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HB-4959, As Passed Senate, December 1, 2005

SENATE SUBSTITUTE FOR

HOUSE BILL NO. 4959

A bill to amend 1998 PA 58, entitled

"Michigan liquor control code of 1998,"

by amending sections 113, 537, 543, and 607 (MCL 436.1113,

436.1537, 436.1543, and 436.1607), section 537 as amended by 2005

PA 166 and section 543 as amended by 2005 PA 97, and by adding

section 113a; and to repeal acts and parts of acts.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

Sec. 113. (1) "Tavern" means any place licensed to sell at

retail beer and wine for consumption on the premises only.

(2) "Vehicle" means any means of transportation by land, by

water, or by air.

(3) "Vendor" means a person licensed by the commission to sell

alcoholic liquor.

(4) "Vendor of spirits" means a person selling spirits to the

commission.

(5) "Warehouse" means a premises or place primarily

constructed, used, or provided with facilities for the storage in

transit or other temporary storage of perishable goods or for the

conduct of a warehousing business, or for both.

(6) "Warehouser" means a licensee authorized by the commission

to store alcoholic beverages, but prohibited from making sales or

deliveries to retailers unless the licensee is also the holder of a

wholesaler or manufacturer license issued by the commission.

(7) "Wholesaler" means a person who sells beer, wine, or mixed

spirit drink only to retailers or other licensees, and who sells

sacramental wine as provided in section 301.

(8) "Wine" means the product made by the normal alcoholic

fermentation of the juice of sound, ripe grapes, or any other fruit

with the usual cellar treatment, and containing not more than 21%

of alcohol by volume, including fermented fruit juices other than

grapes and mixed wine drinks.

(9) "Wine maker" means any person licensed by the commission

to manufacture wine and ~~sell, at wholesale or retail, wine~~

~~manufactured by that person~~ to sell that wine to a wholesaler, to

a consumer by direct shipment, at retail on the licensed winery

premises, to sell that wine to a retailer, and as provided for in

section 537.

Sec. 113a. (1) "Tavern" means any place licensed to sell at

retail beer and wine for consumption on the premises only.

(2) "Vehicle" means any means of transportation by land, by

water, or by air.

(3) "Vendor" means a person licensed by the commission to sell

alcoholic liquor.

(4) "Vendor of spirits" means a person selling spirits to the

commission.

(5) "Warehouse" means a premises or place primarily

constructed, used, or provided with facilities for the storage in

transit or other temporary storage of perishable goods or for the

conduct of a warehousing business, or for both.

(6) "Warehouser" means a licensee authorized by the commission

to store alcoholic liquor, but prohibited from making sales or

deliveries to retailers unless the licensee is also the holder of a

wholesaler license issued by the commission.

(7) "Wholesaler" means a person who sells beer, wine, or mixed

spirit drink only to retailers or other licensees, and who sells

sacramental wine as provided in section 301.

(8) "Wine" means the product made by the normal alcoholic

fermentation of the juice of sound, ripe grapes, or any other fruit

with the usual cellar treatment, and containing not more than 21%

of alcohol by volume, including fermented fruit juices other than

grapes and mixed wine drinks.

(9) "Wine maker" means any person licensed by the commission

to manufacture wine, to sell that wine to a wholesaler, to sell

that wine by direct shipment to a consumer, at retail on the

licensed winery premises, and as provided for in section 537 but

not to sell wine to a retailer.

Sec. 537. (1) The following classes of vendors may sell

alcoholic liquors at retail as provided in this section:

(a) Taverns where beer and wine may be sold for consumption on

the premises only.

(b) Class C license where beer, wine, mixed spirit drink, and

spirits may be sold for consumption on the premises.

may be sold for consumption on the premises only to bona fide

members where consumption is limited to these members and their

bona fide guests, who have attained the age of 21 years.

(d) Direct shippers where wine may be sold and shipped

directly to the consumer.

(e) ~~(d)~~ Hotels of class A where beer and wine may be sold

for consumption on the premises and in the rooms of bona fide

registered guests. Hotels of class B where beer, wine, mixed spirit

drink, and spirits may be sold for consumption on the premises and

in the rooms of bona fide registered guests.

(f) ~~(e)~~ Specially designated merchants, where beer and wine

may be sold for consumption off the premises only.

