SENATE BILL No. 216

 

 

February 21, 2013, Introduced by Senators WALKER, CASPERSON, COLBECK and BOOHER 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 105, 107, 109, 111, 113, 201, 203, 205, 305,

 

403, 409, 411, 413, 501, 513a, 517, 517a, 521a, 525, 526, 529,

 

531, 537, 541, 543, 547, 603, 701, 707, 901, 1013, 1021, and 1027

 

(MCL 436.1105, 436.1107, 436.1109, 436.1111, 436.1113, 436.1201,

 

436.1203, 436.1205, 436.1305, 436.1403, 436.1409, 436.1411,

 

436.1413, 436.1501, 436.1513a, 436.1517, 436.1517a, 436.1521a,

 

436.1525, 436.1526, 436.1529, 436.1531, 436.1537, 436.1541,

 

436.1543, 436.1547, 436.1603, 436.1701, 436.1707, 436.1901,

 

436.2013, 436.2021, and 436.2027), section 105 as amended by 2005

 

PA 320, section 107 as amended by 2001 PA 223, sections 109, 111,

 

113, 205, and 543 as amended by 2010 PA 213, section 203 as

 

amended by 2008 PA 474, section 409 as amended by 2000 PA 395,

 

sections 411, 537, and 603 as amended by 2011 PA 298, section 413


 

as added by 2008 PA 259, section 501 as amended by 2012 PA 82,

 

section 513a as added by 2011 PA 249, section 517 as amended by

 

2004 PA 169, section 517a as added by 2004 PA 170, section 521a

 

as amended by 2010 PA 369, section 525 as amended by 2010 PA 279,

 

section 526 as added by 2008 PA 258, section 531 as amended by

 

2012 PA 212, section 541 as amended by 2008 PA 489, section 547

 

as added by 2011 PA 20, section 701 as amended by 2010 PA 266,

 

section 707 as amended by 2008 PA 11, section 901 as amended by

 

2010 PA 175, section 1021 as amended by 2005 PA 21, and section

 

1027 as amended by 2011 PA 219, and by adding section 415; and to

 

repeal acts and parts of acts.

 

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 

 1        Sec. 105. (1) "Alcohol" means the product of distillation of

 

 2  fermented liquid, whether or not rectified or diluted with water,

 

 3  but does not mean ethyl or industrial alcohol, diluted or not,

 

 4  that has been denatured or otherwise rendered unfit for beverage

 

 5  purposes.

 

 6        (2) "Alcohol vapor device" means any device that provides

 

 7  for the use of air or oxygen bubbled through alcoholic liquor to

 

 8  produce a vapor or mist that allows the user to inhale this

 

 9  alcoholic vapor through the mouth or nose.

 

10        (3) "Alcoholic liquor" means any spirituous, vinous, malt,

 

11  or fermented liquor, liquids and compounds, whether or not

 

12  medicated, proprietary, patented, and by whatever name called,

 

13  containing 1/2 of 1% or more of alcohol by volume which that are

 

14  fit for use for beverage purposes as defined and classified by

 

15  the commission according to alcoholic content as belonging to 1


 

 1  of the varieties defined in this chapter.

 

 2        (4) "Authorized distribution agent" means a person approved

 

 3  by the commission to do 1 or more of the following:

 

 4        (a) To store spirits owned by a supplier of spirits or the

 

 5  commission.

 

 6        (b) To deliver spirits sold by the commission to retail

 

 7  licensees.

 

 8        (c) To perform any function needed to store spirits owned by

 

 9  a supplier of spirits or by the commission or to deliver spirits

 

10  sold by the commission to retail licensees.

 

11        (5) "Bar" means a barrier or counter at which alcoholic

 

12  liquor is sold to, served to, or consumed by customers.

 

13        (6) "Beer" means any beverage obtained by alcoholic

 

14  fermentation of an infusion or decoction of barley, malt, hops,

 

15  or other cereal in potable water.

 

16        (7) "Beer, wine, or spirits festival" means an event at

 

17  which the various types and kinds of beer, wine, or spirits and

 

18  the production of that beer, wine, or spirits are showcased to

 

19  the general public and at which the general public can purchase

 

20  and sample the beer, wine, or spirits being showcased for

 

21  consumption on the licensed premises.

 

22        (8) (7) "Brand" means any word, name, group of letters,

 

23  symbol, trademark, or combination thereof adopted and used by a

 

24  supplier to identify a specific beer, malt beverage, wine, mixed

 

25  wine drink, or mixed spirit drink product and to distinguish that

 

26  product from another beer, malt beverage, wine, mixed wine drink,

 

27  or mixed spirit drink product that is produced or marketed by


 

 1  that or another supplier. As used in this section subsection and

 

 2  notwithstanding sections 305(2)(j) and 403(2)(j), 305(1)(f) and

 

 3  403(1)(f), "supplier" means a brewer, an outstate seller of beer,

 

 4  a wine maker, a small wine maker, an outstate seller of wine, a

 

 5  manufacturer of mixed wine drink, an outstate seller of a mixed

 

 6  wine drink, a mixed spirit drink manufacturer, or an outstate

 

 7  seller of mixed spirit drink.

 

 8        (9) (8) "Brand extension" means any brand which incorporates

 

 9  all or a substantial part of the unique features of a preexisting

 

10  brand of the same supplier. As used in this section subsection

 

11  and notwithstanding sections 305(2)(j) and 403(2)(j), 305(1)(f)

 

12  and 403(1)(f), "supplier" means a brewer, an outstate seller of

 

13  beer, a wine maker, a small wine maker, an outstate seller of

 

14  wine, a manufacturer of mixed wine drink, an outstate seller of a

 

15  mixed wine drink, a mixed spirit drink manufacturer, or an

 

16  outstate seller of mixed spirit drink.

 

17        (10) (9) "Brandy" means an alcoholic liquor as defined in 27

 

18  CFR 5.22(d). (1980).

 

19        (11) (10) "Brandy manufacturer" means a person wine maker or

 

20  a small wine maker licensed under this act to engage in the

 

21  manufacturing, rectifying manufacture, rectify, or blending, or

 

22  both, of blend brandy only and no other distilled spirit. Only a

 

23  licensed wine maker or a small wine maker is eligible to be a

 

24  brandy manufacturer. The commission may approve a brandy

 

25  manufacturer to sell at retail brandy which that it manufactures,

 

26  blends, or rectifies, or both, for export from this state, for

 

27  distribution through an authorized distribution agent, to another


 

 1  distillery in this state, to a wine maker or to a small wine

 

 2  maker for the purpose of fortification, and at retail for

 

 3  consumption on and off the premises at its licensed premises or

 

 4  at other premises authorized in this act.as provided in section

 

 5  537.

 

 6        (12) (11) "Brewer" means a person located in this state that

 

 7  is licensed to manufacture and sell to licensed wholesalers beer

 

 8  produced by it.

 

 9        (12) "Brewpub" means a license issued in conjunction with a

 

10  class C, tavern, class A hotel, or class B hotel license that

 

11  authorizes the person licensed with the class C, tavern, class A

 

12  hotel, or class B hotel to manufacture and brew not more than

 

13  5,000 barrels of beer per calendar year in Michigan and sell at

 

14  those licensed premises the beer produced for consumption on or

 

15  off the licensed brewery premises in the manner provided for in

 

16  sections 405 and 407.

 

17        Sec. 107. (1) "Cash" means money in hand, bank notes, demand

 

18  deposits at a bank, or legal tender, which a creditor must accept

 

19  according to law. Cash does not include call loans, postdated

 

20  checks, or promissory notes.

 

21        (2) "Class C license" means a place licensed to sell at

 

22  retail beer, wine, mixed spirit drink, and spirits for

 

23  consumption on the premises.

 

24        (3) "Class G-1 license" means a place licensed to sell at

 

25  retail beer, wine, mixed spirit drink, and spirits for

 

26  consumption on the premises at a golf course having at least 18

 

27  holes that measure at least 5,000 yards and which license is


 

 1  issued only to a facility which that permits member access by

 

 2  means of payments that include annual paid membership fees.

 

 3        (4) "Class G-2 license" means a place licensed to sell at

 

 4  retail beer and wine for consumption on the premises at a golf

 

 5  course having at least 18 holes that measure at least 5,000 yards

 

 6  and which license is issued only to a facility which that permits

 

 7  member access by means of payments that include annual paid

 

 8  membership fees.

 

 9        (5) "Club" means a nonprofit association, whether

 

10  incorporated or unincorporated, organized for the promotion of

 

11  some common purpose, the object of which is owning, hiring, or

 

12  leasing to own, hire, or lease a building, or space in a

 

13  building, of an extent and character as in the judgment of the

 

14  commission may be is suitable and adequate for the reasonable and

 

15  comfortable use and accommodation of its members and their

 

16  guests, but does not include an association organized for a

 

17  commercial or business purpose.

 

18        (6) "Commercial purpose" means a purpose for which monetary

 

19  gain or other remuneration could reasonably be expected.

 

20        (7) (6) "Commission" means the liquor control commission

 

21  provided for and created in section 209.

 

22        (8) "Completed application" means an application complete on

 

23  its face and submitted with any applicable licensing fees as well

 

24  as any other information, records, approval, security, or similar

 

25  item required by law or rule from a local unit of government, a

 

26  federal agency, or a private entity but not from another

 

27  department or agency of the state of Michigan.


 

 1        (9) (7) "Church" means an entire house or structure set

 

 2  apart primarily for use for purposes of public worship, and which

 

 3  that is tax exempt under the laws of this state, and in which

 

 4  religious services are held and with which a clergyman is

 

 5  associated, and the entire structure of which is kept for that

 

 6  use and not put to any other use inconsistent with that use.

 

 7        (10) "Computer" means any connected, directly interoperable

 

 8  or interactive device, equipment, or facility that uses a

 

 9  computer program or other instructions to perform specific

 

10  operations including logical, arithmetic, or memory functions

 

11  with or on computer data or a computer program and that can

 

12  store, retrieve, alter, or communicate the results of the

 

13  operations to a person, computer program, computer, computer

 

14  system, or computer network.

 

15        (11) "Computer network" means the interconnection of

 

16  hardwire or wireless communication lines with a computer through

 

17  remote terminals, or a complex consisting of 2 or more

 

18  interconnected computers.

 

19        (12) "Computer program" means a series of internal or

 

20  external instructions communicated in a form acceptable to a

 

21  computer that directs the functioning of a computer, computer

 

22  system, or computer network in a manner designed to provide or

 

23  produce products or results from the computer, computer system,

 

24  or computer network.

 

25        (13) "Computer system" means a set of related, connected or

 

26  unconnected, computer equipment, devices, software, or hardware.

 

27        (14) "Consumer" means an individual who purchases alcoholic


 

 1  liquor for personal consumption and not for resale.

 

 2        (15) "Device" includes, but is not limited to, an

 

 3  electronic, magnetic, electrochemical, biochemical, hydraulic,

 

 4  optical, or organic object that performs input, output, or

 

 5  storage functions by the manipulation of electronic, magnetic, or

 

 6  other impulses.

 

 7        (16) "Diligent inquiry" means a diligent good-faith effort

 

 8  to determine the age of an individual that includes at least an

 

 9  examination of a bona fide picture identification that

 

10  establishes the identity and age of the individual.

 

11        (17) "Direct shipper" means a person licensed by the

 

12  commission to sell, deliver, or import beer or wine, to consumers

 

13  in this state, that he or she produces and bottles or wine that

 

14  is manufactured by a wine maker for another wine maker and that

 

15  is transacted or caused to be transacted through the use of any

 

16  mail order, internet, telephone, computer, device, or other

 

17  electronic means, or sells directly to consumers on the small

 

18  brewer's or winery premises.

 

19        (18) (8) "Distiller" means any person licensed to

 

20  manufacture and sell spirits or alcohol, or both, of any kind.

 

21        (19) "Farmer's market" means a group of farmers or their

 

22  designees or a variety of vendors, as determined by the farmer's

 

23  market manager or his or her designee, who assemble on a

 

24  recurring basis at a defined community sponsored or municipally

 

25  sponsored location for the purposes of selling, directly to a

 

26  consumer, food and products produced by those farmers or their

 

27  representatives.


 

 1        (20) "Farmer's market manager" means the person responsible

 

 2  for enforcing the market policy and for the daily operation and

 

 3  management of the farmer's market.

 

 4        (21) "Farmer's market permit" means an annual permit issued

 

 5  as part of an approved license to a small wine maker or an out-

 

 6  of-state entity that is the substantial equivalent of a small

 

 7  wine maker allowing that person to conduct tastings and sell at

 

 8  retail, for consumption off the licensed premises, at a farmer's

 

 9  market, wine produced by the small wine maker.

 

10        (22) "Felony" means a felony under the United States Code or

 

11  the Michigan Compiled Laws.

 

12        (23) "Good faith" means that term as defined and interpreted

 

13  under section 1201 of the uniform commercial code, 1962 PA 174,

 

14  MCL 440.1201.

 

15        (24) "Home brewer" means an individual who manufactures

 

16  beer, wine, mead, honey-based beer, or cider at his or her

 

17  dwelling.

 

18        (25) (9) "Hotel" means a building or group of buildings

 

19  located on the same or adjoining pieces of real property, which

 

20  that provide lodging to travelers and temporary residents and

 

21  which that may also provide food service and other goods and

 

22  services to registered guests and to the public.

 

23        (26) "Identification verification service" means any service

 

24  or device approved by the commission specializing in age and

 

25  identity verification.

 

26        (27) (10) "Class A hotel" means a hotel licensed by the

 

27  commission to sell beer and wine for consumption on the premises


 

 1  only, which that provides for the rental of, and maintains the

 

 2  availability for rental of, not less than 25 bedrooms if located

 

 3  in a local governmental unit with a population of less than

 

 4  175,000 or not less than 50 bedrooms if located in a local

 

 5  governmental unit with a population of 175,000 or more.

 

 6        (28) (11) "Class B hotel" means a hotel licensed by the

 

 7  commission to sell beer, wine, mixed spirit drink, and spirits

 

 8  for consumption on the premises only, which that provides for the

 

 9  rental of, and maintains the availability for rental of, not less

 

10  than 25 bedrooms if located in a local governmental unit with a

 

11  population of less than 175,000 or not less than 50 bedrooms if

 

12  located in a local governmental unit with a population of 175,000

 

13  or more.

 

14        (29) (12) "License" means a contract between the commission

 

15  and the licensee granting authority to that licensee to

 

16  manufacture and sell, or sell, or warehouse alcoholic liquor in

 

17  the manner provided by this act.

 

18        Sec. 109. (1) "Manufacturer" means a person engaged in the

 

19  manufacture of that manufactures alcoholic liquor, including, but

 

20  not limited to, a distiller, a rectifier, a wine maker, and a

 

21  brewer.

 

22        (2) "Master distributor" means a wholesaler who that acts in

 

23  the same or similar capacity as a brewer, wine maker, outstate

 

24  seller of wine, or outstate seller of beer for a brand or brands

 

25  of beer or wine to other wholesalers on a regular basis in the

 

26  normal course of business.

 

27        (3) "Micro brewer" means a brewer that produces in total


 

 1  less than 30,000 barrels of beer per year and that may sell the

 

 2  beer produced to consumers at the licensed brewery premises for

 

 3  consumption on or off the licensed brewery premises. In

 

 4  determining the 30,000-barrel threshold, all brands and labels of

 

 5  a brewer, whether brewed in this state or outside this state,

 

 6  shall be combined and all facilities for the production of beer

 

 7  that are owned or controlled by the same person shall be treated

 

 8  as a single facility.

 

 9        (3) (4) "Minor" means a person an individual less than 21

 

10  years of age.

 

11        (4) (5) "Mixed spirit drink" means a drink produced and

 

12  packaged or sold by a mixed spirit drink manufacturer or an

 

13  outstate seller of mixed spirit drink which that contains 10% or

 

14  less alcohol by volume consisting of distilled spirits mixed with

 

15  nonalcoholic beverages or flavoring or coloring materials and

 

16  which that may also contain 1 or more of the following:

 

17        (a) Water.

 

18        (b) Fruit juices.

 

19        (c) Fruit adjuncts.

 

20        (d) Sugar.

 

21        (e) Carbon dioxide.

 

22        (f) Preservatives.

 

23        (5) (6) "Mixed spirit drink manufacturer" means any person

 

24  licensed under this act to manufacture mixed spirit drink in this

 

25  state and to sell mixed spirit drink to a wholesaler. For

 

26  purposes of rules promulgated by the commission, a mixed spirit

 

27  drink manufacturer shall be treated as a wine manufacturer but is


 

 1  subject to the rules applicable to spirits for purposes of

 

 2  manufacturing and labeling.

 

 3        (6) (7) "Mixed wine drink" means a drink or similar product

 

 4  marketed as a wine cooler and containing that contains less than

 

 5  7% alcohol by volume, consisting consists of wine and plain,

 

 6  sparkling, or carbonated water, and containing contains any 1 or

 

 7  more of the following:

 

 8        (a) Nonalcoholic beverages.

 

 9        (b) Flavoring.

 

10        (c) Coloring materials.

 

11        (d) Fruit juices.

 

12        (e) Fruit adjuncts.

 

13        (f) Sugar.

 

14        (g) Carbon dioxide.

 

15        (h) Preservatives.

 

16        (7) (8) "Outstate seller of beer" means a person licensed by

 

17  the commission to sell beer which that has not been manufactured

 

18  in this state to a wholesaler in this state in accordance with

 

19  rules promulgated by the commission.

 

20        (8) (9) "Outstate seller of mixed spirit drink" means a

 

21  person licensed by the commission to sell mixed spirit drink

 

22  which that has not been manufactured in this state to a

 

23  wholesaler in this state in accordance with rules promulgated by

 

24  the commission. For purposes of rules promulgated by the

 

25  commission, an outstate seller of mixed spirit drink shall be

 

26  treated as an outstate seller of wine but is subject to the rules

 

27  applicable to spirits for purposes of manufacturing and labeling.


 

 1        (9) (10) "Outstate seller of wine" means a person licensed

 

 2  by the commission to sell wine which that has not been

 

 3  manufactured in this state to a wholesaler in this state in

 

 4  accordance with rules promulgated by the commission and to sell

 

 5  sacramental wine as provided in section 301.

 

 6        Sec. 111. (1) "Person" means an individual, firm,

 

 7  partnership, limited partnership, association, limited liability

 

 8  company, or corporation.

 

 9        (2) "Primary source of supply" means, in the case of

 

10  domestic spirits, the distiller, producer, owner of the commodity

 

11  at the time it becomes a marketable product, or bottler, or the

 

12  exclusive agent of any such person the distiller, producer,

 

13  owner, or bottler and, in the case of spirits imported into the

 

14  United States, either the foreign distiller, producer, owner of

 

15  the bottler, or the prime importer for, or the exclusive agent in

 

16  the United States of, the foreign distiller, producer, owner, or

 

17  the bottler.

 

18        (3) "Professional account" means an account established for

 

19  a person by a class C licensee or tavern licensee whose major

 

20  business is the sale of food, by which the licensee extends

 

21  credit to the person for not more than 30 days.

 

22        (3) "Reasonable qualifications" means the average standard

 

23  of the criteria used by the respective supplier for wholesalers

 

24  that entered into or renewed an agreement with the supplier

 

25  during a period of 24 months before the proposed transfer of the

 

26  wholesaler's business.

 

27        (4) "Retaliatory action" means action that includes, but is


 

 1  not limited to, the refusal to continue an agreement, or a

 

 2  material reduction in the quality of service or quantity of

 

 3  products available to a wholesaler under an agreement that is not

 

 4  made in good faith.

 

 5        (5) (4) "Residence" means the premises in which a person

 

 6  resides permanently.

 

 7        (6) (5) "Retailer" means a person licensed by the commission

 

 8  who that sells to the consumer in accordance with rules

 

 9  promulgated by the commission. Retailer includes a brewpub but

 

10  Except for a small brewer, retailer does not include a

 

11  manufacturer or supplier, as defined in section 603, that is

 

12  allowed as a condition of its license to sell to consumers in

 

13  this state.

 

14        (7) (6) "Sacramental wine" means wine containing that

 

15  contains not more than 24% of alcohol by volume which that is

 

16  used for sacramental purposes.

 

17        (8) (7) "Sale" includes the exchange, barter, traffic,

 

18  furnishing, or giving away of alcoholic liquor. In the case of a

 

19  sale in which a shipment or delivery of alcoholic liquor is made

 

20  by a common or other carrier, the sale of the alcoholic liquor is

 

21  considered to be made in the county within which the delivery of

 

22  the alcoholic liquor is made by that carrier to the consignee or

 

23  his or her agent or employee, and venue for the prosecution for

 

24  that sale may be in the county or city where the seller resides

 

25  or from which the shipment is made or at the place of delivery.

 

26        (9) "Sales territory" means an area of exclusive sales

 

27  responsibility for the brand or brands of beer or wine sold by a


 

 1  supplier as designated by an agreement.

 

 2        (10) (8) "School" includes buildings used for school

 

 3  purposes to provide instruction to children in grades

 

 4  kindergarten through 12, when that instruction is provided by a

 

 5  public, private, denominational, or parochial school, except

 

 6  those buildings used primarily for adult education or college

 

 7  extension courses. School does not include a proprietary trade or

 

 8  occupational school.

 

 9        (11) "Small brewer" means a brewer that produces in total

 

10  less than 30,000 barrels of beer per year and that may sell that

 

11  beer to a wholesaler, to a consumer as a direct shipper, at

 

12  retail for consumption on or off the licensed premises, to a

 

13  retailer, and as provided in section 537. In determining the

 

14  30,000-barrel threshold, all brands and labels of a brewer,

 

15  whether brewed in this state or outside this state, shall be

 

16  combined and all facilities for the production of beer that are

 

17  owned or controlled by the same person shall be treated as a

 

18  single facility.

 

19        (12) (9) "Small distiller" means a manufacturer of spirits

 

20  that annually manufacturing manufactures, rectifies, or blends in

 

21  Michigan this state not exceeding more than 60,000 gallons of

 

22  spirits, of all brands combined. The commission may approve a

 

23  small distiller to sell its spirits for export from this state,

 

24  for distribution through an authorized distribution agent, to

 

25  another distillery in this state, to a wine maker or to a small

 

26  wine maker for the purpose of fortification, and at retail for

 

27  consumption on and off the premises at its licensed premises or


 

 1  as provided in section 537.

