Urgent Action Needed Today;

Prevailing Wage Bill to be Voted in the House

The House is planning to vote today on two bills attacking prevailing wage and Pennsylvania’s skilled construction workforce.

Make no mistake, this is not a way to reduce government expenditures.  That has been proven time after time by extensive research.

This is simply an attack on fair wages and organized labor.

Please email OR CALL your state House member now and urge a “no” vote on House Bill 665 and House Bill 796.

TO FIND CONTACT INFORMATION FOR YOUR LEGISLATOR, CLICK HERE

Please forward this message to everyone who supports quality construction and middle-class jobs.

For more information, click here.

Liquor Privatization

In the early hours of Saturday morning, Senate Republicans approved an amendment that would privatize liquor stores and result in the closing PLCB stores and the loss of thousands of jobs.

A final vote on the full bill is likely this weekend. There is still opportunity to convince some GOP lawmakers that this job-killing effort is bad for Pennsylvania taxpayers.

Here is an analysis of the bill as it stands now:

Summary

The bill provides for the privatization of retail sales of wine and spirits in the Commonwealth and for other reforms regarding alcohol sales. The bill would provide for up to 14,000 private wine and spirits retailers, including restaurant (R), hotel (H), retail dispenser (E), distributor (D), and importing distributor (ID) licensees. The bill provides for beer sales package reform for licensees which sell for off-premise consumption. It also provides for the elimination of the Johnstown Flood Tax, but requires that the agency raise the same amount of revenue for state government operations by increasing the markup on products that it sells.

Existing Law

The Liquor Code currently provides for the operation of Pennsylvania Wine and Spirits Stores, the licensing and regulation of those that are permitted to sell alcohol for on- and off-premise consumption, and for the powers of the PLCB to oversee the system of all alcohol sales within the Commonwealth.

Analysis

The bill contains new and amended definitions including:

• Direct Shipper – A producer of wine licensed by the Board to ship wine by mail.

• Distributor – Allows for 6-pack and growler sales by distributors.

• Food Market – A store that sells food for off-premise consumption, is 2,500 to 30,000 sq. ft., and 75% of its floor space is used for food sales.

• Growler – Defined as a 64-ounce refillable container.

• Importing Distributor – Allows for 6-pack and growler sales by importing distributors.

• Private label – Defined as a product made for a specific retailer.

• Retail Dispenser – Allows for three 6-packs or one 12-pack and one 6-pack to be sold by retail dispensers.

• Six-pack – Defined as a package of up to 6 bottles or cans totaling no more than 96 ounces.

• Spirits – Defined as an alcoholic beverage produced by distillation.

• Twelve-pack – Defined as a package of up to 12 bottles or cans totaling no more than 192 ounces.

The bill provides for new Pennsylvania Liquor Control Board (PLCB) powers and duties including:

• A requirement to purchase alcohol and liquor to sell to expanded and enhanced permit holders at the permit holder’s request.

• The requirement to close PLCB Wine and Spirits stores when the number of D’s and ID’s in a county have wine and/or spirits enhanced permits. If a PLCB store is within a municipality that does not have an enhanced permit, the PLCB may keep the store open, taking into consideration the current lease and market conditions before closing the store.

• A requirement to close PLCB Wine and Spirits Stores when market and operational conditions dictate.

• Providing unlimited flexible pricing to the PLCB and removing the requirement that special pricing be put in place for Pennsylvania wines.

• A prohibition on selling private label brands.

• The creation of a Safe-Ride-Home Grant Program to provide transportation for visibly intoxicated persons.

Taxes and Revenue
The bill would repeal the 18% emergency liquor tax (Johnstown Flood Tax), but requires that the PLCB remit $313,000,000 in FY 2013-2014, which is approximately the same amount raised by the tax. After FY 2013-2014, the PLCB is required to remit 15.5% of the agency’s gross sales to the State Treasury. In order for the agency to raise the more than $300 million required by the bill, the retail markup will have to be increased from 30% to 80%.

The bill dedicates any increase in PLCB revenue to a senior property tax reduction relief fund.

Package Reform
The bill would allow R, H, and E licensees to sell up to three 6-packs or one 12-pack and one 6-pack for off-premise consumption. D and ID licensees would be able to sell 6-packs and growlers in any quantity.

Sunday Sales
The bill would allow the PLCB to open as many of its stores on Sundays as it deems necessary, and removes any restriction on the hours of operation. However, stores must still be closed on the Christmas and Easter holidays.

Licensee Discount
The wholesale discount for the newly created expanded and enhanced permit holders would be increased to 18%. The discount only applies to the type of alcohol that the permit holder is permitted to sell for off-premise consumption. The discount would remain at 10% for licensees which do not have the enhanced permits.

Expanded and Enhanced Wine and Spirits Permits
The bill provides for the creation of new permits that would allow for R, H, E, D, and ID licensees to sell wine and/or spirits for off-premise consumption. There is the potential for up to 14,000 new retail locations for off-premise consumption.

Expanded wine and specialty spirits permits would be available to R, H, and E licensees, allowing them to operate from 8AM to 11PM Sunday through Saturday.  However, they can only sell for off-premise consumption during the regular business hours of the licensee.

An expanded wine permit would enable the holder to sell up to four bottles of 750 ml to 1 liter or two bottles of 1.5 liters or 1.75 liters. The wine permit would require a $4,000 fee.

