RULES AND REGULATIONS
Title 40--LIQUOR
LIQUOR CONTROL BOARD
[40 PA. CODE CH. 13]
Promotion
[28 Pa.B. 4920] The Liquor Control Board (Board) under the authority of section 207(i) of the Liquor Code (47 P. S. § 2-207(i)), adopts amendments to §§ 13.1 and 13.51 (relating to definitions; and general prohibition).
The Board's regulations amended by this order will define ''routine business entertainment'' and set limits on the extent to which in-State or out-of-State manufacturers, licensees or trade organizations may give or receive entertainment in the course of conducting business. It permits the giving of specific items, if the items are given without a corresponding obligation on the part of the recipient to purchase alcoholic beverages or to provide any other benefit to the donor. It further prohibits the improper influencing of the recipient to exclude or restrict from sale, the products of any other licensee or manufacturer.
Upon reviewing comments and suggestions initiated by the malt beverage industry after the public comment period, the Board determined that a modification of the language in Annex A of the proposed rulemaking would be appropriate. Therefore, the $200 per person, per event limitation as well as the six occasions per person limit was replaced with a combined limit of $800 per licensee, per calendar year. This limitation will be applicable to and will include the licensee, the licensee's employes, spouse and guests.
Comments:
Notice of proposed rulemaking was published at 28 Pa.B. 488 (January 31, 1998), with a 30-day written public comment period. Written comments were received from the Independent Regulatory Review Commission (IRRC) and from the Executive Secretary of the Malt Beverage Distributors Association of Pennsylvania (MBDA).
The MBDA expressed concern that the restrictions and limitations imposed on routine business entertainment would affect § 13.51(b). Subsection (b) permits manufacturers of alcoholic beverages and their representatives to participate in the activities of conventions of State or National organizations of retail liquor licensees or distributor or importing distributor malt beverage licensees. The response of the Board was that routine business entertainment would not amend or alter in any manner the existing subsection (b).
IRRC questioned the reasonableness of and need for § 13.51(c)(6) which requires that the donor of routine business entertainment accompany the recipient on each occasion that entertainment is provided. It is the Board's position that by deleting this requirement as IRRC suggested, the conduct of business would not necessarily be an element of routine business entertainment. Therefore, the Board respectfully declined IRRC's recommendation.
The Board received no other comments either in support of or in opposition to the proposed amendments during the public comment period.
Fiscal Impact:
These final-form regulations will not impose additional costs on the regulated community, the State or local governments.
Regulatory Review:
Under section 5(a) of the Regulatory Review Act (71 P. S. § 745.5(a)), on January 16, 1998, the Board submitted a copy of the notice of proposed rulemaking to IRRC and the Chairpersons of the House Committee on Liquor Control and the Senate Committee on Law and Justice for review and comment. These final-form regulations were submitted to the Chairpersons of the Senate Committee on Law and Justice and the House Committee on Liquor Control and IRRC on August 7, 1998.
These final-form regulations were deemed approved by the House Committee on Liquor Control and the Senate Committee on Law and Justice on August 28, 1998, and were approved by IRRC on September 10, 1998, in accordance with section 5.1(c) of the Regulatory Review Act.
Contact Person:
Persons requiring an explanation of the final-form regulations, or information related thereto should contact Jerry Danyluk, Liquor Control Board, Room 401, Northwest Office Building, Harrisburg, PA 17124-0001.
Findings:
The Board finds that:
(1) Public notice of intention to adopt amendments to the administrative regulations by this order has been given under sections 201 and 202 of the act of July 31, 1968 (P. L. 769, No. 240) (45 P. S. §§ 1201 and 1202) and the regulations thereunder, 1 Pa. Code §§ 7.1 and 7.2.
(2) The adoption of the final-form regulations set forth in this order is necessary and appropriate for the administration and enforcement of the authorizing statute.
Order:
The Board, acting under the enabling statute, orders that:
(a) The regulations of the Board, 40 Pa. Code Chapter 13, are amended by amending §§ 13.1 and 13.51 to read as set forth in Annex A.
(b) The Board shall submit this order and Annex A to the Office of the Attorney General for approval as to form and legality as required by law.
(c) The Board shall certify this order and Annex A and deposit them with the Legislative Reference Bureau as required by law.
(d) This order shall take effect upon publication in the Pennsylvania Bulletin.
