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Act 39 of 2016, effective 60 days from June 8, 2016, amends the existing Liquor Code relative to the way that the Commonwealth of Pennsylvania and its licensees sell alcoholic beverages to general public. The Bill also has a number of provisions that directly affect licensees of the PLCB in other ways. Licensees have by now received a notice from the PLCB that there will be a $700.00 surcharge in addition to the license validation or renewal fees when licensees validate or renew their licenses. This surcharge is not a one-time charge but will have to be paid each time the license is renewed or validated. Note: This surcharge provision was not enacted by the PLCB but by the PA Legislature.

The Bill also provides for the Board to hold auctions on restaurant liquor licenses where the restaurant liquor licenses has not been renewed or has been revoked, or failed to meet license safekeeping requirements. The law applies to all restaurant liquor licenses going forward from December 31, 1999. Yes, the licenses will be resurrected for the purpose of being auctioned off.

The license becomes available for the auction when any appeal period expires for a revocation or a non-renewal of the license, or after the 2 year period to file a renewal application nunc pro tunc expires.

The maximum number of licenses that can be auctioned in one county per year is 50. The minimum bid shall be $25,000.00. The highest bidder shall be provisionally awarded the license and would have to file an application like any license applicant.

The Board could in its opinion deny the application if the Board determines that the applicant is not of good repute, and will deny the applicant if the applicant violates any of the prohibited interlocking provisions in the Liquor Code (e.g. wholesale distributor cannot have an interest in a retail license).

Interesting to note that the winning bidder receives the license free and clear of any liens or judgments, fines or suspensions that the previous owner acquires against the license.

Holders of a Eating Place Retail Dispensing License can apply to the Board to convert their licenses to a retail restaurant liquor license without regard to the quota restrictions. The fee for the conversion is $30,000.00. However, Philadelphia County holders of an E Dispenser license are specifically barred from converting their licenses into a restaurant license. Holders of E Dispenser licenses in the rest of the State can apply for a conversion. The exclusion of Philadelphia is unfair, but that is the way the House Bill 1690 was passed.

The changes to the law will not happen anytime soon. The Board will need time to set up the procedures to implement the changes in the law.