SB-1558, As Passed Senate, December 4, 2008

SUBSTITUTE FOR

SENATE BILL NO. 1558

A bill to amend 1998 PA 58, entitled

"Michigan liquor control code of 1998,"

by amending sections 525, 537, 541, and 603 (MCL 436.1525,

436.1537, 436.1541, and 436.1603), sections 525, 537, and 603 as

amended by 2008 PA 218 and section 541 as amended by 2006 PA 253,

and by adding section 545.

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.

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 12

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.

(z) Small distiller, $100.00.

(aa) Nonpublic continuing care retirement center license,

$600.00.

(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.

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. 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) 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.

(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).

(p) Small distiller selling not more than 60,000 gallons of

spirits manufactured by that licensee to the consumer at retail for

consumption on or off the licensed premises in the manner provided

for in section 534.

(q) Nonpublic continuing care retirement center license, where

beer, wine, mixed spirit drink, mixed wine drink, and spirits may

be sold at retail and served on the licensed premises to residents

and guests of the residents for consumption on the licensed

premises.

(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. 541. (1) The commission shall not prohibit an applicant

for or the holder of a specially designated distributor license or

specially designated merchant license from owning or operating

motor vehicle fuel pumps on or adjacent to the licensed premises,

if both of the following conditions are met:

(a) One or both of the following conditions exist:

(i) The applicant or licensee is located in a neighborhood

shopping center composed of 1 or more commercial establishments

organized or operated as a unit which is related in location, size,

and type of shop to the trade area that the unit serves, which

provides not less than 50,000 square feet of gross leasable retail

space, and which provides 5 private off-street parking spaces for

each 1,000 square feet of gross leasable retail space.

(ii) The applicant or licensee maintains a minimum inventory on

the premises, excluding alcoholic liquor and motor vehicle fuel, of

not less than $250,000.00, at cost, of those goods and services

customarily marketed by approved types of businesses.

(b) The site of payment and selection of alcoholic liquor is

not less than 50 feet from that point where motor vehicle fuel is

dispensed.

(2) The commission shall not prohibit an applicant for or the

holder of a specially designated distributor license or specially

designated merchant license from owning or operating motor vehicle

fuel pumps on or adjacent to the licensed premises, if all of the

following conditions are met:

(a) The applicant is located in a township with a population

of 7,000 or less, which township is not contiguous with any other

township. For purposes of this subdivision, a township is not

considered contiguous by water.

(b) The applicant or licensee maintains a minimum inventory on

the premises, excluding alcoholic liquor and motor vehicle fuel, of

not less than $12,500.00 at cost, of those goods and services

customarily marketed by approved types of businesses.

evidenced by a resolution duly adopted by the township and

submitted with the application to the commission.

(3) The commission shall not prohibit an applicant for or the

holder of a specially designated merchant license from owning or

operating motor vehicle fuel pumps on or adjacent to the licensed

premises if both of the following conditions are met:

(a) The applicant or licensee is located in either of the

following:

(i) A city, incorporated village, or township with a population

of 3,500 or less and a county with a population of 31,000 or more.

(ii) A city, incorporated village, or township with a

population of 4,000 or less and a county with a population of less

than 31,000.

(b) The applicant or licensee maintains a minimum inventory on

the premises, excluding alcoholic liquor and motor vehicle fuel, of

not less than $10,000.00, at cost, of those goods and services

customarily marketed by approved types of businesses.

(4) The commission shall not prohibit an applicant for or the

holder of a specially designated distributor license from owning or

operating motor vehicle fuel pumps on or adjacent to the licensed

premises if both of the following conditions are met:

(a) The applicant or licensee is located in either of the

following:

(i) A city, incorporated village, or township with a population

of ~~3,000~~ 3,500 or less and a county with a population of 31,000 or

more.

(ii) A city, incorporated village, or township with a

population of ~~3,500~~ 4,000 or less and a county with a population of

less than 31,000.

(b) The applicant or licensee maintains a minimum inventory on

the premises, excluding alcoholic liquor and motor vehicle fuel, of

not less than $12,500.00, at cost, of those goods and services

customarily marketed by approved types of businesses.

(5) A person who was issued a specially designated merchant

license or specially designated distributor license at a location

at which another person owned, operated or maintained motor vehicle

fuel pumps at the same location may have or acquire an interest in

the ownership, operation or maintenance of those motor vehicle fuel

pumps.

(6) The commission may transfer ownership of a specially

designated merchant license or specially designated distributor

license to a person who owns or is acquiring an interest in motor

vehicle fuel pumps already in operation at the same location at

which the license is issued.

Sec. 545. (1) As used in this act, "nonpublic continuing care

retirement center" means a residential community that, as

determined by the commission, meets both of the following

conditions:

(a) Provides full-time residential housing predominantly for

individuals over the age of 62.

