shall not

include any beverage composed, in part, of wine or malt or

brewed beverages. A ready-to-drink cocktail shall be considered

liquor unless the context clearly indicates otherwise.

* * *

Section 2. Section 305(b) of the act is amended and the

section is amended by adding a subsection to read:

Section 305. Sales by Pennsylvania Liquor Stores.--* * *

(a.2) The following shall apply:

(1) Notwithstanding any provision of the law to the

contrary, except as provided under paragraph (2), no product

that meets the definition of a "ready-to-drink cocktail" may be

sold as a special order .

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(2) A product that meets the definition of a "ready-to-drink

cocktail" may be sold as a special order to licensees that do

not possess a ready-to-drink cocktail permit if the products are

not sold for off-premises consumption.

(b) Every Pennsylvania Liquor Store shall sell liquors,

including wine and ready-to-drink cocktails, at wholesale to

hotels, restaurants, clubs, and railroad, pullman and steamship

companies licensed under this act; and ready-to-drink cocktails

to distributors and importing distributors that hold a ready-to-

drink cocktail permit; 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 per centum from the retail price; except that special order

sales to licensees authorized in subsection (a) shall not be

subject to the ten per centum discount. 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, except that

incentives, such as coupons or discounts on certain products,

may be offered to unlicensed customers of the board as provided

under sections 207(m) and 493(24)(ii)(B). A person entitled to

purchase liquor at wholesale prices may purchase the liquor at

any Pennsylvania Liquor Store upon tendering cash, check or

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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.

* * *

Section 3. Section 410(e) of the act is amended to read:

Section 410. Liquor Importers' Licenses; Fees; Privileges;

Restrictions.--* * *

(e) Importers' licenses shall permit the holders thereof to

bring or import liquor and ready-to-drink cocktails from other

states, foreign countries, or insular possessions of the United

States, and purchase liquor from manufacturers located within

this Commonwealth, to be sold outside of this Commonwealth or to

Pennsylvania Liquor Stores within this Commonwealth, or when in

original containers of ten gallons or greater capacity, to

licensed manufacturers within this Commonwealth.

All importations of liquor into Pennsylvania by the licensed

importer shall be consigned to the board or the principal place

of business or authorized place of storage maintained by the

licensee.

* * *

Section 4. The act is amended by adding a section to read:

Section 415.1. Ready-to-Drink Cocktail Permit.--(a) (1)

The holder of a restaurant, hotel, distributor or importing

distributor license may apply for a ready-to-drink cocktail

permit. The board shall issue a ready-to-drink cocktail permit

to the applicant if the applicant meets the requirements set

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forth in this act and the board's regulations and pays the

appropriate fees.

(2) Nothing in this section shall be construed to affect the

ability of an existing licensee to operate within the scope of

its current license as authorized by this act, except that no

sales of ready-to-drink cocktails for off-premises consumption

may take place by a ready-to-drink cocktail permit holder after

eleven o'clock postmeridian. Sales by restaurant and hotel

license holders may occur on Sundays from the time the licensee

may legally begin to sell alcohol that day until eleven o'clock

postmeridian if the licensee has a permit authorized under

sections 406(a)(3) and 432(f). Sales by distributor and

importing distributor license holders may occur on Sundays

between the hours of nine o'clock antemeridian and nine o'clock

postmeridian if the licensee has a permit authorized under

section 492.1(c).

(3) A ready-to-drink cocktail permit may not be issued to a

license holder whose underlying license is subject to a pending

objection by the director of the Bureau of Licensing or the

board under section 470(a.1), until the matter is decided.

Notwithstanding any other provision of law, a holder of a ready-

to-drink cocktail permit may continue to normally operate under

the permit if its underlying license is operational,

notwithstanding if the underlying license is objected to by the

director of the Bureau of Licensing or the board under section

470(a.1).