The expanded wine permit fee would be based on the amount of wine purchased by the permit holder as follows:

Less than $100,000                             $2,000
$100,001-$200,000                             $4,000
$200,001 +                                          $6,000

The expanded specialty spirit permit is $2,000.

E and food market liquor licensees would only be eligible for a wine permit.

Enhanced wine and spirits permits would be available to D and ID licensees allowing them to operate from 8AM to 11PM Sunday through Saturday.

The wine and spirits enhanced permit fee would be based on the amount of wine and/or spirits purchased by the permit holder as follows:

Wine and Spirits:
Less than $200,000                             $4,000
$200,001-$400,000                             $8,000
$400,001 +                                          $12,000

Wine or Spirits:
Less than $100,000                             $2,000
$100,001-$200,000                             $4,000
$200,001 +                                          $6,000

The enhanced specialty spirit expanded permit is $2,000.

An enhanced permit holder may also sell beer in a bottle that is 750 ml or greater.

Product sold by permit holders cannot be sold for less than its purchase price.
Permit holders would be permitted to offer manufacturer rebates.

All permit holders are required to use an ID scan device before serving anyone that appears under the age of 35 to confirm their age.

Food Market Restaurant License
The bill permits for food markets to purchase an R license and to waive the requirements that make it an R license, except for the ability to sell beer for off-premise consumption. An R license cannot be granted to a food market if the PLCB determines that the market is sufficiently serviced by the existing private retail market or if it is within three quarter miles of a D or ID within the first six months, or if the D or ID has a wine and/or spirit enhanced permit after 6 months.

The PLCB is to follow all rules for an R license as it relates to application, renewals, transfers, and county quotas. The seating and on-premise alcohol and food consumption requirements are waived.

Food market liquor licensees are further permitted to purchase a wine expanded permit allowing for the sale of up to 4 bottles of 750 milliliters or 2 bottles of 1.5 liters of wine by the food market liquor license permit holder.

Fuel Prohibition
The fuel prohibition would be removed for R and H licenses permitting gas stations to sell beer and wine if it purchased an R license and an expanded wine permit. It is also removed for D’s and ID’s permitting gas to be sold by distributors creating the possibility that there could be a gas station with beer, wine, and spirits sales in any quantity.

Direct Shipment
The bill would permit for direct shipment of wine to residents. An order of up to 18 liters per month can be taken by telephone, internet, or mail order. A direct shipper must be licensed by the Board and pay a $100 fee. The tax rate for directly shipped wine would be 12% plus the local applicable sales tax.

The tax collected from directly shipped wine would fund a $500,000 grant program to promote, market, and research wine. The grants would be appropriated by a five member board composed of appointees of the Governor and legislative leaders. The Department of Agriculture would be charged with staffing the board.

Breweries, limited wineries, and limited distilleries
The bill would permit breweries, limited wineries, and limited distilleries to sell each other’s products.

Wholesale Market Study
The bill requires the Legislative Budget and Finance Commission (LBFC) and the PLCB to conduct parallel, but separate, studies of the status, value, and performance of the PLCB wholesale system statewide and the effectiveness of the county quota system for issuing licenses and to make recommendations to the legislature on how to improve or privatize the system.

If one of the LBFC or PLCB studies shows that leasing the wholesale operations of the PLCB would not have a negative impact on the fiscal health of the Commonwealth, then the PLCB may pursue a RFP of up to ten years. A proposal can be awarded by a unanimous vote of the Board if it determines that the lease would increase the annual gross profits to the state.

Miscellaneous
The bill authorizes the Governor to nominate with the consent of the Senate the PLCB CEO position.

The bill would permit the PLCB to contract for delivery service to licensees and would require payment to be made by the time of delivery by credit card or electronic fund transfer.

The bill would make it clear that PLCB renewals and transfers would not apply to the permits, but would continue to apply to the license.

Groundhog Day would be added to the list of holidays when alcohol sales by R and H licensees could begin at 7AM.

Bed and breakfasts would be able to provide a bottle of wine for guests as part of the room charge without having to receive a license.

Wine and spirits importers would be given permission to deliver alcohol purchased from the PLCB to licensees.

The bill would permit licensees and manufacturers to offer money or items of value to assist with providing RAMP training. Records must be kept of any money or items of value that are provided in this way.

The bill reduces the amount of food that must be sold by an economic development licensee from 70% to 50%.

Interior connections would be permitted, and the 10 foot or less passage requirement would be repealed.

The period between referenda to permit the sale of alcohol at ski resorts in dry communities would be reduced from four years to two years.

The bill would increase the annual fee to keep a license in safekeeping from $5,000 to $10,000 in 1st through 4th class counties, and from $2,500 to $5,000 in 5th through 8th class counties.

The bill removes the requirement that licensees maintain the records of alcohol sales from the most recent six months.

The bill allows for year-round processing of catering permits as long as the applicant applies at least 60 days prior to the caterer’s first event.

A brewery can obtain a farmers market permit allowing for the brewer to attend an unlimited number of farmers markets annually. The permit fee is $250. The permit holder cannot sell more than 144 ounces (i.e. twelve 12-ounce beers) in a single sale.

The bill reenacts the brewery tax credit. Brewers will be eligible for up to $200,000 annually for capital expenditures. The credit is to be applied to the brewer’s malt beverage tax.