(g) ~~(f)~~ Specially designated distributors where spirits and

mixed spirit drink may be sold for consumption off the premises

only.

(h) ~~(g)~~ Special licenses where beer and wine or beer, wine,

mixed spirit drink, and spirits may be sold for consumption on the

premises only.

(i) ~~(h)~~ Dining cars or other railroad or Pullman cars,

watercraft, or aircraft, where alcoholic liquor may be sold for

consumption on the premises only, subject to rules promulgated by

the commission.

(j) ~~(i)~~ Brewpubs where beer manufactured on the premises by

the licensee may be sold for consumption on or off the premises by

any of the following licensees:

(i) Class C.

(ii) Tavern.

(iii) Class A hotel.

(iv) Class B hotel.

(k) ~~(j)~~ Micro brewers and brewers selling less than 200,000

barrels of beer per year where beer produced by the micro brewer or

brewer may be sold to a consumer for consumption on or off the

brewery premises.

(l) ~~(k)~~ Class G-1 license where beer, wine, mixed spirit

drink, and spirits may be sold for consumption on the premises only

to members required to pay an annual membership fee and consumption

is limited to these members and their bona fide guests.

(m) (l) Class G-2 license where beer and wine may be sold for

consumption on the premises only to members required to pay an

annual membership fee and consumption is limited to these members

and their bona fide guests.

(n) ~~(m)~~ Motorsports event license where beer and wine may be

sold for consumption on the premises during sanctioned motorsports

events only.

(o) Wine maker where wine may be sold by direct shipment, at

retail on the licensed premises, and as provided for in subsections

(2) and (3).

(2) A wine maker may sell wine made by that wine maker in a

restaurant for consumption on or off the premises if the restaurant

is owned by the wine maker or operated by another person under an

agreement approved by the commission and located on the premises

where the wine maker is licensed.

(3) A wine maker, with the prior written approval of the

commission, may conduct wine tastings of wines made by that wine

maker and may sell the wine made by that wine maker for consumption

off the premises at a location other than the premises where the

wine maker is licensed to manufacture wine, under the following

conditions:

(a) The premises upon which the wine tasting occurs conforms

to local and state sanitation requirements.

(b) Payment of a $100.00 fee per location is made to the

commission.

premises.

(d) Wine tasting does not take place between the hours of 2

a.m. and 7 a.m. Monday through Saturday, or between 2 a.m. and 12

noon on Sunday.

(e) The premises and the licensee comply with and are subject

to all applicable rules promulgated by the commission.

Sec. 543. (1) Quarterly, upon recommendation of the

commission, the state shall pay pursuant to appropriation in the

manner prescribed by law to the city, village, or township in which

a full-time police department or full-time ordinance enforcement

department is maintained or, if a police department or full-time

ordinance enforcement department is not maintained, to the county,

to be credited to the sheriff's department of the county in which

the licensed premises are located, 55% of the amount of the

proceeds of the retailers' license fees and license renewal fees

collected in that jurisdiction, for the specific purpose of

enforcing this act and the rules promulgated under this act. Forty-

one and one-half percent of the amount of the proceeds of

retailers' license and license renewal fees collected shall be

deposited in a special fund to be annually appropriated to the

commission for carrying out the licensing and enforcement

provisions of this act. Any unencumbered or uncommitted money in

the special fund shall revert to the general fund of the state 12

months after the end of each fiscal year in which the funds were

collected. The legislature shall appropriate 3-1/2% of the amount

of the proceeds of retailers' license and license renewal fees

collected to be credited to a special fund in the state treasury

for the purposes of promoting and sustaining programs for the

prevention, rehabilitation, care, and treatment of alcoholics. This

subsection does not apply to retail license fees collected for

railroad or Pullman cars, watercraft, or aircraft, or to the

transfer fees provided in section 529.

(2) All license and license renewal fees, other than retail

license and license renewal fees, shall be credited to the grape

and wine industry council created in section 303, to be used as

provided in section 303. Money credited to the grape and wine

industry council shall not revert to the state general fund at the

close of the fiscal year, but shall remain in the account to which

it was credited to be used as provided in section 303.

(3) All retail license fees collected for railroad or Pullman

cars, watercraft, or aircraft, and the transfer fees provided in

section 529 shall be deposited in the special fund created in

subsection (1) for carrying out the licensing and enforcement

provisions of this act.

