September 5, 2006, Introduced by Rep. Hansen and referred to the Committee on Regulatory Reform.
A bill to amend 1998 PA 58, entitled
"Michigan liquor control code of 1998,"
by amending sections 525, 531, and 537 (MCL 436.1525, 436.1531, and
436.1537), section 525 as amended by 2005 PA 166, section 531 as
amended by 2005 PA 97, and section 537 as amended by 2005 PA 269.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 525. (1) Except as otherwise provided for in this
section, the following license fees shall be paid at the time of
filing applications or as otherwise provided in this act:
(a) Manufacturers of spirits, but not including makers,
blenders, and rectifiers of wines containing 21% or less alcohol by
volume, $1,000.00.
(b) Manufacturers of beer, $50.00 per 1,000 barrels, or
fraction of a barrel, production annually with a maximum fee of
$1,000.00, and in addition $50.00 for each motor vehicle used in
delivery to retail licensees. A fee increase does not apply to a
manufacturer of less than 15,000 barrels production per year.
(c) Outstate seller of beer, delivering or selling beer in
this state, $1,000.00.
(d) Wine makers, blenders, and rectifiers of wine, including
makers, blenders, and rectifiers of wines containing 21% or less
alcohol by volume, $100.00. The small wine maker license fee is
$25.00.
(e) Outstate seller of wine, delivering or selling wine in
this state, $300.00.
(f) Outstate seller of mixed spirit drink, delivering or
selling mixed spirit drink in this state, $300.00.
(g) Dining cars or other railroad or Pullman cars selling
alcoholic liquor, $100.00 per train.
(h) Wholesale vendors other than manufacturers of beer,
$300.00 for the first motor vehicle used in delivery to retail
licensees and $50.00 for each additional motor vehicle used in
delivery to retail licensees.
(i) Watercraft, licensed to carry passengers, selling
alcoholic liquor, a minimum fee of $100.00 and a maximum fee of
$500.00 per year computed on the basis of $1.00 per person per
passenger capacity.
(j) Specially designated merchants, for selling beer or wine
for consumption off the premises only but not at wholesale, $100.00
for each location regardless of the fact that the location may be a
part of a system or chain of merchandising.
(k) Specially designated distributors licensed by the
commission to distribute spirits and mixed spirit drink in the
original package for the commission for consumption off the
premises, $150.00 per year, and an additional fee of $3.00 for each
$1,000.00 or major fraction of that amount in excess of $25,000.00
of the total retail value of merchandise purchased under each
license from the commission during the previous calendar year.
(l) Hotels of class A selling beer and wine, a minimum fee of
$250.00 and, for all bedrooms in excess of 20, $1.00 for each
additional bedroom, but not more than $500.00.
(m) Hotels of class B selling beer, wine, mixed spirit drink,
and spirits, a minimum fee of $600.00 and, for all bedrooms in
excess of 20, $3.00 for each additional bedroom. If a hotel of
class B sells beer, wine, mixed spirit drink, and spirits in more
than 1 public bar, the fee entitles the hotel to sell in only 1
public bar, other than a bedroom, and a license shall be secured
for each additional public bar, other than a bedroom, the fee for
which is $350.00.
(n) Taverns, selling beer and wine, $250.00.
(o) Class C license selling beer, wine, mixed spirit drink,
and spirits, $600.00. If a class C licensee sells beer, wine, mixed
spirit drink, and spirits in more than 1 bar, a fee of $350.00
shall be paid for each additional bar. In municipally owned or
supported facilities in which nonprofit organizations operate
concession stands, a fee of $100.00 shall be paid for each
additional bar.
(p) Clubs selling beer, wine, mixed spirit drink, and spirits,
$300.00 for clubs having 150 or fewer duly accredited members and
$1.00 for each additional member. The membership list for the
purpose only of determining the license fees to be paid under this
subdivision shall be the accredited list of members as determined
by a sworn affidavit 30 days before the closing of the license
year. This subdivision does not prevent the commission from
checking a membership list and making its own determination from
the list or otherwise. The list of members and additional members
is not required of a club paying the maximum fee. The maximum fee
shall not exceed $750.00 for any 1 club.
