SB-0981, As Passed Senate, October 20, 2016

HOUSE SUBSTITUTE FOR

SENATE BILL NO. 981

A bill to amend 1998 PA 58, entitled

"Michigan liquor control code of 1998,"

by amending section 525 (MCL 436.1525), as amended by 2014 PA 353.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

Sec. 525. (1) Except as otherwise provided in this section,

the following license fees ~~shall~~ must be paid at the time of filing

applications or as otherwise provided in this act and are subject

to allocation under section 543:

(a) Manufacturers of spirits, 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 whether the location is 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 $1.00 for each bedroom in excess of 20, but not more

than $500.00 total.

(m) Hotels of class B selling beer, wine, mixed spirit drink,

and spirits, a minimum fee of $600.00 and $3.00 for each bedroom in

excess of 20. If a hotel of class B sells beer, wine, mixed spirit

drink, and spirits in more than 1 public bar, a fee of $350.00

~~shall~~ must be paid for each additional public bar, other than a

bedroom.

(n) Taverns, selling beer and wine, $250.00.

(o) Class C license selling beer, wine, mixed spirit drink,

and spirits, $600.00. Subject to section 518(2), if a class C

licensee sells beer, wine, mixed spirit drink, and spirits in more

than 1 bar, a fee of $350.00 ~~shall~~ must 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~~ must be paid for each additional bar.

(p) Clubs selling beer, wine, mixed spirit drink, and spirits,

$300.00 for clubs having 150 or fewer accredited members and $1.00

for each member in excess of 150. Clubs shall submit a list of

members by ~~a sworn~~ an affidavit 30 days before the closing of the

license year. The ~~sworn~~ affidavit ~~shall~~ must be used only for

determining the license fees to be paid under this subdivision.

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~~

must 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~~ the license or permit issued to ~~any~~ a bona fide

nonprofit association, ~~duly~~ organized and in continuous existence

for 1 year before the filing of its application, is $25.00. ~~Not~~ The

commission shall not grant 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, the amount as described and

determined under section 518(2).

(z) Small distiller, $100.00.

(aa) Wine auction license, $50,000.00.

(bb) Nonpublic continuing care retirement center license,

$600.00.

(cc) Conditional license approved under subsection (6) and

issued under subsection (7), $300.00.

(2) The fees provided in this act for the various types of

licenses ~~shall~~ must not be prorated for a portion of the effective

period of the license. Notwithstanding subsection (1), the initial

license fee for ~~any licenses~~ a license issued under section 531(3)

or (4) is $20,000.00. The renewal license fee ~~shall be~~ is 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) If the commission requires an applicant to submit

fingerprints, the applicant shall have the fingerprints taken by a

local law enforcement agency, the department of state police, or

any other person qualified to take fingerprints as determined by

the department of state police. The applicant shall submit the

fingerprints and the appropriate state and federal fees, which

shall be borne by the applicant, to the department of state police

and the ~~federal bureau of investigation~~ Federal Bureau of

Investigation for a criminal history check. After conducting the

criminal history check, the department of state police shall

provide the commission with a report of the criminal history check.

The report ~~shall contain~~ must include criminal history record

information concerning the person who is the subject of the

criminal history check that is maintained by the department of

state police. If a criminal arrest fingerprint card is subsequently

submitted to the department of state police and matches against a

fingerprint that was submitted ~~pursuant to~~ under this act and

stored in its automated fingerprint identification system (AFIS)

database, the department of state police shall notify the

commission.

(4) Except ~~in the case of any~~ for a resort or resort economic

development license issued under section 531(2), (3), (4), or (5)

or a license issued under section 521a, the commission shall issue

an initial or renewal license not later than 90 days after the

applicant files a completed application. The application is

considered to be received the date the application is received by

~~any~~ an agency or department of this state. If the commission

determines that an application is incomplete, 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 is not an approval of the application for the

license and does not confer eligibility ~~upon~~ on an applicant

determined otherwise ineligible for issuance of a license. The 90-

day period is tolled for the following periods under any of the

following circumstances:

(a) If notice is sent by the commission of a deficiency in the

application, until the date all of the requested information is

received by the commission.

(b) For the time required to complete actions required by a

person, other than the applicant or the commission, including, but

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.

(5) 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~~ the application, ~~upon~~ on completion, ~~shall~~

must 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~~ because the license fee was refunded or

discounted under this subsection.

(6) If, in addition to a completed application under this

section, an applicant submits a separate form requesting a

conditional license with an acceptable proof of financial

responsibility form under section 803, ~~and~~ an executed property

document, and, for an application to transfer the location of an

existing retailer license other than specially designated

distributor license, a church or school proximity affidavit on a

form prescribed by the commission attesting that the proposed

location is not within 500 feet of a church or school building

using the method of measurement required under section 503, the

commission shall, after considering the arrest and conviction

records or previous violation history in the management, operation,

or ownership of a licensed business, approve or deny a conditional

license. A conditional license issued under subsection (7) ~~for the~~

~~transfer of an existing license at the same location shall~~ must

only include any existing permits and approvals held in connection

with ~~that~~ the license, other than permits or approvals for which

the conditional applicant does not meet the requirements in this

act or rules promulgated under this act, or permits or approvals

that the conditional applicant has requested to cancel as part of

the application that serves as the basis for the conditional

license. The commission shall not issue a new permit with a

conditional license issued under subsection (7). The following

applicants may request a conditional license:

(a) An applicant seeking to transfer ownership of ~~or interest~~

in an existing retailer license at the same location to sell

alcoholic liquor for consumption on or off the premises.