(4) If the board has approved the operation of another

business which has an inside passage or communication to or with

the licensed premises, the sale and purchase of ready-to-drink

cocktails shall be confined strictly to the areas covered by the

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license. The payment for the purchase of goods obtained from the

unlicensed area of the premises shall be permitted in the

licensed area.

(5) For purposes of selling ready-to-drink cocktails for

off-premises consumption, a holder of a ready-to-drink cocktail

permit is not subject to section 493(14).

(6) A ready-to-drink cocktail permit holder shall comply

with the responsible alcohol management provisions under section

471.1.

(7) A ready-to-drink cocktail permit holder may store ready-

to-drink cocktails in a noncontiguous area that is not

accessible to the public and is:

(i) locked at all times when not being accessed by the

licensees' employees;

(ii) not accessible to employees under eighteen years of

age; and

(iii) identified by dimensions and locations on forms

submitted to the board.

(8) A ready-to-drink cocktail permit holder shall utilize a

transaction scan device to verify the age of an individual who

appears to be under thirty-five years of age before making a

sale of a ready-to-drink cocktail. A ready-to-drink cocktail

permit holder may not sell or share data from the use of a

transaction scan device, provided that the licensee may use the

data to show the enforcement bureau of the board that the

licensee is in compliance with this act. As used in this

paragraph, the term "transaction scan device" means a device

capable of deciphering, in an electronically readable format,

the information encoded on the magnetic strip or bar code of an

identification card under section 495(a).

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(9) A sale of ready-to-drink cocktails by a ready-to-drink

cocktail permit holder shall be made through a register, which

is located on the licensed premises, which is well designated

with signage, which is staffed at all times when patrons are on

the licensed premises. The actual sale shall be conducted by a

person who is at least eighteen years of age and has been

trained under section 471.1 and which utilizes a transaction

scan device for the sale as set forth in paragraph (8). The sale

of ready-to-drink cocktails may not occur at a point of sale

where the customer scans the customer's own purchases. Sales of

ready-to-drink cocktails must occur on the licensed premises.

(10) If a ready-to-drink cocktail permit holder has an

interior connection to another business that it operates, the

permit holder may use one or more of the registers in the other

business to sell ready-to-drink cocktails for off-premises

consumption under the following conditions:

(i) the building is eleven thousand (11,000) square feet or

less;

(ii) the registers are located in the same building as the

licensed premises;

(iii) the registers comply with the signage, staffing,

training, carding, scanning and prohibition on the sharing of

data provisions of paragraphs (8) and (9); and

(iv) the board has been provided notice of compliance with

this paragraph by the ready-to-drink cocktail permit holder,

including square footage of the building and the location of the

specific registers to be used prior to their use.

(11) The registers used under paragraph (10) shall be deemed

to be licensed areas but no formal application beyond notice to

the board shall be required. The registers may be used by the

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other business.

(b) The application and renewal fee for a ready-to-drink

cocktail permit shall be as follows:

(1) An initial application fee of two thousand and five

hundred dollars ($2,500).

(2) An annual renewal fee equal to two per centum of the

cost of ready-to-drink cocktails purchased from the board for

off-premises consumption.

paid to the board under this section shall be paid into the

State Treasury for deposit as follows:

(1) All moneys shall be deposited into the State Stores

Fund.

(2) Beginning June 1, 2025, and every June 1 thereafter, all

moneys deposited under paragraph (1) shall be transferred to the

General Fund.

(d) A restaurant or hotel license holder that is also a

ready-to-drink cocktail permit holder may sell for off-premises

consumption, in a single transaction, up to one hundred ninety-

two (192) fluid ounces. Ounces of ready-to-drink cocktails shall

not be combined with wine or malt or brewed beverages for the

purpose of calculating the sale restrictions applicable to each

of those beverages. A distributor or importing distributor

license holder that is also a ready-to-drink cocktail permit

holder, may sell ready-to-drink cocktails, in any quantity. No

ready-to-drink cocktail permit holder may sell ready-to-drink

cocktails to a permit or license holder.

