RULES AND REGULATIONS
Title 40--LIQUOR
LIQUOR CONTROL BOARD
[40 PA. CODE CHS. 5, 11, 13 AND 17]
Revisions to Codify Practices and Procedures Resulting from Legislative Amendments
[37 Pa.B. 16]
[Saturday, January 6, 2007]The Liquor Control Board (Board), under the authority of section 207(i) of the Liquor Code (code) (47 P. S. § 2-207(i)), amends Chapters 5, 11, 13 and 17.
Summary
The final-form rulemaking codifies practices and procedures of the Board and further explains various legislative changes to the code.
The final-form rulemaking explains conditions under which minors without a parent, guardian or proper supervisor may be present in licensed premises that primarily serve food.
The final-form rulemaking prohibits purchases or redemption of the Board's gift cards by minors.
The final-form rulemaking establishes procedures for the Board to participate in wine events.
The final-form rulemaking codifies established practices regarding limits on point-of-sale incentive programs for malt or brewed beverages.
The final-form rulemaking explains the procedure for intervention by interested parties when a municipality has requested leave to enforce its own noise ordinance instead of the Board's regulations on amplified music.
Comments to Proposed Rulemaking
During the public comment period, comments were received on behalf of the Pennsylvania State Association of Township Supervisors (PSATS). These comments and the Board's responses are as follows:
Comment: The calculation of a licensee's eligibility for renewal of a Sunday sales permit (SSP) in § 11.176 (relating to renewal) allows inclusion of sales on Sunday of food and nonalcoholic beverages after an SSP expires. By doing so, it is suggested that the regulation allows artificial inflation of the licensee's ratio that is likely to decrease if the applicant receives an SSP.
Response: The act of July 6, 2005 (P. L. 135, No. 39) (Act 39) removed the ratio requirement for licensees to receive an SSP, except for licensees in a first class city (Philadelphia). See section 406(a)(3) of the code (47 P. S. § 4-406(a)(3)). As a result, further study of the SSP procedures as they apply to Philadelphia will be needed. Accordingly, the proposed amendments to this section have been withdrawn.
Comment: The qualification to be a petitioner in noise exemption proceedings under § 17.15 was questioned. Neighbors petitioning as a group, or those who collectively have a direct interest, should be accepted as interveners.
Response: This section establishes procedures for parties to participate in a proceeding when a municipality is asking to enforce its own noise ordinances in the place of § 5.32(a). The regulation establishes a time limit for acceptance of petitions to intervene. This serves the interests of all parties in a fair and orderly hearing. The standards for a person or group of people to qualify as interveners are drawn from existing law and regulations, notably 1 Pa. Code Part II (relating to General Rules of Administrative Practice and Procedure) and Application of Biester, 487 Pa. 438, 409 A.2d 848 (1979). The Board proposed this regulation to clarify the procedure to be followed and to apply current legal standards. These standards would not preclude a collective or neighborhood petition to intervene under proper circumstances. Therefore, the section was adopted as proposed.
On June 8, 2005, the Independent Regulatory Review Commission (IRRC) provided comments to the proposed rulemaking. These comments and the Board's responses are as follows.
Comment: IRRC questioned the calculation of a licensee's eligibility for an SSP. Like the PSATS, IRRC asked for an explanation of the inclusion of Sunday sales of food and nonalcoholic beverages occurring outside of the effective date of an SSP. Also questioned was the 120-day waiting period for licensees to reapply after expiration of the previous SSP. IRRC suggested allowing reapplication as soon as a licensee can show 90-consecutive days of compliance with the 30% ratio in the most recent 12 months. Alternatively, an explanation of the 120-day waiting period was requested.
Response: Act 39 removed the ratio requirement for licensees to receive an SSP, except for licensees in a first class city (Philadelphia). See section 406(a)(3) of the code. As a result, further study of the SSP procedures as they apply to Philadelphia will be needed. Accordingly, the proposed amendments to this section have been withdrawn.
