HOUSE BILL No. 5641 March 10, 1998, Introduced by Rep. Profit and referred to the Committee on Regulatory Affairs. A bill to amend 1933 (Ex Sess) PA 8, entitled "The Michigan liquor control act," by amending section 19c (MCL 436.19c), as amended by 1996 PA 440. THE PEOPLE OF THE STATE OF MICHIGAN ENACT: 1 Sec. 19c. (1)ATHE COMMISSION SHALL NOT GRANT A public 2 licenseshall not be grantedfor the sale of alcoholic liquor 3 for consumption on the premises in excess of 1 license for each 4 1,500 of population or major fraction thereof.On-premise5escrowed licenses issued under this subsection are available6subject to section 17(3) to an applicant whose proposed operation7is located within any local governmental unit in a county with a8population of under 500,000 in which the escrowed license was9located. If the local governmental unit within which the former10licensee's premises were located spans more than 1 county, an05733'98 LBO 2 1escrowed license is available subject to section 17(3) to an2applicant whose proposed operation is located within any local3governmental unit in either county. If an escrowed license is4activated within a local governmental unit other than that local5governmental unit within which the escrowed license was origi-6nally issued, the commission shall count that activated license7against the local governmental unit originally issuing the8license.This quota does not bar the right of an existing 9 licensee to renew a license or transfer the license and does not 10 bar the right of a tavern or class A hotel from requesting 11 reclassification of a license to class C,unless local option 12 laws prevent the sale of spirits and mixed spirit drinks by those 13 licensed premises, subject to the consent of the commission. 14TheA LOCAL GOVERNMENTAL UNIT HAVING JURISDICTION SHALL APPROVE 15 THE upgrading of a license resulting from a RECLASSIFICATION 16 request under this subsection.shall be approved by the local17governmental unit having jurisdiction.18 (2) In a resort area, the commission may issue 1 or more 19 licenses for a period not to exceed 12 months without regard to a 20 limitation because of population, but not in excess of 550, and 21 with respect to the resort license the commission, by rule, shall 22 define and classify resort seasons by months and may issue 1 or 23 more licenses for resort seasons without regard to the calendar 24 year or licensing year. 25 (3) In addition to the resort licenses authorized in subsec- 26 tion (2), the commission may issue not more than 10 additional 27 licenses per year for the years 1996 and 1997 to establishments 05733'98 3 1 whose business and operation, as determined by the commission, is 2 designed to attract and accommodate tourists and visitors to the 3 resort area, and whose primary purpose is not for the sale of 4 alcoholic liquor. In counties having a population of less than 5 50,000, as determined by the last federal decennial census or as 6 determined pursuant to subsection (11) and subject to 7 subsection (17) in the case of a class A hotel or a class B 8 hotel, the commission shall not require the establishments to 9 have dining facilities to seat more than 50 persons. The commis- 10 sion may cancel the license if the resort is no longer active or 11 no longer qualifies for the license. Before January 16 of each 12 year the commission shall transmit to the legislature a report 13 giving details as to the number of applications received under 14 this subsection; the number of licenses granted and to whom; the 15 number of applications rejected and the reasons; and the number 16 of the licenses revoked, suspended, or other disciplinary action 17 taken and against whom and the grounds for revocation, suspen- 18 sion, or disciplinary action. 19 (4) In addition to any licenses for the sale of alcoholic 20 liquor for consumption on the premises that may be available in 21 the local governmental unit under subsection (1) and the resort 22 licenses authorized in subsections (2) and (3), the commission 23 may issue not more than 25 additional resort licenses per year 24 for the years 1996 and 1997 if all of the following conditions 25 are met: 05733'98 4 1 (a) The establishment's business and operation, as 2 determined by the commission, is designed to attract and 3 accommodate tourists and visitors to the resort area. 4 (b) The establishment's primary business is not the sale of 5 alcoholic liquor. 