(b) Is registered as a facility under the living care

disclosure act, 1976 PA 440, MCL 554.801 to 554.844.

(2) The commission, upon submission of a completed application

and upon demonstrating compliance with any applicable public notice

requirements of this section, shall grant a nonpublic continuing

care retirement center license to an applicant complying with this

section.

(3) The nonpublic continuing care retirement center license

allows the licensee to sell at retail and serve on the licensed

premises beer, wine, mixed spirit drink, mixed wine drink, and

spirits, for consumption by a resident or the resident's guests,

only on the licensed premises.

(4) In the case of the issuance of an initial license under

this section for an applicant that has not been in existence for at

least 10 years before the effective date of the amendatory act that

added this section, the commission shall publish a notice of intent

to issue the license in a newspaper of general circulation in the

county in which the applicant is located. The notice shall be

published at least 10 days before the proposed date of issuance of

the license. The notice requirement of this subsection does not

apply to the renewal of a license issued under this section.

Sec. 603. (1) Except as provided in ~~subsection~~ subsections (6)

to (12) and section 605, a manufacturer, mixed spirit drink

manufacturer, warehouser, wholesaler, outstate seller of beer,

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

vendor of spirits shall not have any financial interest, directly

or indirectly, in the establishment, maintenance, operation, or

promotion of the business of any other vendor.

(2) Except as provided in ~~subsection~~ subsections (6) to (12)

and section 605, a manufacturer, mixed spirit drink manufacturer,

warehouser, wholesaler, outstate seller of beer, outstate seller of

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

or a stockholder of a manufacturer, mixed spirit drink

manufacturer, warehouser, wholesaler, outstate seller of beer,

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

vendor of spirits shall not have an interest by ownership in fee,

leasehold, mortgage, or otherwise, directly or indirectly, in the

establishment, maintenance, operation, or promotion of the business

of any other vendor.

(3) Except as provided in ~~subsection~~ subsections (6) to (12)

and section 605, a manufacturer, mixed spirit drink manufacturer,

warehouser, wholesaler, outstate seller of beer, outstate seller of

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

shall not have an interest directly or indirectly by interlocking

directors in a corporation or by interlocking stock ownership in a

corporation in the establishment, maintenance, operation, or

promotion of the business of any other vendor.

(4) Except as provided in ~~subsection~~ subsections (6) to (12)

and section 605, a person shall not buy the stocks of a

manufacturer, mixed spirit drink manufacturer, warehouser,

wholesaler, outstate seller of beer, outstate seller of wine,

outstate seller of mixed spirit drink, or vendor of spirits and

place the stock in any portfolio under an arrangement, written

trust agreement, or form of investment trust agreement and issue

participating shares based upon the portfolio, trust agreement, or

investment trust agreement, and sell the participating shares

within this state.

(5) The commission may approve a brandy manufacturer to sell

brandy made by that brandy manufacturer in a restaurant for

consumption on or off the premises if the restaurant is owned by

the brandy manufacturer or operated by another person under an

agreement approved by the commission and is located on the premises

where the brandy manufacturer is licensed. Brandy sold for

consumption off the premises under this subsection shall be sold at

the uniform price established by the commission.

(6) The commission shall allow a small distiller to sell

brands of spirits it manufactures for consumption on the licensed

premises at that distillery.

(7) A brewpub may have an interest in up to 2 other brewpubs

so long as the combined production of all the locations in which

the brewpub has an interest does not exceed 5,000 barrels of beer

per calendar year.

(8) This section does not prohibit a supplier from having any

interest, directly or indirectly, in any other supplier.

(9) The commission may approve the following pursuant to R

436.1023(3) of the Michigan administrative code, subject to the

written approval of the United States department of treasury,

bureau of alcohol and tobacco tax and trade:

(a) A wine maker participating with 1 or more wine makers in

an alternating proprietor operation in accordance with 27 CFR part

24, subpart D, section 24.136.

(b) A brewer participating with 1 or more brewers in an

alternating proprietor operation in accordance with 27 CFR part 25,

subpart F, section 25.52a.

(10) A manufacturer is prohibited from having any interest,

directly or indirectly, in a wholesaler.

(11) A wine maker is prohibited from collectively delivering

wine, with any other wine maker, to retail licensees.

(12) As used in this section:

(a) "Manufacturer" means, notwithstanding section 109(1), a

wine maker, small wine maker, brewer, micro brewer, manufacturer of

spirits, small distiller, brandy manufacturer, and mixed spirit

drink manufacturer.

(b) "Supplier" means a manufacturer, mixed spirit drink

manufacturer, outstate seller of beer, outstate seller of wine,

outstate seller of mixed spirit drink, and vendor of spirits.