NOTICES

INDEPENDENT REGULATORY REVIEW COMMISSION

Actions Taken by the Commission

[26 Pa.B. 1313]

   The Independent Regulatory Review Commission met publicly at 11 a.m., Wednesday, March 6, 1996, and took the following actions:

Regulations Deemed Approved Under Section 5(B.3) of the Regulatory Review Act:

   Department of Revenue #15-375:  Wild Card Lotto (amends 61 Pa. Code §§ 817.113, 817.116, 817.118 and 817.120.

   (Editor's note: For the text of the regulations pertaining to this order, see 26 Pa.B. 1268 (March 23, 1996).

   Liquor Control Board #54-49:  Size Limitations on Containers of Wine (amends 40 Pa. Code Chapter 11)

Commissioners Present:  John R. McGinley, Jr., Chairperson; Robert J. Harbison, III, Vice-Chairperson; John F. Mizner; Irvin G. Zimmerman

Public meeting held
March 6, 1996

Liquor Control Board--Size Limitations on Containers of Wine; Doc. No. 54-49

Order

   On November 14, 1995, the Independent Regulatory Review Commission (Commission) received this proposed regulation from the Liquor Control Board (LCB). This rulemaking would amend 40 Pa. Code Chapter 11 under the authority found in section 207(1) of the Pennsylvania Liquor Code (Code) (47 P. S. § 2-207(i)). The proposed regulation was published in the November 25, 1995 Pennsylvania Bulletin with a 30-day public comment period. The final-form regulation was submitted to the Commission on February 9, 1996.

   These rulemaking amendments to three sections of the LCB's regulation will increase the maximum size limitation on wine containers sold in the Commonwealth from 4 liters to 5 liters. This increase to the size limit also applies to sales by winery licensees and limited winery licensees in the Commonwealth. The LCB's regulation will continue to provide that the container size restrictions do not apply to wines sold by Pennsylvania wineries for delivery outside this Commonwealth. A ''[L]imited [W]inery'' is defined by the Code (at Section 1-102) as a winery which has a maximum annual output of 200,000 gallons.

   This market-driven change will allow the sale in Pennsylvania of the so-called ''bag in the box'' wine (box wine), which the LCB says is popular in neighboring states. The LCB states that this rulemaking change is based on projections by the A. C. Neilson Company (A. C. Neilson) and the National Alcohol Beverage Control Association, Inc., which project that one in five glasses of wine consumed in 1996 will be from a 5 liter box. According to the LCB, A. C. Neilson also reports that 5 liter box wine represented a 61.9% share of the growth of the table wine industry in 1993; it increased an additional 3.1% (to 64%) in 1994; and it made up 48% of the growth of the table wine market for the January--August time period in 1995.

   These proposed amendments will have some beneficial impacts and no adverse impact. Consumers and retail liquor licensees will benefit by having an additional choice of purchasing wines in 5 liter containers. Limited wineries will have the option of manufacturing wine in 5 liter containers for sale in the Commonwealth. The proposed slight increase in wine container size would also apply to sacramental wine available to ordained priests, rabbis and other clergymen.

   In our Comments, we suggested that the LCB consider increasing the maximum container size limitation to slightly more than 6, rather than 5, liters. Doing so would authorize the sale in Pennsylvania of slightly larger-sized champagne and wine bottles. In addition, we suggested that the LCB also consider allowing other wine type (that is, fermented alcohol content) products, such as hard cider, be made available to Pennsylvania consumers.

   The LCB did not choose to incorporate our suggestions into the final-form regulation. It acknowledged that while both suggestions have some consumer appeal, neither was of a significant enough level to warrant being added to this final-form rulemaking. The LCB also pointed out that because Pennsylvania is a ''control'' state, the LCB shoulders a greater responsibility than our neighboring private enterprise states. The LCB has the dual responsibility of providing quality service and products to our consumers and licensees while not encouraging increased consumption of alcoholic beverages.

   We have reviewed this regulation and find it to be in the public interest. These minor regulatory amendments proposed by the LCB will allow the sale of box wine in Pennsylvania, which has been established to be popular with consumers.

Therefore, It Is Ordered That:

   1.  Regulation No. 54-49 from the Pennsylvania Liquor Control Board, as submitted to the Commission on February 9, 1996, is approved; and

   2.  The Commission will transmit a copy of this Order to the Legislative Reference Bureau.

Commissioners Present:  John R. McGinley, Jr., Chairperson; Robert J. Harbison, III, Vice-Chairperson; John F. Mizner; Irvin G. Zimmerman

Public meeting held
March 6, 1996

Department of Revenue--Wild Card Lotto; Doc. No. 15-375

Order

   On February 12, 1996, the Independent Regulatory Review Commission (Commission) received this regulation from the Department of Revenue (Revenue). This rulemaking will amend 61 Pa. Code §§ 817.113, 817.116, 817.118 and 817.120. The authority for this regulation is section 6 of the State Lottery Law (72 P. S. § 3761-6). Notice of proposed rulemaking was omitted for this regulation. It will become effective upon publication in the Pennsylvania Bulletin.

   These amendments to the ''Wild Card Lotto'' rules will give ticket holders the option of receiving a lump sum award for a ticket that wins the first prize. Currently, the first prize award is a 20-year annuity.

   In order to receive the lump sum payment, a player must select this option when he or she buys a ''Wild Card Lotto'' ticket. When this option is selected, the words ''cash payment'' will appear on the ticket. First prize for this lottery game is 60% of the parimutuel prize pool. The minimum amount awarded for first prize is $1 million. If the first prize is the minimum, the lump-sum cash payment will equal the funds necessary, as determined by the Pennsylvania State Lottery, to purchase an annuity of not less than $1 million. Forty-nine percent of Wild Card Lotto gross sales is reserved for the total parimutuel prize pool and allocated to the payment of prizes. Revenue asserts that this regulation will have no significant adverse fiscal impact on the Commonwealth.

   We have reviewed this regulation and find it to be in the public interest. Revenue contends this proposal is in response to demands from lottery players. In addition, similar lump sum payment programs have generated additional lottery ticket sales and revenues in other states.

Therefore, It Is Ordered That:

   1.  Regulation No. 15-375 from the Department of Revenue, as submitted to the Commission on February 12, 1996, is approved; and

   2.  The Commission will transmit a copy of this Order to the Legislative Reference Bureau.

JOHN R. MCGINLEY, Jr.,   
Chairperson

[Pa.B. Doc. No. 96-461. Filed for public inspection March 22, 1996, 9:00 a.m.]

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