PROPOSED RULEMAKING
LIQUOR CONTROL BOARD
[40 PA. CODE CHS. 3, 5 AND 11]
Limited Wineries
[51 Pa.B. 7869]
[Saturday, December 18, 2021]The Liquor Control Board (Board), under the authority of section 207(i) of the Liquor Code (47 P.S. § 2-207(i)), proposes to delete §§ 3.62—3.64, 5.103 and 11.111, and add §§ 5.401—5.409 to read as set forth in Annex A.
Summary
This proposed rulemaking gathers regulations pertaining to limited wineries from Chapters 3, 5 and 11 (relating to license applications; duties and rights of licensees; and purchases, sales and returns) of the Board's regulations, and places them in a new subchapter in Chapter 5. In addition, this proposed rulemaking revises many of these regulations to make them more consistent with the Liquor Code, which has been amended several times since 2011. The proposed changes are intended to provide more clarity to the regulated community and allow for easier navigation of the applicable regulations.
Currently, regulations that are specifically applicable to licensed limited wineries are located in three different chapters of the Board's regulations: Chapters 3, 5 and 11. The regulated community would benefit from having, in one location, the regulations that apply to them. In addition, the current regulations are out of date and in certain sections, which will be explained as follows, misleading or incorrect. As such, the regulated community, which consists of 450 active licensed limited wineries as of September 3, 2021, will benefit by having accurate, up-to-date regulations.
To ensure that the regulations include only necessary content, two regulations are deleted completely and not relocated. These regulations are §§ 3.62 and 11.111(a)(7) (relating to creation; and sale by limited winery licensees). Section 3.62 states, ''Under section 505.2 of the Liquor Code (47 P.S. § 5-505.2), holders of a Limited Winery License may produce and sell wines, subject to §§ 3.63, 5.103 and 11.111 (relating to agents; limited wineries; and sale by limited winery licensees).'' It is not necessary to have a regulation reiterate what is provided by statute or other regulations. Similarly, § 11.111(a)(7) provides, ''Limited winery licensees engaged in the retail and wholesale sales of wine are responsible to conform to the Liquor Code and this title.'' It is not necessary to have a regulation that tells the regulated community that they must follow the enabling statute and the regulations.
This proposed rulemaking creates Subchapter K (relating to limited wineries), which incorporates existing regulations from Chapters 3, 5 and 11 and organizes them to improve accessibility for the regulated community. The following two tables show where the previous content has been relocated and a sequential ordering of the new content in Subchapter K, showing its origins:
Current section Proposed section Proposed section Current section 3.62 Deleted 5.401 New 3.63 5.405(c) 5.402 11.111(a)(6) 3.64 5.408 5.403 11.111(a)(4), (5) 5.103 5.409 5.404 11.111(a)(1) 11.111(a)(1) 5.404 5.405 3.63
11.111(a)(10)
11.111(b)11.111(a)(2) 5.407 11.111(a)(3) 5.407 11.111(a)(4) 5.403 5.406 11.111(a)(8), (9) 11.111(a)(5) 5.403 5.407 11.111(a)(2) 11.111(a)(6) 5.402 11.111(a)(3) 11.111(a)(7) Deleted 11.111(a)(10) 11.111(a)(8) 5.406 5.408 3.64
11.111(d)11.111(a)(9) 5.406 11.111(a)(10) 5.405, 5.407 5.409 5.103 11.111(b) 5.405(c) 11.111(c) 11.111(c) 5.409 11.111(d) 5.408
Proposed § 5.401 (relating to definitions) is new content; it has not been relocated from another section. The Board believes the addition of these definitions to the regulations will provide clarity. Section 5.401 includes the following:
• A definition for ''limited winery,'' which is consistent with the definition provided in section 102 of the Liquor Code (47 P.S. § 1-102), but also incorporates a minimum production amount of 200 gallons per year, based on language in section 491(2) of the Liquor Code (47 P.S. § 4-491(2)). Section 491(2) allows the manufacture of up to 200 gallons of wine for personal use without the need to obtain a manufacturing license.
• A definition for ''original container,'' which is based on a definition for the same term that is provided in section 102 of the Liquor Code. However, because the definition in the Liquor Code is geared towards manufacturers of malt or brewed beverages, it has been modified in § 5.401 to apply to limited wineries.
• A definition for ''produce'' (verb), is proposed to be added because the Board is frequently asked what type of activity is required to say that a limited winery ''produced'' wine. The need for this definition stems from the following provision in section 505.2(a)(2) of the Liquor Code (47 P.S. § 5-505.2(a)(2)) (emphasis added):
[A] limited winery shall not, in any calendar year, purchase alcoholic cider, fermented fruit beverages, mead or wine produced by other limited wineries in an amount in excess of fifty per centum of the alcoholic cider, fermented fruit beverage, mead or wine produced by the purchasing limited winery in the preceding calendar year.• A definition for ''tasting sample,'' is proposed to be added to provide clarification for § 5.402 (relating to tasting samples), addressing where a limited winery may provide tasting samples of winery product. This phrase is added for clarity between the verbiage of the Liquor Code and that of the Board's regulations. The Liquor Code uses the word ''samples'' to refer to small quantities offered to consumers who want to taste the product. However, in the Board's regulations, ''samples'' are small bottles of product that may be given to consumers to try at home. See § 13.231 (relating to samples). To reduce confusion, the proposed regulation uses the phrase ''tasting sample,'' which incorporates the verbiage of the Liquor Code but is distinguished from the § 13.231 sample.