(e) (1) Ready-to-drink cocktail permit holders shall comply

with the provisions of section 201(f), (k) and (o) of the act of

March 4, 1971 (P.L.6, No.2), known as the "Tax Reform Code of

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1971," regarding the purchase of ready-to-drink cocktails from a

Pennsylvania Liquor Store.

(2) The sale of ready-to-drink cocktails by a ready-to-drink

cocktail permit holder for off-premises consumption shall be

considered a "purchase at retail" under section 201(f) of the

"Tax Reform Code of 1971," a "sale at retail" under section

201(k) of the "Tax Reform Code of 1971" or a "use" under section

201(o) of the "Tax Reform Code of 1971."

(3) A ready-to-drink cocktail permit holder may, when filing

its required returns under Article II of the "Tax Reform Code of

1971," request a refund of any taxes paid in accordance with

paragraph (1) for ready-to-drink cocktails sold for off-premises

consumption and for which taxes were remitted to the department

under paragraph (2). The request for a refund shall include the

original receipt from a Pennsylvania Liquor Store showing the

amount of taxes paid under paragraph (1) for which the taxpayer

is requesting a refund.

(4) The department shall refund the amount of taxes paid to

a Pennsylvania Liquor Store by a ready-to-drink cocktail permit

holder under paragraph (1) for which the taxpayer remitted taxes

imposed under paragraph (2). The department may promulgate rules

or regulations and prescribe forms as may be necessary to

implement the provisions of this subsection.

(f) A ready-to-drink cocktail permit holder may not sell

ready-to-drink cocktail for off-premises consumption at a price

less than the licensee's purchase price from the board of the

ready-to- drink cocktail .

(g) A ready-to-drink cocktail permit holder may not sell a

private label product.

(h) Holders of a ready-to-drink cocktail permit may ALSO

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purchase ready-to-drink cocktails directly from a licensed

Pennsylvania manufacturer for the purpose of reselling the

ready-to-drink cocktail for off-premises consumption.

(I) AS USED IN THIS SECTION, THE TERM "LICENSED PENNSYLVANIA

MANUFACTURER" SHALL MEAN AN ENTITY THAT HOLDS AN ACTIVE LIMITED

DISTILLERY LICENSE OR HELD AN ACTIVE LIMITED DISTILLERY LICENSE

PRIOR TO JULY 1, 2024, AND SUBSEQUENTLY ACQUIRED A DISTILLERY

LICENSE.

Section 5. The heading of Subdivision (B) of Article IV of

the act is amended to read:

(B) Malt and Brewed Beverages and

Ready-to-Drink Cocktails (Including Manufacturers).

Section 6. The act is amended by adding a section to read:

Section 431.2. Authority to Acquire Ready-to-Drink Cocktail

Permits.--The holder of a distributor or importing distributor

license may acquire a ready-to-drink cocktail permit as set

forth in section 415.1. The holder of a ready-to-drink cocktail

permit may conduct tastings of ready-to-drink cocktails in

accordance with the board ' s regulations pertaining to tastings

for liquor. The ready-to-drink cocktails shall not be subject to

the prohibitions set forth in sections 492(13) and 492(14) which

would otherwise prohibit distributors and importing distributors

from selling, storing, possessing or interacting with liquor.

Section 7. Sections 441 and 492(13) and (14) of the act are

amended to read:

Section 441. Distributors' and Importing Distributors'

Restrictions on Sales, Storage, Etc.--(a) No distributor or

importing distributor shall purchase, receive or resell any malt

or brewed beverages and ready-to-drink cocktails, if a ready-to-

drink cocktail permit is obtained, except:

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(1) in the original containers as prepared for the market by

the manufacturer at the place of manufacture;

(2) in the case of identical containers repackaged in the

manner described by subsection (f); or

(3) as provided in section 431(b).