 

 2        (13) (10) "Small wine maker" means a wine maker

 

 3  manufacturing or bottling person licensed by the commission that

 

 4  manufactures or bottles not more than 50,000 gallons of wine in 1

 

 5  calendar year in this state. A small wine maker may produce,

 

 6  blend, bottle, store, and transport wines, import wines in bulk,

 

 7  and import bottled wine of brands owned by the small wine maker.

 

 8  A small wine maker may purchase spirits from the commission, a

 

 9  small distiller, or a brandy manufacturer and have spirits on the

 

10  premises for the purpose of fortification. A small wine maker may

 

11  sell wine that it manufactures for export out of the state, to a

 

12  wholesaler, to another winery in this state, to a retailer, to a

 

13  consumer as a direct shipper, and at retail for consumption on

 

14  and off the premises at its licensed premises or as provided in

 

15  section 537.

 

16        (14) (11) "Special license" means a contract between the

 

17  commission and the special licensee granting authority to that

 

18  licensee to sell beer, wine, mixed spirit drink, or spirits. The

 

19  license shall be granted only to such persons and such

 

20  organization and for such period of time as the commission shall

 

21  determine so long as determines if the person or organization is

 

22  able to demonstrate an existence separate from an affiliated

 

23  umbrella organization. If such an existence is demonstrated, the

 

24  commission shall not deny a special license solely by the

 

25  applicant's affiliation with an organization that is also

 

26  eligible for a special license.

 

27        (15) (12) "Specially designated distributor" means, subject


 

 1  to section 534, a person engaged in an established business

 

 2  licensed by the commission to distribute spirits and mixed spirit

 

 3  drink in the original package for the commission for consumption

 

 4  off the premises.

 

 5        (16) (13) "Specially designated merchant" means a person to

 

 6  whom the commission grants a license to sell beer or wine, or

 

 7  both, at retail for consumption off the licensed premises.

 

 8        (17) (14) "Spirits" means a beverage that contains alcohol

 

 9  obtained by distillation, mixed with potable water or other

 

10  substances, or both, in solution, and includes wine containing an

 

11  alcoholic content of that contains more than 21% of alcohol by

 

12  volume, except sacramental wine and mixed spirit drink.

 

13        (15) "State liquor store" means a store established by the

 

14  commission under this act for the sale of spirits in the original

 

15  package for consumption off the premises.

 

16        (18) (16) "Supplier of spirits" means a vendor of spirits, a

 

17  manufacturer of spirits, or a primary source of supply.

 

18        Sec. 113. (1) "Tavern" means any place licensed to sell at

 

19  retail beer and wine for consumption on the premises only.

 

20        (2) "Transfer of a wholesaler's business" means the

 

21  voluntary sale, assignment, or other transfer of the business or

 

22  control of the business of the wholesaler, including the sale or

 

23  other transfer of stock or assets by merger, consolidation, or

 

24  dissolution.

 

25        (3) (2) "Vehicle" means any means of transportation by land,

 

26  by water, or by air.

 

27        (4) (3) "Vendor" means a person licensed by the commission


 

 1  to sell alcoholic liquor.

 

 2        (5) (4) "Vendor of spirits" means a person selling that

 

 3  sells spirits to the commission.

 

 4        (6) (5) "Warehouse" means a premises or place primarily

 

 5  constructed, used, or provided with facilities for the storage in

 

 6  transit or other temporary storage of perishable goods or for the

 

 7  conduct of a warehousing business, or for both.

 

 8        (7) (6) "Warehouser" means a licensee authorized by the

 

 9  commission to store alcoholic beverages, but prohibited from

 

10  making sales selling or deliveries delivering to retailers unless

 

11  the licensee is also the holder of a wholesaler or manufacturer

 

12  license issued by the commission.

 

13        (8) (7) "Wholesaler" means a person who that is licensed by

 

14  the commission and sells beer, wine, or mixed spirit drink only

 

15  to retailers or other licensees, and who that sells sacramental

 

16  wine as provided in section 301. A wholesaler includes a person

 

17  who that may also act as a master distributor unless prohibited

 

18  from doing so by its supplier or manufacturer in a written

 

19  agreement required by either section 305(3)(i) or 403(3)(i)

 

20  305(2)(i) or 403(2)(i) and, by mutual agreement with an outstate

 

21  seller of beer or wine, can be authorized by the outstate seller

 

22  of beer or wine to do, in the manner prescribed by the

 

23  commission, either or both of the following:

 

24        (a) Register with the state of Michigan the labels of the

 

25  outstate seller of beer or wine.

 

26        (b) On behalf of the outstate seller of beer or wine,

 

27  collect excise taxes levied by the state of Michigan and remit


 

 1  the taxes to the commission.

 

 2        (9) (8) "Wine" means the product made by the normal

 

 3  alcoholic fermentation of the juice of sound, ripe grapes, or any

 

 4  other fruit with the usual cellar treatment, and containing that

 

 5  contains not more than 21% of alcohol by volume, including

 

 6  fermented fruit juices other than grapes and mixed wine drinks.

 

 7        (10) (9) "Wine maker" means any person licensed by the

 

 8  commission to manufacture wine and to sell that wine to a

 

 9  wholesaler, to a consumer by direct shipment, at retail on the

 

10  licensed winery premises, to sell that wine to a retailer, and as

 

11  provided for in section 537.a person licensed by the commission

 

12  that manufactures and bottles wine in this state. A wine maker

 

13  may produce, blend, bottle, store, and transport wines, import

 

14  wines in bulk, and import bottled wine of brands owned by the

 

15  wine maker. A wine maker may purchase spirits from the

 

16  commission, a small distiller, or a brandy manufacturer and have

 

17  spirits on the premises for the purpose of fortification. A wine

 

18  maker may sell wine that it manufactures for export out of the

 

19  state, to a wholesaler, to another winery in this state, to a

 

20  retailer, to a consumer as a direct shipper, and at retail for

 

21  consumption on and off the premises at its licensed premises or

 

22  as provided in section 537.

 

23        Sec. 201. (1) On and after December 15, 1933, it shall be is

 

24  lawful to manufacture for sale, sell, offer for sale, keep for

 

25  sale, possess, or transport any alcoholic liquor, as defined in

 

26  this act, including alcoholic liquor used for medicinal,

 

27  mechanical, chemical, or scientific purposes and wine used for


 

 1  sacramental purposes, subject to the terms, conditions,

 

 2  limitations, and restrictions contained in this act, and only as

 

 3  provided for in this act.

 

 4        (2) Except as otherwise provided in this act, the commission

 

 5  shall have has the sole right, power, and duty to control the

 

 6  alcoholic beverage traffic and traffic in other alcoholic liquor

 

 7  within this state, including the manufacture, importation,

 

 8  possession, transportation, and sale thereof.of alcoholic liquor.

 

 9        (3) A rule, regulation, ordinance, or order made by the

 

10  commission or a local unit of government shall not unreasonably

 

11  discriminate against Michigan similar manufacturers of alcoholic

 

12  liquor in this state.

 

13        (4) A peace officer or law enforcement officer of this state

 

14  or a county, township, city, village, state university, or

 

15  community college or an inspector of the commission is

 

16  authorized, and it is the duty of each of them, to enforce the

 

17  provisions of this act and the rules promulgated by the

 

18  commission within his or her respective jurisdiction. It is the

 

19  special duty of an officer described in this section to use his

 

20  or her utmost efforts to repress and prevent crime and the

 

21  violation of any of the provisions of this act. An officer

 

22  described in this section who willfully neglects or refuses to

 

23  perform the duties imposed upon him or her by this section is

 

24  guilty of a misdemeanor and upon conviction shall be fined not

 

25  more than $500.00 or imprisoned in the county jail not more than

 

26  90 days, or both.

 

27        Sec. 203. (1) Except as provided in this section and section


 

 1  301, a sale, delivery, or importation of person shall not sell,

 

 2  deliver, or import alcoholic liquor, including alcoholic liquor

 

 3  for personal use, shall not be made in this state unless the

 

 4  sale, delivery, or importation is made by the commission, the

 

 5  commission's authorized agent or distributor, an authorized

 

 6  distribution agent approved by order of the commission, a person

 

 7  licensed by the commission, or by prior written order of the

 

 8  commission.

 

 9        (2) Notwithstanding R 436.1011(7)(b) and R 436.1527 of the

 

10  Michigan administrative code and except as provided in subsection

 

11  (11), a retailer shall not deliver alcoholic liquor to a Michigan

 

12  consumer in this state at the home or business of the consumer or

 

13  at any location away from the licensed premises of the retailer.

 

14  The purpose of this subsection is to exercise the state of

 

15  Michigan's authority under section 2 of amendment XXI of the

 

16  constitution of the United States, to maintain the inherent

 

17  police powers to regulate the transportation and delivery of

 

18  alcoholic liquor, and to promote a transparent system for the

 

19  transportation and delivery of alcoholic liquor. The regulation

 

20  described in this subsection is considered necessary for both of

 

21  the following reasons:

 

22        (a) To promote the public health, safety, and welfare.

 

23        (b) To maintain strong, stable, and effective regulation by

 

24  having beer and wine sold by retailers to Michigan consumers by

 

25  passing through the 3-tier distribution system established under

 

26  this act.

 

27        (3) For purposes of subsection (1), the sale, delivery, or


 

 1  importation of a direct shipper may sell, deliver, or import beer

 

 2  or wine, to consumers in this state, by a person who both

 

 3  produces and bottles the wine or wine that is manufactured by a

 

 4  wine maker for another wine maker and that is transacted or

 

 5  caused to be transacted by means of any mail order, internet,

 

 6  telephone, computer, device, or other electronic means, or sold

 

 7  sell directly to a consumer on the small brewer's or winery

 

 8  premises. , shall only be done by a direct shipper. If a retail

 

 9  sale, delivery, or importation of wine occurs A direct shipper

 

10  that sells, delivers, or imports beer or wine to a consumer by

 

11  any means described in under this subsection , the direct shipper

 

12  must shall comply with all of the following:

 

13        (a) Hold a direct shipper license.

 

14        (b) Pay any applicable taxes to the commission and pay any

 

15  applicable taxes to the department of treasury as directed by the

 

16  department of treasury. Upon the request of the department of

 

17  treasury, a direct shipper shall furnish an affidavit to verify

 

18  payment.

 

19        (c) Comply with all prohibitions of the laws of this state,

 

20  including, but not limited to, sales to minors.

 

21        (d) Verify with diligent inquiry the age of the individual

 

22  placing the order by obtaining from him or her a copy of a photo

 

23  identification issued by this state, another state, or the

 

24  federal government or by utilizing an identification verification

 

25  service. The person receiving and accepting the order on behalf

 

26  of the direct shipper shall record the name, address, date of

 

27  birth, and telephone number of the person individual placing the


 

 1  order on the order form or other verifiable record of a type and

 

 2  generated in a manner approved by the commission and provide a

 

 3  duplicate to the commission.

 

 4        (e) Upon request of the commission, make available to the

 

 5  commission any document used to verify the age of the individual

 

 6  ordering or receiving the beer or wine from the direct shipper.

 

 7        (f) Stamp, print, or label on the outside of the shipping

 

 8  container that the package "Contains Alcohol. Must be delivered

 

 9  to a person 21 years of age or older." The recipient at the time

 

10  of the delivery is required to shall provide photo identification

 

11  verifying his or her age along with a signature.

 

12        (g) Place a label on the top panel of the shipping container

 

13  containing the direct shipper license number, the order number,

 

14  the name and address of the individual placing the order, and the

 

15  name of the designated recipient if different from the name of

 

16  the individual placing the order.

 

17        (h) Direct ship not more than 115 barrels of beer or 1,500

 

18  9-liter cases, or 13,500 liters in total, of wine in a calendar

 

19  year to Michigan consumers in this state. If a direct shipper,

 

20  whether located in this state or outside this state, owns, in

 

21  whole or in part, or commonly manages 1 or more direct shippers,

 

22  it shall not in combination ship to consumers in this state more

 

23  than 115 barrels of beer or 13,500 liters of wine in the

 

24  aggregate.

 

25        (i) Pay beer and wine taxes quarterly and report to the

 

26  commission quarterly the total amount of beer and wine, by type,

 

27  brand, and price, shipped to consumers in this state during the


 

 1  preceding calendar quarter, and the order numbers.

 

 2        (j) Authorize and allow the commission and the department of

 

 3  treasury to conduct an audit of the direct shipper's records.

 

 4        (k) Consent and submit to the jurisdiction of the

 

 5  commission, the department of treasury, and the courts of this

 

 6  state concerning enforcement of this section and any related

 

 7  laws, rules, and regulations.

 

 8        (4) Notwithstanding subsection (3), in the case of a sale,

 

 9  delivery, or importation of alcoholic liquor occurring by any

 

10  means described in subsection (3), a person taking the order on

 

11  behalf of the direct shipper must shall comply with subsection

 

12  (3)(c) through (g).

 

13        (5) The A person who that delivers the beer or wine for a

 

14  direct shipper under this section shall verify that the

 

15  individual accepting delivery is of legal age 21 years of age or

 

16  older and is the individual who placed the order or the

 

17  designated recipient, is an individual of legal age 21 years of

 

18  age or older currently occupying or present at the address, or is

 

19  an individual otherwise authorized through a by rule promulgated

 

20  under this act by the commission to receive alcoholic liquor

 

21  under this section. If the delivery person, after a diligent

 

22  inquiry, determines that the purchaser or designated recipient is

 

23  not of legal age 21 years of age or older, the delivery person

 

24  shall return the beer or wine to the direct shipper. A delivery

 

25  person who returns beer or wine to the direct shipper due to

 

26  inability to obtain because the purchaser's purchaser or

 

27  designated recipient's legal age recipient is not 21 years of age


 

 1  or older is not liable for any damages suffered by the purchaser

 

 2  or direct shipper.

 

 3        (6) All spirits for sale, use, storage, or distribution in

 

 4  this state, shall originally be purchased by and imported into

 

 5  the state by the commission, or by prior written authority of the

 

 6  commission.

 

 7        (7) This section does not apply in the case of an to

 

 8  alcoholic liquor brought into this state for personal or

 

 9  household use in an amount permitted by federal law by a person

 

10  of legal age to purchase alcoholic liquor an individual 21 years

 

11  of age or older at the time of reentry into this state from

 

12  without the territorial limits of the United States if the person

 

13  individual has been outside the territorial limits of the United

 

14  States for more than 48 hours and has not brought alcoholic

 

15  liquor into the United States during the preceding 30 days.

 

16        (8) A person who is of legal age to purchase alcoholic

 

17  liquor An individual 21 years of age or older may do either of

 

18  the following in relation to alcoholic liquor that contains less

 

19  than 21% alcohol by volume:

 

20        (a) Personally transport from another state, once in a 24-

 

21  hour period, not more than 312 ounces of alcoholic liquor for

 

22  that person's individual's personal use, notwithstanding

 

23  subsection (1).

 

24        (b) Ship or import from another state alcoholic liquor for

 

25  that person's individual's personal use so long as if that

 

26  personal importation is done in compliance with subsection (1).

 

27        (9) A direct shipper shall not engage in the sale, delivery,


 

 1  or importation of sell, deliver, or import beer or wine to a

 

 2  consumer unless it applies for and is granted a direct shipper

 

 3  license from the commission. This subsection does not prohibit

 

 4  beer or wine tasting or the selling at retail by a wine maker, a

 

 5  small wine maker, or small brewer of wines or beer he or she

 

 6  produced and bottled or wine manufactured for that a wine maker

 

 7  by another wine maker, if done in compliance with this act. Only

 

 8  the following persons qualify for the issuance of a direct

 

 9  shipper license:

 

10        (a) A licensed wine maker.

 

11        (b) A wine producer and bottler located inside this country

 

12  but outside of this state holding both a federal basic permit

 

13  issued by the alcohol and tobacco tax and trade bureau and a

 

14  license to manufacture wine in its state of domicile.

 

15        (c) A small brewer or an out-of-state entity that is the

 

16  substantial equivalent of a small brewer.

 

17        (d) A small wine maker.

 

18        (10) An applicant for a direct shipper license shall submit

 

19  an application to the commission in a written or electronic

 

20  format provided by the commission and accompanied by an

 

21  application and initial license fee of $100.00. The application

 

22  shall be accompanied by a copy or other evidence of the existing

 

23  federal basic permit or license, or both, held by the applicant.

 

24  The direct shipper may renew its license annually by submission

 

25  of a license renewal fee of $100.00 and a completed renewal

 

26  application. The commission shall use the fees collected under

 

27  this section to conduct investigations and audits of direct


 

 1  shippers. The failure to renew, or the revocation or suspension

 

 2  of, the applicant's existing Michigan license in this state,

 

 3  federal basic permit, or license to manufacture beer or wine in

 

 4  its state of domicile is grounds for revocation or denial of the

 

 5  direct shipper license. If a direct shipper is found guilty of

 

 6  violating this act or a rule promulgated by the commission, the

 

 7  commission shall notify both the alcoholic liquor control agency

 

 8  in the direct shipper's state of domicile and the alcohol and

 

 9  tobacco tax and trade bureau of the United States department of

 

10  treasury of the violation.

 

11        (11) A Except as otherwise provided in subsection (12), a

 

12  retailer that holds a specially designated merchant license in

 

13  this state ; or an out-of-state retailer that holds its state's

 

14  substantial equivalent license ; or a brewpub, microbrewer, or an

 

15  out-of-state entity that is the substantial equivalent of a

 

16  brewpub or microbrewer may deliver beer and wine to the home or

 

17  other designated location of a consumer in this state if all of

 

18  the following conditions are met: and except as otherwise

 

19  provided in subsection (12):

 

20        (a) The beer or wine, or both, is delivered by the

 

21  retailer's , brewpub's, or microbrewer's employee and not by an

 

22  agent or by a third party delivery service.

 

23        (b) The retailer , brewpub, or microbrewer or its employee

 

24  who delivers the beer or wine, or both, verifies that the person

 

25  individual accepting delivery is at least 21 years of age.

 

26        (c) If the retailer , brewpub, or microbrewer or its

 

27  employee intends to provide service to consumers, the retailer ,


 

 1  brewpub, or microbrewer or its employee providing the service

 

 2  must have has received alcohol server training through a server

 

 3  training program approved by the commission.

 

 4        (12) A retailer that holds a specially designated merchant

 

 5  license in this state or an out-of-state retailer that holds its

 

 6  state's substantial equivalent license may utilize a third party

 

 7  that provides delivery service to municipalities in this state

 

 8  that are surrounded by water and inaccessible by motor vehicle to

 

 9  deliver beer and wine to the home or other designated location of

 

10  that consumer is if the delivery service is approved by the

 

11  commission and agrees to verify that the person individual

 

12  accepting delivery of the beer and wine is at least 21 years of

 

13  age.

 

14        (13) As used in this section:

 

15        (a) "Computer" means any connected, directly interoperable

 

16  or interactive device, equipment, or facility that uses a

 

17  computer program or other instructions to perform specific

 

18  operations including logical, arithmetic, or memory functions

 

19  with or on computer data or a computer program and that can

 

20  store, retrieve, alter, or communicate the results of the

 

21  operations to a person, computer program, computer, computer

 

22  system, or computer network.

 

23        (b) "Computer network" means the interconnection of hardwire

 

24  or wireless communication lines with a computer through remote

 

25  terminals, or a complex consisting of 2 or more interconnected

 

26  computers.

 

27        (c) "Computer program" means a series of internal or


 

 1  external instructions communicated in a form acceptable to a

 

 2  computer that directs the functioning of a computer, computer

 

 3  system, or computer network in a manner designed to provide or

 

 4  produce products or results from the computer, computer system,

 

 5  or computer network.

 

 6        (d) "Computer system" means a set of related, connected or

 

 7  unconnected, computer equipment, devices, software, or hardware.

 

 8        (e) "Consumer" means an individual who purchases wine for

 

 9  personal consumption and not for resale.

 

10        (f) "Device" includes, but is not limited to, an electronic,

 

11  magnetic, electrochemical, biochemical, hydraulic, optical, or

 

12  organic object that performs input, output, or storage functions

 

13  by the manipulation of electronic, magnetic, or other impulses.

 

14        (g) "Diligent inquiry" means a diligent good faith effort to

 

15  determine the age of a person, which includes at least an

 

16  examination of an official Michigan operator's or chauffeur's

 

17  license, an official Michigan personal identification card, or

 

18  any other bona fide picture identification that establishes the

 

19  identity and age of the person.

 

20        (h) "Direct shipper" means a person who engages in the sale,

 

21  delivery, or importation of wine, to consumers in this state,

 

22  that he or she produces and bottles or wine that is manufactured

 

23  by a wine maker for another wine maker and that is transacted or

 

24  caused to be transacted through the use of any mail order,

 

25  internet, telephone, computer, device, or other electronic means,

 

26  or sells directly to consumers on the winery premises.

 

27        (i) "Identification verification service" means any


 

 1  internet-based service approved by the commission specializing in

 

 2  age and identity verification.

 

 3        Sec. 205. (1) The commission shall, as provided in section

 

 4  203(1), by order appoint authorized distribution agents to engage

 

 5  in the warehousing warehouse and delivery of deliver spirits in

 

 6  this state so as to ensure that all retail licensees continue to

 

 7  be are properly serviced with spirits. An authorized distribution

 

 8  agent is subject to uniform requirements, including business

 

 9  operating procedures, that the commission may prescribe by rule,

 

10  subject to this section.

 

11        (2) A person is eligible for appointment by the commission

 

12  as an authorized distribution agent if the following

 

13  circumstances exist:

 

14        (a) The person satisfies all applicable commission rules

 

15  prescribing qualifications for licensure promulgated under

 

16  section 215.

 

17        (b) The person has entered into a written agreement or

 

18  contract with a supplier of spirits for the purposes of

 

19  warehousing to warehouse and delivering deliver a brand or brands

 

20  of spirits of that supplier of spirits.

 

21        (c) The person has an adequate warehousing facility located

 

22  in this state for the storing of to store spirits from which all

 

23  delivery of spirits to retail licensees shall be made.