(b) An applicant seeking to transfer the ownership and

location of an existing retailer license, other than a specially

designated distributor license, to sell alcoholic liquor for

consumption on or off the premises.

~~specially designated distributor license or~~ a new specially

designated merchant license not to be held in conjunction with a

license for the sale of alcoholic liquor for consumption on the

premises.

(7) The commission shall issue a conditional license to

applicants approved under subsection (6) within 20 business days

after receipt of a completed application and a completed

conditional license request form and documentation for a

conditional license at a single location. The commission may take

up to 30 business days to issue conditional licenses to approved

applicants seeking conditional licenses at multiple locations.

Notwithstanding the applicant's submission of a church or school

proximity affidavit under subsection (6), if the commission

determines that a conditional license in conjunction with an

application to transfer the location of an existing retailer

license has been issued under this subsection at a proposed

location that is within 500 feet of a church or school building,

the commission shall suspend the conditional license and notify the

church or school of the proposed location under the rules

promulgated under this act. If the commission issues a conditional

license under this subsection based on a church or school proximity

affidavit under subsection (6) without knowledge that the

representations included in the affidavit are incorrect, this state

is not liable to any person for the commission's issuance of the

conditional license. The commission may assume without inquiry the

existence of the facts contained in the affidavit.

(8) A conditional license approved under subsection (6) and

issued under subsection (7) is nontransferable and nonrenewable. A

~~conditional license approved under subsection (6) and issued under~~

~~subsection (7) expires when the commission issues an order of~~

~~denial of the license application that serves as the basis for the~~

~~conditional license after all administrative remedies before the~~

~~commission have been exhausted, expires 20 business days after the~~

~~commission issues an order of approval of the license application~~

~~that serves as the basis for the conditional license, expires when~~

~~the licensee or conditional licensee notifies the commission in~~

~~writing that the initial application should be canceled, or expires~~

~~1 year after the date the conditional license was issued, whichever~~

~~occurs first. If a conditionally approved licensee fails to~~

~~maintain acceptable proof of its financial responsibility, the~~

~~commission shall, after due notice and proper hearing, suspend the~~

~~conditional license until the licensee files an acceptable proof of~~

~~financial responsibility form under section 803. If a conditional~~

~~license is revoked, the conditional licensee shall not recover from~~

~~a unit of local government any compensation for property, future~~

~~income, or future economic loss due to the revocation.~~A conditional

licensee is required to comply with the server training

requirements in section 501(1) beginning on the date a conditional

license is issued under subsection (7) regardless of whether the

conditional licensee is actively operating under the conditional

license.

(9) A conditional license approved under subsection (6) and

issued under subsection (7) expires when the first of the following

occurs:

(a) The commission issues an order of denial of the license

application that serves as the basis for the conditional license

and all administrative remedies before the commission have been

exhausted.

(b) The commission issues the license under subsection (4) for

which the applicant submitted the license application that serves

as the basis for the conditional license.

commission in writing that the initial or conditional application

should be canceled.

(d) One year passes after the date the conditional license was

issued, notwithstanding any suspension of the conditional license

by the commission.

(10) If a conditional licensee fails to maintain acceptable

proof of its financial responsibility as required under section

803, the commission shall summarily suspend the conditional license

under section 92(2) of the administrative procedures act of 1969,

1969 PA 306, MCL 24.292, until the conditional licensee files an

acceptable proof of financial responsibility form under section

803. If a conditional license is revoked, the conditional licensee

shall not recover from this state or a unit of local government any

compensation for property, future income, or future economic loss

because of the revocation.

(11) ~~(9) Upon~~ On issuing a conditional license under

subsection (7), the commission shall, until the conditional license

expires under subsection ~~(8),~~ (9), place an the existing license

under subsection (4) for which the applicant submitted the

application that serves as the basis for the conditional license in

escrow in compliance with R 436.1107 of the Michigan ~~administrative~~

~~code.~~ Administrative Code. If the conditional license expires

~~because a transfer of an existing license was denied or because the~~

~~license was not transferred within the 1-year period,~~ under

subsection (9), an existing licensee may do 1 of the following:

(a) Request that the commission release the license from

escrow.

(b) Keep the license in escrow. The escrow date for compliance

with R 436.1107 of the Michigan ~~administrative code shall be~~

Administrative Code is the date the conditional license expires.

(12) ~~(10)~~ 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 (4).

(b) The number of applications denied.

90-day time period and the amount of money returned to licensees

under subsection (5).

(13) ~~(11)~~ 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