(4) The license fee enhancement imposed for licenses issued

under section 531(3) and (4) shall be deposited into a special fund

to be annually appropriated to the commission for enforcement and

other related projects determined appropriate by the commission.

The money representing that amount of the license fees for

identical licenses not issued under section 531(3) and (4) shall be

allocated and appropriated under subsection (1).

(5) The license fee imposed on direct shipper licenses and any

violation fines imposed by the commission shall be deposited into

the direct shipper enforcement revolving fund. The direct shipper

enforcement revolving fund is created within the state treasury.

The state treasurer shall direct the investment of the fund. The

state treasurer shall credit to the fund interest and earnings from

fund investments. Money in the fund at the close of the fiscal year

shall remain in the fund and shall not lapse to the general fund.

The commission shall expend money from the fund, upon

appropriation, only for enforcement of the provisions of section

203 and related projects.

(6) ~~(5)~~ As used in this section, "license fee enhancement"

means the money representing the difference between the license fee

imposed for a license under section 525(1) and the additional

amount imposed for resort and resort economic development licenses

under section 525(2).

Sec. 607. (1) Except as provided in section 537(2), a

warehouser, mixed spirit drink manufacturer, wholesaler, outstate

seller of beer, outstate seller of wine, outstate seller of mixed

spirit drink, or vendor of spirits shall not be licensed as a

specially designated merchant or a specially designated

distributor. ~~or permitted to sell or deliver to the consumer any~~

~~quantity of alcoholic liquor at retail.~~ Beginning on the effective

date of the amendatory act that added this sentence and in addition

to the persons described in this subsection, a wine maker and a

small wine maker shall also not be licensed as a specially

designated merchant or a specially designated distributor. Any wine

maker or small wine maker holding a specially designated merchant

or specially designated distributor license on the effective date

of the amendatory act that added this sentence may continue to hold

a specially designated merchant or specially designated distributor

license.

(2) A specially designated distributor or specially designated

merchant or any other retailer shall not hold a mixed spirit drink

manufacturer, wholesale, warehouse, outstate seller of beer,

outstate seller of mixed spirit drink, or outstate seller of wine

license. Beginning on the effective date of the amendatory act that

added this sentence, a specially designated distributor or

specially designated merchant shall not hold a wine maker or small

wine maker license in addition to being prohibited from holding any

other license described in this subsection. Any specially

designated distributor or specially designated merchant holding a

wine maker or small wine maker license on the effective date of the

amendatory act that added this sentence may continue to hold a wine

maker or small wine maker license.

(3) A brewer, warehouser, or wholesaler shall not be licensed

as a specially designated merchant. ~~, except for brewers who~~

~~manufacture less than 200,000 barrels of beer per year.~~ This

subsection ~~shall~~ does not affect the operation of a brewery

hospitality room.

(4) A wholesaler may sell or deliver beer and alcoholic liquor

to hospitals, military establishments, governments of federal

Indian reservations, and churches requiring sacramental wines and

may sell to the wholesaler's own employees to a limit of 2 cases of

24 12-ounce units or its equivalent of malt beverage per week, or 1

case of 12 1-liter units or its equivalent of wine or mixed spirit

drink per week.

Enacting section 1. This amendatory act does not take effect

unless Senate Bill No. 625 of the 93rd Legislature is enacted into

law.

Enacting section 2. (1) If any provision of section 113 of the

Michigan liquor control code of 1998, 1998 PA 58, MCL 436.1113, as

amended by this amendatory act, is held to be unconstitutional by a

court of competent jurisdiction and the allowable time for filing

an appeal has expired or the appellant has exhausted all of his or

her avenues of appeal, section 113 of the Michigan liquor control

code of 1998, 1998 PA 58, MCL 436.1113, is repealed.

(2) Section 113a of the Michigan liquor control code of 1998,

1998 PA 58, as added by this amendatory act, shall not take effect

unless section 113 of the Michigan liquor control code of 1998,

1998 PA 58, MCL 436.1113, is held unconstitutional or repealed

pursuant to subsection (1).

Enacting section 3. If an appellate court declares this

amendatory act unconstitutional, then it is the intent of the

legislature that a good faith effort be made to amend section 305

of the Michigan liquor control code of 1998, 1998 PA 58, MCL

436.1305, to make it less burdensome for a small winery to

terminate an agreement with a wholesaler.