 

24        (3) An authorized distribution agent shall not have a direct

 

25  or indirect interest in a supplier of spirits or in a retailer. A

 

26  supplier of spirits or a retailer shall not have a direct or

 

27  indirect interest in an authorized distribution agent. An


 

 1  authorized distribution agent shall not hold title to spirits.

 

 2        (4) An authorized distribution agent shall deliver to each

 

 3  retailer located in its assigned distribution area on at least a

 

 4  weekly basis if the order meets the minimum requirements. Except

 

 5  that in those weeks that accompany a state holiday, the

 

 6  commission may order a modified delivery schedule provided that a

 

 7  retailer waits not longer than 9 days between deliveries due to a

 

 8  modified delivery schedule. The commission shall provide for an

 

 9  integrated on-line ordering system for spirits and shall require

 

10  the continuance of any ordering system in existence on the

 

11  activation date of the system established under section 206. The

 

12  minimum requirements shall be set by the commission and shall be

 

13  a sufficient number of bottles to comprise not more than 2 cases.

 

14  A retailer may pick up the product at the authorized distribution

 

15  agent's warehouse. To avoid occasional emergency outages of

 

16  spirits, a retail licensee may make up to 12 special emergency

 

17  orders to an authorized distribution agent per in each calendar

 

18  year. which An authorized distribution agent shall make a special

 

19  emergency order shall be made available to the retail licensee

 

20  within 18 hours of the placing of the order. A An authorized

 

21  distribution agent shall make a special emergency order placed on

 

22  Saturday or Sunday shall be made available to the retail licensee

 

23  before noon on the following Monday. An authorized distribution

 

24  agent may impose a fee of up to $20.00 to deliver a special

 

25  emergency order to a retail licensee.

 

26        (5) In locations inaccessible to a motor vehicle as that

 

27  term is defined by the Michigan vehicle code, 1949 PA 300, MCL


 

 1  257.1 to 257.923, the an authorized distribution agent shall

 

 2  arrange that a delivery of spirits to a retailer be in compliance

 

 3  with the following procedures:

 

 4        (a) After processing an order from a retailer, an authorized

 

 5  distribution agent shall contact a retailer to confirm the

 

 6  quantity of cases or bottles, or both, and the exact dollar total

 

 7  of the order.

 

 8        (b) The authorized distribution agent shall have has the

 

 9  responsibility to coordinate with the retailer the date and time

 

10  a driver is scheduled to deliver the order to a ferry transport

 

11  dock, shall arrange any ferry, drayage, or other appropriate

 

12  service, and shall pick up the retailer's payment at that time.

 

13        (c) The ferry transport company or company representing any

 

14  other form of conveyance shall take the retailer's payment to the

 

15  mainland dock and give that payment to the authorized

 

16  distribution agent's driver.

 

17        (d) The ferry transport company or company representing any

 

18  other form of conveyance shall transport the order to the drayage

 

19  or other appropriate company at the island dock for immediate

 

20  delivery to the retailer.

 

21        (e) The drayage or other appropriate company shall deliver

 

22  the order to the retailer.

 

23        (6) The An authorized distribution agent is responsible for

 

24  the payment of all transportation and delivery charges imposed by

 

25  the ferry, drayage, or other conveyance company and is

 

26  responsible for all breakage and any shortages, whether

 

27  attributable to the ferry, drayage, or other conveyance company


 

 1  or any combination of those companies, until the order is

 

 2  delivered to the retailer's establishment. This subsection does

 

 3  not in any way prevent the authorized distribution agent from

 

 4  seeking reimbursement or damages from any company conveying the

 

 5  authorized distribution agent's product.

 

 6        (7) Except as otherwise provided in subsection (4), an

 

 7  authorized distribution agent shall not charge a delivery fee or

 

 8  a split-case fee for delivery of spirits sold by the commission

 

 9  to a retailer.

 

10        (8) An authorized distribution agent or prospective

 

11  authorized distribution agent shall maintain and make available

 

12  to the commission or its representatives, upon notice, any

 

13  contract or written agreement it may have has with a supplier of

 

14  spirits or other authorized distribution agent for the

 

15  warehousing and delivery of delivering spirits in this state.

 

16        (9) For any violation of this act, rules promulgated under

 

17  this act, or the terms of an order appointing an authorized

 

18  distribution agent, an authorized distribution agent shall be is

 

19  subject to the suspension, revocation, forfeiture, and penalty

 

20  provisions of sections 903(1) and 907 in the same manner in which

 

21  a licensee would be subject to those provisions. An authorized

 

22  distribution agent aggrieved by a penalty imposed by the

 

23  commission may invoke the hearing and appeal procedures of

 

24  section 903(2) and rules promulgated under that section.

 

25        (10) A specially designated distributor may sell to an on-

 

26  premises licensee, up to 9 liters of spirits during any 1-month

 

27  period and an on-premises licensee may purchase , collectively


 

 1  from specially designated distributors. , up to that amount

 

 2  during any 1-month period. Notwithstanding any other provision of

 

 3  this act or rule promulgated under this act, a specially

 

 4  designated distributor is only liable for knowingly violating

 

 5  this section. Records verifying these purchases shall be

 

 6  maintained by the on-premises licensee and be available to the

 

 7  commission upon request.

 

 8        (11) An authorized distribution agent shall demonstrate that

 

 9  it has made a good faith effort to provide employment to those

 

10  former state employees who were terminated due to the

 

11  privatization of the liquor distribution system. A good faith

 

12  effort is demonstrated by the authorized distribution agent

 

13  performing at least the following actions:

 

14        (a) Seeking from the commission a list of names and resumes

 

15  of all such former state employees who have indicated a desire

 

16  for continued employment in the distribution of liquor in

 

17  Michigan.

 

18        (b) Providing a list of employment opportunities created by

 

19  the authorized distribution agent in the distribution of liquor

 

20  in Michigan to each individual whose name and resume is

 

21  transmitted from the commission.

 

22        (c) Providing an opportunity for application and interview

 

23  to any terminated state worker who indicates an interest in

 

24  pursuing a job opportunity with the authorized distribution

 

25  agent.

 

26        (d) Providing a priority in hiring for those individuals who

 

27  apply and interview under this process.


 

 1        (12) Any former state employees terminated due to

 

 2  privatization who have reason to believe that an authorized

 

 3  distribution agent has not made a good faith effort to provide

 

 4  him or her with employment opportunities as described in

 

 5  subsection (11) may file a complaint with the commission who

 

 6  shall hear the complaint and make a determination on its

 

 7  validity. If the commission determines that the complaint is

 

 8  valid, the violation may be treated as a violation of this act

 

 9  and the authorized distribution agent may be subject to the

 

10  suspension, revocation, forfeiture, and penalty provisions of

 

11  sections 903(1) and 907.

 

12        (11) (13) In addition to paying a vendor of spirits the

 

13  acquisition price for purchasing spirits, the commission, except

 

14  as otherwise provided under this subsection, may pay a vendor of

 

15  spirits an additional amount of not less than $4.50 and not more

 

16  than $7.50 for each case of spirits purchased as an offset to the

 

17  costs being incurred by that vendor of spirits in contracting

 

18  with an authorized distribution agent for the warehousing and

 

19  delivery of delivering spirits to retailers. The payment

 

20  described in this subsection shall not be included in the cost of

 

21  purchasing spirits by the commission and shall not be subject to

 

22  the commission's markup, special taxes, or state sales tax. The

 

23  per-case offset established by this subsection may be increased

 

24  by the state administrative board each January to reflect

 

25  reasonable increases in the authorized distribution agent's cost

 

26  of warehousing and delivery. shall be adjusted annually for

 

27  inflation using the United States consumer price index. Beginning


 

 1  January 1, 2014 and each January 1 thereafter, the commission may

 

 2  adjust the per-case offset amount, within the limitations

 

 3  provided under this subsection, to accurately reflect costs

 

 4  incurred by a vendor of spirits if incurred under reasonable and

 

 5  prudent policies and practices. As used in this subsection: ,

 

 6  "case"

 

 7        (a) "Case" means a container holding twelve 750 ml bottles

 

 8  of spirits or other containers containing spirits which are

 

 9  standard to the industry.

 

10        (b) "United States consumer price index" means the United

 

11  States consumer price index for all urban consumers as defined

 

12  and reported by the United States department of labor, bureau of

 

13  labor statistics.

 

14        Sec. 305. (1) The purpose of this section is to provide a

 

15  structure for the business relations between a wholesaler of wine

 

16  and a supplier of wine. Regulation in this area is considered

 

17  necessary for the following reasons:

 

18        (a) To maintain stability and healthy competition in the

 

19  wine industry in this state.

 

20        (b) To promote and maintain a sound, stable, and viable 3-

 

21  tier distribution system of wine to the public.

 

22        (c) To recognize the marketing distinctions between beer and

 

23  wine.

 

24        (d) To promote the public health, safety, and welfare.

 

25        (1) (2) As used in this section, unless the context requires

 

26  otherwise:

 

27        (a) "Agreement" means any agreement between a wholesaler and


 

 1  a supplier, whether oral or written, whereby a wholesaler is

 

 2  granted the right to offer and sell a brand or brands of wine

 

 3  sold by a supplier.

 

 4        (b) "Ancillary business" means a business owned by a

 

 5  wholesaler, a stockholder of a wholesaler, or a partner of a

 

 6  wholesaler the primary purpose of which is directly related to

 

 7  the transporting, storing, or marketing of the brand or brands of

 

 8  wine of a supplier with whom the wholesaler has an agreement; or

 

 9  a business owned by a wholesaler, a stockholder of a wholesaler,

 

10  or a partner of a wholesaler which that recycles empty returnable

 

11  beverage containers.

 

12        (c) "Designated member" means the spouse, child, grandchild,

 

13  parent, brother, or sister of a deceased individual who owned an

 

14  interest in a wholesaler, who is entitled to inherit the deceased

 

15  individual's ownership interest in the wholesaler under the terms

 

16  of the deceased individual's will, or who has otherwise been

 

17  designated in writing by the deceased individual to succeed the

 

18  deceased individual in the wholesaler's business, or is entitled

 

19  to inherit such that ownership interest under the laws of

 

20  intestate succession of this state. With respect to an

 

21  incapacitated individual owning an ownership interest in a

 

22  wholesaler, the term means the person appointed by a court as the

 

23  conservator of such that individual's property. The term also

 

24  includes the appointed and qualified personal representative and

 

25  the testamentary trustee of a deceased individual owning an

 

26  ownership interest in a wholesaler.

 

27        (d) "Good faith" means honesty in fact and the observance of


 

 1  reasonable commercial standards of fair dealing in the trade, as

 

 2  defined and interpreted under section 2103 of the uniform

 

 3  commercial code, 1962 PA 174, MCL 440.2103.

 

 4        (d) (e) "Master distributor" means a wholesaler who acts in

 

 5  the same or similar capacity as a wine maker or an outstate

 

 6  seller of wine for a brand or brands of wine to other wholesalers

 

 7  on a regular basis in the normal course of business.

 

 8        (f) "Reasonable qualifications" means the average standard

 

 9  of the criteria used by the respective supplier for wholesalers

 

10  that entered into or renewed an agreement with the suppliers

 

11  during a period of 24 months prior to the proposed transfer of

 

12  the wholesaler's business.

 

13        (g) "Retaliatory action" means action which includes, but is

 

14  not limited to, the refusal to continue an agreement, or a

 

15  material reduction in the quality of service or quantity of

 

16  products available to a wholesaler under an agreement, which

 

17  refusal or reduction is not made in good faith.

 

18        (h) "Sales territory" means an area of sales responsibility

 

19  for the brand or brands of wine sold by a supplier as designated

 

20  by an agreement.

 

21        (e) (i) "Successor" means a supplier who obtains, in any

 

22  manner from any person, including a person who is not a supplier,

 

23  the distribution rights of 1 or more brands of wine which a

 

24  licensed Michigan wholesaler has distributed in this state

 

25  pursuant to an agreement with another supplier, who previously

 

26  had the distribution rights for the brand or brands.

 

27        (f) (j) "Supplier" means a wine maker or an outstate seller


 

 1  of wine, or a master distributor. Supplier does not include a

 

 2  small wine maker that accounts for less than 3% of a wholesaler's

 

 3  total annual sales.

 

 4        (k) "Transfer of a wholesaler's business" means the

 

 5  voluntary sale, assignment, or other transfer of the business or

 

 6  control of the business of the wholesaler, including the sale or

 

 7  other transfer of stock or assets by merger, consolidation, or

 

 8  dissolution.

 

 9        (2) (3) A supplier shall not do any of the following:

 

10        (a) Coerce, or attempt to coerce, any wholesaler to accept

 

11  delivery of any wine or other commodity which that has not been

 

12  ordered by the wholesaler. However, a supplier may impose

 

13  reasonable inventory requirements upon a wholesaler if the

 

14  requirements are made in good faith and are generally applied to

 

15  other wholesalers having an agreement with the supplier.

 

16        (b) Coerce, or attempt to coerce, any wholesaler to accept

 

17  delivery of any wine or other commodity ordered by a wholesaler

 

18  if the order was properly canceled by the wholesaler in

 

19  accordance with the procedures agreed upon by the supplier and

 

20  wholesaler.

 

21        (c) Coerce, or attempt to coerce, any wholesaler to do any

 

22  illegal act by threatening to amend, cancel, terminate, or refuse

 

23  to renew any agreement existing between the supplier and

 

24  wholesaler.

 

25        (d) Require a wholesaler to assent to any condition,

 

26  stipulation, or provision limiting the wholesaler's right to sell

 

27  the brand or brands of wine of any other supplier anywhere in


 

 1  this state unless the acquisition of the brand or brands of

 

 2  another supplier would materially impair the quality of service

 

 3  of the brand or brands of the supplier presently being sold by

 

 4  the wholesaler.

 

 5        (e) Require a wholesaler to purchase 1 or more brands of

 

 6  wine in order for the wholesaler to purchase another brand or

 

 7  brands of wine for any reason. However, a wholesaler that has

 

 8  agreed to distribute a brand or brands before June 26, 1984 shall

 

 9  continue to distribute the brand or brands in conformance with

 

10  this section.

 

11        (f) Request a wholesaler to submit profit and loss

 

12  statements, balance sheets, or financial records as a requirement

 

13  for renewing or retaining an agreement.

 

14        (g) Withhold delivery of wine ordered by a wholesaler, or

 

15  change a wholesaler's quota of a brand or brands if the

 

16  withholding or change is not made in good faith.

 

17        (h) Require a wholesaler by any means to participate in or

 

18  contribute to any local or national advertising fund controlled

 

19  directly or indirectly by a supplier.

 

20        (i) Fail to provide each wholesaler of the supplier's brand

 

21  or brands with a written agreement which that contains in total

 

22  the supplier's agreement with each wholesaler, and designates a

 

23  specific sales territory.

 

24        (j) Fix, maintain, or establish the price at which a

 

25  wholesaler shall sell any wine.

 

26        (k) Take any retaliatory action against a wholesaler that

 

27  files a complaint regarding an alleged violation by the supplier


 

 1  of state or federal law or an administrative rule.

 

 2        (l) Require or prohibit any change in the manager or

 

 3  successor manager of any wholesaler who has been approved by the

 

 4  supplier as of June 26, 1984. Should, If, after June 26, 1984, a

 

 5  supplier require that requires a manager or successor manager be

 

 6  appointed, or should a wholesaler change an approved manager or

 

 7  successor manager, a supplier shall not interfere with or

 

 8  prohibit the appointment unless the person fails to meet the

 

 9  reasonable written standards for Michigan wholesalers of the

 

10  supplier which standards that have been provided to the

 

11  wholesaler.

 

12        (m) Require by a provision of any agreement or other

 

13  instrument in connection with the agreement that any dispute

 

14  arising out of or in connection with that agreement be determined

 

15  through the application of any other state's laws. Any supplier

 

16  or wholesaler aggrieved by any dispute arising out of or in

 

17  connection with an agreement governed by this act shall have the

 

18  right to file an appropriate action consistent with this act in

 

19  any court in this state having venue.

 

20        (3) (4) A wholesaler shall not sell or deliver wine to a

 

21  retail licensee located outside the sales territory designated by

 

22  the supplier of a particular brand or brands of wine. However,

 

23  during periods of temporary service interruptions impacting a

 

24  particular sales territory, a wholesaler who that normally

 

25  services the impacted sales territory shall file with the

 

26  commission a written notice designating the specific wholesaler

 

27  or wholesalers who that will service the sales territory during


 

 1  the period of temporary service interruption and the approximate

 

 2  length of time of the service interruption. When the temporary

 

 3  service interruption is over, the wholesaler who that normally

 

 4  services the sales territory shall notify in writing the

 

 5  commission and the wholesaler, or wholesalers, which is that are

 

 6  servicing the sales territory on a temporary basis of this fact

 

 7  and any wholesaler servicing the sales territory on a temporary

 

 8  basis shall cease servicing the sales territory upon receipt of

 

 9  the notice.

 

10        A wholesaler who is designated to service the impacted sales

 

11  territory during the period of temporary service shall not be in

 

12  violation of this subsection.

 

13        A wholesaler who has been designated to service the impacted

 

14  sales territory during the period of temporary service

 

15  interruption shall not have any of the rights provided under

 

16  subsections (6) to (12).(5) to (11).

 

17        (4) (5) A supplier or wholesaler shall not directly or

 

18  indirectly restrict or inhibit , directly or indirectly, the

 

19  right of free association among suppliers or wholesalers for any

 

20  lawful purpose.

 

21        (5) (6) Notwithstanding the terms, provisions, or conditions

 

22  of any agreement, a supplier shall not amend any agreement unless

 

23  the supplier is acting in good faith in making the amendment.

 

24        (6) (7) Notwithstanding any agreement and except as

 

25  otherwise provided for in this section, a supplier shall not

 

26  cause a wholesaler to resign from an agreement; or cancel,

 

27  terminate, fail to renew, or refuse to continue under an


 

 1  agreement unless the supplier has complied with all of the

 

 2  following:

 

 3        (a) Has satisfied the applicable notice requirements of

 

 4  subsection (10).(9).

 

 5        (b) Has acted in good faith.

 

 6        (c) Has good cause for the cancellation, termination,

 

 7  nonrenewal, discontinuance, or forced resignation.

 

 8        (7) (8) Notwithstanding any agreement, good cause shall

 

 9  exist exists for the purposes of a termination, cancellation,

 

10  nonrenewal, or discontinuance under subsection (7)(c) (6)(c) when

 

11  all of the following occur:

 

12        (a) There is a failure by the The wholesaler fails to comply

 

13  with a provision of the agreement which that is both reasonable

 

14  and of material significance to the business relationship between

 

15  the wholesaler and the supplier.

 

16        (b) The supplier first acquired knowledge of the failure

 

17  described in subdivision (a) not more than 2 years before the

 

18  date notification was given pursuant to under subsection (7).(6).

 

19        (c) The wholesaler was given written notice by the supplier

 

20  of failure to comply with the agreement.

 

21        (d) The wholesaler was afforded a reasonable opportunity to

 

22  assert good faith efforts to comply with the agreement within the

 

23  time limits as provided for in subdivision (e).

 

24        (e) The wholesaler has been afforded 25 days in which to

 

25  submit a plan of corrective action to comply with the agreement

 

26  and an additional 75 days to cure such the noncompliance in

 

27  accordance with the plan.


 

 1        (8) (9) A supplier or wholesaler who terminates, cancels,

 

 2  nonrenews, or discontinues an agreement shall have has the burden

 

 3  of showing that it has acted in good faith, complied with the

 

 4  applicable notice requirements under this section, and that there

 

 5  was good cause for the termination, cancellation, nonrenewal, or

 

 6  discontinuance.

 

 7        (9) (10) Notwithstanding any agreement and except as

 

 8  otherwise provided in this section, the a supplier shall furnish

 

 9  written notice of the a termination, cancellation, nonrenewal, or

 

10  discontinuance of an agreement to the a wholesaler not less than

 

11  15 days before the effective date of the termination,

 

12  cancellation, nonrenewal, or discontinuance. The notice shall be

 

13  by certified mail and shall contain all of the following:

 

14        (a) A statement of intention to terminate, cancel, not

 

15  renew, or discontinue the agreement.

 

16        (b) A statement of the reason for the termination,

 

17  cancellation, nonrenewal, or discontinuance.

 

18        (c) The effective date on which of the termination,

 

19  cancellation, nonrenewal, or discontinuance. takes effect.

 

20        (10) (11) Notwithstanding subsections (7) and (10), (6) and

 

21  (9), a supplier may immediately terminate, cancel, fail to not

 

22  renew, or discontinue an agreement upon written notice given in

 

23  the manner and containing the information required by subsection

 

24  (10) (9) if any of the following occur:

 

25        (a) Insolvency of the wholesaler, the filing of any petition

 

26  by or against the wholesaler under any bankruptcy or receivership

 

27  law, or the dissolution or liquidation of the wholesaler which


 

 1  that materially affects the wholesaler's ability to remain in

 

 2  business.

 

 3        (b) Revocation of The commission revokes the wholesaler's

 

 4  license by the commission whereby the wholesaler cannot service

 

 5  the wholesaler's sales territory for more than 60 days.

 

 6        (c) The wholesaler, or an individual who owns more than 10%

 

 7  of the stock of a corporate wholesaler, has been is convicted of

 

 8  a felony. As used in this subdivision, "felony" means a felony

 

 9  under the United States code or the Michigan Compiled Laws.

 

10  However, an existing approved stockholder or stockholders shall

 

11  have has the right to purchase the stock of the offending

 

12  stockholder prior to before the conviction of the offending

 

13  stockholder, and if the sale is completed prior to before the

 

14  conviction, the provisions of this subdivision shall do not

 

15  apply.

 

16        (11) (12) Notwithstanding subsections (7), (10), and (11),

 

17  upon not less than (6), (9), and (10), if a supplier gives a

 

18  wholesaler at least 15 days' prior written notice given in the

 

19  manner and containing the information required by subsection

 

20  (10), (9), a supplier may terminate, cancel, fail to not renew,

 

21  or discontinue an agreement if any of the following events occur:

 

22        (a) There was fraudulent conduct on the part of the

 

23  wholesaler in dealings with the supplier.