(q) Warehousers, to be fixed by the commission with a minimum
fee for each warehouse of $50.00.
(r) Special licenses, a fee of $50.00 per day, except that the
fee for that license or permit issued to any bona fide nonprofit
association, duly organized and in continuous existence for 1 year
before
the filing of its application, is $25.00. Not more than 5
25 special licenses may be granted to any organization, including
an auxiliary of the organization, in a calendar year.
(s) Airlines licensed to carry passengers in this state that
sell, offer for sale, provide, or transport alcoholic liquor,
$600.00.
(t) Brandy manufacturer, $100.00.
(u) Mixed spirit drink manufacturer, $100.00.
(v) Brewpub, $100.00.
(w) Class G-1, $1,000.00.
(x) Class G-2, $500.00.
(y) Motorsports event license, $250.00.
(2) The fees provided in this act for the various types of
licenses shall not be prorated for a portion of the effective
period of the license. Notwithstanding subsection (1), the initial
license fee for any licenses issued under section 531(3) and (4) is
$20,000.00. The renewal license fee shall be the amount described
in subsection (1). However, the commission shall not impose the
$20,000.00 initial license fee for applicants whose license
eligibility was already approved on July 20, 2005.
(3) Beginning July 23, 2004, and except in the case of any
resort or resort economic development license issued under section
531(2), (3), (4), and (5) and a license issued under section 521,
the commission shall issue an initial or renewal license not later
than 90 days after the applicant files a completed application.
Receipt of the application is considered the date the application
is received by any agency or department of the state of Michigan.
If the application is considered incomplete by the commission, the
commission shall notify the applicant in writing, or make the
information electronically available, within 30 days after receipt
of the incomplete application, describing the deficiency and
requesting the additional information. The determination of the
completeness of an application does not operate as an approval of
the application for the license and does not confer eligibility
upon an applicant determined otherwise ineligible for issuance of a
license. The 90-day period is tolled under any of the following
circumstances:
(a) Notice sent by the commission of a deficiency in the
application until the date all of the requested information is
received by the commission.
(b) The time period during which actions required by a party
other than the applicant or the commission are completed that
include, but are not limited to, completion of construction or
renovation of the licensed premises; mandated inspections by the
commission or by any state, local, or federal agency; approval by
the legislative body of a local unit of government; criminal
history or criminal record checks; financial or court record
checks; or other actions mandated by this act or rule or as
otherwise mandated by law or local ordinance.
(4) If the commission fails to issue or deny a license within
the time required by this section, the commission shall return the
license fee and shall reduce the license fee for the applicant's
next renewal application, if any, by 15%. The failure to issue a
license within the time required under this section does not allow
the commission to otherwise delay the processing of the
application, and that application, upon completion, shall be placed
in sequence with other completed applications received at that same
time. The commission shall not discriminate against an applicant in
the processing of the application based upon the fact that the
license fee was refunded or discounted under this subsection.
(5) Beginning October 1, 2005, the chair of the commission
shall submit a report by December 1 of each year to the standing
committees and appropriations subcommittees of the senate and house
of representatives concerned with liquor license issues. The chair
of the commission shall include all of the following information in
the report concerning the preceding fiscal year:
(a) The number of initial and renewal applications the
commission received and completed within the 90-day time period
described in subsection (3).
(b) The number of applications denied.
(c) The number of applicants not issued a license within the
90-day time period and the amount of money returned to licensees
under subsection (4).
(6) As used in this section, "completed application" means an
application complete on its face and submitted with any applicable
licensing fees as well as any other information, records, approval,
security, or similar item required by law or rule from a local unit
of government, a federal agency, or a private entity but not from
another department or agency of the state of Michigan.