• A definition for ''wine cooler,'' is proposed to be added because the phrase appears in the Liquor Code but is not defined in the Liquor Code. The Board had previously attempted to amend the regulations pertaining to limited wineries, (IRRC # 3117, PLCB # 54-85), but the final-form rulemaking was disapproved by the Independent Regulatory Review Commission (IRRC). During that process, IRRC recommended that the Board define the phrase ''wine cooler.'' Based on IRRC's recommendation, the Board is adding a definition to this proposed rulemaking.
• A definition for ''winery products,'' is proposed to be added to enhance the readability of the regulation. It is cumbersome to identify the numerous different products that can be made by a limited winery, including alcoholic cider, fermented fruit beverages, mead, wine or wine coolers, or both. The term ''winery products'' is an umbrella term that incorporates all of these products. For clarity, the winery products must be produced by the limited winery that is engaging in any of the activities covered by this subchapter.
This proposed rulemaking will add § 5.402 which is based, in part, on the current regulatory provisions in § 11.111(a)(6) of the Board's regulations. Section 11.111(a)(6) states that visitors may be provided samples of wine ''without charge.'' However, section 505.2(a)(4) of the Liquor Code states that samples may be sold or offered free of charge. Therefore, this proposed regulation provides that ''The limited winery may provide tasting samples of winery products in accordance with section 505.2(a) of the Liquor Code and § 13.211 (relating to tasting events).'' This proposed regulation also provides that ''To the extent possible, section 505.2 of the Liquor Code and § 13.211 will be construed together; however, when there is a conflict between these two sections, including with regard to locations where tasting samples may be provided, the volume of each tasting sample that may be provided, and whether a fee may be charged for a tasting sample, the provisions of section 505.2 of the Liquor Code will prevail.'' In this way, it is clear that limited wineries may continue offering tasting samples in a manner that is consistent with the provisions of the Liquor Code and the Board's regulations regarding tasting events, depending on the specific circumstances involved with the offering being made.
Section 5.402 clarifies that tasting samples may not be provided at a limited winery's storage facilities. Section 505.2(a)(6.4) of the Liquor Code, allows a limited winery licensee to have up to two Board-approved storage locations. The section provides that only the limited winery licensee and its employees may be present at the storage locations. Therefore, no customers or potential customers should be present at the storage locations, and as a result, no tasting samples may be provided. This section also directs the limited winery licensee to operate the storage locations ''under such conditions and regulations as the board may enforce.''
This proposed rulemaking will add § 5.403 (relating to sales generally) to give general information regarding sales by a limited winery. This section was based on the current regulation in § 11.111(a)(4). This proposed rulemaking provides that a limited winery may sell winery products during the time periods or circumstances set forth in section 505.2(a)(6.3) of the Liquor Code. In addition, this section incorporates the types of payment that a limited winery may accept, which is currently found in § 11.111(a)(5). A limited winery may accept, from licensees, checks drawn on their account, cash, money orders, cashier checks, debit cards and electronic funds transfers. From unlicensed individuals, a limited winery may accept all of the aforementioned methods as well as credit cards issued by banking or financial institutions subject to Federal or State regulations.
The Board notes that the act of June 8, 2016 (P.L. 273, No. 39) (Act 39 of 2016) specifically amended the Liquor Code to allow distributors and importing distributors to accept credit cards from licensees. No similar amendment was made to allow limited wineries to accept credit cards from licensees. In light of this legislative inaction, the Board decided not to allow limited wineries to accept credit cards for payment by licensees.
Proposed § 5.403 will add language to clarify requirements that exist in the Liquor Code for alcoholic cider, fermented fruit beverages and mead. These products are considered malt or brewed beverages, not wine, and are treated differently under the Liquor Code. For instance, malt or brewed beverages are subject to the brand registration requirements set forth in section 445 of the Liquor Code (47 P.S. § 4-445), as well as the distribution provisions set forth in section 431 of the Liquor Code (47 P.S. § 4-431). This proposed rulemaking explains that a limited winery may sell alcoholic cider, fermented fruit beverages and mead to importing distributors, distributors or any other licensee that is authorized, under the Liquor Code, to sell, possess, or store malt or brewed beverages. However, a limited winery shall not sell wine or wine coolers to importing distributors, distributors or any other licensee that is not authorized, under the Liquor Code, to sell, possess, or store alcoholic beverages other than malt or brewed beverages.
This proposed rulemaking will add § 5.404 (relating to sales for on-premises consumption) which updates the types of liquor or malt or brewed beverages a limited winery may sell for consumption on the premises. Currently, § 11.111(a)(1) of the Board's regulations provides that there may be no consumption of liquor or malt or brewed beverages on the licensed premises. However, the act of June 28, 2011 (P.L. 55, No. 11) (Act 11 of 2011) amended section 505.2(a)(6.1) of the Liquor Code to allow limited wineries to sell, for on-premises consumption, any winery products they could sell for off-premises consumption. In addition, Act 39 of 2016 amended the Liquor Code to allow limited winery licensees to sell malt or brewed beverages and liquor for on-premises consumption, provided that the malt or brewed beverages and liquor are produced by Pennsylvania-licensed manufacturers.