 

24        (b) The wholesaler failed to confine its sales of a brand or

 

25  brands to the assigned sales territory. This subdivision does not

 

26  apply if there is a dispute between 2 or more wholesalers as to

 

27  the boundaries of the assigned territory, and the boundaries


 

 1  cannot be determined by a reading of the description contained in

 

 2  the agreements between the supplier and the wholesalers.

 

 3        (c) The sale by the wholesaler of any brand or brands sold

 

 4  by the supplier to the wholesaler and known by that the

 

 5  wholesaler to be knew were ineligible for sale prior to before

 

 6  the actual sale to the retailer. The supplier shall repurchase

 

 7  the ineligible product from the wholesaler when the ineligibility

 

 8  is caused by the supplier. The supplier must give the wholesaler

 

 9  written notice specifying the ineligible product.

 

10        (12) (13) Notwithstanding subsections (7), (10), (11), and

 

11  (12), (6), (9), (10), and (11), a supplier may terminate, cancel,

 

12  not renew, or discontinue an agreement upon not less than 30

 

13  days' prior written notice if the supplier discontinues

 

14  production or discontinues distribution in this state of all the

 

15  brands sold by the supplier to the wholesaler. Nothing in this

 

16  section shall prohibit prohibits a supplier upon not less than 30

 

17  days' notice to discontinue the distribution of any particular

 

18  brand or package of wine. This subsection does not prohibit a

 

19  supplier from conducting test marketing of a new brand of wine or

 

20  from conducting the test marketing of a brand of wine which that

 

21  is not currently being sold in this state provided that if the

 

22  supplier has notified the commission in writing of its plans to

 

23  test market. The notice shall describe the market area in which

 

24  where the test shall be conducted; the name or names of the

 

25  wholesaler or wholesalers who will be selling the wine; the name

 

26  or names of the brand of wine being tested; and the period of

 

27  time during which the testing will take place. A market testing


 

 1  period shall not exceed 18 months.

 

 2        (13) (14) The A wholesaler shall devote reasonable efforts

 

 3  and resources to sales and distribution of all the a supplier's

 

 4  products which that the wholesaler has been granted the right to

 

 5  sell and distribute and shall maintain reasonable sales levels.

 

 6        (14) (15) A supplier shall not withhold consent to any

 

 7  transfer of a wholesaler's business if the proposed transferee

 

 8  meets the material and reasonable qualifications and standards

 

 9  required by the supplier. A wholesaler shall give the supplier

 

10  written notice of intent to transfer the wholesaler's business. A

 

11  supplier shall not unreasonably delay a response to a request for

 

12  a proposed transfer of a wholesaler's business. However, a

 

13  transfer of a wholesaler's business which that is not approved by

 

14  the supplier shall be null and is void. A supplier shall not

 

15  interfere with, or prevent, the transfer of the wholesaler's

 

16  business if the proposed transferee is a designated member.

 

17        (15) (16) A supplier as part of the written agreement

 

18  required by this section may, subject to the provisions of

 

19  subsection (3)(l), (2)(l), require a wholesaler to designate a

 

20  successor manager who shall be subject to prior approval by the

 

21  supplier. In the event the designated successor manager fails to

 

22  assume the role of approved manager or for any reason does not

 

23  continue to manage the wholesaler's business, after assuming that

 

24  responsibility, then any successor shall be subject to the prior

 

25  approval of the supplier, subject to the provisions of subsection

 

26  (3)(l), (2)(l), notwithstanding the transferee's interest as a

 

27  designated member.


 

 1        (16) (17) A supplier that has amended, canceled, terminated,

 

 2  or refused to renew not renewed any agreement; has caused a

 

 3  wholesaler to resign from an agreement; or has withheld consent

 

 4  to any assignment or transfer of a wholesaler's business, except

 

 5  as provided for in this section, shall pay the wholesaler

 

 6  reasonable compensation for the diminished value of the

 

 7  wholesaler's business or of any ancillary business which has been

 

 8  negatively affected by the act of the supplier, or both. The

 

 9  value of the wholesaler's business or ancillary business shall

 

10  include, but not be limited to, its goodwill.

 

11        (17) (18) Either party A supplier or wholesaler may, at any

 

12  time, determine that mutual agreement on the amount of reasonable

 

13  compensation cannot be reached. Should such a determination be

 

14  made, the supplier or the wholesaler shall send written notice to

 

15  the other party declaring their intention to proceed with

 

16  arbitration. Arbitration shall proceed only by mutual agreement

 

17  of both parties.

 

18        (18) (19) The supplier and wholesaler may, by agreement,

 

19  submit the matter of determining the amount of compensation under

 

20  arbitration may, by agreement of the parties, be submitted to a

 

21  5-member arbitration panel consisting of 2 representatives

 

22  selected by the supplier but unassociated with the affected

 

23  supplier, 2 wholesaler representatives selected by the wholesaler

 

24  but unassociated with the wholesaler, and an impartial

 

25  arbitrator.

 

26        (19) (20) Not more than 10 days after the notice to enter

 

27  into arbitration has been sent, each party the supplier and


 

 1  wholesaler shall request, in writing, a list of 5 arbitrators

 

 2  from the American arbitration association. Not more than 10 days

 

 3  after the receipt of supplier and wholesaler receive the list of

 

 4  5 choices, the wholesaler arbitrators and the supplier

 

 5  arbitrators may strike and disqualify up to 2 names each from the

 

 6  list. Should either party If the supplier and wholesaler fail to

 

 7  respond within the 10 days or should if more than 1 name remain,

 

 8  remains, the American arbitration association shall make the

 

 9  selection of select the impartial arbitrator.

 

10        (20) (21) Not more than 30 days after the supplier and

 

11  wholesaler receive the list of arbitrators, is received, the

 

12  wholesaler and supplier shall exchange in writing the names of

 

13  their respective arbitration panel representatives.

 

14        (21) (22) Not more than 30 days after the final selection of

 

15  the arbitration panel is made, the arbitration panel shall

 

16  convene to decide the dispute. The panel shall render a decision

 

17  by majority vote of the participants within 20 days from the

 

18  conclusion of the arbitration.

 

19        (22) (23) The cost of the impartial arbitrator, the

 

20  stenographer, and the meeting site shall be equally divided

 

21  between the wholesaler and the supplier. All other costs shall be

 

22  paid by the party incurring them. The award of the arbitration

 

23  panel shall be final and binding on the parties.

 

24        (23) (24) Should either party fail If the supplier or

 

25  wholesaler fails to abide by the time limitations as prescribed

 

26  in subsections (20), (21), and (22), (19), (20), and (21), or

 

27  fail or refuse to make the selection of fails or refuses to


 

 1  select any arbitrators, or fail fails to participate in the

 

 2  arbitration hearings, the other party shall make the selection of

 

 3  their arbitrators and proceed to arbitration. The party who has

 

 4  failed or refused to comply as prescribed in this subsection

 

 5  shall be is considered to be in default. Any party considered to

 

 6  be in default pursuant to under this subsection shall have waived

 

 7  waives any and all rights the party would have had in the

 

 8  arbitration and shall be is considered to have consented to the

 

 9  determination of the arbitration panel.

 

10        (24) (25) A wholesaler shall not waive any of the rights

 

11  granted in any provision of this section. Nothing in this section

 

12  shall be construed to limit or prohibit good faith limits or

 

13  prohibits good-faith dispute settlements voluntarily entered into

 

14  by the parties.

 

15        (25) (26) A successor to a supplier that continues in

 

16  business as a wine maker, an outstate seller of wine, or master

 

17  distributor shall be is bound by all terms and conditions of each

 

18  agreement of the supplier with a wholesaler licensed in this

 

19  state that were in effect on the date on which the successor

 

20  received the distribution rights of the previous supplier.

 

21        (26) (27) This section shall apply applies to agreements in

 

22  existence on June 26, 1984, as well as agreements entered into or

 

23  renewed after that date.

 

24        (27) (28) If a supplier engages in conduct prohibited under

 

25  this section, a wholesaler with which the supplier has an

 

26  agreement may maintain a civil action against the supplier to

 

27  recover actual damages reasonably incurred as the result of the


 

 1  prohibited conduct. If a wholesaler engages in conduct prohibited

 

 2  under this section, a supplier with which the wholesaler has an

 

 3  agreement may maintain a civil action against the wholesaler to

 

 4  recover actual damages reasonably incurred as the result of the

 

 5  prohibited conduct.

 

 6        (28) (29) A supplier that violates any provision of this

 

 7  section is liable for all actual damages and all court costs and

 

 8  reasonable attorney fees incurred by a wholesaler as a result of

 

 9  that violation. A wholesaler that violates any provision of this

 

10  section is liable for all actual damages and all court costs and

 

11  reasonable attorney fees incurred by the supplier as a result of

 

12  that violation.

 

13        (29) (30) A supplier or wholesaler may bring an action for

 

14  declaratory judgment for determination of any controversy arising

 

15  pursuant to under this section.

 

16        (30) (31) Except as otherwise provided in this section, if a

 

17  court finds that a supplier has not acted in good faith in

 

18  effecting the amendment, termination, cancellation, or nonrenewal

 

19  of amending, terminating, canceling, or not renewing any

 

20  agreement; or has unreasonably withheld its consent to any

 

21  assignment, transfer, or sale of a wholesaler's business, it the

 

22  court may award exemplary damages, as well as actual damages,

 

23  court costs, and reasonable attorney fees to the wholesaler who

 

24  has been damaged by the action of the supplier.

 

25        (31) (32) Upon proper application to the a court, a supplier

 

26  or wholesaler may obtain injunctive relief against any violation

 

27  of this section. If the court grants injunctive relief or issues


 

 1  a temporary restraining order, bond shall not be required to be

 

 2  posted.

 

 3        (32) (33) The procedure for resolving any violation of

 

 4  subsection (3)(a), (2)(a), (b), (c), (e), (f), (h), (i), (j),

 

 5  (k), or (l) , or (4) (3) shall be the procedure prescribed by this

 

 6  act and the administrative procedures act of 1969, 1969 PA 306,

 

 7  MCL 24.201 to 24.328. Any other violation of or dispute regarding

 

 8  this section, unless the dispute is resolved pursuant to under

 

 9  subsections (18) to (24), (17) to (23), shall only be resolved by

 

10  a civil action in court as provided in this section and not by

 

11  the commission.

 

12        Sec. 403. (1) The purpose of this section is to provide a

 

13  structure for the business relations between a wholesaler of beer

 

14  and a supplier of beer. Regulation in this area is considered

 

15  necessary for the following reasons:

 

16        (a) To maintain stability and healthy competition in the

 

17  beer industry in this state.

 

18        (b) To promote and maintain a sound, stable, and viable 3-

 

19  tier system of distribution of beer to the public.

 

20        (c) To promote the public health, safety, and welfare.

 

21        (1) (2) As used in this section, unless the context requires

 

22  otherwise:

 

23        (a) "Agreement" means any agreement between a wholesaler and

 

24  a supplier, whether oral or written, whereby a wholesaler is

 

25  granted the right to offer and sell a brand or brands of beer

 

26  sold by a supplier.

 

27        (b) "Ancillary business" means a business owned by a


 

 1  wholesaler, a stockholder of a wholesaler, or a partner of a

 

 2  wholesaler the primary purpose of which is directly related to

 

 3  the transporting, storing, or marketing of the brand or brands of

 

 4  beer of a supplier with whom the wholesaler has an agreement; or

 

 5  a business owned by a wholesaler, a stockholder of a wholesaler,

 

 6  or a partner of a wholesaler which that recycles empty returnable

 

 7  beverage containers.

 

 8        (c) "Designated member" means the spouse, child, grandchild,

 

 9  parent, brother, or sister of a deceased individual who owned an

 

10  interest in a wholesaler, who is entitled to inherit the deceased

 

11  individual's ownership interest in the wholesaler under the terms

 

12  of the deceased individual's will, or who has otherwise been

 

13  designated in writing by the deceased individual to succeed the

 

14  deceased individual in the wholesaler's business, or is entitled

 

15  to inherit such that ownership interest under the laws of

 

16  intestate succession of this state. With respect to an

 

17  incapacitated individual owning an ownership interest in a

 

18  wholesaler, the term means the person appointed by a court as the

 

19  conservator of such that individual's property. The term also

 

20  includes the appointed and qualified personal representative and

 

21  the testamentary trustee of a deceased individual owning an

 

22  ownership interest in a wholesaler.

 

23        (d) "Good faith" means honesty in fact and the observance of

 

24  reasonable commercial standards of fair dealing in the trade, as

 

25  defined and interpreted under section 2103 of the uniform

 

26  commercial code, 1962 PA 174, MCL 440.2103.

 

27        (d) (e) "Master distributor" means a wholesaler who acts in


 

 1  the same or similar capacity as a brewer or outstate seller of

 

 2  beer for a brand or brands of beer to other wholesalers on a

 

 3  regular basis in the normal course of business.

 

 4        (f) "Reasonable qualifications" means the average standard

 

 5  of the criteria used by the respective supplier for wholesalers

 

 6  that entered into or renewed an agreement with the supplier

 

 7  during a period of 24 months prior to the proposed transfer of

 

 8  the wholesaler's business.

 

 9        (g) "Retaliatory action" means action which includes, but is

 

10  not limited to, the refusal to continue an agreement, or a

 

11  material reduction in the quality of service or quantity of

 

12  products available to a wholesaler under an agreement, which

 

13  refusal or reduction is not made in good faith.

 

14        (h) "Sales territory" means an area of exclusive sales

 

15  responsibility for the brand or brands of beer sold by a supplier

 

16  as designated by an agreement.

 

17        (e) (i) "Successor" means a supplier who obtains, in any

 

18  manner from any person, including a person who is not a supplier,

 

19  the distribution rights of 1 or more brands of beer which a

 

20  licensed Michigan wholesaler has distributed in this state

 

21  pursuant to an agreement with another supplier who previously had

 

22  the distribution rights for the brand or brands.

 

23        (f) (j) "Supplier" means a brewer, an outstate seller of

 

24  beer, or a master distributor. Supplier does not include a small

 

25  brewer that accounts for less than 3% of a wholesaler's total

 

26  annual sales.

 

27        (k) "Transfer of a wholesaler's business" means the


 

 1  voluntary sale, assignment, or other transfer of the business or

 

 2  control of the business of the wholesaler, including the sale or

 

 3  other transfer of stock or assets by merger, consolidation, or

 

 4  dissolution.

 

 5        (2) (3) A supplier shall not do any of the following:

 

 6        (a) Coerce, or attempt to coerce, any wholesaler to accept

 

 7  delivery of any beer or other commodity which that has not been

 

 8  ordered by the wholesaler. However, a supplier may impose

 

 9  reasonable inventory requirements upon a wholesaler if the

 

10  requirements are made in good faith and are generally applied to

 

11  other wholesalers having an agreement with the supplier.

 

12        (b) Coerce, or attempt to coerce, any wholesaler to accept

 

13  delivery of any beer or other commodity ordered by a wholesaler

 

14  if the order was properly canceled by the wholesaler in

 

15  accordance with the procedures agreed upon by the supplier and

 

16  wholesaler.

 

17        (c) Coerce, or attempt to coerce, any wholesaler to do any

 

18  illegal act by threatening to amend, cancel, terminate, or refuse

 

19  to renew any agreement existing between the supplier and

 

20  wholesaler.

 

21        (d) Require a wholesaler to assent to any condition,

 

22  stipulation, or provision limiting the wholesaler's right to sell

 

23  the brand or brands of beer of any other supplier anywhere in

 

24  this state unless the acquisition of the brand or brands of

 

25  another supplier would materially impair the quality of service

 

26  of the brand or brands of the supplier presently being sold by

 

27  the wholesaler.


 

 1        (e) Require a wholesaler to purchase 1 or more brands of

 

 2  beer in order for the wholesaler to purchase another brand or

 

 3  brands of beer for any reason. However, a wholesaler that has

 

 4  agreed to distribute a brand or brands before June 26, 1984 shall

 

 5  continue to distribute the brand or brands in conformance with

 

 6  this section.

 

 7        (f) Request a wholesaler to submit profit and loss

 

 8  statements, balance sheets, or financial records as a requirement

 

 9  for renewing or retaining an agreement.

 

10        (g) Withhold delivery of beer ordered by a wholesaler, or

 

11  change a wholesaler's quota of a brand or brands if the

 

12  withholding or change is not made in good faith.

 

13        (h) Require a wholesaler by any means to participate in or

 

14  contribute to any local or national advertising fund controlled

 

15  directly or indirectly by a supplier.

 

16        (i) Fail to provide each wholesaler of the supplier's brand

 

17  or brands with a written agreement which that contains, in total,

 

18  the supplier's agreement with each wholesaler and which that

 

19  designates a specific sales territory. Any agreement which that

 

20  is in existence on June 26, 1984 shall be renewed consistent with

 

21  this section, except that this section may be incorporated by

 

22  reference in the agreement.

 

23        (j) Fix, maintain, or establish the price at which a

 

24  wholesaler shall sell any beer.

 

25        (k) Take any retaliatory action against a wholesaler that

 

26  files a complaint regarding an alleged violation by the supplier

 

27  of state or federal law or an administrative rule.


 

 1        (l) Require or prohibit any change in the manager or

 

 2  successor manager of any wholesaler who has been approved by the

 

 3  supplier as of June 26, 1984. Should If a wholesaler change

 

 4  changes an approved manager or successor manager, a supplier

 

 5  shall not require or prohibit the change unless the person fails

 

 6  to meet the reasonable written standards for Michigan wholesalers

 

 7  of the supplier which standards that have been provided to the

 

 8  wholesaler.

 

 9        (m) Require by a provision of any agreement or other

 

10  instrument in connection with the agreement that any dispute

 

11  arising out of or in connection with that agreement be determined

 

12  through the application of any other state's laws, be determined

 

13  in federal court sitting in a state other than Michigan, this

 

14  state, or be determined in a state court of a state other than

 

15  the state of Michigan. this state. A provision contained in any

 

16  agreement or other instrument in connection with the agreement

 

17  which that contravenes this subdivision shall be null and is

 

18  void.

 

19        (3) (4) A wholesaler shall not sell or deliver beer to a

 

20  retail licensee located outside the sales territory designated by

 

21  the supplier of a particular brand or brands of beer. However,

 

22  during periods of temporary service interruptions impacting a

 

23  particular sales territory, a wholesaler who that normally

 

24  services the impacted sales territory shall file with the

 

25  commission a written notice designating the specific wholesaler

 

26  or wholesalers who that will service the sales territory during

 

27  the period of temporary service interruption and the approximate


 

 1  length of time of the service interruption. When the temporary

 

 2  service interruption is over, the wholesaler who that normally

 

 3  services the sales territory shall notify in writing the

 

 4  commission and the wholesaler, or wholesalers, which is that are

 

 5  servicing the sales territory on a temporary basis of this fact

 

 6  and any wholesaler servicing the sales territory on a temporary

 

 7  basis shall cease servicing the sales territory upon receipt of

 

 8  the notice. A wholesaler that is designated to service the

 

 9  impacted sales territory during the period of temporary service

 

10  is not in violation of this subsection. A wholesaler that has

 

11  been designated to service the impacted sales territory during

 

12  the period of temporary service interruption shall not have any

 

13  of the rights provided under subsections (5) to (11).

 

14        A wholesaler who is designated to service the impacted sales

 

15  territory during the period of temporary service shall not be in

 

16  violation of this subsection.

 

17        A wholesaler who has been designated to service the impacted

 

18  sales territory during the period of temporary service

 

19  interruption shall not have any of the rights provided under

 

20  subsections (6) to (12).

 

21        (4) (5) A supplier or wholesaler shall not directly or

 

22  indirectly restrict or inhibit , directly or indirectly, the

 

23  right of free association among suppliers or wholesalers for any

 

24  lawful purpose.

 

25        (5) (6) Notwithstanding the terms, provisions, or conditions

 

26  of any agreement, a supplier shall not amend any agreement unless

 

27  the supplier is acting in good faith in making the amendment.


 

 1        (6) (7) Notwithstanding any agreement and except as

 

 2  otherwise provided for in this section, a supplier shall not

 

 3  cause a wholesaler to resign from an agreement; or cancel,

 

 4  terminate, fail to renew, or refuse to continue under an

 

 5  agreement unless the supplier has complied with all of the

 

 6  following:

 

 7        (a) Has satisfied the applicable notice requirements of

 

 8  subsection (10).(9).

 

 9        (b) Has acted in good faith.

 

10        (c) Has good cause for the cancellation, termination,

 

11  nonrenewal, discontinuance, or forced resignation.

 

12        (7) (8) Notwithstanding any agreement, good cause shall

 

13  exist exists for the purposes of a termination, cancellation,

 

14  nonrenewal, or discontinuance under subsection (7)(c) (6)(c) when

 

15  all of the following occur:

 

16        (a) There is a failure by the The wholesaler fails to comply

 

17  with a provision of the agreement which that is both reasonable

 

18  and of material significance to the business relationship between

 

19  the wholesaler and the supplier.

 

20        (b) The supplier first acquired knowledge of the failure

 

21  described in subdivision (a) not more than 2 years before the

 

22  date notification was given pursuant to under subsection (7).(6).

 

23        (c) The wholesaler was given written notice by the supplier

 

24  of failure to comply with the agreement.

 

25        (d) The wholesaler was afforded a reasonable opportunity to

 

26  assert good-faith efforts to comply with the agreement within the

 

27  time limits as provided for in subdivision (e).


 

 1        (e) The wholesaler has been was afforded 30 days in which to

 

 2  submit a plan of corrective action to comply with the agreement

 

 3  and an additional 90 days to cure such the noncompliance in

 

 4  accordance with the plan.

 

 5        (8) (9) For each termination, cancellation, nonrenewal, or

 

 6  discontinuance, the a supplier shall have has the burden of

 

 7  showing that it has acted in good faith, that the notice

 

 8  requirements under this section have been complied with, and that

 

 9  there was good cause for the termination, cancellation,

 

10  nonrenewal, or discontinuance.