Sec. 531. (1) A public license shall not be granted for the
sale of alcoholic liquor for consumption on the premises in excess
of 1 license for each 1,500 of population or major fraction
thereof. On-premises escrowed licenses issued under this subsection
may be transferred subject to local legislative approval under
section 501(2) to an applicant whose proposed operation is located
within any local governmental unit in a county in which the
escrowed license was located. However, beginning July 8, 2004, and
until July 1, 2009, if the on-premises escrowed license was issued
to a location within a city with a population of over 190,000 but
under 300,000, the on-premises escrowed license shall not be
transferred to an applicant whose proposed operation is located
within any other local governmental unit in the county in which
that city is located and, in addition, an escrowed license located
within any local governmental unit in that county is not
transferable into the city with a population of over 190,000 but
under 300,000. If the local governmental unit within which the
former licensee's premises were located spans more than 1 county,
an escrowed license is available subject to local legislative
approval under section 501(2) to an applicant whose proposed
operation is located within any local governmental unit in either
county. If an escrowed license is activated within a local
governmental unit other than that local governmental unit within
which the escrowed license was originally issued, the commission
shall count that activated license against the local governmental
unit originally issuing the license. This quota does not bar the
right of an existing licensee to renew a license or transfer the
license and does not bar the right of an on-premise licensee of any
class to reclassify to another class of on-premises license in a
manner not in violation of law or this act, subject to the consent
of the commission. The upgrading of a license resulting from a
request under this subsection shall be approved by the local
governmental unit having jurisdiction.
(2) In a resort area, the commission may issue 1 or more
licenses for a period not to exceed 12 months without regard to a
limitation because of population, but not in excess of 550, and
with respect to the resort license the commission, by rule, shall
define and classify resort seasons by months and may issue 1 or
more licenses for resort seasons without regard to the calendar
year or licensing year.
(3) In addition to the resort licenses authorized in
subsection (2), the commission may issue not more than 5 additional
licenses per year to establishments whose business and operation,
as determined by the commission, is designed to attract and
accommodate tourists and visitors to the resort area, whose primary
purpose is not for the sale of alcoholic liquor, and whose capital
investment in real property, leasehold improvement, and fixtures
for the premises to be licensed is $75,000.00 or more. Further, the
commission shall issue 1 license under this subsection per year to
an applicant located in a rural area that has a poverty rate, as
defined by the latest decennial census, greater than the statewide
average, or that is located in a rural area that has an
unemployment rate higher than the statewide average for 3 of the 5
preceding years. In counties having a population of less than
50,000, as determined by the last federal decennial census or as
determined
pursuant to subsection (11) (12)
and subject to
subsection (16)
(17) in the case of a class A hotel or a class B
hotel, the commission shall not require the establishments to have
dining facilities to seat more than 50 persons. The commission may
cancel the license if the resort is no longer active or no longer
qualifies for the license. Before January 16 of each year the
commission shall transmit to the legislature a report giving
details as to the number of applications received under this
subsection; the number of licenses granted and to whom; the number
of applications rejected and the reasons; and the number of the
licenses revoked, suspended, or other disciplinary action taken and
against whom and the grounds for revocation, suspension, or
disciplinary action.
(4) In addition to any licenses for the sale of alcoholic
liquor for consumption on the premises that may be available in the
local governmental unit under subsection (1) and the resort
licenses authorized in subsections (2) and (3), the commission may
issue not more than 15 resort economic development licenses per
year. A person is eligible to apply for a resort economic
development license under this subsection upon submitting an
application to the commission and demonstrating all of the
following:
(a) The establishment's business and operation, as determined
by the commission, is designed to attract and accommodate tourists
and visitors to the resort area.
(b) The establishment's primary business is not the sale of
alcoholic liquor.
(c) The capital investment in real property, leasehold
improvement, fixtures, and inventory for the premises to be
licensed is in excess of $1,500,000.00.
(d) The establishment does not allow or permit casino gambling
on the premises.