6 (c) The capital investment in real property, leasehold 7 improvement, fixtures, and inventory for the premises to be 8 licensed is in excess of $1,000,000.00. 9 (5) In governmental units having a population of 50,000 per- 10 sons or less, as determined by the last federal decennial census 11 or as determined pursuant to subsection (11), in which the quota 12 of specially designated distributor licenses, as provided by com- 13 mission rule, has been exhausted, the commission may issue not 14 more than 10 additional specially designated distributor licenses 15 per year for the years 1996 and 1997 to established merchants 16 whose business and operation, as determined by the commission, is 17 designed to attract and accommodate tourists and visitors to the 18 resort area.ATHE COMMISSION MAY ISSUE A specially designated 19 distributor license issued pursuant to this subsectionmay be20issuedat a location within 2,640 feet of existing specially 21 designated distributor license locations. A specially designated 22 distributor license issued pursuant to this subsectionshall23 DOES not bar another specially designated distributor licensee 24 from transferring location to within 2,640 feet ofsaidTHAT 25 licensed location. 26 (6) In addition to any licenses for the sale of alcoholic 27 liquor for consumption on the premises that may be available in 05733'98 5 1 the local governmental unit under subsection (1), and the resort 2 licenses authorized in subsections (2), (3), and (4), and not- 3 withstanding section 17(4), the commission may issue not more 4 than 5 additional special purpose licenses in any calendar year 5 for the sale of beer and wine for consumption on the premises. 6ATHE COMMISSION SHALL ISSUE A special purpose licenseissued7 pursuant to this subsectionshall be issuedonly for events 8 which are to be held from May 1 to September 30, are artistic in 9 nature, and which are to be held on the campus of a public uni- 10 versity with an enrollment of 30,000 or more students. A special 11 purpose licenseshall beIS valid for 30 days or for the dura- 12 tion of the event for which it is issued, whichever is less. The 13 fee for a special purpose licenseshall beIS $50.00.ATHE 14 COMMISSION MAY ISSUE A special purpose licensemay be issued15 only to a corporation which is all of the following: 16 (a) Is a nonprofit corporation organized pursuant to the 17 nonprofit corporation act,Act No. 162 of the Public Acts of181982, being sections 450.2101 to 450.3192 of the Michigan19Compiled Laws1982 PA 162, MCL 450.2101 TO 450.3192. 20 (b) Has a board of directors constituted of members of whom 21 half are elected by the public university at which the event is 22 scheduled and half are elected by the local governmental unit. 23 (c) Has been in continuous existence for not less than 6 24 years. 25 (7) Notwithstanding the local legislative body approval pro- 26 vision of section 17(3) and notwithstanding the provisions of 27 section 17(5), the commission may issue, without regard to the 05733'98 6 1 quota provisions of subsection (1) and with the approval of the 2 governing board of the university, either a tavern or class C 3 license which may be used only for regularly scheduled events at 4 a public university's established outdoor program or festival at 5 a facility on the campus of a public university having a head 6 count enrollment of 10,000 students or more.ATHE COMMISSION 7 MAY ISSUE A licenseissuedunder this subsectionmayonlybe8issuedto the governing board of a public university, a person 9 that is the lessee or concessionaire of the governing board of 10 the university, or both. A license issued under this subsection 11 is not transferable as to ownership or location. A license 12 issued under this subsection may not be issued at an outdoor sta- 13 dium customarily used for intercollegiate athletic events. 14 (8) In issuing a resort license under subsection (3), (4), 15 or (5) the commission shall consider economic development factors 16 of the area in the issuance of licenses to establishments 17 designed to stimulate and promote the resort and tourist 18 industry. The commission shall not transfer a resort license 19 issued under subsection (3), (4), or (5) to another location, and 20 if the licensee goes out of business the license shall be surren- 21 dered to the commission. 