Comment: The Board's role with respect to wine events under section 215(e) of the code (47 P. S. § 2-215(e)) was questioned in two respects. First, the text of proposed § 13.27(c) and (d) (relating to Board participation in wine events) indicated the Board's approval of wine events, as contrasted to the statutory authority granted to the Board to participate in or sponsor wine events. Second, the provision of subsection (d) making the Board's decision not to approve a wine event a nonappealable decision is questioned in the context of 2 Pa.C.S. § 702 (relating to appeals).
Response: Because the intent of § 13.27 was to explain the conditions applicable to the Board's sponsorship of or participation in a wine event, reference to ''approval'' was meant to reflect action by the Board to sponsor or participate in a wine event. The Board's business decision to forego sponsorship or participation was intended to be made without the potential for judicial review. The text of this section has been amended to clarify the Board's role with respect to wine events.
Several clarity points were recommended. These comments are as follows:
Comment: Section 5.121(a) (relating to service in establishments primarily serving food) cross references ''section 494(14) of the Liquor Code (47 P. S. § 4-494(a)).'' This reference should be corrected to section 493(14) of the code (47 P. S. § 4-493(14)).
Response: The cross reference was corrected in this final-form rulemaking.
Comment: Section 11.13 (relating to gift card transactions by minors prohibited) cross references all of section 305 of the code (47 P. S. § 3-305). It appears that only subsection (h) of the this section applies to gift cards. If so, the reference in the final-form rulemaking should be more specific by referencing section 305(h) of the code.
Response: The cross reference was corrected in this final-form rulemaking.
Comment: Section 11.172(a)(4) (relating to application for Sunday sales permit) was proposed to be amended to state '' . . . at least 30%. . . .'' To be consistent with section 406(a)(3) of the code and § 11.171(b) (relating to statutory provisions), this subsection should be amended to state ''equal to 30% or more.''
Response: This section is being withdrawn for further consideration.
Comment: The example in § 11.176 does not specify which subsection it demonstrates. It is placed after subsection (c), but it appears to demonstrate subsection (b). The regulation should clearly state which provision is being demonstrated.
Response: This section is being withdrawn for further consideration.
Comment: The terms ''wine event'' and ''event'' are used interchangeably in § 13.27. The term ''wine event'' should be defined and used consistently.
Response: The term ''wine event'' is used in this final-form rulemaking.
Comment: The amendments to § 13.51(a) (relating to general prohibition) replace specific references to exceptions with general language. The Board should retain the specific reference to exceptions.
Response: This section has been withdrawn.
Comment: Section 17.15(a) stated when petitions to intervene may be filed. It should also include where they must be filed.
Response: This information has been added to this final-form rulemaking.
Affected Parties
This final-form rulemaking affects existing licensees and parties interested in municipal noise ordinance proceedings.
Paperwork Requirements
The final-form rulemaking will not significantly increase paperwork for the Board or the regulated community.
Fiscal Impact
Because the final-form rulemaking primarily codifies and organizes existing practices or obligations under the code, it will not have a fiscal impact on the licensees of the Board, applicants for licenses or the Board itself.
Effective Date
The final-form rulemaking will become effective upon publication in the Pennsylvania Bulletin.
Contact Person
Additional information is available from James F. Maher, Assistant Counsel, Office of Chief Counsel, Liquor Control Board, Room 401, Northwest Office Building, Harrisburg, PA 17124-0001.
Regulatory Review
Under section 5(a) of the Regulatory Review Act (71 P. S. § 745.5(a)), on March 16, 2005, the Board submitted a copy of the notice of proposed rulemaking, published at 35 Pa.B. 2112 (March 16, 2005), to IRRC and the Chairpersons of the House Committee on Liquor Control and Senate Committee on Law and Justice for review and comment.
Under section 5(c) of the Regulatory Review Act, IRRC and the Committees were provided with copies of the comments received during the public comment period, as well as other documents when requested. In preparing the final-form rulemaking, the Department has considered all comments from IRRC, the House and Senate Committees and the public.
Under section 5.1(j.2) of the Regulatory Review Act (71 P. S. § 745.5a(j.2)), on October 18, 2006, the final-form rulemaking was deemed approved by the House and Senate Committees. Under section 5.1(e) of the Regulatory Review Act, IRRC met on October 19, 2006, and approved the final-form rulemaking.