 

11        (9) (10) Notwithstanding any agreement and except as

 

12  otherwise provided in this section, the a supplier shall furnish

 

13  written notice of the a termination, cancellation, nonrenewal, or

 

14  discontinuance of an agreement to the a wholesaler not less than

 

15  15 days before the effective date of the termination,

 

16  cancellation, nonrenewal, or discontinuance. The notice shall be

 

17  by certified mail and shall contain all of the following:

 

18        (a) A statement of intention to terminate, cancel, not

 

19  renew, or discontinue the agreement.

 

20        (b) A statement of the reason for the termination,

 

21  cancellation, nonrenewal, or discontinuance.

 

22        (c) The effective date on which of the termination,

 

23  cancellation, nonrenewal, or discontinuance. takes effect.

 

24        (10) (11) Notwithstanding subsections (7) and (10), (6) and

 

25  (9), a supplier may terminate, cancel, fail to not renew, or

 

26  discontinue an agreement upon written notice given in the manner

 

27  and containing the information required by subsection (10) (9) if


 

 1  any of the following occur:

 

 2        (a) Insolvency of the wholesaler, the filing of any petition

 

 3  by or against the wholesaler under any bankruptcy or receivership

 

 4  law, or the dissolution or liquidation of the wholesaler which

 

 5  that materially affects the wholesaler's ability to remain in

 

 6  business.

 

 7        (b) Revocation of The commission revokes the wholesaler's

 

 8  license, by the commission whereby the wholesaler cannot service

 

 9  the wholesaler's sales territory for more than 60 days.

 

10        (c) The wholesaler, or an individual who owns more than 10%

 

11  of the stock of a corporate wholesaler, has been is convicted of

 

12  a felony. As used in this subdivision, "felony" means a felony

 

13  under the United States Code or the Michigan Compiled Laws.

 

14  However, an existing approved stockholder or stockholders shall

 

15  have has the right to purchase the stock of the offending

 

16  stockholder prior to before the conviction of the offending

 

17  stockholder and, if the sale is completed prior to before the

 

18  conviction, the provisions of this subdivision shall do not

 

19  apply.

 

20        (11) (12) Notwithstanding subsections (7), (10), and (11),

 

21  upon not less than (6), (9), and (10), if a supplier gives a

 

22  wholesaler at least 15 days' prior written notice given in the

 

23  manner and containing the information required by subsection

 

24  (10), (9), a supplier may terminate, cancel, fail to not renew,

 

25  or discontinue an agreement if any of the following events occur:

 

26        (a) There was fraudulent conduct on the part of the

 

27  wholesaler in dealings with the supplier.


 

 1        (b) The wholesaler failed to confine its sales of a brand or

 

 2  brands to the assigned sales territory. This subdivision does not

 

 3  apply if there is a dispute between 2 or more wholesalers as to

 

 4  the boundaries of the assigned territory, and the boundaries

 

 5  cannot be determined by a reading of the description contained in

 

 6  the agreements between the supplier and the wholesalers.

 

 7        (c) The sale by the wholesaler of any brand or brands sold

 

 8  by the supplier to the wholesaler and known by that the

 

 9  wholesaler to be knew were ineligible for sale prior to before

 

10  the actual sale to the retailer. The supplier shall repurchase

 

11  the ineligible product from the wholesaler when the ineligibility

 

12  is caused by the supplier. The supplier must give the wholesaler

 

13  written notice specifying the ineligible product. This

 

14  subdivision does not apply when a supplier ships a brand or

 

15  brands to a wholesaler that must be removed within 60 days of the

 

16  deadline for retail sale of the product. This 60-day period shall

 

17  commence upon receipt of the product by the wholesaler.

 

18        (12) (13) Notwithstanding subsections (7), (10), (11), and

 

19  (12), (6), (9), (10), and (11), a supplier may terminate, cancel,

 

20  not renew, or discontinue an agreement upon not less than 30

 

21  days' prior written notice if the supplier discontinues

 

22  production or discontinues distribution in this state of all the

 

23  brands sold by the supplier to the wholesaler. Nothing in this

 

24  section shall prohibit prohibits a supplier upon not less than 30

 

25  days' notice to discontinue the distribution of any particular

 

26  brand or package of beer. This subsection does not prohibit a

 

27  supplier from conducting test marketing of a new brand of beer or


 

 1  from conducting the test marketing of a brand of beer which that

 

 2  is not currently being sold in this state provided that if the

 

 3  supplier has notified the commission in writing of its plans to

 

 4  test market. The notice shall describe the market area in which

 

 5  where the test shall be conducted; the name or names of the

 

 6  wholesaler or wholesalers who will be selling the beer; the name

 

 7  or names of the brand of beer being tested; and the period of

 

 8  time during which the testing will take place. A market testing

 

 9  period shall not exceed 18 months.

 

10        (13) (14) The A wholesaler shall devote reasonable efforts

 

11  and resources to sales and distribution of all the a supplier's

 

12  products which that the wholesaler has been granted the right to

 

13  sell and distribute and shall maintain reasonable sales levels.

 

14        (14) (15) A brewer, an outstate seller of beer, or a master

 

15  distributor that has designated a sales territory for a

 

16  wholesaler shall not enter into an additional agreement with any

 

17  other wholesaler for the same brand or brands of beer in the same

 

18  territory or any portion of that territory.

 

19        (15) (16) A supplier shall not withhold consent to any

 

20  transfer of a wholesaler's business if the proposed transferee

 

21  meets the material and reasonable qualifications and standards

 

22  required by the supplier. A wholesaler shall give the supplier

 

23  written notice of intent to transfer the wholesaler's business. A

 

24  supplier shall not unreasonably delay a response to a request for

 

25  a proposed transfer of a wholesaler's business. However, a

 

26  transfer of a wholesaler's business which that is not approved by

 

27  the supplier shall be null and is void. A supplier shall not


 

 1  interfere with, or prevent, the transfer of the wholesaler's

 

 2  business if the proposed transferee is a designated member.

 

 3        (16) (17) A supplier that has amended, canceled, terminated,

 

 4  or refused to renew not renewed any agreement; has caused a

 

 5  wholesaler to resign from an agreement; or has withheld consent

 

 6  to any assignment or transfer of a wholesaler's business, except

 

 7  as provided for in this section, shall pay the wholesaler

 

 8  reasonable compensation for the diminished value of the

 

 9  wholesaler's business or of any ancillary business which has been

 

10  negatively affected by the act of the supplier, or both. The

 

11  value of the wholesaler's business or ancillary business shall

 

12  include, but not be limited to, its good will.goodwill.

 

13        (17) (18) Either party A supplier or wholesaler may, at any

 

14  time, determine that mutual agreement on the amount of reasonable

 

15  compensation cannot be reached. Should If such a determination be

 

16  is made, the supplier or the wholesaler shall send written notice

 

17  to the other party declaring their intention to proceed with

 

18  arbitration. Arbitration shall proceed only by mutual agreement

 

19  of both parties.

 

20        (18) (19) The supplier and wholesaler may, by agreement,

 

21  submit the matter of determining the amount of compensation under

 

22  arbitration may, by agreement of the parties, be submitted to a

 

23  5-member arbitration panel consisting of 2 representatives

 

24  selected by the supplier but unassociated with the affected

 

25  supplier, 2 wholesaler representatives selected by the wholesaler

 

26  but unassociated with the wholesaler, and an impartial

 

27  arbitrator.


 

 1        (19) (20) Not more than 10 days after the notice to enter

 

 2  into arbitration has been sent, each party the supplier and

 

 3  wholesaler shall request, in writing, a list of 5 arbitrators

 

 4  from the American arbitration association. Not more than 10 days

 

 5  after the receipt of supplier and wholesaler receive the list of

 

 6  5 choices, the wholesaler arbitrators and the supplier

 

 7  arbitrators may strike and disqualify up to 2 names each from the

 

 8  list. Should either party fail If the supplier and wholesaler

 

 9  fail to respond within the 10 days or should if more than 1 name

 

10  remain, remains, the American arbitration association shall make

 

11  the selection of select the impartial arbitrator.

 

12        (20) (21) Not more than 30 days after the supplier and

 

13  wholesaler receive the list of arbitrators, is received, the

 

14  wholesaler and supplier shall exchange in writing the names of

 

15  their respective arbitration panel representatives.

 

16        (21) (22) Not more than 30 days after the final selection of

 

17  the arbitration panel is made, the arbitration panel shall

 

18  convene to decide the dispute. The panel shall render a decision

 

19  by majority vote of the participants within 20 days from the

 

20  conclusion of the arbitration.

 

21        (22) (23) The cost of the impartial arbitrator, the

 

22  stenographer, and the meeting site shall be equally divided

 

23  between the wholesaler and the supplier. All other costs shall be

 

24  paid by the party incurring them. The award of the arbitration

 

25  panel shall be final and binding on the parties.

 

26        (23) (24) After both parties have agreed to arbitrate,

 

27  should either party fail if the supplier or wholesaler fails to


 

 1  abide by the time limitations as prescribed in subsections (20),

 

 2  (21), and (22), or fail or refuse (19), (20), and (21), fails or

 

 3  refuses to make the selection of select any arbitrators, or fail

 

 4  fails to participate in the arbitration hearings, the other party

 

 5  shall make the selection of their select its arbitrators and

 

 6  proceed to arbitration. The party who has failed or refused to

 

 7  comply as prescribed in this subsection shall be is considered to

 

 8  be in default. Any party considered to be in default pursuant to

 

 9  under this subsection shall have waived waives any and all rights

 

10  the party would have had in the arbitration and shall be is

 

11  considered to have consented to the determination of the

 

12  arbitration panel.

 

13        (24) (25) A wholesaler shall not waive any of the rights

 

14  granted in any provision of this section. Nothing in this section

 

15  shall be construed to limit limits or prohibit prohibits good-

 

16  faith dispute settlements voluntarily entered into by the

 

17  parties.

 

18        (25) (26) A successor to a supplier that continues in

 

19  business as a brewer, an outstate seller of beer, or a master

 

20  distributor shall be is bound by all terms and conditions of each

 

21  agreement of the supplier with a wholesaler licensed in this

 

22  state that were in effect on the date on which the successor

 

23  received the distribution rights of the previous supplier.

 

24        (26) (27) This section shall apply applies to agreements in

 

25  existence on June 26, 1984, as well as agreements entered into or

 

26  renewed after that date.

 

27        (27) (28) If a supplier engages in conduct prohibited under


 

 1  this section, a wholesaler with which the supplier has an

 

 2  agreement may maintain a civil action against the supplier to

 

 3  recover actual damages reasonably incurred as the result of the

 

 4  prohibited conduct. If a wholesaler engages in conduct prohibited

 

 5  under this section, a supplier with which the wholesaler has an

 

 6  agreement may maintain a civil action against the wholesaler to

 

 7  recover actual damages reasonably incurred as the result of the

 

 8  prohibited conduct.

 

 9        (28) (29) A supplier that violates any provision of this

 

10  section is liable for all actual damages and all court costs and

 

11  reasonable attorney fees incurred by a wholesaler as a result of

 

12  that violation. A wholesaler that violates any provision of this

 

13  section is liable for all actual damages and all court costs and

 

14  reasonable attorney fees incurred by the supplier as a result of

 

15  that violation.

 

16        (29) (30) A supplier or wholesaler may bring an action for

 

17  declaratory judgment for determination of any controversy arising

 

18  pursuant to under this section.

 

19        (30) (31) Except as otherwise provided in this section, if a

 

20  court finds that a supplier has not acted in good faith in

 

21  effecting an amendment, termination, cancellation, or nonrenewal

 

22  of amending, terminating, canceling, or not renewing any

 

23  agreement; or has unreasonably withheld its consent to any

 

24  assignment, transfer, or sale of a wholesaler's business, it the

 

25  court may award exemplary damages, as well as actual damages,

 

26  court costs, and reasonable attorney fees to the wholesaler who

 

27  has been damaged by the action of the supplier.


 

 1        (31) (32) Upon proper application to the a court, a supplier

 

 2  or wholesaler may obtain injunctive relief against any violation

 

 3  of this section. If the court grants injunctive relief or issues

 

 4  a temporary restraining order, bond shall not be required to be

 

 5  posted.

 

 6        (32) (33) The procedure for resolving any violation of

 

 7  subsection (3)(a), (2)(a), (b), (c), (e), (f), (h), (i), (j),

 

 8  (k), or (l) , or (4) (3) shall be the procedure prescribed by this

 

 9  act and the administrative procedures act of 1969, 1969 PA 306,

 

10  MCL 24.201 to 24.328. Any other violation of or dispute regarding

 

11  this section, unless the dispute is resolved pursuant to under

 

12  subsections (18) to (24), (17) to (23), shall only be resolved by

 

13  a civil action in court as provided in this section and not by

 

14  the commission.

 

15        Sec. 409. (1) Except as provided in this section, the

 

16  commission shall levy and collect a tax on all beer manufactured

 

17  or sold in this state at the rate of $6.30 per barrel if the beer

 

18  is sold in bulk or in different quantities. The tax shall be paid

 

19  by the brewer or brewpub small brewer if manufactured in this

 

20  state or by the wholesaler or the person from whom purchased if

 

21  manufactured outside this state. , whichever is designated by the

 

22  commission. The commission shall establish by rule a method for

 

23  the collection of the tax levied in this subsection. The rules

 

24  shall be promulgated pursuant to the administrative procedures

 

25  act of 1969, 1969 PA 306, MCL 24.201 to 24.328.

 

26        (2) The tax levied in subsection (1) shall not be collected

 

27  with respect to on beer that is consumed on the premises of the


 

 1  manufacturer or is damaged in the process of brewing, packaging,

 

 2  and storage and is not offered for sale, except that beer sold by

 

 3  a brewpub for consumption on the premises or beer produced and

 

 4  consumed on the premises of a micro small brewer is subject to

 

 5  the tax levied under subsection (1).

 

 6        (3) The tax levied under subsection (1) shall be rebated to

 

 7  the person who that paid the tax if that person provides

 

 8  satisfactory proof to the commission that the beer was shipped

 

 9  outside of this state for sale and consumption outside this

 

10  state.

 

11        (4) For the purposes of the tax levied under subsection (1),

 

12  a barrel of beer contains 31 gallons.

 

13        (5) The commission may promulgate a rule that designates the

 

14  states or the laws or the rules of other states that require a

 

15  licensed prohibits all licensees from purchasing, receiving,

 

16  possessing, or selling any beer manufactured in the following

 

17  states:

 

18        (a) Any state that requires a wholesaler of beer to pay an

 

19  additional fee for the right to purchase, import, or sell beer

 

20  manufactured in this state. ; that

 

21        (b) Any state that denies the issuance of a license

 

22  authorizing the importation of beer to any licensed wholesaler of

 

23  beer in that state who may make application that applies for the

 

24  license. ; that

 

25        (c) Any state that prohibits licensed wholesalers of beer in

 

26  that state from possessing or selling beer purchased in this

 

27  state, unless the person from whom the beer was purchased has


 

 1  secured a license and paid a fee in that state, if the seller

 

 2  does not transport the beer into the state and does not sell the

 

 3  beer in the state. ; or

 

 4        (d) Any state that imposes any higher taxes or inspection

 

 5  fees upon beer manufactured in this state when transporting the

 

 6  beer into or selling the beer in that state than taxes or fees

 

 7  imposed upon beer manufactured and sold within that state. A rule

 

 8  promulgated under this subsection shall prohibit all licensees

 

 9  from purchasing, receiving, possessing, or selling any beer

 

10  manufactured in any state designated in the rule.

 

11        (6) A rule promulgated under this subsection (5) becomes

 

12  effective as provided in section 47 of the administrative

 

13  procedures act of 1969, 1969 PA 306, MCL 24.247. Any licensee or

 

14  person adversely affected by a rule promulgated under this

 

15  subsection (5) is entitled to review by leave to a court of

 

16  competent jurisdiction regarding the question as to whether the

 

17  commission acted illegally or in excess of its authority in

 

18  making its finding under this subsection with respect to any

 

19  state.

 

20        (7) (6) An eligible brewer may claim a credit against the

 

21  tax levied under subsection (1) in the amount of $2.00 per barrel

 

22  for the first 30,000 barrels. As used in this subsection,

 

23  "eligible brewer" means a brewer, whether or not located in this

 

24  state, or brewpub that manufactures not more than 50,000 barrels

 

25  of beer during the tax year for which the credit is claimed. In

 

26  determining the number of barrels for purposes of the credit, all

 

27  brands and labels of a brewer shall be combined and all


 

 1  facilities for the production of beer that are owned or

 

 2  controlled by the same person shall be treated as a single

 

 3  facility.

 

 4        Sec. 411. A brewer that is not licensed as a micro small

 

 5  brewer may sell its beer for on-premises consumption at not more

 

 6  than 1 location in this state that is on any of its licensed

 

 7  brewery premises.

 

 8        Sec. 413. Notwithstanding any provision of this act or rule

 

 9  promulgated under this act, a licensed brewpub manufacturer may

 

10  directly sell to a holder of a special license issued under

 

11  section 526, for the purpose of conducting a beer, wine, or

 

12  spirits festival, a quantity of beer, wine, or spirits determined

 

13  appropriate by the commission for the purpose of participating in

 

14  a beer, wine, or spirits festival.

 

15        Sec. 415. (1) The commission may issue a farmer's market

 

16  permit to a small wine maker or an out-of-state entity that is

 

17  the substantial equivalent of a small wine maker. The holder of a

 

18  farmer's market permit may conduct tastings and sell, at retail

 

19  at a farmer's market, the wine produced by that small wine maker.

 

20        (2) The commission shall charge a fee for a farmer's market

 

21  permit of $25.00 for each farmer's market location. The

 

22  commission shall not limit the number of permits a small wine

 

23  maker, or an out-of-state entity that is substantial equivalent

 

24  of a small wine maker, obtains under this section, but an

 

25  application for a farmer's market permit shall only contain up to

 

26  5 separate locations at 1 time. Section 503 does not apply to the

 

27  application or issuance of a permit under this subsection or to


 

 1  the location of a farmer's market where the holder of a farmer's

 

 2  market permit intends to participate under this section.

 

 3        (3) The commission shall not issue a farmer's market permit

 

 4  under this section unless the applicant provides documentation,

 

 5  in a manner prescribed by the commission, that the local police

 

 6  agency where the farmer's market is located and the farmer's

 

 7  market manager at that location have approved the proposed

 

 8  activity.

 

 9        (4) The tastings and sales performed under a farmer's market

 

10  permit shall be limited to an exclusive area, in a manner

 

11  prescribed by the commission, that is under the control of the

 

12  holder of the farmer's market permit, as verified by the farmer's

 

13  market manager.

 

14        (5) The tastings and sales performed under a farmer's market

 

15  permit shall be conducted by employees of the holder of the

 

16  farmer's market permit who have completed a server training

 

17  course approved by the commission.

 

18        (6) The wine sold or used for tastings shall be furnished

 

19  from the stock of the holder of the farmer's market permit and

 

20  removed from the farmer's market premises immediately after the

 

21  farmer's market has concluded.

 

22        (7) Tasting samples provided to a customer shall not exceed

 

23  3 servings of not more than 2 ounces of wine in a 24-hour period

 

24  of time.

 

25        (8) The commission shall develop an application for an

 

26  annual farmer's market permit allowing for licensed activities

 

27  under this section. A farmer's market manager shall verify on the


 

 1  application that the location listed on the application qualifies

 

 2  as a farmer's market under this section.

 

 3        (9) A wholesaler shall not conduct or participate in any

 

 4  event allowed by this section.

 

 5        (10) A holder of a farmer's market permit is considered a

 

 6  manufacturer as provided under section 603(13)(a).

 

 7        Sec. 501. (1) The commission may issue licenses as provided

 

 8  in this act upon the payment of the fees provided in section 525

 

 9  and the filing of the bonds required in section 801 or liability

 

10  insurance as provided in section 803. The commission shall

 

11  provide a notification of the ability of the purchaser or

 

12  transferee to obtain a tax clearance certificate, as provided in

 

13  subsection (6). Subject to section 906(2) and (3), the commission

 

14  shall not issue a new on premises license or transfer more than

 

15  50% interest in an existing on premises license unless the

 

16  applicant or transferee offers proof acceptable to the commission

 

17  that he or she has employed or has present on the licensed

 

18  premises, at a minimum, supervisory personnel on each shift and

 

19  during all hours in which alcoholic liquor is served who have

 

20  successfully completed a server training program described in

 

21  section 906. The commission may consider an individual enrolled

 

22  and actively participating in a server training program as having

 

23  successfully completed the program for the time the individual is

 

24  participating. The commission may allow an applicant or a

 

25  conditionally approved licensee at least 180 days, or more upon a

 

26  showing of good cause, to meet the minimum personnel training

 

27  requirements of this subsection. The commission may suspend the


 

 1  license of a conditionally approved licensee if that licensee

 

 2  does not comply with this subsection. The commission may waive

 

 3  the server training requirements of this subsection on the basis

 

 4  of based on either of the following circumstances:

 

 5        (a) The licensee's responsible operating experience or

 

 6  training.

 

 7        (b) The person's demonstration of an acceptable level of

 

 8  responsible operation either as a licensee during the preceding 3

 

 9  years or as a manager with substantial experience in serving

 

10  alcoholic liquor.

 

11        (2) A full-year license issued by the commission shall

 

12  expire on April 30 following the date of issuance or the date

 

13  fixed by the commission. A license issued under this act is a

 

14  contract between the commission and the licensee and shall be

 

15  signed by both parties. If a licensee dies, the commission may

 

16  approve the operation of the establishment by a personal

 

17  representative or independent personal representative duly

 

18  appointed by a court of competent jurisdiction to operate the

 

19  establishment, pending the settlement of the estate of the

 

20  deceased licensee. The commission may approve a receiver or

 

21  trustee appointed by a court of competent jurisdiction to operate

 

22  the licensed establishment of a licensee. The commission may

 

23  grant a part-year license for a proportionate part of the license

 

24  fee specified in section 525. In a resort area the commission

 

25  shall grant a license for a period of time as short as 3 months.

