Expanding Opportunities: Pennsylvania’s Act 49 Allows Hotel License Conversion to Restaurant Licenses

Daniel C. Conlon, dconlon@tuckerlaw.com, (412) 594-3951

On December 14, 2023, Governor Shapiro signed House Bill No. 1096 into law, now known as Act 49 of 2023 (Act 49), which allows certain hotel licensees to apply to the Pennsylvania Liquor Control Board (PLCB) to convert to restaurant liquor licenses upon application and payment of a $30,000 fee. All changes made by Act 49 to Section 461(c) of the Liquor Code went into effect on February 12, 2024.

Key Provisions for Conversion:

• When applying for the conversion of a hotel license to a restaurant liquor license, several provisions outlined in section 461(c)(9.2) of the Liquor Code, 47 P.S. § 4-461(c)(9.2), must be observed:

• Hotel licenses cannot be in a city of the first class.

• Any pending objections from the PLCB’s Bureau of Licensing regarding the hotel license must be addressed, and the hotel license renewal application must be approved by the PLCB before conversion.

• If an application to transfer a converted restaurant liquor license is submitted within five years of the original conversion application, the seller must pay an additional fee to the PLCB. This fee is the greater of $30,000 or 25% of the sale price.

• The option for conversion will expire on February 27, 2026, unless extended again.

Understanding Eligibility Criteria:

Only hotel licenses that qualify under the conditions set forth in Sections 461(c)(8) or 461(c)(8.1) of the Liquor Code are eligible to apply for a conversion:

• Section 461(c)(8) refers to hotel licenses issued or applied for before September 1, 1949, from certain room requirements.

• Section 461(c)(8.1) refers to hotel licenses issued before January 1, 1965, in municipalities with populations of less than 10,000.
• Additionally, it includes hotel licenses issued before September 1, 1949, if they lapsed not more than once, and the Board issued a new hotel liquor license before January 1, 1971.

Benefits of Converting a Hotel License to a Restaurant License:

The main benefit for possibly converting an H license to an R license is that R licenses do not carry a requirement to have and maintain a certain number of guest sleeping rooms; as a result, there is a larger market for R licenses, which makes them more expensive.  Also, R licenses in certain rural counties are scarce because the Liquor Code imposes a quota of one R license per 3,000 inhabitants in the County. However, Act 49 will allow the conversion of H licenses to R licenses regardless of the Code’s quota restriction. The legislative changes ushered by Act 49 offer hotel licenses increased flexibility and potential for growth within Pennsylvania’s hospitality industry.

For those navigating the complexities of liquor licensing in Pennsylvania’s evolving hospitality landscape, having a seasoned legal advisor is paramount. Tucker Arensberg’s team of liquor license attorneys are here to guide you through the nuances of Act 49 and its implications for your establishment. Whether you’re considering a conversion or seeking clarity on eligibility criteria, don’t hesitate to call us. Your next step towards seizing these expanded opportunities begins with a conversation.

For more information, contact Daniel Conlon at (412) 594-3951 or at dconlon@tuckerlaw.com.