Findings
The Commission finds that:
(1) Public notice of intention to adopt the administrative amendment adopted 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 amendment of the Board's regulations in the manner provided in this order is necessary and appropriate for the administration of the code.
Order
The Board, acting under authorizing statute, orders that:
(a) The regulations of the Board, 40 Pa. Code Chapters 5, 11, 13 and 17, are amended by adding §§ 5.121, 11.13, 13.27, 13.54, 13.56 and 17.15 and by amending § 17.1 to read as set forth in Annex A.
(Editor's Note: The Board has withdrawn the proposals to amended § 11.172, 11.176 and 13.51, which were included in the proposed rulemaking at 35 Pa.B. 2112.)
(b) The Executive Director of the Board shall certify this order and Annex A and deposit them with the Legislative Reference Bureau as required by law.
(c) This order shall become effective upon final-form publication in the Pennsylvania Bulletin.
JONATHAN H. NEWMAN,
Chairperson(Editor's Note: For the text of the order of the Independent Regulatory Review Commission, relating to this document, see 36 Pa.B. 6742 (November 4, 2006).)
Fiscal Note: Fiscal Note 54-61 remains valid for the final adoption of the subject regulations.
Annex A
TITLE 40. LIQUOR
PART I. LIQUOR CONTROL BOARD
CHAPTER 5. DUTIES AND RIGHTS OF LICENSEES
Subchapter J. MINORS ON LICENSED PREMISES Sec.
5.121. Service in establishments primarily serving food. § 5.121. Service in establishments primarily serving food.
(a) Section 493(14) of the Liquor Code (47 P. S. § 4-493(14)) creates several exceptions to the general prohibition of minors being present in licensed premises. One of these exceptions, known as the ''Pizza Hut'' exception, permits a minor to be present in a restaurant, hotel or retail dispenser (but not a club) licensed premises that has gross sales of food and nonalcoholic beverages equal to at least 50% of its combined gross sales of both food and alcoholic beverages.
(b) Licensees qualifying for this exception will not be cited for unlawfully allowing minors to frequent the licensed premises.
(c) To qualify for this exception, a licensee will assure that:
(1) Minors are not permitted to sit at the bar counter of the premises.
(2) Alcoholic beverages are not served to any adult at the table or booth where the minor is seated, unless the minor is also there with a parent, legal guardian or proper supervisor.
(3) Sales of food and nonalcoholic beverages at the licensed premises during the preceding 12-month licensing year are at least 50% of the combined gross sales of both food and alcoholic beverages.
CHAPTER 11. PURCHASES AND SALES
RETAIL AND WHOLESALE PURCHASE--GENERAL§ 11.13. Gift card transactions by minors prohibited.
Gift cards authorized by section 305(h) of the Liquor Code (47 P. S. § 3-305(h)) for sale and redemption by the Board may not be purchased or redeemed by minors.
CHAPTER 13. PROMOTION
Subchapter A. ADVERTISING
WINE § 13.27. Board participation in wine events.
(a) Section 215(e) of the Liquor Code (47 P. S. § 2-215(e)) authorizes the Board to sponsor or participate in wine events. A ''wine event'' is a show, demonstration, exposition or festival that has a purpose of educating consumers about wine that is available in this Commonwealth.
(b) Persons seeking Board sponsorship or participation in a wine event shall submit a request in writing to the Board at least 60 days prior to the first day of the wine event.
(c) If the Board decides to sponsor or participate in the wine event, it will issue a letter of authority to the event organizer. The Board's letter will describe the premises upon which the wine event will be held.
(d) If the Board decides not to sponsor or participate in the wine event, the Board's decision is final, and may not be appealed.
(e) Wine to be used in a wine event that the Board sponsors or participates in may be acquired and possessed in accordance with the following:
(1) Wine donated for the wine event may be shipped directly to the wine event organizer or its agents.
(2) Records showing the amount, types and brands of all wine received, the identity of the donors and the dates received and documents evidencing payment of all necessary taxes shall be forwarded to the Board prior to the wine event.