 

26  A license may be transferred with the consent of the commission.

 

27  A class C or specially designated distributor license obtained in


 

 1  a manner other than by transfer shall not be transferred within 3

 

 2  years after its issuance it is issued except under circumstances

 

 3  where the licensee clearly and convincingly demonstrates that

 

 4  unusual hardship will result if the transfer does not receive the

 

 5  consent of the commission. An application for a license to sell

 

 6  alcoholic liquor for consumption on the premises, except in a

 

 7  city having a population of 600,000 or more, shall be approved by

 

 8  the local legislative body or, if the local legislative body has

 

 9  delegated the approval process, by the clerk of the local

 

10  governmental unit or other administrative officer as designated

 

11  by the local legislative body in which the applicant's place of

 

12  business is located before the license is granted by the

 

13  commission, except that in the case of an application for renewal

 

14  of an existing license, if an objection to a renewal has not been

 

15  filed with the commission by the local legislative body not less

 

16  than 30 days before the date of expiration of the license, the

 

17  approval of the local legislative body is not required. The

 

18  commission shall provide the local legislative body and the local

 

19  chief of police with the name, home and business addresses, and

 

20  home and business phone numbers to accomplish the local

 

21  legislative reviews of new and transferred license applications

 

22  required by this subsection. Upon request of the local

 

23  legislative body after due notice and proper hearing by the local

 

24  legislative body and the commission, the commission shall revoke

 

25  the license of a licensee granted a license to sell alcoholic

 

26  liquor for consumption on the premises or any permit held in

 

27  conjunction with that license.


 

 1        (3) A local legislative body, by resolution, may request

 

 2  that the commission revoke the license of a licensee granted a

 

 3  license to sell alcoholic liquor for consumption off the premises

 

 4  whose place of business is located within the local legislative

 

 5  body's jurisdiction and that has been determined in commission

 

 6  violation hearings to have sold or furnished alcoholic liquor, on

 

 7  at least 3 separate occasions in a consecutive 12-month period,

 

 8  to a minor if those violations did not involve the use of

 

 9  falsified or fraudulent identification by the minor. If the

 

10  commission verifies that the licensee who is the subject of the

 

11  resolution has been found to have committed the violations as

 

12  prescribed in this subsection, the commission may suspend or

 

13  revoke the licensee's license and any permit held in conjunction

 

14  with that license.

 

15        (4) This act does not prohibit a hotel that is or was the

 

16  holder of a license authorizing the retail sale of alcoholic

 

17  liquor for consumption on the premises from applying for and

 

18  receiving under this act any other and different type of license

 

19  authorizing the retail sale of alcoholic liquor for consumption

 

20  on the premises. , and the The application for the license shall

 

21  not be considered a new application for a license if the total

 

22  number of public licenses for consumption on the premises does

 

23  not exceed the authorized total established in this act and the

 

24  sale of alcoholic liquor is approved by the electors. The

 

25  commission may divide the state into 3 zones and establish for

 

26  each zone an anniversary date for renewal of full-year retail

 

27  licenses in the licensing year. The commission shall promulgate


 

 1  rules pursuant to the administrative procedures act of 1969, 1969

 

 2  PA 306, MCL 24.201 to 24.328, for the effective administration of

 

 3  the renewal of licenses.

 

 4        (5) The commission, with the written approval of the

 

 5  department of agriculture and rural development for the Michigan

 

 6  state fairgrounds and the Upper Peninsula state fairgrounds, may

 

 7  issue without regard to the quota provision of section 531 a

 

 8  tavern license to a person as concessionaire leasing or renting a

 

 9  portion of either the Upper Peninsula state fairgrounds or the

 

10  state fairgrounds, or both, to service the licensed area in use

 

11  for recreational or exhibition purposes other than at the time of

 

12  the annual Upper Peninsula state fair under section 2 of 1927 PA

 

13  89, MCL 285.142. A license issued under this subsection is not

 

14  transferable.

 

15        (6) The application for initial licensure or for a transfer

 

16  of a license shall contain a notice in substantial compliance

 

17  with the following:

 

 

18

 

When purchasing a license, a buyer can be held liable

19

 

for tax debts incurred by the previous owner. Prior to

20

 

committing to the purchase of any license or establishment,

21

 

the buyer should request a tax clearance certificate

22

 

from the seller that indicates that all taxes have been

23

 

paid up to the date of issuance. Obtaining sound

24

 

professional assistance from an attorney or accountant

25

 

can be helpful to identify and avoid any pitfalls

26

 

and hidden liabilities when buying even a portion

27

 

of a business.


1

 

Sellers can make a request for the tax clearance

2

 

certificate through the Michigan department of treasury.

 

 

 3        (7) The commission may approve a receiver or trustee

 

 4  appointed by a court of competent jurisdiction or a secured party

 

 5  that forecloses on its security interest in a liquor license to

 

 6  operate the licensed establishment of a licensee.

 

 7        Sec. 513a. (1) Beginning October 1, 2011, the commission may

 

 8  issue to the governing board of a community college or university

 

 9  that is accredited by a nationally recognized accrediting agency

 

10  as determined by the United States secretary of education under

 

11  20 USC 1099b and that operates an accredited culinary or

 

12  hospitality program, without regard to the quota provisions of

 

13  section 531, a license to sell alcoholic liquor for consumption

 

14  at the community college's or university's culinary or

 

15  hospitality program's location for activities that further the

 

16  community college's or university's community or academic

 

17  mission.

 

18        (2) Except as otherwise provided in subsection (7), the sale

 

19  of alcoholic liquor to patrons at a location other than the

 

20  community college's or university's culinary or hospitality

 

21  program's location or at activities that do not further the

 

22  community college's or university's community or academic

 

23  mission, including, but not limited to, public and private

 

24  gatherings or meetings that do not have a direct correlation to

 

25  the community college's or university's community or academic

 

26  mission, is prohibited under this section.

 


 1        (3) To obtain a license under this section, a community

 

 2  college or university shall submit both of the following to the

 

 3  commission:

 

 4        (a) Documentation verifying that the community college or

 

 5  university is accredited by a nationally recognized accrediting

 

 6  agency as determined by the United States secretary of education

 

 7  under 20 USC 1099b.

 

 8        (b) Either of the following:

 

 9        (i) Documentation verifying that the community college's or

 

10  university's culinary or hospitality program is accredited by a

 

11  regionally recognized accrediting body.

 

12        (ii) Within 180 days after the effective date of the

 

13  amendatory act that added this section, December 8, 2011, a copy

 

14  of the community college's or university's application to a

 

15  regionally recognized accrediting body for accreditation of its

 

16  culinary or hospitality program.

 

17        (4) The commission shall cancel a license issued under this

 

18  section if, within 2 years of applying for a license under this

 

19  section, the community college's or university's culinary or

 

20  hospitality program is not accredited by a regionally recognized

 

21  accrediting body, unless the community college or university

 

22  demonstrates good cause for an extension of time to obtain

 

23  accreditation by a regionally recognized accrediting body.

 

24        (5) Except as otherwise provided in subsection (7), a liquor

 

25  license issued under this section shall be granted and registered

 

26  to the community college's or university's culinary or

 

27  hospitality program's location.

 


 1        (6) Except as otherwise provided in subsection (7), a liquor

 

 2  license issued under this section shall be used by the community

 

 3  college or university and not by a private entity.

 

 4        (7) Subject to section 531, the commission may issue a

 

 5  license to a private entity for the sale of alcoholic liquor for

 

 6  consumption on the premises of an outdoor stadium located on land

 

 7  owned by Lake Michigan college and leased to a private entity.

 

 8  The prohibition in section 531(7) 531(8) on licenses at outdoor

 

 9  stadiums does not apply to a license issued under this

 

10  subsection.

 

11        (8) A community college or university that holds a liquor

 

12  license under this section shall not obtain a catering permit

 

13  under section 547.

 

14        (9) As used in this section:

 

15        (a) "Community college" means a community college

 

16  established under the community college act of 1966, 1966 PA 331,

 

17  MCL 389.1 to 389.195.

 

18        (b) "University" means a public university described in

 

19  section 4, 5, or 6 of article VIII of the state constitution of

 

20  1963.

 

21        Sec. 517. (1) The commission may issue international

 

22  sporting event licenses for the sale of alcoholic liquor for

 

23  consumption on the premises in connection with an international

 

24  golf tournament conducted during calendar year 2004 if all of the

 

25  following circumstances are found by the commission to exist:

 

26        (a) The local governmental unit in which the international

 

27  sporting event is to be conducted is the host governmental unit

 


 1  for that event.

 

 2        (b) The premises to be licensed are located in a theme area

 

 3  or theme areas designated by the governing body of the host

 

 4  governmental unit in connection with the international sporting

 

 5  event or are operated in conjunction with that event.

 

 6        (c) The commission determines that the international

 

 7  sporting event will attract a substantial number of tourists from

 

 8  outside this state.

 

 9        (d) The international sporting event is conducted under the

 

10  auspices of a national or international sanctioning body.

 

11        (e) The applicant is any of the following:

 

12        (i) A Michigan licensee for the sale of alcoholic liquor for

 

13  consumption on the premises.

 

14        (ii) The promoter of the international sporting event or an

 

15  affiliate of the promoter.

 

16        (iii) A person who has entered into a written concession or

 

17  catering agreement with the promoter of the international

 

18  sporting event or its affiliate, which agreement has been

 

19  approved by the commission.

 

20        (iv) An organization qualified for licensure as a special

 

21  licensee under section 111(10) 111(14) and the rules of the

 

22  commission.

 

23        (2) Licenses issued under this section shall be for a period

 

24  of not more than 30 consecutive days and are not transferable as

 

25  to ownership or location. The license shall be for specific

 

26  designated time periods that include the international sporting

 

27  event and activities associated with the event.

 


 1        (3) Not more than 40 licenses shall be issued under this

 

 2  section for use at the same time in a theme area or theme areas.

 

 3        (4) The governing body of a host governmental unit described

 

 4  in subsection (1) shall supply to the commission for the

 

 5  commission's review a list containing the names of applicants and

 

 6  the locations of the premises to be licensed under this section.

 

 7  The governing body of the host governmental unit shall recommend

 

 8  the number of licenses to be issued pursuant to this section in

 

 9  the theme area or theme areas. The commission shall not issue any

 

10  licenses pursuant to this section that are not recommended by the

 

11  governing body of the host governmental unit.

 

12        (5) The governing body of the host governmental unit shall

 

13  provide, in conjunction with the list described in subsection

 

14  (4), written certification to the commission that all premises to

 

15  be licensed under this section comply with applicable state and

 

16  local building, safety, and health laws, rules, and regulations.

 

17        (6) A license issued pursuant to this section is not subject

 

18  to section 503.

 

19        (7) An applicant for a license under this section shall pay

 

20  to the commission a license fee of $1,000.00 at the time of

 

21  application.

 

22        Sec. 517a. (1) The commission may issue national sporting

 

23  event licenses for the sale of alcoholic liquor for consumption

 

24  on the premises concerning a national sporting event, if all of

 

25  the following circumstances are found by the commission to exist:

 

26        (a) The local governmental unit in which the national

 

27  sporting event is to be conducted is the host governmental unit

 


 1  for that event.

 

 2        (b) The premises to be licensed are located in a theme area

 

 3  or theme areas designated by the governing body of the host

 

 4  governmental unit in connection with the national sporting event

 

 5  or are operated in conjunction with that event.

 

 6        (c) The commission determines that the national sporting

 

 7  event will attract a substantial number of tourists from outside

 

 8  this state.

 

 9        (d) The national sporting event is conducted under the

 

10  auspices of a national sanctioning body.

 

11        (e) The applicant is any of the following:

 

12        (i) A Michigan licensee for the sale of alcoholic liquor for

 

13  consumption on the premises.

 

14        (ii) The promoter of the national sporting event or an

 

15  affiliate of the promoter.

 

16        (iii) A person who has entered into a written concession or

 

17  catering agreement with the promoter of the national sporting

 

18  event or its affiliate, which agreement has been approved by the

 

19  commission.

 

20        (iv) An organization qualified for licensure as a special

 

21  licensee under section 111(10) 111(14) and the rules of the

 

22  commission.

 

23        (2) Licenses issued under this section shall be for a period

 

24  of not more than 30 consecutive days and are not transferable as

 

25  to ownership or location. The license shall be for specific

 

26  designated time periods that include the national sporting event

 

27  and activities associated with the national sporting event.

 


 1        (3) Not more than 40 licenses shall be issued under this

 

 2  section for use at the same time in a theme area or theme areas.

 

 3        (4) The governing body of a host governmental unit described

 

 4  in subsection (1) shall supply to the commission for the

 

 5  commission's review a list containing the names of applicants and

 

 6  the locations of the premises to be licensed under this section.

 

 7  The governing body of the host governmental unit shall recommend

 

 8  the number of licenses to be issued pursuant to this section in

 

 9  the theme area or theme areas. The commission shall not issue any

 

10  licenses pursuant to this section that are not recommended by the

 

11  governing body of the host governmental unit.

 

12        (5) The governing body of the host governmental unit shall

 

13  provide, in conjunction with the list described in subsection

 

14  (4), written certification to the commission that all premises to

 

15  be licensed under this section comply with applicable state and

 

16  local building, safety, and health laws, rules, and regulations.

 

17        (6) A license issued pursuant to this section is not subject

 

18  to section 503.

 

19        (7) An applicant for a license under this section shall pay

 

20  to the commission a license fee of $1,000.00 at the time of

 

21  application.

 

22        (8) As used in this section, "national sporting event" means

 

23  a sports related event considered of national prominence and

 

24  includes only the following:

 

25        (a) The major league baseball all-star game during calendar

 

26  year 2005.

 

27        (b) The national football league super bowl during calendar

 


 1  year 2006.

 

 2        (c) The professional golfers association championship during

 

 3  calendar year 2008.

 

 4        (d) The national college athletic association final four

 

 5  games during calendar year 2009.

 

 6        Sec. 521a. (1) In order to allow cities municipalities to

 

 7  enhance the quality of life for their residents and visitors to

 

 8  their communities, the commission may issue public on-premises

 

 9  licenses in addition to those quota licenses allowed in cities

 

10  municipalities under section 531(1). The licenses under this

 

11  section shall be issued to businesses that meet 1 either of the

 

12  following conditions:

 

13        (a) Are located in a city redevelopment project area meeting

 

14  the criteria described in subsections (3) and (4) and are engaged

 

15  in activities determined by the commission to be related to

 

16  dining, entertainment, or recreation.

 

17        (b) Are located in a development district or area that is

 

18  any of the following:

 

19        (i) An authority district established under the tax increment

 

20  finance authority act, 1980 PA 450, MCL 125.1801 to 125.1830.

 

21        (ii) A development area established under the corridor

 

22  improvement authority act, 2005 PA 280, MCL 125.2871 to 125.2899.

 

23        (iii) A downtown district established under 1975 PA 197, MCL

 

24  125.1651 to 125.1681.

 

25        (iv) A principal shopping district established under 1961 PA

 

26  120, MCL 125.981 to 125.990m.

 

27        (2) The commission shall not issue a license under

 


 1  subsection (1)(a) unless the applicant fulfills the following in

 

 2  relation to the licensed premises:

 

 3        (a) Provides the activity described in subsection (1)(a) not

 

 4  less than 5 days per week.

 

 5        (b) Is open to the public not less than 10 hours per day, 5

 

 6  days per week.

 

 7        (c) Presents verification of redevelopment project area

 

 8  status to the commission that shall include includes the

 

 9  following:

 

10        (i) A resolution of the governing body of the city

 

11  municipality establishing its status as a redevelopment project

 

12  area.

 

13        (ii) An affidavit from the assessor, as certified by the city

 

14  clerk of the municipality, stating the total amount of investment

 

15  in real and personal property within the redevelopment project

 

16  area of the city during the preceding 3 years. In the case of an

 

17  applicant seeking a license under this section within the first

 

18  license cycle after December 29, 2006, the time period described

 

19  in this subdivision may be up to 5 years, or 7 years for a city

 

20  having a population between 80,000 and 85,000 according to the

 

21  2000 federal decennial census and the application is submitted

 

22  within the first 6 months after December 29, 2006.

 

23        (iii) An affidavit from the assessor, as certified by the city

 

24  clerk of the municipality, separately stating the amount of

 

25  investment money expended for manufacturing, industrial,

 

26  residential, and commercial development within the redevelopment

 

27  project area of the city municipality during the preceding 3

 


 1  years. In the case of an applicant seeking a license under this

 

 2  section within the first license cycle after December 29, 2006,

 

 3  the time period described in this subdivision may be up to 5

 

 4  years, or 7 years for a city having a population between 80,000

 

 5  and 85,000 according to the 2000 federal decennial census and the

 

 6  application is submitted within the first 6 months after December

 

 7  29, 2006.

 

 8        (3) Relative to the licenses issued under subsection (1)(a),

 

 9  the amount of commercial investment in the redevelopment project

 

10  area within the city municipality shall constitute not less than

 

11  25% of the total investment in real and personal property in that

 

12  redevelopment project area as evidenced by an affidavit of the

 

13  city assessor of the municipality. This subsection does not

 

14  prevent the city municipality from realigning the redevelopment

 

15  project area in the presentment of verification provided for

 

16  under subsection (2)(c).

 

17        (4) In relation to a license issued under subsection (1)(a),

 

18  an applicant shall be located in a city municipality that meets

 

19  at least 1 of the investment requirements of subsection (1)(a)

 

20  during the 3 years preceding the submission of its application. ,

 

21  or within the preceding 5 years in the case of an applicant

 

22  applying during the first license cycle after December 29, 2006.

 

23  The total investment in real and personal property in the

 

24  redevelopment project area within the city municipality over the

 

25  appropriate time period described in this subsection shall be at

 

26  least 1 of the following:

 

27        (a) Not less than $50,000,000.00 in cities municipalities

 


 1  having a population of 50,000 or more.

 

 2        (b) Not less than an amount reflecting $1,000,000.00 per

 

 3  1,000 people in cities municipalities having a population of less

 

 4  than 50,000.

 

 5        (5) The commission may issue a license under subsection

 

 6  (1)(a) for each monetary threshold described in subsection (4)(a)

 

 7  and (b), and, after reaching the initial threshold, 1 additional

 

 8  license for each major fraction thereof above that original

 

 9  threshold.

 

10        (6) The following apply to a license issued under subsection

 

11  (1)(b):

 

12        (a) The amount expended for the rehabilitation or

 

13  restoration of the building that housed the licensed premises

 

14  shall be not less than $75,000.00 over a period of the preceding

 

15  5 years or a commitment for a capital investment of at least that

 

16  amount in the building that houses the licensed premises, which

 

17  must be expended before the issuance of the license.

 

18        (b) The total amount of public and private investment in

 

19  real and personal property within the qualified redevelopment

 

20  project area shall not be less than $200,000.00 over a period of

 

21  the preceding 5 years as verified to the commission by means of

 

22  an affidavit from the assessor, as certified by the clerk of the

 

23  local governmental unit.municipality.

 

24        (c) The licensed business is engaged in dining,

 

25  entertainment, or recreation, is open to the general public, and

 

26  has a seating capacity of not less than 25 persons.

 

27        (7) The commission may issue 1 license for each monetary

 


 1  threshold described in subsection (6)(b), or for each major

 

 2  fraction thereof. The initial enhanced license fee for a license

 

 3  issued under this section is $20,000.00.

 

 4        (8) The commission shall not transfer a license issued under

 

 5  this section to another location. If the licensee goes out of

 

 6  business, the licensee shall surrender the license to the

 

 7  commission. The governing body of the local governmental unit

 

 8  municipality may approve another applicant within a city

 

 9  redevelopment project area to replace a licensee who has

 

10  surrendered the license issued under this section provided the

 

11  new applicant's business meets the requirements of this section

 

12  but without regard to subsections (2)(c), (3), and (4) or

 

13  subsection (6)(b).

 

14        (9) The individual signing the application for the license

 

15  shall state and demonstrate that the applicant attempted to

 

16  secure an appropriate on-premise on-premises escrowed license or

 

17  quota license issued under section 531 and that, to the best of

 

18  his or her knowledge, an on-premise on-premises license or quota

 

19  license issued under section 531 is not readily available within

 

20  the local unit of government municipality in which the applicant

 

21  proposes to operate.

 

22        (10) As used in this section:

 

23        (a) "City" means a city established under either of the

 

24  following:

 

25        (i) The home rule city act, 1909 PA 279, MCL 117.1 to 117.38.

 

26        (ii) The fourth class city act, 1895 PA 215, MCL 81.1 to

 

27  113.20.

 


 1        (a) (b) "Escrowed license" means a license in which the

 

 2  rights of the licensee in the license or to the renewal of the

 

 3  license are still in existence and are subject to renewal and

 

 4  activation in the manner provided for in R 436.1107 of the

 

 5  Michigan administrative code.

 

 6        (b) "Municipality" means a city, village, or township.

 

 7        (c) "Readily available" means available under a standard of

 

 8  economic feasibility, as applied to the specific circumstances of

 

 9  the applicant, that includes, but is not limited to, the

 

10  following:

 

11        (i) The fair market value of the license, if determinable.

 

12        (ii) The size and scope of the proposed operation.

 

13        (iii) The existence of mandatory contractual restrictions or

 

14  inclusions attached to the sale of the license.

 

15        Sec. 525. (1) Except as otherwise provided for in this

 

16  section, the following license fees shall be paid at the time of

 

17  filing applications or as otherwise provided in this act and are

 

18  subject to allocation under section 543:

 

19        (a) Manufacturers of spirits, but not including makers,

 

20  blenders, and rectifiers of wines containing 21% or less alcohol

 

21  by volume, $1,000.00.

 

22        (b) Manufacturers of beer, $50.00 per 1,000 barrels, or

 

23  fraction of a barrel, production annually with a maximum fee of

 

24  $1,000.00, and in addition $50.00 for each motor vehicle used in

 

25  delivery to retail licensees. A fee increase does not apply to a

 

26  manufacturer of less than 15,000 barrels production per year.

 

27        (c) Outstate seller of beer, delivering or selling beer in

 


 1  this state, $1,000.00.

 

 2        (d) Wine makers, blenders, and rectifiers of wine, including

 

 3  makers, blenders, and rectifiers of wines containing 21% or less

 

 4  alcohol by volume, $100.00. The small wine maker license fee is

 

 5  $25.00.

 

 6        (e) Outstate seller of wine, delivering or selling wine in

 

 7  this state, $300.00.