(b) (1) No distributor or importing distributor shall sell

any malt or brewed beverages in quantities of less than a case

or original containers containing one hundred twenty-eight

ounces or more which may be sold separately: Provided, That no

malt or brewed beverages sold or delivered shall be consumed

upon the premises of the distributor or importing distributor,

or in any place provided for such purpose by such distributor or

importing distributor. Notwithstanding any other provision of

this section or act, malt or brewed beverages and ready-to-drink

cocktails which are part of a tasting conducted pursuant to the

board's regulations may be consumed on licensed premises.

(2) Distributors and importing distributors that hold a

ready-to-drink cocktail permit shall be permitted to sell ready-

to-drink cocktails in any quantity and all sales must be in

original containers. Sales of ready-to-drink cocktails are

limited to sales to non-licensees and sales of ready-to-drink

cocktails for subsequent resale are prohibited.

or operate any place where sales are made other than that for

which the license is granted.

(d) (1) No distributor shall maintain any place for the

storage of malt or brewed beverages and ready-to-drink cocktails

except in the same municipality in which the licensed premises

is located and unless the same has been approved by the board.

In the event there is no place of cold storage in the same

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municipality, the board may approve a place of cold storage in

the nearest municipality.

(2) No importing distributor shall maintain any place for

the storage of malt or brewed beverages and ready-to-drink

cocktails except in the franchise territory in which the

licensed premises is located and unless the same has been

approved by the board. The board shall issue no more than four

storage facilities license to an importing distributor. The

storage location shall be designated solely as a storage

facility, from which only sales to other licensees are

permitted. Retail sales may be made at the licensed location

pursuant to subsection (c). If the importing distributor

maintains a storage location for cold storage in the same

municipality in which the importing distributor is licensed or a

nearby municipality, the importing distributor may continue to

maintain that cold storage location in addition to another

storage location within their franchise territory.

(e) No distributor or importing distributor shall purchase,

sell, resell, receive or deliver any malt or brewed beverages,

except in strict compliance with the provisions of subsection

(b) of section 431 of this act.

(f) (1) To salvage one or more salable cases from one or

more damaged cases, cartons or packages of malt or brewed

beverages and ready-to-drink cocktails, a distributor or

importing distributor may repackage consequent to inadvertent

damage and sell a case, carton or package of identical units of

malt or brewed beverages or ready-to-drink cocktails.

(2) Repackaging is permissible only to the extent made

necessary by inadvertent damage. Repackaging not consequent to

damage is prohibited.

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(3) The term "identical units" as used in this subsection

means undamaged bottles or cans of identical brand, package and

volume.

(g) All malt or brewed beverages purchased by an importing

distributor from a Pennsylvania manufacturer of malt or brewed

beverages or from any person located outside this Commonwealth

for resale shall be invoiced to the importing distributor, shall

come physically into the possession of such importing

distributor and shall be unloaded into and distributed from the

licensed premises of such importing distributor. The board may

act to further define and control the storage and distribution

of malt or brewed beverages and ready-to-drink cocktails in

conformity with this section and this act.

(h) As used in this section, the term "franchise territory"

shall mean the geographically contiguous area in which an

importing distributor has been given rights for the sale or

resale of malt or brewed beverages and ready-to-drink cocktails.

(i) Notwithstanding any other provision to the contrary,

when making a sale of malt or brewed beverages and ready-to-

drink cocktails to a private individual, no distributor or

importing distributor may be required to collect the name,

address or any other identifying information of the private

individual for the purpose of keeping a record of the quantity

of cases or volume of malt or brewed beverages or ready-to-drink

cocktails purchased.

Section 492. Unlawful Acts Relative to Malt or Brewed

Beverages and Licensees.--

It shall be unlawful--

* * *

(13) Possession or Storage of Liquor or Alcohol by Certain

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Licensees. For any distributor, importing distributor or retail

dispenser, or his servants, agents or employes, to have in his

possession, or to permit the storage of on the licensed premises

or in any place contiguous or adjacent thereto accessible to the

public or used in connection with the operation of the licensed

premises, any alcohol or liquor. The provisions of this section

shall not apply to the possession or storage of ready-to-drink

cocktails that are purchased in compliance with section 441 of

this act.