(3) Wine obtained for the wine event that is not used at the wine event shall be returned to the donor, donated to a nonprofit, charitable organization registered with the Department of State or destroyed and may not be sold.
(4) Wine may also be obtained for the wine event through the Board's wine and spirits stores.
(f) The Board's letter of authority authorizes the wine event organizer or its agents to possess and transport wine for the wine event.
(g) Participation in the wine event, including the service and consumption of wine, may be conditioned on the purchase of a ticket to the wine event. The wine event organizer, its agents or the Board may sell tickets. Sale of tickets by the wine event organizer or its agents does not constitute the unlawful sale of alcohol.
(h) The wine event organizer shall appoint a manager who shall be present on the premises at all times during the wine event.
(i) The Board may sell wine for off-premises consumption in an area it designates at the wine event. The Board shall comply with the provisions of the Liquor Code governing retail sales at Wine and Spirits Stores, except that advance advertisement or notice posting by the Board of the location of the designated sales area is not required and provisions granting a right of protest will not be applicable.
(j) If the premises where the wine event is to occur is licensed by the Board, the licensee will not be cited under the Liquor Code for conduct occurring on the licensed premises during the wine event, so long as the licensee, its employees or agents are not directly involved in the violation and are not participating in the operation or management of the wine event.
GIVING AND ACCEPTING THINGS OF VALUE § 13.54. Point of sale (POS) incentive programs--defined.
A POS incentive program provides prizes for nonlicensed buyers to purchase and for distributors/importing distributors to promote the sale of a brand of malt or brewed beverages. These promotions feature displays or advertisements at the location where a sale is made.
§ 13.56. Permissible point of sale (POS) incentive programs.
(a) A POS incentive program must be sponsored by a manufacturer or importing distributor of malt or brewed beverages.
(b) The composite value of prizes available to nonlicensed buyers shall be at least three times the value of prizes available to distributors/importing distributors.
(c) Associated display and novelty items must be directed at and available for nonlicensed buyers.
(d) A prize may not be given to every participant.
(e) The value of a prize for a nonlicensed buyer may not exceed $1,500.
(f) The POS incentive program may not incorporate a payment to licensees based on the number of cases displayed.
(g) The POS incentive program shall be approved in advance by the Office of Chief Counsel, Pennsylvania Liquor Control Board.
CHAPTER 17. SPECIAL RULES OF PRACTICE AND PROCEDURE FOR MATTERS BEFORE THE BOARD
Subchapter A. GENERAL § 17.1. Purpose.
This chapter supplements 1 Pa. Code Part II (relating to General Rules of Administrative Practice and Procedure) and governs the practice and procedure before the Board regarding license applications, appeals from ALJ decisions, applications for supersedeas, divestiture and noise exemption petitions.
Subchapter B. LICENSE APPLICATIONS § 17.15. Intervention in noise exemption petitions.
(a) Petitions to intervene may be filed with the Board when a municipality has petitioned the Board for exemption from the Board's regulation regarding the sound of amplified music or other entertainment, or the advertisement thereof, being heard outside of licensed premises.
(b) The deadline for filing a petition to intervene with the Board is 7 calendar days before the hearing. In extraordinary circumstances and for good cause, a petition to intervene may be accepted by the Board after the deadline, but not after the hearing begins.
(c) A petition to intervene must present proof that the petitioner has a substantial, direct and immediate interest in the outcome of the proceeding. For an interest to be substantial, it means that there is some discernible adverse effect to the petitioner's individual interest. For the petitioner to have a direct interest, it means that the person claiming to be aggrieved must show the harm to his interest would be caused by the municipality's enforcement of its own noise ordinance. An immediate interest means that there is a close causal connection between the alleged injury and the grant of the exemption.
(d) The Board may allow petitioners to become interveners if the petition also shows the petitioner has an interest of such a nature so that intervention is necessary or appropriate to administration of the Liquor Code and this title. The Board will also consider whether or not the interest asserted in the petition to intervene is adequately represented by existing parties.
[Pa.B. Doc. No. 07-5. Filed for public inspection January 5, 2007, 9:00 a.m.]
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