(5) In governmental units having a population of 50,000
persons or less, as determined by the last federal decennial census
or
as determined pursuant to subsection
(11) (12),
in which the
quota of specially designated distributor licenses, as provided by
section 533, has been exhausted, the commission may issue not more
than a total of 10 additional specially designated distributor
licenses per year to established merchants whose business and
operation, as determined by the commission, is designed to attract
and accommodate tourists and visitors to the resort area. A
specially designated distributor license issued pursuant to this
subsection may be issued at a location within 2,640 feet of
existing specially designated distributor license locations. A
specially designated distributor license issued pursuant to this
subsection shall not bar another specially designated distributor
licensee from transferring location to within 2,640 feet of said
licensed location. A specially designated distributor license
issued pursuant to section 533 may be located within 2,640 feet of
a specially designated distributor license issued pursuant to this
subsection.
(6) In addition to any licenses for the sale of alcoholic
liquor for consumption on the premises that may be available in the
local governmental unit under subsection (1), and the resort or
resort economic development licenses authorized in subsections (2),
(3), and (4), and notwithstanding section 519, the commission may
issue not more than 5 additional special purpose licenses in any
calendar year for the sale of beer and wine for consumption on the
premises. A special purpose license issued pursuant to this
subsection shall be issued only for events which are to be held
from May 1 to September 30, are artistic in nature, and which are
to be held on the campus of a public university with an enrollment
of 30,000 or more students. A special purpose license shall be
valid for 30 days or for the duration of the event for which it is
issued, whichever is less. The fee for a special purpose license
shall be $50.00. A special purpose license may be issued only to a
corporation which is all of the following:
(a) Is a nonprofit corporation organized pursuant to the
nonprofit corporation act, 1982 PA 162, MCL 450.2101 to 450.3192.
(b) Has a board of directors constituted of members of whom
half are elected by the public university at which the event is
scheduled and half are elected by the local governmental unit.
(c) Has been in continuous existence for not less than 6
years.
(7) In addition to any licenses for the sale of alcoholic
liquor on the premises that may be available in the local
governmental unit under subsection (1), and the resort or resort
economic development licenses authorized under subsections (2),
(3), (4), and (6), and notwithstanding section 519, the commission
may issue special purpose licenses to winemakers and qualified
nonprofit organizations operating as farmer's markets for the
purposes of wine tasting and the sale of wine for consumption off
the licensed premises. The commission shall charge a license fee of
$300.00. The license is valid for not more than 5 2-day events.
(8) (7)
Notwithstanding the local legislative body approval
provision of section 501(2) and notwithstanding the provisions of
section 519, the commission may issue, without regard to the quota
provisions of subsection (1) and with the approval of the governing
board of the university, either a tavern or class C license which
may be used only for regularly scheduled events at a public
university's established outdoor program or festival at a facility
on the campus of a public university having a head count enrollment
of 10,000 students or more. A license issued under this subsection
may only be issued to the governing board of a public university, a
person that is the lessee or concessionaire of the governing board
of the university, or both. A license issued under this subsection
is not transferable as to ownership or location. A license issued
under this subsection may not be issued at an outdoor stadium
customarily used for intercollegiate athletic events.
(9) (8)
In issuing a resort or resort economic development
license under subsection (3), (4), or (5), the commission shall
consider economic development factors of the area in the issuance
of licenses to establishments designed to stimulate and promote the
resort and tourist industry. The commission shall not transfer a
resort or resort economic development license issued under
subsection (3), (4), or (5) to another location. If the licensee
goes out of business the license shall be surrendered to the
commission.
(10) (9)
The limitations and quotas of this section are not
applicable to the issuance of a new license to a veteran of the
armed forces of the United States who was honorably discharged or
released under honorable conditions from the armed forces of the
United States and who had by forced sale disposed of a similar
license within 90 days before or after entering or while serving in
the armed forces of the United States, as a part of the person's
preparation for that service if the application for a new license
is submitted for the same governmental unit in which the previous
license was issued and within 60 days after the discharge of the
applicant from the armed forces of the United States.