(14) Malt or Brewed Beverage Licensees Dealing in Liquor or

Alcohol. For any malt or brewed beverage licensee, other than a

distributor or importing distributor that possesses a ready-to-

drink cocktail permit, a manufacturer, or the servants, agents

or employes thereof, to manufacture, import, sell, transport,

store, trade or barter in any liquor or alcohol.

* * *

Section 8. Section 493 of the act is amended by adding a

paragraph to read:

Section 493. Unlawful Acts Relative to Liquor, Malt and

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

in this section, shall mean those persons licensed under the

provisions of Article IV, unless the context clearly indicates

otherwise.

It shall be unlawful--

* * *

(35) (i) Ready-to-Drink Cocktails. For any licensee that

does not hold a ready-to-drink cocktail permit to sell an

alcoholic beverage that meets the definition of a "ready-to-

drink cocktail" for off-premises consumption, except an entity

licensed under section 505.4. FOR AN ENTITY THAT MEETS THE

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DEFINITION OF A "LICENSED PENNSYLVANIA MANUFACTURER" UNDER

SECTION 415.1(I).

(II) FOR ANY LICENSEE TO ACQUIRE AN ALCOHOLIC BEVERAGE THAT

MEETS THE DEFINITION OF A "READY-TO-DRINK COCKTAIL" FROM ANYONE

OTHER THAN THE BOARD, OR AN ENTITY THAT MEETS THE DEFINITION OF

A "LICENSED PENNSYLVANIA MANUFACTURER" UNDER SECTION 415.1(I),

EXCEPT THAT A LICENSEE MAY ACQUIRE AN ALCOHOLIC BEVERAGE THAT

MEETS THE DEFINITION OF A "READY-TO-DRINK COCKTAIL" FROM AN

ENTITY LICENSED UNDER SECTION 505.4, IF THE PURCHASING LICENSEE

DOES NOT RESELL THE ALCOHOLIC BEVERAGE FOR OFF-PREMISES

CONSUMPTION.

(ii) (III) For a licensee who acquired an alcoholic beverage

that meets the definition of a "ready-to-drink cocktail" as a

special order to sell the alcoholic beverage that meets the

definition of a "ready-to-drink cocktail" for off-premises

consumption regardless of whether the licensee holds a ready-to-

drink cocktail permit.

SECTION 9. SECTION 505.4 OF THE ACT IS AMENDED BY ADDING

SUBSECTIONS TO READ:

SECTION 505.4. LIMITED DISTILLERIES AND DISTILLERIES.--* * *

(D) AN ENTITY THAT MEETS THE DEFINITION OF A "LICENSED

PENNSYLVANIA MANUFACTURER" UNDER SECTION 415.1(I) MUST, UPON

REQUEST, OFFER TO SELL TO THE BOARD ANY READY-TO-DRINK COCKTAIL

THE LICENSED PENNSYLVANIA MANUFACTURER SELLS.

(E) AN ENTITY THAT MEETS THE DEFINITION OF A "LICENSED

PENNSYLVANIA MANUFACTURER" UNDER SECTION 415.1(I) THAT SELLS

READY-TO-DRINK COCKTAILS TO LICENSEES THAT HOLD A READY-TO-DRINK

COCKTAIL PERMIT SHALL REPORT QUARTERLY IN WRITING TO THE BOARD

THE FOLLOWING:

(I) THE QUANTITY OF PRODUCT SOLD TO EACH PERMITTEE.

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(II) THE PURCHASE PRICE TO PERMITTEES.

(III) THE NAME OR BRAND OF THE PRODUCT SOLD.

Section 9 10. This act shall take effect in 60 days.

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