Proposed subsection (c) requires that, if the limited winery licensee sells malt or brewed beverages through a malt or brewed beverage dispensing system—also known as a draft beer system—the limited winery must comply with §§ 5.51—5.54 (relating to cleaning of malt or brewed beverage systems). The limited winery licensee will be held to the same standard of beer line cleaning as other retail dispensers who sell beer by draft. In addition, proposed subsection (d) provides that a limited winery that chooses to sell wine or wine coolers through a wine dispensing system must comply with § 11.103 (relating to dispensing system sanitation).
Proposed § 5.405 (relating to sales for off-premises consumption) pertains to sales for off-premises consumption. This section begins with a reference to section 505.2(a) of the Liquor Code. Subsection (b) is based on current § 11.111(a)(10) and has been expanded to allow the acceptance of orders by the Internet. Subsection (b) references proposed § 5.407 (relating to delivery of products). Subsection (c) incorporates the regulatory language regarding agents, which is currently located in § 3.63 (relating to agents). Subsections (d) and (e) clarify who may sell winery products at wine expositions and farmers markets, as well as where those sales must occur.
Proposed § 5.406 (relating to sales of other items) updates the list of items that limited wineries may sell. Currently found in § 11.111(a)(8), the list is amended to reflect the statutory changes found in section 505.2(a)(6.1) and (6.2) of the Liquor Code. Act 11 of 2011 amended section 505.2(a)(6.1), which now permits limited winery licensees to ''Sell food for consumption on or off the licensed premises. . . .'' The statute does not authorize any restriction as to the source or type of food. Thus, the current reference to fruits, jellies, jams, preserves and mushrooms, as well as cheese, crackers, breads, nuts and preserved meats, is moot since each of these items is permissible under the limited winery's general authority to sell food. Proposed § 5.406 also incorporates current § 11.111(a)(9), which explains the process for a limited winery to follow if it wants to sell something that is not on the regulatory list.
Proposed § 5.407 (relating to delivery of products) sets forth rules pertaining to the delivery of winery products by or for limited wineries. Subsection (a) identifies general rules for all deliveries by a limited winery. Subsection (b) pertains to a limited winery utilizing its own vehicles to deliver its winery products, whereas subsection (c) pertains to a limited winery utilizing a transporter-for-hire licensee to delivery its winery products.
Subsection (d) addresses a change in the law regarding the delivery of wine or wine coolers to an unlicensed individual. Act 39 of 2016 amended the Liquor Code to require limited winery licensees—and all other wine manufacturers—to obtain a direct wine shipping license before shipping wine to consumers in this Commonwealth. Subsection (d) clarifies that the delivery of alcoholic cider, fermented fruit beverages or mead, does not require a direct wine shipping license. Finally, subsection (e) incorporates language from current § 11.111(a)(10), that limited wineries are responsible for ensuring that winery products are not delivered to minors or visibly intoxicated persons, and that proper receipts are provided in accordance with § 5.409 (relating to records, receipts and reports).
Proposed § 5.408 (relating to additional Board-approved locations) is largely based on current § 3.64 (relating to additional Board-approved locations). Subsection (e) refers licensees to four other sections in the Board's regulations—§§ 3.51 through 3.54—and was included to reduce confusion among licensees as to what may or may not be an appropriate location for an additional Board-approved location. Subsections (j) and (k) offer new guidance to clarify to licensees what arrangements are and are not consistent with the Liquor Code when multiple licensees want to operate additional Board-approved locations.
Proposed § 5.409 is based substantially upon current § 5.103 (relating to records, invoices and reports). The term ''invoices'' has been amended with ''receipts'' because it is a more accurate term to describe the paperwork that accompanies a purchase of a winery product. Invoices are issued prior to payment; receipts are issued after payment. A licensee cannot sell products off of the licensed premises; therefore, there should never be a situation where a product is shipped with an invoice for the recipient to pay after the product is received. A licensee can only ship products for which payment has already been received. That being the case, the proper terminology for the document that accompanies the product is ''receipt,'' not ''invoice.''
In proposed § 5.409, current § 5.103(a) was broken into subsections for easier comprehension. The phrase ''agricultural commodity'' replaces the word ''fruits'' to be consistent with section 505.2(a)(1) of the Liquor Code. The last sentence of current § 5.103(a) is deleted since it is actually a repeat of a sentence that occurs earlier in that section.
Proposed subsection (b) is based on current § 5.103(b) and addresses receipts and identifies what information the sales receipt should include. Proposed subsection (c) is based on current § 5.103(b)(5) and sets forth how receipts are to be used during a delivery. Proposed subsection (d) pertains to reports and is based on the text at current § 5.103(c) but broken into paragraphs and subparagraphs for greater readability.
Affected Parties
The affected parties include present and future holders of a limited winery license. As of September 3, 2021, there are approximately 450 active limited winery licensees that could be affected by this proposed rulemaking.
Paperwork Requirements
This proposed rulemaking would not require any additional paperwork to be filed.
Fiscal Impact
The proposed regulatory changes are intended to make the Board's regulations consistent with the Liquor Code. Therefore, no fiscal impact is anticipated.