 

 8        (f) Outstate seller of mixed spirit drink, delivering or

 

 9  selling mixed spirit drink in this state, $300.00.

 

10        (g) Dining cars or other railroad or Pullman cars selling

 

11  alcoholic liquor, $100.00 per train.

 

12        (h) Wholesale vendors other than manufacturers of beer,

 

13  $300.00 for the first motor vehicle used in delivery to retail

 

14  licensees and $50.00 for each additional motor vehicle used in

 

15  delivery to retail licensees.

 

16        (i) Watercraft, licensed to carry passengers, selling

 

17  alcoholic liquor, a minimum fee of $100.00 and a maximum fee of

 

18  $500.00 per year computed on the basis of $1.00 per person per

 

19  passenger capacity.

 

20        (j) Specially designated merchants, for selling beer or wine

 

21  for consumption off the premises only but not at wholesale,

 

22  $100.00 for each location regardless of the fact that whether the

 

23  location may be a is part of a system or chain of merchandising.

 

24        (k) Specially designated distributors licensed by the

 

25  commission to distribute spirits and mixed spirit drink in the

 

26  original package for the commission for consumption off the

 

27  premises, $150.00 per year, and an additional fee of $3.00 for

 


 1  each $1,000.00 or major fraction of that amount in excess of

 

 2  $25,000.00 of the total retail value of merchandise purchased

 

 3  under each license from the commission during the previous

 

 4  calendar year.

 

 5        (l) Hotels of class A selling beer and wine, a minimum fee of

 

 6  $250.00 and , for all bedrooms in excess of 20, $1.00 for each

 

 7  additional bedroom in excess of 20, but not more than $500.00

 

 8  total.

 

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

 

10  drink, and spirits, a minimum fee of $600.00 and , for all

 

11  bedrooms in excess of 20, $3.00 for each additional bedroom in

 

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

 

13  spirit drink, and spirits in more than 1 public bar, the fee

 

14  entitles the hotel to sell in only 1 public bar, other than a

 

15  bedroom, and a license shall be secured a fee of $350.00 shall be

 

16  paid for each additional public bar, other than a bedroom. , the

 

17  fee for which is $350.00.

 

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

 

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

 

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

 

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

 

22  more than 1 bar, a fee of $350.00 shall be paid for each

 

23  additional bar. In municipally owned or supported facilities in

 

24  which nonprofit organizations operate concession stands, a fee of

 

25  $100.00 shall be paid for each additional bar.

 

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

 

27  spirits, $300.00 for clubs having 150 or fewer duly accredited

 


 1  members and $1.00 for each additional member in excess of 150.

 

 2  The membership list for the purpose only of determining the

 

 3  license fees to be paid under this subdivision shall be the

 

 4  accredited Clubs shall submit a list of members as determined by

 

 5  a sworn affidavit 30 days before the closing of the license year.

 

 6  The sworn affidavit shall be used only for determining the

 

 7  license fees to be paid under this subdivision. This subdivision

 

 8  does not prevent the commission from checking a membership list

 

 9  and making its own determination from the list or otherwise. The

 

10  list of members and additional members is not required of a club

 

11  paying the maximum fee. The maximum fee shall not exceed $750.00

 

12  for any 1 club.

 

13        (q) Warehousers, to be fixed by the commission with a

 

14  minimum fee for each warehouse of $50.00.

 

15        (r) Special licenses, a fee of $50.00 per day, except that

 

16  the fee for that license or permit issued to any bona fide

 

17  nonprofit association, duly organized and in continuous existence

 

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

 

19  more than 12 special licenses may be granted to any organization,

 

20  including an auxiliary of the organization, in a calendar year.

 

21        (s) Airlines licensed to carry passengers in this state that

 

22  sell, offer for sale, provide, or transport alcoholic liquor,

 

23  $600.00.

 

24        (t) Brandy manufacturer, $100.00.

 

25        (u) Mixed spirit drink manufacturer, $100.00.

 

26        (v) Brewpub, $100.00.

 

27        (v) (w) Class G-1, $1,000.00.

 


 1        (w) (x) Class G-2, $500.00.

 

 2        (x) (y) Motorsports event license, the amount as described

 

 3  and determined under section 518(2).

 

 4        (y) (z) Small distiller, $100.00.

 

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

 

 6        (aa) (bb) Nonpublic continuing care retirement center

 

 7  license, $600.00.

 

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

 

 9  licenses shall not be prorated for a portion of the effective

 

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

 

11  initial license fee for any licenses issued under section 531(3),

 

12  or (4), or (5) is $20,000.00. The renewal license fee shall be

 

13  the amount described in subsection (1). However, the commission

 

14  shall not impose the $20,000.00 initial license fee for

 

15  applicants whose license eligibility was already approved on July

 

16  20, 2005.

 

17        (3) Beginning July 23, 2004, and except Except in the case

 

18  of any resort or resort economic development license issued under

 

19  section 531(2), (3), (4), or (5), or (6) or a license issued

 

20  under section 521, 521a, the commission shall issue an initial or

 

21  renewal license not later than 90 days after the applicant files

 

22  a completed application. Receipt of the The application is

 

23  considered to be received the date the application is received by

 

24  any agency or department of the state of Michigan. this state. If

 

25  the commission determines that an application is considered

 

26  incomplete, by the commission, the commission shall notify the

 

27  applicant in writing, or make the information electronically

 


 1  available, within 30 days after receipt of the incomplete

 

 2  application, describing the deficiency and requesting the

 

 3  additional information. The determination of the completeness of

 

 4  an application does not operate as is not an approval of the

 

 5  application for the license and does not confer eligibility upon

 

 6  an applicant determined otherwise ineligible for issuance of a

 

 7  license. The 90-day period is tolled for the following periods

 

 8  under any of the following circumstances:

 

 9        (a) Notice If notice is sent by the commission of a

 

10  deficiency in the application, until the date all of the

 

11  requested information is received by the commission.

 

12        (b) The For the time period during which required to

 

13  complete actions required by a party person, other than the

 

14  applicant or the commission, are completed that include,

 

15  including, but are not limited to, completion of construction or

 

16  renovation of the licensed premises; mandated inspections by the

 

17  commission or by any state, local, or federal agency; approval by

 

18  the legislative body of a local unit of government; criminal

 

19  history or criminal record checks; financial or court record

 

20  checks; or other actions mandated by this act or rule or as

 

21  otherwise mandated by law or local ordinance.

 

22        (4) If the commission fails to issue or deny a license

 

23  within the time required by this section, the commission shall

 

24  return the license fee and shall reduce the license fee for the

 

25  applicant's next renewal application, if any, by 15%. The failure

 

26  to issue a license within the time required under this section

 

27  does not allow the commission to otherwise delay the processing

 


 1  of the application, and that application, upon completion, shall

 

 2  be placed in sequence with other completed applications received

 

 3  at that same time. The commission shall not discriminate against

 

 4  an applicant in the processing of the application based upon the

 

 5  fact that the license fee was refunded or discounted under this

 

 6  subsection.

 

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

 

 8  section, an applicant submits a separate form requesting a

 

 9  conditional license with an acceptable proof of financial

 

10  responsibility form under section 803, and an executed property

 

11  document, the commission shall, after considering the arrest and

 

12  conviction records or previous violation history in the

 

13  management, operation, or ownership of a licensed business,

 

14  approve or deny a conditional license to any of the following:

 

15        (a) An applicant seeking to transfer ownership of or

 

16  interest in an existing license at the same location under

 

17  subsection (3) to sell alcoholic liquor for consumption on or off

 

18  the premises.

 

19        (b) An applicant seeking an initial license under subsection

 

20  (3), except for a specially designated distributor license or a

 

21  license for the sale of alcoholic liquor for consumption on the

 

22  premises.

 

23        (6) The commission shall issue a conditional license to

 

24  applicants under subsection (5) within 20 business days after

 

25  receipt of a completed conditional license request form for a

 

26  conditional license at a single location. The commission may take

 

27  up to 30 business days to issue conditional licenses to

 


 1  applicants seeking conditional licenses at multiple locations.

 

 2        (7) A conditional license issued under subsection (5) is

 

 3  nontransferable and nonrenewable. A conditional license issued

 

 4  under subsection (5) expires when the commission issues an order

 

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

 

 6  the conditional license after all administrative remedies before

 

 7  the commission have been exhausted, expires 20 business days

 

 8  after the commission issues an order of approval of the license

 

 9  application that serves as the basis for the conditional license,

 

10  expires when the licensee or conditional licensee notifies the

 

11  commission in writing that the initial application should be

 

12  canceled, or expires 1 year after the date the conditional

 

13  license was issued, whichever occurs first. If a conditionally

 

14  approved licensee fails to maintain acceptable proof of its

 

15  financial responsibility, the commission shall, after due notice

 

16  and proper hearing, suspend the conditional license until the

 

17  licensee files an acceptable proof of financial responsibility

 

18  form under section 803. If a conditional license is revoked, the

 

19  conditional licensee shall not recover from a unit of local

 

20  government any compensation for property, future income, or

 

21  future economic loss due to the revocation.

 

22        (8) Upon issuing a conditional license under subsection (5),

 

23  the commission shall, until the conditional license expires under

 

24  subsection (7), place an existing license under subsection (3) in

 

25  escrow in compliance with R 436.1107 of the Michigan

 

26  administrative code. If the conditional license expires because a

 

27  transfer of an existing license was denied or because the license

 


 1  was not transferred within the 1-year period, an existing

 

 2  licensee may do 1 of the following:

 

 3        (a) Request that the commission release the license from

 

 4  escrow.

 

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

 

 6  compliance with R 436.1107 of the Michigan administrative code

 

 7  shall be the date the conditional license expires.

 

 8        (9) (5) Beginning October 1, 2005, the The chair of the

 

 9  commission shall submit a report by December 1 of each year to

 

10  the standing committees and appropriations subcommittees of the

 

11  senate and house of representatives concerned with liquor license

 

12  issues. The chair of the commission shall include all of the

 

13  following information in the report concerning the preceding

 

14  fiscal year:

 

15        (a) The number of initial and renewal applications the

 

16  commission received and completed within the 90-day time period

 

17  described in subsection (3).

 

18        (b) The number of applications denied.

 

19        (c) The number of applicants not issued a license within the

 

20  90-day time period and the amount of money returned to licensees

 

21  under subsection (4).

 

22        (6) As used in this section, "completed application" means

 

23  an application complete on its face and submitted with any

 

24  applicable licensing fees as well as any other information,

 

25  records, approval, security, or similar item required by law or

 

26  rule from a local unit of government, a federal agency, or a

 

27  private entity but not from another department or agency of the

 


 1  state of Michigan.

 

 2        (10) Except as otherwise provided under this subsection,

 

 3  application fees charged by a local unit of government for

 

 4  licenses shall be in accordance with, and shall not exceed, the

 

 5  fees provided in this act. A local unit of government may charge

 

 6  up to $5,000.00 for a license issued under section 531(4), and

 

 7  that fee shall be used for law enforcement purposes.

 

 8        Sec. 526. (1) The commission may issue a special license

 

 9  under this section to any organization conducting a beer, wine,

 

10  or spirits festival. The application shall conform to the

 

11  following:

 

12        (a) Be submitted by a nonprofit entity composed primarily of

 

13  brewers, microbrewers, and brewpubs, small brewers, brandy

 

14  manufacturers, small distillers, wine makers, or small wine

 

15  makers, as determined by the commission.

 

16        (b) Involve an event having for its primary purpose the

 

17  showcasing of beer, wine, or spirits and its production.

 

18        (c) Be accompanied by a fee of $25.00 per day of the event.

 

19        (2) The special license shall not allow more than 6 events

 

20  per calendar year conforming to the requirements of subsection

 

21  (1).

 

22        (3) A holder of a special license issued under this section

 

23  may buy a quantity of beer, wine, or spirits, as determined

 

24  appropriate under the circumstances by the commission, directly

 

25  from any licensed brewpub manufacturer for consumption only at

 

26  the licensed event.

 

27        (4) As used in this section and section 413, "beer festival"

 


 1  means an event at which the various types and kinds of beer and

 

 2  the production of that beer are showcased to the general public

 

 3  and at which the general public can purchase and sample the beer

 

 4  being showcased for consumption on the licensed premises.

 

 5        Sec. 529. (1) A license or an interest in a license shall

 

 6  not be transferred from 1 person to another without the prior

 

 7  approval of the commission. For purposes of this section, the

 

 8  transfer in the aggregate to another person during any single

 

 9  licensing year of more than 10% of the outstanding stock of a

 

10  licensed corporation or more than 10% of the total interest in a

 

11  licensed limited partnership shall be is considered to be a

 

12  transfer requiring the prior approval of the commission.

 

13        (2) Not later than July 1 of each year, each privately held

 

14  licensed corporation and each licensed limited partnership shall

 

15  notify the commission as to whether any of the shares of stock in

 

16  the corporation, or interest in the limited partnership, have

 

17  been transferred during the preceding licensing year. The

 

18  commission may investigate the transfer of any number of shares

 

19  of stock in a licensed corporation, or any amount of interest in

 

20  a licensed limited partnership, for the purpose of ensuring

 

21  compliance with this act and the rules promulgated under this

 

22  act.

 

23        (3) Except as otherwise provided in this subsection and

 

24  subdivisions (a) through (f), upon approval by the commission of

 

25  a transfer subject to subsection (1), there shall be paid to the

 

26  applicant or licensee shall pay the commission a transfer fee

 

27  equal to the fee provided in this act for the class of license

 


 1  being transferred unless the license is being transferred from 1

 

 2  county to another as provided in section 531(1). The transfer fee

 

 3  for the transfer of an escrowed license from 1 contiguous county

 

 4  to another is $10,000.00. A transfer fee shall not be prorated

 

 5  for a portion of the effective period of the license. If a person

 

 6  holding more than 1 license or more than 1 interest in a license

 

 7  at more than 1 location, but in the name of a single legal

 

 8  entity, transfers all of the licenses or interests in licenses

 

 9  simultaneously to another single legal entity, the transfers

 

10  shall be considered 1 transfer for purposes of determining a

 

11  transfer fee, payable in an amount equal to the highest license

 

12  fee provided in this act for any of the licenses, or interests in

 

13  licenses, being transferred. A transfer fee shall not be required

 

14  in regard to any of the following:

 

15        (a) The transfer, in the aggregate, of less than 50% of the

 

16  outstanding shares of stock in a licensed corporation or less

 

17  than 50% of the total interest in a licensed limited partnership

 

18  during any licensing year.

 

19        (b) The exchange of the assets of a licensed sole

 

20  proprietorship, licensed general partnership, or licensed limited

 

21  partnership for all outstanding shares of stock in a corporation

 

22  in which either the sole proprietor, all members of the general

 

23  partnership, or all members of the limited partnership are the

 

24  only stockholders of that corporation. An exchange under this

 

25  subdivision shall not be considered an application for a license

 

26  for the purposes of section 501.

 

27        (c) The transfer of the interest in a licensed business of a

 


 1  deceased licensee, a deceased stockholder, or a deceased member

 

 2  of a general or limited partnership to the deceased person's

 

 3  spouse or children.

 

 4        (d) The removal of a member of a firm, a stockholder, a

 

 5  member of a general partnership or limited partnership, or

 

 6  association of licensees from a license.

 

 7        (e) The addition to a license of the spouse, son, daughter,

 

 8  or parent of any of the following:

 

 9        (i) A licensed sole proprietor.

 

10        (ii) A stockholder in a licensed corporation.

 

11        (iii) A member of a licensed general partnership, licensed

 

12  limited partnership, or other licensed association.

 

13        (f) The occurrence of any of the following events:

 

14        (i) A corporate stock split of a licensed corporation.

 

15        (ii) The issuance to a stockholder of a licensed corporation

 

16  of previously unissued stock as compensation for services

 

17  performed.

 

18        (iii) The redemption by a licensed corporation of its own

 

19  stock.

 

20        (4) A nonrefundable inspection fee of $70.00 shall be paid

 

21  to the commission by an applicant or licensee at the time of

 

22  filing any of the following:

 

23        (a) An application for a new license or permit.

 

24        (b) A request for approval of a transfer of ownership or

 

25  location of a license.

 

26        (c) A request for approval to increase or decrease the size

 

27  of the licensed premises, or to add a bar.

 


 1        (d) A request for approval of the transfer in any licensing

 

 2  year of any of the shares of stock in a licensed corporation from

 

 3  1 person to another, or any part of the total interest in a

 

 4  licensed limited partnership from 1 person to another.

 

 5        (5) An inspection fee shall be returned to the person by

 

 6  whom it was paid who paid the fee if the purpose of the

 

 7  inspection was to inspect the physical premises of the licensee,

 

 8  and the inspection was not actually conducted. An inspection fee

 

 9  shall not be is not required for any of the following:

 

10        (a) The issuance or transfer of a special license,

 

11  salesperson license, limited alcohol buyer license, corporate

 

12  salesperson license, hospital permit, military permit, or Sunday

 

13  sale of spirits permit.

 

14        (b) The issuance of a new permit, or the transfer of an

 

15  existing permit, if the permit is issued or transferred

 

16  simultaneously with the issuance or transfer of a license or an

 

17  interest in a license.

 

18        (c) The issuance of authorized but previously unissued

 

19  corporate stock to an existing stockholder of a licensed

 

20  corporation.

 

21        (d) The transfer from a corporation to an existing

 

22  stockholder of any of the corporation's stock that is owned by

 

23  the corporation itself.

 

24        (6) All inspection fees collected under this section shall

 

25  be deposited in the special fund in section 543 for carrying out

 

26  of the licensing and enforcement provisions of this act.

 

27        Sec. 531. (1) A public license shall not be granted for the

 


 1  sale of alcoholic liquor for consumption on the premises in

 

 2  excess of 1 license for each 1,500 of population or major

 

 3  fraction thereof. An on-premises escrowed license issued under

 

 4  this subsection may be transferred, subject to the limitations

 

 5  established under this subsection, to the transfer fees provided

 

 6  in section 529, and to local legislative approval under section

 

 7  501(2), to an applicant whose proposed operation is located

 

 8  within any local governmental unit in a county in which the

 

 9  escrowed license was located or located in a county contiguous to

 

10  the county in which the escrowed license was located. An escrowed

 

11  license that is transferred from 1 county to another under this

 

12  subsection shall not be subsequently transferred to another

 

13  county within a 5-year period. If the local governmental unit

 

14  within which the former licensee's premises were located spans

 

15  more than 1 county, an escrowed license may be transferred,

 

16  subject to local legislative approval under section 501(2), to an

 

17  applicant whose proposed operation is located within any local

 

18  governmental unit in either county. If an escrowed license is

 

19  activated within a local governmental unit other than that local

 

20  governmental unit within which the escrowed license was

 

21  originally issued, the commission shall count that activated

 

22  license against the local governmental unit originally issuing

 

23  the license. This quota does not bar the right of an existing

 

24  licensee to renew a license or transfer the license and does not

 

25  bar the right of an on-premises licensee of any class to

 

26  reclassify to another class of on-premises license in a manner

 

27  not in violation of law or this act, subject to the consent of

 


 1  the commission. The upgrading of a license resulting from a

 

 2  request under this subsection is subject to approval by the local

 

 3  governmental unit having jurisdiction.

 

 4        (2) In a resort area, the commission may issue no more than

 

 5  550 licenses for a period not to exceed 12 months without regard

 

 6  to a limitation because of population and with respect to the

 

 7  resort license the commission, by rule, shall define and classify

 

 8  resort seasons by months and may issue 1 or more licenses for

 

 9  resort seasons without regard to the calendar year or licensing

 

10  year.

 

11        (3) In addition to the resort licenses authorized in

 

12  subsection (2), the commission may issue not more than 5

 

13  additional licenses per year to establishments whose business and

 

14  operation, as determined by the commission, is designed to

 

15  attract and accommodate tourists and visitors to the resort area,

 

16  whose primary purpose is not for the sale of alcoholic liquor,

 

17  and whose capital investment in real property, leasehold

 

18  improvement, and fixtures for the premises to be licensed is

 

19  $75,000.00 or more. Further, the commission shall issue 1 license

 

20  under this subsection per year to an applicant located in a rural

 

21  area that has a poverty rate, as defined by the latest decennial

 

22  census, greater than the statewide average, or that is located in

 

23  a rural area that has an unemployment rate higher than the

 

24  statewide average for 3 of the 5 preceding years. In counties

 

25  having a population of less than 50,000, as determined by the

 

26  last federal decennial census or as determined under subsection

 

27  (11) (12) and subject to subsection (16) (17) in the case of a

 


 1  class A hotel or a class B hotel, the commission shall not

 

 2  require the establishments to have dining facilities to seat more

 

 3  than 50 persons. The commission may cancel the license if the

 

 4  resort is no longer active or no longer qualifies for the

 

 5  license. Before January 16 of each year the commission shall

 

 6  transmit to the legislature a report giving details as to all of

 

 7  the following:

 

 8        (a) The number of applications received under this

 

 9  subsection.

 

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

 

11        (c) The number of applications rejected and the reasons they

 

12  were rejected.

 

13        (d) The number of the licenses revoked, suspended, or other

 

14  disciplinary action taken and against whom and the grounds for

 

15  revocation, suspension, or disciplinary action.

 

16        (4) In addition to any licenses for the sale of alcoholic

 

17  liquor for consumption on the premises that may be available in

 

18  the local governmental unit under subsection (1) and the licenses

 

19  authorized in subsections (2) and (3), the commission may issue

 

20  not more than 40 additional licenses per year. A person is

 

21  eligible to apply for a license under this subsection upon

 

22  submitting an application to the commission and demonstrating all

 

23  of the following:

 

24        (a) The establishment's business and operation, as

 

25  determined by the commission, is designed to attract and

 

26  accommodate tourists and visitors to the resort area.

 

27        (b) The establishment's primary business is not the sale of

 


 1  alcoholic liquor.

 

 2        (c) The capital investment in real property, leasehold

 

 3  improvement, fixtures, and inventory for the premises to be

 

 4  licensed is in excess of $500,000.00.

