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Deadline looming, senator to submit a different plan on liquor privatization in Pennsylvania

June 5, 2013

After a final hearing on privatizing state liquor sales, the chairman of a key Senate committee said Tuesday he will unveil a plan that departs from the House proposal with less than two weeks to negotiate differences before Gov. Tom Corbett’s requested deadline.
Sen. Chuck McIlhinney, R-Bucks and chair of the Law & Justice Committee, said he has set aside the bill the House passed in March and will propose his own plan the week of June 17. Mr. Corbett has repeatedly said he wants a privatization bill on his desk by June 30.
Mr. McIlhinney said he favors maintaining the current number of retail licenses but allowing businesses to sell more types of alcohol. Where the House plan sells off the wholesale operation, Mr. McIlhinney said the state should wait to see how changing the rules of retail sales affects the worth of a wholesale license.
“I’m having a really tough time getting a handle on that value of the wholesale system,” he said. “Selling it right now, outright, isn’t something I think you’re going to see in the bill.”
Such a change spells trouble in the House, where Majority Leader Mike Turzai, R-Bradford Woods, said any liquor-privatization bill must be “substantially similar” to the legislation that cleared his chamber.
“Wholesale divestiture is a crucial component to make sure there is a competitive market,” he said. “It’s an essential component.”
Mr. McIlhinney said he opposes the House bill in large part because it divests the state’s wholesale business through a one-time sale of licenses. He said he would not use the bill, which he described as “rather complicated,” as a starting point.
But Mr. Turzai said he expects the House bill to be considered by the Senate.
“I believe that the Senate as a whole will ultimately take up House Bill 790 and study it in detail,” he said. “The only bill that gets to the governor’s desk is a serious bill, one that is substantially similar to House Bill 790.”
The House bill would create 1,200 licenses for the sale of wine and spirits, first available to beer distributors, with the possibility of up to 600 additional licenses as state liquor stores close. Groceries could buy licenses to sell wine but not beer, except through existing restaurant licenses. State stores would be required to close by county as private retailers opened, and the Liquor Control Board would be required to close all state stores when the number fell below 100.
Mr. McIlhinney said he wants to allow holders of alcohol licenses to sell more types of products. Asked what a grocery could sell under this plan, he said: “You’re talking about an alcohol license. Alcohol means wine, spirits and beer.”
Mr. Corbett kicked off this year’s attempts at privatization in January with a proposal that, unlike the House bill, would have allowed groceries and convenience stores to sell beer and would have set a deadline for shuttering the state stores. But he hailed the passage of the House version as a momentous step.
Testifying before the Senate panel Tuesday, Lt. Gov. Jim Cawley said the administration believes its plan is best suited to achieve its goals. But he said Mr. Corbett has shown he is willing to talk with legislators about how to improve convenience, selection and pricing in liquor sales.
“Certainly the governor has indicated his willingness to enter into and continue discussions,” he said.
Mr. Corbett’s spokesman, Kevin Harley, declined to say whether the components Mr. McIlhinney described would be acceptable to the governor.
“We look forward to seeing Sen. McIlhinney’s bill and working with him and the Senate to provide consumer choice and convenience,” he said. “We’ll wait to see the details of his bill.”
The committee meeting featured a sharp exchange between Mr. Cawley and Sen. Jim Ferlo, D-Highland Park, who called the lieutenant governor’s remarks “totally outrageous” — drawing applause from the union members filling the hearing room — and criticized the secretary of health, Michael Wolf, the commissioner of the state police, Frank Noonan, and a deputy secretary of education, Carolyn Dumaresq, for sitting beside him.
Afterward, Mr. Noonan and Mr. Wolf said the proposal would bring additional money to liquor enforcement and alcohol education, while Ms. Dumaresq spoke about an education grant program that Mr. Corbett proposed, using the proceeds from his privatization plan.

Source: Pittsburgh Post-Gazette