Effective Date
This proposed rulemaking will become effective upon final-form publication in the Pennsylvania Bulletin.
Public Comments
Interested persons are invited to submit written comments about this proposed rulemaking to Rodrigo Diaz, Chief Counsel, Jason M. Worley, Deputy Chief Counsel, or Norina Foster, Assistant Counsel, Office of Chief Counsel, Liquor Control Board, Room 401, Northwest Office Building, Harrisburg, PA 17124-0001, or RA-lblegal@pa.gov, within 30 days after publication of this proposed rulemaking in the Pennsylvania Bulletin. E-mail is preferred. When commenting, individuals should indicate if they wish to be apprised of future developments regarding this proposed rulemaking, and include a name, address and e-mail address. Comments submitted by facsimile will not be accepted.
Public comments will be posted on IRRC's web site. Personal information will not be redacted from the public comments received.
Regulatory Review
Under section 5(a) of the Regulatory Review Act (71 P.S. §§ 745.5(a)), on November 9, 2021, the Board submitted a copy of this proposed rulemaking and a copy of a Regulatory Analysis Form to IRRC and to the Chairpersons of the House Liquor Control Committee and Senate Committee on Law and Justice. A copy of this material is available to the public upon request.
Under section 5(g) of the Regulatory Review Act, IRRC may convey comments, recommendations or objections to the proposed rulemaking within 30 days of the close of the public comment period. The comments, recommendations or objections must specify the regulatory review criteria in section 5.2 of the Regulatory Review Act (71 P.S. § 745.5b) which have not been met. The Regulatory Review Act specifies detailed procedures for review prior to final publication of the rulemaking by the Board, the General Assembly and the Governor.
TIM HOLDEN,
ChairpersonFiscal Note: 54-95. No fiscal impact; (8) recommends adoption.
Annex A
TITLE 40. LIQUOR
PART I. LIQUOR CONTROL BOARD
CHAPTER 3. LICENSE APPLICATIONS
Subchapter G. [LIMITED WINERY LICENSES] (Reserved) § 3.62. [Creation] (Reserved).
[Under section 505.2 of the Liquor Code (47 P.S. § 5-505.2), holders of a Limited Winery License may produce and sell wines, subject to §§ 3.63, 5.103 and 11.111 (relating to agents; limited wineries; and sale by limited winery licensees).]
§ 3.63. [Agents] (Reserved).
[A limited winery licensee may employ individuals to solicit orders, off the licensed premises, for wine produced by it or to promote the sale of wine off the premises. Agents may advertise and promote the sale of merchandise by ''missionary work'' of only brands sold by the limited winery licensee by whom the agents are employed and may solicit orders from licensees and make deliveries in properly registered vehicles.]
§ 3.64. [Additional Board-approved locations] (Reserved).
[(a) Additional locations, as authorized by section 505.2(3) of the Liquor Code (47 P.S. § 5-505.2(3)) may not be used by a limited winery licensee in the operation of a licensed business unless approved by the Board.
(1) An application for an additional location shall be made to the Board, accompanied by a $220 fee. A renewal application shall be submitted annually and be accompanied by a $75 fee.
(2) Applications for additional Board-approved locations may be submitted on a prior approval basis. If plans are approved, the necessary construction or alterations shall be completed within 6 months of the approval. Business may not be transacted until the premises has been reinspected and the Board has approved the completed construction or alterations.
(3) Portions of an additional Board-approved location premises shall be contiguous.
(4) Additional Board-approved locations of a limited winery license shall be under the control of a manager appointed in accordance with § 5.16 (relating to appointment of managers).
(5) Additional Board-approved locations of a limited winery license shall be enclosed by soundly constructed walls, with controlled points of access and egress directly accessible to the general public from a public thoroughfare.
(6) Limited winery licensees shall provide Board officers conducting licensing investigations of additional locations with the following:
(i) Leases which contain percentage agreements.
(ii) Management agreements.
(iii) Employe agreements.
(iv) Commission agreements.
(b) Limited winery licensees shall notify the Board immediately upon discontinuing use of an additional location.]
CHAPTER 5. DUTIES AND RIGHTS OF LICENSEES
Subchapter H. RECORDS AND REPORTS—BREWERIES, BONDED WAREHOUSES, [LIMITED WINERIES] AND LICENSED DISTILLERIES OF HISTORICAL SIGNIFICANCE § 5.103. [Limited wineries] (Reserved).
[(a) Records. A holder of a Limited Winery License obtained under § 3.62 (relating to creation) shall maintain and keep on the licensed premises daily permanent records which shall conform to the requirements of section 512 of the Liquor Code (47 P.S. § 5-512). The records shall include complete details concerning the source of fruits used in the production of wines. Electronic media recordkeeping, maintained and based upon generally accepted accounting principles, shall be permitted in lieu of hard copy records. The recordkeeping system utilized by the licensee shall have the capability to provide for the reconciling of required data. Entries shall be verifiable by supporting original documents. The records shall include complete details concerning the source of fruits used in the production of wines.
(b) Sales invoice. In addition to the records prescribed in subsection (a), except as otherwise provided in this part, a sales invoice shall be prepared at the licensed premises for each sale. The sales invoice shall be prepared in accordance with the following:
(1) The sales invoice shall be imprinted or affixed with the name and address of the limited winery.
