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06/12/2021 02:41 PM
Pennsylvania State Senate
https://www.legis.state.pa.us/cfdocs/Legis/CSM/showMemoPublic.cfm?chamber=S&SPick=20210&cosponId=35072
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Senate of Pennsylvania
Session of 2021 - 2022 Regular Session

MEMORANDUM

Posted: March 15, 2021 03:50 PM
From: Senator Mike Regan
To: All Senate members
Subject: Dead Liquor License Auctions
 
In the near future, I plan to re-introduce Senate Bill 896. This legislation makes adjustments to the current Pennsylvania Liquor Control Board (PLCB) “dead license auction” system. The auctions, as established in Act 39 of 2016, allow expired restaurant liquor licenses (“R” licenses) to be auctioned to the highest bidder within the county where the license is located.

As the current auctions continue, there are some counties that do not have any “R” licenses left to be auctioned and those counties that do have available licenses, are not receiving a single bid. For example, in my district, Cumberland County only had one license, which was auctioned, and while there is a market and need for more, there are none available.

Further, Act 39 of 2016 requires winning bidders to deposit the full bid amount in escrow within 14 days—something that only large businesses or corporations have the capital to do. This makes it impossible for small or independent restaurants to participate in the auction process because they are not able to obtain a bank loan that quickly.
 
My legislation addresses both of these issues.  First, it establishes a statewide auction that would occur once a year for the purpose of auctioning licenses that did not receive bids during the regular auction process.  Entities from all counties would be eligible to bid on the available licenses, and no more than one license would be awarded within a county per year.  This will ensure licenses are redistributed at a rate that does not disrupt the current market value.
 
Additionally, it restructures payment for a winning bid to align with the current process of a license transfer – a promissory note would be issued by the winning bidder, with the full bid amount being deposited within 6 months, as required by law. This will encourage small or independent restaurants to participate and help diversify licensed establishments within a county.
 
Clarifying language will be included upon reintroduction that ensures the current process for transferring licenses into a municipality is followed for licenses obtained through this once-a-year auction.
 
Please join me as a co-sponsor of this legislation to further advance economic development efforts within our communities and provide additional revenues to the Commonwealth.
 
Previous co-sponsors of SB 896: BREWSTER, BROWNE, KEARNEY, MARTIN, MENSCH, J. WARD, AND YAW.
 



Introduced as SB566