(11) (10)
The limitations and quotas of this section shall
not be applicable to the issuance of a new license or the renewal
of an existing license where the property or establishment to be
licensed is situated in or on land on which an airport owned by a
county or in which a county has an interest is situated.
(12) (11)
For purposes of implementing this section a
special state census of a local governmental unit may be taken at
the expense of the local governmental unit by the federal bureau of
census or the secretary of state under section 6 of the home rule
city act, 1909 PA 279, MCL 117.6. The special census shall be
initiated by resolution of the governing body of the local
governmental unit involved. The secretary of state may promulgate
additional rules necessary for implementing this section pursuant
to the administrative procedures act of 1969, 1969 PA 306, MCL
24.201 to 24.328.
(13) (12)
Before granting an approval as required in section
501(2) for a license to be issued under subsection (2), (3), or
(4), a local legislative body shall disclose the availability of
transferable licenses held in escrow for more than 1 licensing year
within that respective local governmental unit. Public notice of
the meeting to consider the granting of the license by the local
governmental unit shall be made 2 weeks before the meeting.
(14) (13)
The person signing the application for an on-
premise resort or resort economic development license shall state
and verify that he or she attempted to secure an on-premise
escrowed license or quota license and that, to the best of his or
her knowledge, an on-premise escrowed license or quota license is
not readily available within the county in which the applicant for
the on-premise resort or resort economic development license
proposes to operate, except that until July 1, 2009, and in the
case involving a city with a population of over 190,000 but under
300,000 that verification is not required.
(15) (14)
The commission shall not issue an on-premise
resort or resort economic development license if the county within
which the resort or resort economic development license applicant
proposes to operate has not issued all on-premise licenses
available under subsection (1) or if an on-premise escrowed license
exists and is readily available within the local governmental unit
in which the applicant for the on-premise resort or resort economic
development license proposes to operate, except until July 1, 2009,
in the case involving a city with a population of over 190,000 but
under 300,000. The commission may waive the provisions of this
subsection upon a showing of good cause.
(16) (15)
The commission shall annually report to the
legislature the names of the businesses issued licenses under this
section and their locations.
(17) (16)
The commission shall not require a class A hotel
or a class B hotel licensed pursuant to subsection (2), (3), or (4)
to provide food service to registered guests or to the public.
(18) (17)
Subject to the limitation and quotas of subsection
(1) and to local legislative approval under section 501(2), the
commission may approve the transfer of ownership and location of an
on-premises escrowed license within the same county to a class G-1
or class G-2 license or may approve the reclassification of an
existing on-premises license at the location to be licensed to a
class G-1 license or to a class G-2 license, subject to subsection
(1). Resort or economic development on-premises licenses created
under subsection (3) or (4) may not be issued as, or reclassified
to, a class G-1 or class G-2 license.
(19) (18)
As used in this section:
(a) "Escrowed license" means a license in which the rights of
the licensee in the license or to the renewal of the license are
still in existence and are subject to renewal and activation in the
manner provided for in R 436.1107 of the Michigan administrative
code.
(b) "Readily available" means available under a standard of
economic feasibility, as applied to the specific circumstances of
the applicant, that includes, but is not limited to, the following:
(i) The fair market value of the license, if determinable.
(ii) The size and scope of the proposed operation.
(iii) The existence of mandatory contractual restrictions or
inclusions attached to the sale of the license.
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.
(c) Clubs where beer, wine, mixed spirit drink, and spirits
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) 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) Specially designated merchants, where beer and wine may be
sold for consumption off the premises only .
(g) Specially designated distributors where spirits and mixed
spirit drink may be sold for consumption off the premises only.
(h) Special licenses where beer and wine or beer, wine, mixed
spirit drink, and spirits may be sold for consumption on the
premises only
off the licensed premises in
the case of a special
license issued under section 531(7).
(i) 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) 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) 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) 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) 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) 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.
(c) The wine tasting locations shall be considered licensed
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.