(2) The sales invoice shall show the name and address of the recipient of the merchandise, date of sale, number of units, size and type of package, brand name, selling price of the wine and the net cost to the customer. The name and address of private individuals is not required on sales invoices covering quantities of 16 liters or less; in lieu of preparing sales invoices for the sales, the transactions may be entered individually on a counter sheet maintained in columnar form showing the information required on sales invoices, other than name and address of the purchaser. The counter sheet shall be totaled daily and the totals entered into the sales register noted in section 512 of the Liquor Code (47 P.S. § 5-512).
(3) The sales invoice shall show the Commonwealth sales tax, where applicable, as a separate entry.
(4) The sales invoice may include other items permitted for sale by limited wineries if the sale of wines is listed separately from other permitted items sold by the licensee.
(5) An invoice shall be prepared for any amount of wine shipped to customers via Transporter-for-Hire, Class C carriers. The invoice shall be prepared only for persons 21 years of age or older, and limited winery licensees shall request the signature of a recipient, 21 years of age or older, from the transporter making the deliveries and a return acknowledgement of delivery to the recipient. Copies of acknowledgments of delivery shall be maintained on the licensed premises for 2 years.
(6) When a sale requires the preparation of an invoice, one copy shall be given to the recipient of the merchandise and a copy retained on the licensed premises for 2 years.
(c) Reports. A licensed limited winery shall file reports in the manner set forth by the Board covering operations of their licensed business during the preceding calendar year. The reports shall be signed and sworn to by the licensee or his authorized agent and shall be filed with the Board at the time of the renewal or validation of the license. A copy of each report shall be retained on the licensed premises for at least 2 years from the date of filing. Failure to file the reports will preclude the Board from renewing or validating the license in question. These reports are in addition to information or reports the licensed limited winery may be required to provide to the Department of Agriculture under 3 Pa.C.S. Chapter 45 (relating to Agricultural Commodities Marketing Act) and regulations promulgated thereunder, including 7 Pa. Code § 104.75 (relating to accounting and payment).]
(Editor's Note: The following subchapter is proposed to be added and is printed in regular type to enhance readability.)
Subchapter K. LIMITED WINERIES Sec.
5.401. Definitions. 5.402. Tasting samples. 5.403. Sales generally. 5.404. Sales for on-premises consumption. 5.405. Sales for off-premises consumption. 5.406. Sales of other items. 5.407. Delivery of products. 5.408. Additional Board-approved locations. 5.409. Records, receipts and reports. § 5.401. Definitions.
The following words and terms, when used in this subchapter, have the following meanings, unless the context clearly indicates otherwise:
Limited winery—A winery that produces at least 200 gallons per year but not more than 200,000 gallons per year of winery products for each full calendar year that the limited winery holds an active limited winery license from the Commonwealth.
Original container—All bottles, casks, kegs, cans, boxes or other suitable containers that have been securely capped, sealed or corked by the limited winery at the place of manufacture, with the name and address of the limited winery affixed to the bottle, cask, keg or other container.
Produce—To manufacture winery products from agricultural commodities, including preparation for fermentation, fermentation, blending, preserving, filtering and packaging the winery products.
Tasting sample—An individual portion of a winery product, in an open container, offered to allow a consumer to sample the flavor of the winery product.
Wine cooler—A beverage made from combining wine with a non-alcoholic beverage, such as fruit juice or a carbonated beverage, resulting in a beverage with lower alcohol by volume than the original wine, and shall not include a malt or brewed beverage.
Winery products—All alcoholic products including alcoholic cider, fermented fruit beverages, mead, wine and wine coolers that have been produced by the limited winery.
§ 5.402. Tasting samples.
(a) A limited winery may provide tasting samples of winery products in accordance with section 505.2(a) of the Liquor Code (47 P.S. § 5-505.2(a)) and § 13.211 (relating to tasting events). To the extent possible, section 505.2 of the Liquor Code and § 13.211 shall be construed together; however, when there is a conflict between these two sections, including with regard to locations where tasting samples may be provided, the volume of each tasting sample that may be provided and whether a fee may be charged for a tasting sample, the provisions of section 505.2 of the Liquor Code shall prevail.
(b) Tasting samples may not be provided at a limited winery's storage facilities since only the limited winery and its employees may be present at those locations, in accordance with section 505.2(a)(6.4) of the Liquor Code.
§ 5.403. Sales generally.
(a) A limited winery may sell winery products during the time periods or circumstances set forth in section 505.2(a)(6.3) of the Liquor Code (47 P.S. § 5-505.2(a)(6.3)).
(b) A limited winery may accept all of the following methods of payment:
(1) From licensees: checks drawn on their account, cash, money orders, cashier checks, debit cards and electronic funds transfers.
(2) From unlicensed individuals: all of the methods of payment listed in paragraph (1) and credit cards issued by banking or financial institutions subject to Federal or State regulations.
(c) A limited winery that manufactures alcoholic cider, fermented fruit beverages and mead, which are defined as ''malt or brewed beverages'' in section 102 of the Liquor Code (47 P.S. § 1-102), must register these brands with the Board as required under section 445 of the Liquor Code (47 P.S. § 4-445). The following apply:
(1) A limited winery may self-distribute alcoholic cider, fermented fruit beverages and mead to importing distributors, distributors or any other licensee that is authorized under the Liquor Code to sell, possess or store malt or brewed beverages.