JOHN E. JONES III,
Chairperson(Editor's Note: For the text of the order of the Independent Regulatory Review Commission relating to this document, see 28 Pa.B. 4845 (September 26, 1998).)
Fiscal Note: Fiscal Note 54-53 remains valid for the final adoption of the subject regulations.
Annex A
TITLE 40. LIQUOR
PART I. LIQUOR CONTROL BOARD
CHAPTER 13. PROMOTION
Subchapter A. ADVERTISING
GENERAL PROVISIONS § 13.1. Definitions.
The following words and terms, when used in this subchapter, have the following meanings, unless the context clearly indicates otherwise:
Advertisement--Any promotion through the medium of newspapers, magazines or similar publications, except that the term does not include the following:
(i) Any label affixed to a container of distilled spirits or wine, or any covering, carton or wrapper of the container.
(ii) Any editorial or other reading matter in any periodical, publication or newspaper for the preparation or publication of which no money or other valuable consideration is paid or promised, directly or indirectly, by any person subject to this subchapter.
Person--An individual, partnership, joint-stock company, business trust, association, corporation or other form of business enterprise, including a receiver, trustee or liquidating agent.
Routine business entertainment--Meals, beverages, tickets or passes to concerts, theaters, arts, sporting or charitable events provided to licensees, trade organizations or in-State manufacturers by licensees, trade organizations, in-State manufacturers or out-of-State manufacturers. For purposes of this definition, the term ''licensee'' includes all entities licensed under the Liquor Code including liquor importer licensees and vendor permittees.
Wine--Any fermented alcoholic beverage produced from grapes, fruit or other agricultural products, which contains 7.0% or more alcohol by volume, and includes, but is not limited to, still wines, sparkling wines, carbonated wines, imitation wines, vermouth, cider, perry, sake or any product offered for sale as wine.
GIVING AND ACCEPTING THINGS OF VALUE § 13.51. General prohibition.
(a) Except as provided in subsections (b), (c) and § 13.52 (relating to advertising novelties), no in-State or out-of-State manufacturer, licensee or group of licensees, their servants, agents or employes, may directly or indirectly, in person, individually or through a trade organization, contribute to or accept from another licensee or group of licensees of a different class, their servants, agents or employes or a trade organization of licensees of a different class, anything of value by means of advertisements, contributions, purchase, sale of tickets, donations or by any device, for any purpose.
(b) Manufacturers of alcoholic beverages and their servants, agents, employes or representatives are not prohibited from participating in the activities of conventions of State or National organizations of retail liquor licensees, or distributor or importing distributor malt beverage licensees. The participation shall be limited to the payment of registration fees entitling registrant to admission to the convention, to the insertion of advertising in the convention program of the State or National convention and to the furnishing of food, beverages and entertainment to persons who are bona fide registrants at the conventions.
(c) This section does not prohibit an in-State or out-of-State manufacturer, licensee or trade organization from providing another in-State or out-of-State manufacturer, licensee or trade organization routine business entertainment as defined in § 13.1 (relating to definitions). The routine business entertainment shall be subject to the following conditions:
(1) Routine business entertainment shall be provided without a corresponding obligation on the part of the recipient to purchase alcoholic beverages or to provide any other benefit to the donor or to exclude or restrict from sale the products of any other licensee or in-State or out-of-State manufacturer.
(2) The donor, its servants, agents or employes shall accompany the recipient during routine business enter-tainment. When items such as tickets are donated by manufacturers to importing distributors for the ultimate use of retailers, the donor is considered to be the importing distributor and it is the importing distributor, or its servants, agents or employes, who shall accompany the retailer.
(3) Routine business entertainment that requires or includes an overnight stay is prohibited.
(4) No more than $800 may be spent in a calendar year on any recipient licensee.
(5) Included under the $800 yearly entertainment cap for a recipient licensee are the licensee, his spouse, employes and guests.
(6) Licensees, in-State manufacturers and out-of-State manufacturers shall keep complete and accurate records of all expenses incurred and all routine business entertainment received for 2 years. These records shall contain the name of the recipient and donor of the entertainment, the type of routine business entertainment, the date and, in the case of a donor, the amount of expenditure for each occasion.
[Pa.B. Doc. No. 98-1598. Filed for public inspection October 2, 1998, 9:00 a.m.]
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