The two most common retail liquor licenses in Pennsylvania are the H license or hotel license and the R license or restaurant license. Virtually all restaurants and taverns serving alcohol in the Commonwealth utilize one of these two types of licenses. In recent years the price of an R license in many counties throughout Pennsylvania has skyrocketed while the price of H licenses has remained relatively stable. The rights permitted to H and R licensees are virtually identical, so why are the prices different?
At some point after the repeal of Prohibition, the Pennsylvania General Assembly initiated quotas restricting the number of R licenses that would be issued in any given municipality to one license per 3,000 inhabitants of that municipality. For the remainder of the twentieth century, an R license could only be moved within the municipality in which it originated. Along with the change in millennium came a major change in the Liquor Code which allowed R licenses to be transferred to other municipalities within the same county in which they originated. This change had a dramatic effect upon the market for R-licenses. Municipalities that had burgeoned since the quota system had been implemented could now, for practical purposes, accommodate as many R licenses that their local governance deemed appropriate.
Unlike R licenses, there are no quotas on the H license. The Pennsylvania Liquor Control Board (“PLCB”) will issue an H license to any hotel that meets the minimum room requirements of the Liquor Code (the minimum number of rooms is dependent upon the population of the municipality in which the license is issued) provided that the hotel is in a “wet” municipality. H Licensees must have rooms available for public accommodation on the licensed premises. In 2006 the General Assembly made temporary changes to the hotel provisions of the Liquor Code. Under this change, upon application, certain H licensees were granted a room waiver and were no longer obligated to maintain rooms for public accommodation. H licensees who took advantage of this perishable offering were able to convert their establishments to full-fledged restaurants, however the license was still categorized as an H license. In 2007 the General Assembly again opened a temporary window to H licensees, authorizing room waivers; however, licensees who took advantage of this second opportunity could not convert former rooms into restaurant space. An H license can be moved to a new location within the county, however, the room waivers are not portable and must remain on the premises for which the license was issued. In other words, if the H license that has a room waiver associated with it is transferred, the room waiver is not portable, similarly, to continue to use this example, a new H license cannot be paired with the room waiver from the transferred H-license.
Our office has decades of experience dealing with the PLCB and is able to answer your questions about the transferability of liquor licenses.
– J. Ken Butera