March 1, 2005, Introduced by Senator HAMMERSTROM and referred to the Committee on Economic Development, Small Business and Regulatory Reform.
A bill to amend 1998 PA 58, entitled
"Michigan liquor control code of 1998,"
by amending section 531 (MCL 436.1531), as amended by 2004 PA 191.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
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
the effective
date
of the amendatory act that added this sentence 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 10
additional
licenses per year for the years 2003 2005 and 2004
2006 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 for the years 2003 2005
and
2004
2006 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) and subject to subsection
(16) 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 20 resort economic development licenses per
year
for the years 2003 2005 and 2004 2006. 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), 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 for the years 2003 2005 and 2004 2006
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) 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.
(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.
(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.
(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.
(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.
(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.
(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.
(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.
(15) The commission shall annually report to the legislature
the names of the businesses issued licenses under this section and
their locations.
(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.
(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.
(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.