22 (9) The limitations and quotas of this section shall not be 23 applicable to the issuance of a new license to a veteran of the 24 armed forces of the United States who was honorably discharged or 25 released under honorable conditions from the armed forces of the 26 United States and who had by forced sale disposed of a similar 27 license within 90 days before or after entering or while serving 05733'98 7 1 in the armed forces of the United States, as a part of the 2 person's preparation for that service if the application for a 3 new license is made for the same governmental unit in which the 4 previous license was issued and within 60 days after the dis- 5 charge of the applicant from the armed forces of the United 6 States. 7 (10) The limitations and quotas of this sectionshallDO 8 notbe applicableAPPLY to the issuance of a new license or the 9 renewal of an existing license where the property or establish- 10 ment to be licensed is situated in or on land on which an airport 11 owned by a county or in which a county has an interest is 12 situated. 13 (11) For purposes of implementing this section a special 14 state census of a local governmental unit may be taken at the 15 expense of the local governmental unit by the federal bureau of 16 census or the secretary of state under section 6 ofAct No. 27917of the Public Acts of 1909, as amended, being section 117.6 of18the Michigan Compiled LawsTHE HOME RULE CITY ACT, 1909 PA 279, 19 MCL 117.6. The special census shall be initiated by resolution 20 of the governing body of the local governmental unit involved. 21 The secretary of state may promulgate additional rules necessary 22 for implementing this section pursuant to the administrative pro- 23 cedures act of 1969,Act No. 306 of the Public Acts of 1969,24being sections 24.201 to 24.328 of the Michigan Compiled Laws25 1969 PA 306, MCL 24.201 TO 24.328. 26 (12) The limitations and quotas of this sectionshallARE 27 notbeapplicable to the issuance of a new license to the 05733'98 8 1 governing board of a college or university pursuant to section 2 17h. 3 (13) The limitations and quotas of this sectionshallARE 4 notbeapplicable to the issuance of a national sporting event 5 license pursuant to section 17b. 6 (14) Before granting an approval as required in 7 section 17(3) for a license to be issued under subsection (2), 8 (3), or (4), a local legislative body shall disclose the avail- 9 ability of transferable licenses held in escrow for more than 1 10 licensing year within that respective local governmental unit. 11 Public notice of the meeting to consider the granting of the 12 license by the local governmental unit shall be made 2 weeks 13 before the meeting. 14 (15) The person signing the application for an on-premise 15 resort license shall state and verify that he or she attempted to 16 secure an on-premise escrowed or quota license and that, to the 17 best of his or her knowledge, an on-premise escrowed or quota 18 license is not readily available within the local governmental 19 unit in which the applicant for the on-premise resort license 20 proposes to operate. 21 (16) The commission shall not issue an on-premise resort 22 license if the local governmental unit within which the resort 23 license applicant proposes to operate has not issued all 24 on-premise licenses available under subsection (1) or if an 25 on-premise escrowed license exists and is readily available 26 within the local governmental unit in which the applicant for the 27 on-premise resort license proposes to operate. The commission 05733'98 9 1 may waive the provisions of this subsection upon a showing of 2 good cause. 3 (17) The commission shall not require a class A hotel or a 4 class B hotel licensed pursuant to subsection (2), (3), or (4) to 5 provide food service to registered guests or to the public. 6 (18) As used in this section: 7 (a) "Escrowed license" means a license in which the rights 8 of the licensee in the license or to the renewal of the license 9 are still in existence and are subject to renewal and activation 10 in the manner provided for in R 436.1107 of the Michigan adminis- 11 trative code. 12 (b) "Readily available" means available under a standard of 13 economic feasibility, as applied to the specific circumstances of 14 the applicant, that includes but is not limited to the 15 following: 16 (i) The fair market value of the license, if determinable. 17 (ii) The size and scope of the proposed operation. 18 (iii) The existence of mandatory contractual restrictions or 19 inclusions attached to the sale of the license. 05733'98 Final page. 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