(2) A limited winery may choose to grant territorial distribution rights and name a distributor or an importing distributor as the primary or original supplier of the product in accordance with section 431(b) of the Liquor Code (47 P.S. § 4-431(b)).
(d) A limited winery may not sell wine or wine coolers to importing distributors, distributors, retail dispensers or any other licensee that is not authorized under the Liquor Code to sell, possess, or store any alcoholic beverages other than malt or brewed beverages.
§ 5.404. Sales for on-premises consumption.
(a) A limited winery may sell winery products on the licensed premises and at additional Board-approved locations in accordance with the Liquor Code and this part. Sales of winery products for on-premises consumption may be made by the glass, bottle or any other open or closed container.
(b) A limited winery may sell, only for on-premises consumption, malt or brewed beverages and liquor produced by Pennsylvania-licensed manufacturers, under section 505.2(a)(6.1) of the Liquor Code (47 P.S. § 5-505.2(a)(6.1)).
(c) A limited winery that chooses to sell malt or brewed beverages through a malt or brewed beverage dispensing system, defined in § 5.50 (relating to definition), must comply with §§ 5.51—5.54 (relating to cleaning of malt or brewed beverage systems).
(d) A limited winery that chooses to sell wine or wine coolers through a wine dispensing system must comply with § 11.103 (relating to dispensing system sanitation).
§ 5.405. Sales for off-premises consumption.
(a) A limited winery may sell winery products for off-premises consumption as permitted under section 505.2(a) of the Liquor Code (47 P.S. § 5-505.2(a)).
(b) A limited winery may accept orders for the purchase of its winery products in person or through mail, telephone or the Internet. A limited winery shall make deliveries of winery products in accordance with § 5.407 (relating to delivery of products).
(c) A limited winery may employ individuals, known as agents, to solicit orders for winery products or promote the sale of winery products. The following apply:
(1) Agents may only advertise and promote the sale of winery products produced by the limited winery that has employed the agent. Agents may solicit orders from licensees and make deliveries on behalf of the limited winery in accordance with § 5.407.
(2) Agents may only sell, as that word is defined under section 102 of the Liquor Code (47 P.S. § 1-102), the limited winery's products on the limited winery's licensed premises, additional Board-approved location or a location that is covered by the limited winery's wine exposition permit or farmer's market permit.
(d) Under section 505.2(a)(4) of the Liquor Code, a limited winery may obtain a permit to participate in alcoholic cider, fermented fruit beverages, mead, wine and food expositions off the licensed premises. The following apply:
(1) Only the limited winery, including its employees and agents, may sell its winery products at a wine and food exposition.
(2) Sales of the limited winery's products must occur on a location within the exposition that is covered by the limited winery's wine exposition permit.
(e) Under section 505.2(a)(4.1) of the Liquor Code, a limited winery may obtain a permit to participate in one or more farmers' markets at any given time and an unlimited number throughout the year. The following apply:
(1) Only the limited winery, including its employees and agent, may sell its winery products at a farmers market.
(2) Sales of the limited winery's products must occur on a location within the farmers market that is covered by the limited winery's farmers market permit.
§ 5.406. Sales of other items.
(a) In addition to the sale of food, wine-scented or liquor-scented candles, and any other item authorized under section 505.2(a) of the Liquor Code (47 P.S. § 5-505.2(a)), the following items are permitted to be offered for sale on the licensed premises and at additional Board-approved locations:
(i) Home winemaking, cider making, fermented fruit beverage making or mead making equipment, or both and supplies.
(ii) Serving and storage accessories as follows: cork removers, wine glasses and decanters, wine racks, serving baskets and buckets and bottle stoppers.
(iii) Publications dealing with wine and winemaking, alcoholic cider and cider making, fermented fruit beverages and fermented fruit beverage making and mead and mead making.
(iv) Promotional items advertising the limited winery including tee shirts, glassware, caps and the like.
(b) If a limited winery wants to sell on the licensed premises or additional Board-approved location an item that is not listed in subsection (a), the limited winery shall request, in writing, Board approval to sell that item. The Board will advise the limited winery, in writing, whether approval to sell the item is granted, with or without conditions, or denied.
§ 5.407. Delivery of products.
(a) The only winery products a limited winery is authorized to deliver are those it has produced. A limited winery may not deliver any liquor or malt or brewed beverages, as those terms are defined in section 102 of the Liquor Code (47 P.S. § 1-102), that were manufactured by another entity. The following apply:
(1) A limited winery shall ensure that winery products sold and delivered to points within this Commonwealth are sealed in original containers and labeled as required by applicable law.
(2) A limited winery may deliver food or other non-alcoholic items that have already been purchased by the customer. A limited winery may not offer for sale items from the delivery vehicle.
(3) A limited winery shall include with the delivery of any winery products a sales receipt in accordance with § 5.409(b) (relating to records, receipts and reports).
(b) A limited winery may utilize its own vehicle to deliver its winery products. The following apply:
(1) A limited winery's vehicle must be identified in accordance with § 9.22 (relating to identification of vehicles).
