HOUSE BILL No. 5611

 

May 9, 2012, Introduced by Rep. Ouimet and referred to the Committee on 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 2005 PA 97.

 

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 An on-premises escrowed licenses license

 

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 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 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 on-premises 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 is subject to approval by the local

 

governmental unit having jurisdiction.

 

     (2) In a resort area, the commission may issue 1 or no more

 

than 550 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 under 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 all of the following:

 

     (a) The number of applications received under this subsection.


 

; the

 

     (b) The number of licenses granted and to whom. ; the

 

     (c) The number of applications rejected and the reasons ; and

 

the they were rejected.

 

     (d) 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 under 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 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 under

 

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 under

 

this subsection shall not bar another specially designated

 

distributor licensee from transferring location to within 2,640

 

feet of said that licensed location. A specially designated

 

distributor license issued pursuant to under section 533 may be

 

located within 2,640 feet of a specially designated distributor

 

license issued pursuant to under 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 under this

 

subsection shall be issued only for events which that are to be


 

held from May 1 to September 30, are artistic in nature, and which

 

that 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 is 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 is $50.00. A special purpose license may

 

be issued only to a corporation which is that meets all of the

 

following requirements:

 

     (a) Is a nonprofit corporation organized pursuant to under 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 Except as

 

otherwise provided in this subsection, a license issued under this

 

subsection may not be issued at an outdoor stadium customarily used

 

for intercollegiate athletic events. A license may be issued at an

 

outdoor stadium customarily used for intercollegiate athletic

 

events for not more than 30 consecutive days to a concessionaire of

 

an entity granted exclusive use of a public university's property

 

in conjunction with a hockey game sanctioned by an unincorporated

 

not-for-profit association that operates a major professional ice

 

hockey league consisting of teams located in Canada and in the

 

United States if the concessionaire has entered into an agreement

 

granting it control of the licensed premises for the purposes of

 

complying with this act and rules promulgated under this act

 

regarding the sale of alcoholic liquor. A nationally televised game

 

between 2 professional hockey teams played outdoors is considered

 

an established outdoor program for the purposes of this subsection.

 

Notwithstanding any provision of this act or any rule promulgated

 

under this act, a concessionaire obtaining a license under this

 

subsection may share the profits generated from that license with

 

an unincorporated not-for-profit association that operates a major

 

professional ice hockey league consisting of teams located in

 

Canada and in the United States or an affiliated entity under a

 

written contract reviewed by the commission. If the established

 

outdoor program is a nationally televised game between 2

 

professional hockey teams, the commission may allow the promotion

 

and advertising of alcoholic liquor brands on the campus of a

 

public university issued a license under this subsection for the


 

duration of the license.

 

     (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 issuing

 

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 issuing 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 are not

 

be applicable to the issuance of issuing a new license or the

 

renewal of renewing 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 The local

 

governmental unit shall provide 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 on-

 

premises resort or resort economic development license shall state

 

and verify that he or she attempted to secure an on-premise on-

 

premises escrowed license or quota license and that, to the best of

 

his or her knowledge, an on-premise on-premises escrowed license or

 

quota license is not readily available within the county in which

 

the applicant for the on-premise on-premises 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 on-premises

 

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 on-premises

 

licenses available under subsection (1) or if an on-premise on-

 

premises escrowed license exists and is readily available within

 

the local governmental unit in which the applicant for the on-

 

premise on-premises 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 under 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.