(2) A limited winery may utilize the same vehicle to deliver alcoholic cider, fermented fruit beverages or mead as well as wine or wine coolers.
(c) A limited winery may utilize a transporter-for-hire licensee to deliver its winery products. The following apply:
(1) Alcoholic cider, fermented fruit beverages and mead may be delivered by a Transporter-for-Hire Class A, B or C, in accordance with §§ 9.1 and 9.11 (relating to definitions; and transportation-for-hire).
(2) Wine or wine coolers must be delivered by a Transporter-for-Hire Class A or Class C, but may not be delivered by a Transporter-for-Hire Class B, in accordance with §§ 9.1 and 9.11.
(d) Prior to delivering wine or wine coolers to an unlicensed individual in this Commonwealth, a limited winery shall obtain a direct wine shipping license under section 488 of the Liquor Code (47 P.S. § 4-488). The following apply:
(1) A direct wine shipping license is required whether the delivery of wine or wine coolers is accomplished by the limited winery or by a transporter-for-hire.
(2) A direct wine shipping license is not required for the lawful delivery of wine or wine coolers to another licensee, or for the lawful delivery of alcoholic cider, fermented fruit beverages or mead.
(e) It is the limited winery's responsibility to ensure that its winery products are not delivered to minors or visibly intoxicated persons and that proper receipts are provided under § 5.409.
§ 5.408. Additional Board-approved locations.
(a) A limited winery may not use additional locations, as authorized under section 505.2(a)(3) of the Liquor Code (47 P.S. § 5-505.2(a)(3)), in the operation of a licensed business unless the additional location is approved by the Board.
(b) Applications and fees are as follows:
(1) A limited winery seeking Board approval of an additional location shall submit an application to the Board, accompanied by payment of a $220 fee. Board approval is valid for that calendar year.
(2) If a limited winery wants to continue use of the additional Board-approved location, it shall submit a renewal application on an annual basis, accompanied by payment of a $75 fee.
(c) If the additional location requires physical alterations or new construction, the Board may grant prior approval for the additional location, as similarly provided in section 403(a) of the Liquor Code (47 P.S. § 4-403(a)). The limited winery may not produce or sell any winery products at the location until the additional location has been re-inspected and the Board has approved the completed alterations or construction and issued the limited winery a license for the additional location.
(d) Portions of an additional Board-approved location must be contiguous.
(e) The licensed premises and any additional Board-approved locations of a limited winery are subject to the following regulations:
(1) § 3.51 (relating to connection with residence);
(2) § 3.52 (relating to connection with other business);
(3) § 3.53 (relating to restriction on storage and sales where Board has approved connection with other business); and
(4) § 3.54 (relating to separation between licensed premises and other business).
(f) The limited winery shall appoint a manager for each additional Board-approved location in accordance with § 5.23 (relating to appointment of managers).
(g) Additional Board-approved locations of a limited winery license shall be enclosed by soundly constructed walls, with controlled points of access and egress directly accessible to the general public. The application shall be subject to the provisions of section 468(e)(2) of the Liquor Code (47 P.S. § 4-468(e)(2)).
(h) A limited winery shall provide Board officers who are conducting licensing investigations of additional locations with all of the following:
(1) Leases or other evidence of the right to occupy the premises.
(2) Management agreements.
(3) Employee agreements.
(4) Commission agreements.
(5) Any other agreement the Board may deem necessary.
(i) The Board may grant permission for two or more limited wineries to share a single, additional Board-approved location, in accordance with section 505.2(a)(3) of the Liquor Code.
(j) The Board shall not grant permission for a limited winery and another manufacturer, such as a brewery, limited distillery or distillery, to share a single, additional Board-approved location.
(k) If a limited winery licensee holds, under identical ownership, a manufacturing license other than a limited winery license, such as a brewery, limited distillery or distillery license, each licensee may have an additional Board-approved location at the same property, but each licensee shall have its own separate designated area at the property.
(l) If a limited winery discontinues use of an additional Board-approved location, it shall notify the Board within 15 days of the discontinuance.
§ 5.409. Records, receipts and reports.
(a) A limited winery shall maintain and keep on the licensed premises daily permanent records that shall conform to the requirements of section 512 of the Liquor Code (47 P.S. § 5-512). The following apply:
(1) The records shall include complete details concerning the source of any agricultural commodity, as that term is defined in section 505.2(c) of the Liquor Code (47 P.S. § 5-505.2(c)), used in the production of limited winery products.
(2) Electronic media recordkeeping, maintained and based upon generally accepted accounting principles, may be kept instead of hard copy records.
(3) The recordkeeping system utilized by the limited winery shall have the capability to provide for the reconciling of required data.
(4) Entries shall be verifiable by supporting original documents.
(b) In addition to the records prescribed in subsection (a), the limited winery shall prepare a sales receipt at the licensed premises for each sale to a private individual when the purchase is for greater than 16 liters in a single transaction. The sales receipt shall include all of the following:
(1) The name and address of the limited winery.
(2) The name and address of the recipient of the winery products if the winery products are being delivered off the licensed premises to the recipient.
(3) The winery products' name, the date of sale, the size of the package in milliliters, number of units sold, the price per unit of the winery products, the Commonwealth sales tax and any other taxes applicable, and the total amount paid by the customer.
(4) Any items other than winery products that are sold by the limited winery, which shall be listed on the receipt separately from the winery products.
(c) Any winery products that are delivered shall be accompanied by two copies of a sales receipt that includes the information identified in subsection (b)(1)—(4). The limited winery shall require the person who is delivering the winery products to obtain the signature of the recipient, 21 years of age or older, on one copy of the sales receipt.
(1) The person delivering the winery products shall give an unsigned copy of the sales receipt to the recipient of the winery products and shall retain the signed copy of the sales receipt on the licensed premises for 2 years
(2) Delivery shall be accomplished in accordance with § 5.407 (relating to delivery of products).
(d) A limited winery shall file reports, in the manner set forth by the Board, covering operations of their licensed business during the preceding calendar year. The following apply:
(1) The reports shall be signed and sworn to by the limited winery or his authorized agent and shall be filed with the Board at the time of the renewal or validation of the license. The following apply:
(i) A copy of each report shall be retained on the licensed premises for at least 2 years from the date of filing.
(ii) Failure to file the reports will preclude the Board from renewing or validating the license in question.
(2) These reports are in addition to information or reports the limited winery may be required to provide to the Department of Agriculture under 3 Pa.C.S. Chapter 45 (relating to Agricultural Commodities Marketing Act) and regulations promulgated thereunder, including 7 Pa. Code § 104.75 (relating to accounting and payment), as well as any reports required under section 488.1 of the Liquor Code (47 P.S. § 4-488.1).
CHAPTER 11. PURCHASES, SALES AND RETURNS
Subchapter C. WINES
[LIMITED WINERIES] § 11.111. [Sale by limited winery licensees] (Reserved).
[(a) A limited winery licensee, licensed under § 3.62 (relating to creation), may sell wines produced on the licensed premises in accordance with the Liquor Code and this part, under the conditions in this subsection.
(1) There may be no sales for consumption on the licensed premises.
(2) Wine sold under a limited winery license may be shipped by transporter-for-hire or in a vehicle properly registered with the Board, as provided in Chapter 9, Subchapter A (relating to transportation of liquor, malt or brewed beverages or alcohol).
(3) Wine sold and destined to points within this Commonwealth shall be in sealed original containers.
(4) Sales may be made generally only between the hours of 9 a.m. and 9 p.m. Monday to Saturday, inclusive, and 10 a.m. to 6 p.m. on Sunday. During the period from the Thanksgiving Day holiday through New Year's Day, limited winery sales locations may remain open until 10 p.m. of sales day to conform with the closing times of neighboring mall or shopping district businesses. Additionally, a limited winery may request approval from the Board to extend sales hours in individual locations at other times during the year, or beyond the limits set in this section. The request shall be in writing, to the Board's Office of the Chief Counsel, and shall detail the exact locations where sales hours are proposed to be extended. The licensee shall also set forth the proposed hours and dates of extended operation, as well as the reason for, and justification of, the proposed extended sales hours.
(5) While there may be no sales on credit, a limited winery may accept:
(i) From licensees and retail customers, checks drawn on their account.
(ii) From retail customers, credit cards issued by banking or financial institutions subject to State or Federal regulations.
(6) Visitors on the licensed premises may be provided without charge with samples of wine produced by the limited winery for tasting and with crackers, nuts, cheese, bread sticks and bread cubes to be used in conjunction with tastings.
(7) Limited winery licensees engaged in the retail and wholesale sales of wine are responsible to conform to the Liquor Code and this title.
(8) In addition to the sale of wines, the following items are permitted to be offered for sale on the licensed premises:
(i) Pennsylvania-grown fruits and the following products produced from the fruits:
(A) Juices.
(B) Juice concentrates.
(C) Jellies, jams and preserves.
(ii) Pennsylvania-grown mushrooms.
(iii) Home winemaking equipment and supplies.
(iv) Wine serving and storage accessories as follows:
(A) Cork removers.
(B) Wine glasses and decanters.
(C) Wine racks.
(D) Serving baskets and buckets.
(E) Bottle stoppers.
(v) Publications dealing with wine and winemaking.
(vi) Cheese, crackers, breads, nuts and preserved meats for consumption off the premises.
(vii) Gift packages consisting of any combination of the items listed in subparagraphs (i)—(vi).
(viii) Promotional items advertising the limited winery such as tee shirts, glassware, caps and the like.
(9) Sales on the licensed premises of merchandise not listed in paragraph (8) is subject to Board approval. The approval shall be requested by letter addressed to the Board. A limited winery licensee will be advised of approved items through an appropriate means of dissemination.
(10) Mail or telephone orders may be accepted. Delivery of products shall be accomplished through the use of vehicles properly registered by the limited winery licensees or through properly licensed transporters. It is the responsibility of the limited winery licensee to insure that wine is not delivered to minors and that proper invoices are maintained under § 5.103 (relating to limited wineries).
(b) The employment of an agent by a limited winery is governed by § 3.63 (relating to agents).
(c) Records, sales invoices and reports shall be kept as prescribed in § 5.103.
(d) The use of additional Board-approved locations by limited winery licensees is governed by § 3.64 (relating to additional Board-approved locations).]
[Pa.B. Doc. No. 21-2111. Filed for public inspection December 17, 2021, 9:00 a.m.]
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