 

 5        (5) (4) In addition to any licenses for the sale of

 

 6  alcoholic liquor for consumption on the premises that may be

 

 7  available in the local governmental unit under subsection (1) and

 

 8  the resort licenses authorized in subsections (2), and (3), and

 

 9  (4), the commission may issue not more than 15 resort economic

 

10  development licenses per year. A person is eligible to apply for

 

11  a resort economic development license under this subsection upon

 

12  submitting an application to the commission and demonstrating all

 

13  of the following:

 

14        (a) The establishment's business and operation, as

 

15  determined by the commission, is designed to attract and

 

16  accommodate tourists and visitors to the resort area.

 

17        (b) The establishment's primary business is not the sale of

 

18  alcoholic liquor.

 

19        (c) The capital investment in real property, leasehold

 

20  improvement, fixtures, and inventory for the premises to be

 

21  licensed is in excess of $1,500,000.00.

 

22        (d) The establishment does not allow or permit casino

 

23  gambling on the premises.

 

24        (6) (5) In governmental units having a population of 50,000

 

25  or less, as determined by the last federal decennial census or as

 

26  determined under subsection (11), (12), in which the quota of

 

27  specially designated distributor licenses, as provided by section

 


 1  533, has been exhausted, the commission may issue not more than a

 

 2  total of 10 additional specially designated distributor licenses

 

 3  per year to established merchants whose business and operation,

 

 4  as determined by the commission, is designed to attract and

 

 5  accommodate tourists and visitors to the resort area. A specially

 

 6  designated distributor license issued under this subsection may

 

 7  be issued at a location within 2,640 feet of existing specially

 

 8  designated distributor license locations. A specially designated

 

 9  distributor license issued under this subsection shall not bar

 

10  another specially designated distributor licensee from

 

11  transferring location to within 2,640 feet of that licensed

 

12  location. A specially designated distributor license issued under

 

13  section 533 may be located within 2,640 feet of a specially

 

14  designated distributor license issued under this subsection.

 

15        (7) (6) In addition to any licenses for the sale of

 

16  alcoholic liquor for consumption on the premises that may be

 

17  available in the local governmental unit under subsection (1),

 

18  and the resort or resort economic development licenses authorized

 

19  in subsections (2), (3), and (4), and (5), and notwithstanding

 

20  section 519, the commission may issue not more than 5 additional

 

21  special purpose licenses in any calendar year for the sale of

 

22  beer and wine for consumption on the premises. A special purpose

 

23  license issued under this subsection shall be issued only for

 

24  events that are to be held from May 1 to September 30, are

 

25  artistic in nature, and that are to be held on the campus of a

 

26  public university with an enrollment of 30,000 or more students.

 

27  A special purpose license is valid for 30 days or for the

 


 1  duration of the event for which it is issued, whichever is less.

 

 2  The fee for a special purpose license is $50.00. A special

 

 3  purpose license may be issued only to a corporation that meets

 

 4  all of the following requirements:

 

 5        (a) Is a nonprofit corporation organized under the nonprofit

 

 6  corporation act, 1982 PA 162, MCL 450.2101 to 450.3192.

 

 7        (b) Has a board of directors constituted of members of whom

 

 8  half are elected by the public university at which the event is

 

 9  scheduled and half are elected by the local governmental unit.

 

10        (c) Has been in continuous existence for not less than 6

 

11  years.

 

12        (8) (7) Notwithstanding the local legislative body approval

 

13  provision of section 501(2) and notwithstanding the provisions of

 

14  section 519, the commission may issue, without regard to the

 

15  quota provisions of subsection (1) and with the approval of the

 

16  governing board of the university, either a tavern or class C

 

17  license which may be used only for regularly scheduled events at

 

18  a public university's established outdoor program or festival at

 

19  a facility on the campus of a public university having a head

 

20  count enrollment of 10,000 students or more. A license issued

 

21  under this subsection may only be issued to the governing board

 

22  of a public university, a person that is the lessee or

 

23  concessionaire of the governing board of the university, or both.

 

24  A license issued under this subsection is not transferable as to

 

25  ownership or location. Except as otherwise provided in this

 

26  subsection, a license issued under this subsection may not be

 

27  issued at an outdoor stadium customarily used for intercollegiate

 


 1  athletic events. A license may be issued at an outdoor stadium

 

 2  customarily used for intercollegiate athletic events for not more

 

 3  than 30 consecutive days to a concessionaire of an entity granted

 

 4  exclusive use of a public university's property in conjunction

 

 5  with a hockey game sanctioned by an unincorporated not-for-profit

 

 6  association that operates a major professional ice hockey league

 

 7  consisting of teams located in Canada and in the United States if

 

 8  the concessionaire has entered into an agreement granting it

 

 9  control of the licensed premises for the purposes of complying

 

10  with this act and rules promulgated under this act regarding the

 

11  sale of alcoholic liquor. A nationally televised game between 2

 

12  professional hockey teams played outdoors is considered an

 

13  established outdoor program for the purposes of this subsection.

 

14  Notwithstanding any provision of this act or any rule promulgated

 

15  under this act, a concessionaire obtaining a license under this

 

16  subsection may share the profits generated from that license with

 

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

 

18  major professional ice hockey league consisting of teams located

 

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

 

20  a written contract reviewed by the commission. If the established

 

21  outdoor program is a nationally televised game between 2

 

22  professional hockey teams, the commission may allow the promotion

 

23  and advertising of alcoholic liquor brands on the campus of a

 

24  public university where a concessionaire has been issued a

 

25  license under this subsection for the duration of the license.

 

26        (9) (8) In issuing a resort or resort economic development

 

27  license under subsection (3), (4), or (5), or (6), the commission

 


 1  shall consider economic development factors of the area in

 

 2  issuing licenses to establishments designed to stimulate and

 

 3  promote the resort and tourist industry. The commission shall not

 

 4  transfer a resort or resort economic development license issued

 

 5  under subsection (3), (4), or (5), or (6) to another location. If

 

 6  the licensee goes out of business the license shall be

 

 7  surrendered to the commission.

 

 8        (10) (9) The limitations and quotas of this section are not

 

 9  applicable to issuing a new license to a veteran of the armed

 

10  forces of the United States who was honorably discharged or

 

11  released under honorable conditions from the armed forces of the

 

12  United States and who had by forced sale disposed of a similar

 

13  license within 90 days before or after entering or while serving

 

14  in the armed forces of the United States, as a part of the

 

15  person's preparation for that service if the application for a

 

16  new license is submitted for the same governmental unit in which

 

17  the previous license was issued and within 60 days after the

 

18  discharge of the applicant from the armed forces of the United

 

19  States.

 

20        (11) (10) The limitations and quotas of this section are not

 

21  applicable to issuing a new license or renewing an existing

 

22  license where the property or establishment to be licensed is

 

23  situated in or on land on which an airport owned by a county or

 

24  in which a county has an interest is situated.

 

25        (12) (11) For purposes of implementing this section a

 

26  special state census of a local governmental unit may be taken at

 

27  the expense of the local governmental unit by the federal bureau

 


 1  of census or the secretary of state under section 6 of the home

 

 2  rule city act, 1909 PA 279, MCL 117.6. The special census shall

 

 3  be initiated by resolution of the governing body of the local

 

 4  governmental unit involved. The secretary of state may promulgate

 

 5  additional rules necessary for implementing this section pursuant

 

 6  to the administrative procedures act of 1969, 1969 PA 306, MCL

 

 7  24.201 to 24.328.

 

 8        (13) (12) Before granting an approval as required in section

 

 9  501(2) for a license to be issued under subsection (2), (3), or

 

10  (4), a local legislative body shall disclose the availability of

 

11  transferable licenses held in escrow for more than 1 licensing

 

12  year within that respective local governmental unit. The local

 

13  governmental unit shall provide public notice of the meeting to

 

14  consider the granting of the license by the local governmental

 

15  unit 2 weeks before the meeting.

 

16        (14) (13) The person signing the application for an on-

 

17  premises resort or resort economic development license shall

 

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

 

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

 

20  of his or her knowledge, an on-premises escrowed license or quota

 

21  license is not readily available within the county in which the

 

22  applicant for the on-premises resort or resort economic

 

23  development license proposes to operate.

 

24        (15) (14) The commission shall not issue an on-premises

 

25  resort or resort economic development license if the county

 

26  within which the resort or resort economic development license

 

27  applicant proposes to operate has not issued all on-premises

 


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

 

 2  escrowed license exists and is readily available within the local

 

 3  governmental unit in which the applicant for the on-premises

 

 4  resort or resort economic development license proposes to

 

 5  operate. The commission may waive the provisions of this

 

 6  subsection upon a showing of good cause.

 

 7        (16) (15) The commission shall annually report to the

 

 8  legislature the names of the businesses issued licenses under

 

 9  this section and their locations.

 

10        (17) (16) The commission shall not require a class A hotel

 

11  or a class B hotel licensed under subsection (2), (3), or (4), or

 

12  (5) to provide food service to registered guests or to the

 

13  public.

 

14        (18) (17) Subject to the limitation and quotas of subsection

 

15  (1) and to local legislative approval under section 501(2), the

 

16  commission may approve the transfer of ownership and location of

 

17  an on-premises escrowed license within the same county to a class

 

18  G-1 or class G-2 license or may approve the reclassification of

 

19  an existing on-premises license at the location to be licensed to

 

20  a class G-1 license or to a class G-2 license, subject to

 

21  subsection (1). Resort or economic development on-premises

 

22  licenses created under subsection (3) or (4) (5) may not be

 

23  issued as, or reclassified to, a class G-1 or class G-2 license.

 

24        (19) (18) As used in this section:

 

25        (a) "Escrowed license" means a license in which the rights

 

26  of the licensee in the license or to the renewal of the license

 

27  are still in existence and are subject to renewal and activation

 


 1  in the manner provided for in R 436.1107 of the Michigan

 

 2  administrative code.

 

 3        (b) "Readily available" means available under a standard of

 

 4  economic feasibility, as applied to the specific circumstances of

 

 5  the applicant, that includes, but is not limited to, the

 

 6  following:

 

 7        (i) The fair market value of the license, if determinable.

 

 8        (ii) The size and scope of the proposed operation.

 

 9        (iii) The existence of mandatory contractual restrictions or

 

10  inclusions attached to the sale of the license.

 

11        Sec. 537. (1) The following classes of vendors may sell

 

12  alcoholic liquor at retail as provided in this section:

 

13        (a) Taverns, where beer and wine may be sold for consumption

 

14  on the premises only.

 

15        (b) Class C license, where beer, wine, mixed spirit drink,

 

16  and spirits may be sold for consumption on the premises.

 

17        (c) Clubs, where beer, wine, mixed spirit drink, and spirits

 

18  may be sold for consumption on the premises only to bona fide

 

19  members where consumption is limited to these members and their

 

20  bona fide guests, who are 21 years of age or older.

 

21        (d) Direct shippers, where beer or wine may be sold and

 

22  shipped directly to the consumer.

 

23        (e) Hotels of class A, where beer and wine may be sold for

 

24  consumption on the premises and in the rooms of bona fide

 

25  registered guests. Hotels of class B, where beer, wine, mixed

 

26  spirit drink, and spirits may be sold for consumption on the

 

27  premises and in the rooms of bona fide registered guests.

 


 1        (f) Specially designated merchants, where beer and wine may

 

 2  be sold for consumption off the premises only.

 

 3        (g) Specially designated distributors, where spirits and

 

 4  mixed spirit drink may be sold for consumption off the premises

 

 5  only.

 

 6        (h) Special licenses, where beer and wine or beer, wine,

 

 7  mixed spirit drink, and spirits may be sold for consumption on

 

 8  the premises only.

 

 9        (i) Dining cars or other railroad or Pullman cars,

 

10  watercraft, or aircraft, where alcoholic liquor may be sold for

 

11  consumption on the premises only, subject to rules promulgated by

 

12  the commission.

 

13        (j) Brewpubs Small brewers, where beer manufactured on the

 

14  premises by the licensee may be sold for consumption on or off

 

15  the premises by any of the following licensees:produced by the

 

16  small brewer may be sold by direct shipment as a direct shipper

 

17  and on the licensed premises for consumption on or off the

 

18  premises.

 

19        (i) Class C.

 

20        (ii) Tavern.

 

21        (iii) Class A hotel.

 

22        (iv) Class B hotel.

 

23        (k) Micro brewers and brewers Brewers, where beer produced

 

24  by the micro brewer or brewer may be sold to a consumer for

 

25  consumption on or off the brewery premises.

 

26        (l) Class G-1 license, where beer, wine, mixed spirit drink,

 

27  and spirits may be sold for consumption on the premises only to

 


 1  members required to pay an annual membership fee and consumption

 

 2  is limited to these members and their bona fide guests.

 

 3        (m) Class G-2 license, where beer and wine may be sold for

 

 4  consumption on the premises only to members required to pay an

 

 5  annual membership fee and consumption is limited to these members

 

 6  and their bona fide guests.

 

 7        (n) Motorsports event license, where beer and wine may be

 

 8  sold for consumption on the premises during sanctioned

 

 9  motorsports events only.

 

10        (o) Wine maker, where wine may be sold by direct shipment,

 

11  at retail on the licensed premises, and as provided for in

 

12  subsections (2) and (3).

 

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

 

14  spirits manufactured by that licensee to the consumer at retail

 

15  for consumption on or off the licensed premises in the manner

 

16  provided for in section 534.

 

17        (q) Nonpublic continuing care retirement center license,

 

18  where beer, wine, mixed spirit drink, mixed wine drink, and

 

19  spirits may be sold at retail and served on the licensed premises

 

20  to residents and bona fide guests accompanying the resident for

 

21  consumption only on the licensed premises.

 

22        (r) A small wine maker, where wine may be sold by direct

 

23  shipment as a direct shipper, at retail on the licensed premises,

 

24  and as provided for in subsections (2) and (3).

 

25        (2) A wine maker or small wine maker may sell wine made by

 

26  that wine maker in a restaurant for consumption on or off the

 

27  premises if the restaurant is owned by the wine maker or operated

 


 1  by another person under an agreement approved by the commission

 

 2  and located on the premises where the wine maker or small wine

 

 3  maker is licensed or on contiguous premises owned by the wine

 

 4  maker or small wine maker. A wine maker or small wine maker may

 

 5  sell beer or wine not produced by the wine maker or small wine

 

 6  maker for a restaurant for consumption on the premises if those

 

 7  alcoholic beverages are purchased from a wholesaler.

 

 8        (3) The commission may approve a brandy manufacturer or

 

 9  small distiller to sell brandy and spirits made by that brandy

 

10  manufacturer or small distiller in a restaurant for consumption

 

11  on or off the premises if the restaurant is owned by the brandy

 

12  manufacturer or small distiller or operated by another person

 

13  under an agreement approved by the commission and is located on

 

14  premises where the brandy manufacturer or small distiller is

 

15  licensed or on contiguous premises owned by the brandy

 

16  manufacturer or small distiller. Brandy and spirits sold for

 

17  consumption off the premises under this subsection shall be sold

 

18  at the uniform price established by the commission. A brandy

 

19  manufacturer or small distiller may sell beer or wine not

 

20  produced by the brandy manufacturer or small distiller at a

 

21  restaurant for consumption on the premises if those alcoholic

 

22  beverages are purchased from a wholesaler.

 

23        (4) The commission shall allow a small distiller, brandy

 

24  manufacturer, wine maker, or small wine maker to sell the brands

 

25  of spirits and wines it manufactures for consumption on any

 

26  licensed premises at that distillery, brandy manufacturer, or

 

27  winery.

 


 1        (5) (3) A brewer, small brewer, wine maker, or small wine

 

 2  maker, with the prior written approval of the commission, may

 

 3  conduct beer or wine tastings of beer or wines made by that

 

 4  brewer, small brewer, wine maker, or small wine maker on the

 

 5  premises where the brewer, small brewer, wine maker, or small

 

 6  wine maker is licensed to manufacture beer or wine. The brewer,

 

 7  small brewer, wine maker, or small wine maker may charge for the

 

 8  samples.

 

 9        (6) (4) A wine maker , or small wine maker, with the prior

 

10  written approval of the commission, may conduct wine tastings of

 

11  wines made by that wine maker and may sell the wine made by that

 

12  wine maker for consumption off the premises at a location other

 

13  than the premises where the wine maker is licensed to manufacture

 

14  wine, under the following conditions:

 

15        (a) The premises upon which the wine tasting occurs conforms

 

16  to local and state sanitation requirements.

 

17        (b) Payment of a $100.00 fee per location is made to the

 

18  commission.

 

19        (c) The wine tasting locations are considered licensed

 

20  premises, and the wine maker may include a charge for the

 

21  samples.

 

22        (d) The wine tasting takes place during the legal hours for

 

23  the sale of alcoholic liquor by the licensee.

 

24        (e) The premises and the licensee comply with and are

 

25  subject to all applicable rules promulgated by the commission.

 

26        (7) (5) Notwithstanding section 1025(1), an outstate seller

 

27  of beer, an outstate seller of wine, a wine maker, a brewer, a

 


 1  micro small brewer, or a specially designated merchant, or an

 

 2  agent of any of those persons, who does not hold a license

 

 3  allowing the consumption of alcoholic liquor on the premises at

 

 4  the same licensed address, may conduct beer and wine tastings on

 

 5  the licensed premises of a specially designated merchant under

 

 6  the following conditions:

 

 7        (a) A customer is not charged for the tasting of beer or

 

 8  wine.

 

 9        (b) The tasting samples provided to a customer do not exceed

 

10  3 servings at up to 3 ounces per serving of beer or 3 servings at

 

11  up to 2 ounces of wine. A customer shall not be provided more

 

12  than a total of 3 samples of beer or wine within a 24-hour period

 

13  per licensed premises.

 

14        (c) The specially designated merchant, outstate seller of

 

15  beer, outstate seller of wine, wine maker, micro small brewer, or

 

16  brewer has first obtained an annual beer and wine tasting permit

 

17  approved by the commission.

 

18        (d) The commission is notified, in writing, a minimum of 10

 

19  working days before the event, regarding the date, time, and

 

20  location of the event.

 

21        (8) (6) During the time a beer or wine tasting is conducted

 

22  under subsection (5), (7), a specially designated merchant,

 

23  outstate seller of beer, outstate seller of wine, wine maker,

 

24  micro small brewer, or brewer, or its agent or employee who has

 

25  successfully completed a server training program as provided for

 

26  in section 906, shall devote full time to the beer and wine

 

27  tasting activity and shall perform no other duties, including the

 


 1  sale of alcoholic liquor for consumption off the licensed

 

 2  premises. Beer and wine used for the tasting must come from the

 

 3  specially designated merchant's inventory, and all open bottles

 

 4  must be removed from the premises on the same business day or

 

 5  resealed and stored in a locked, separate storage compartment on

 

 6  the licensed premises when not being used for the activities

 

 7  allowed by the permit.

 

 8        (9) (7) A wholesaler shall not conduct or participate in

 

 9  beer and wine tastings allowed under a permit issued under

 

10  subsection (5).(7).

 

11        (10) (8) A beer and wine tasting under subsection (5) (7)

 

12  may only be conducted during the legal hours for the sale of

 

13  alcoholic liquor by the licensee.

 

14        (11) (9) A brandy manufacturer or small distiller, with the

 

15  prior written approval of the commission, may conduct tastings of

 

16  brandy and spirits made by that brandy manufacturer or small

 

17  distiller and may sell the brandy and spirits made by that brandy

 

18  manufacturer or small distiller for consumption off the licensed

 

19  premises at a location other than the licensed premises where the

 

20  brandy manufacturer or small distiller is licensed to manufacture

 

21  brandy or spirits under the following conditions:

 

22        (a) The premises upon which the brandy and spirits tastings

 

23  occur conform to local and state sanitation requirements.

 

24        (b) Payment of a $100.00 fee per location is made to the

 

25  commission.

 

26        (c) The brandy and spirits tasting locations are considered

 

27  licensed premises and the brandy manufacturer or small distiller

 


 1  may charge for samples.

 

 2        (d) The brandy and spirits tasting takes place during the

 

 3  legal hours for the sale of alcoholic liquor by the licensee.

 

 4        (e) The premises and the license comply with and are subject

 

 5  to all applicable rules promulgated by the commission.

 

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

 

 7  for or the holder of a specially designated distributor license

 

 8  or specially designated merchant license from owning or operating

 

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

 

10  if both of the following conditions are met:

 

11        (a) One 1 or both of the following conditions exist:

 

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

 

13  neighborhood shopping center composed of 1 or more commercial

 

14  establishments organized or operated as a unit which that is

 

15  related in location, size, and type of shop to the trade area

 

16  that the unit serves, which that provides not less than 50,000

 

17  square feet of gross leasable retail space, and which that

 

18  provides 5 private off-street parking spaces for each 1,000

 

19  square feet of gross leasable retail space.

 

20        (b) (ii) The applicant or licensee maintains a minimum

 

21  inventory on the premises, excluding alcoholic liquor and motor

 

22  vehicle fuel, of not less than $250,000.00, $50,000.00, at cost,

 

23  of those goods and services customarily marketed by approved

 

24  types of businesses.

 

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

 

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

 

27  dispensed.

 


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

 

 2  the holder of a specially designated distributor license or

 

 3  specially designated merchant license from owning or operating

 

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

 

 5  if all of the following conditions are met:

 

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

 

 7  of 7,000 or less, which and the township is not contiguous with

 

 8  any other township. For purposes of this subdivision, a township

 

 9  is not considered contiguous by water.

 

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

 

11  on the premises, excluding alcoholic liquor and motor vehicle

 

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

 

13  services customarily marketed by approved types of businesses.

 

14        (c) The applicant has the approval of the township, as

 

15  evidenced by a resolution duly adopted by the township and

 

16  submitted with the application to the commission.

 

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

 

18  the holder of a specially designated merchant license from owning

 

19  or operating motor vehicle fuel pumps on or adjacent to the

 

20  licensed premises if both of the following conditions are met:

 

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

 

22  following:

 

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

 

24  population of 3,500 or less and a county with a population of

 

25  31,000 or more.

 

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

 

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

 


 1  less than 31,000.

 

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

 

 3  on the premises, excluding alcoholic liquor and motor vehicle

 

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

 

 5  services customarily marketed by approved types of businesses.

 

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

 

 7  the holder of a specially designated distributor license from

 

 8  owning or operating motor vehicle fuel pumps on or adjacent to

 

 9  the licensed premises if both of the following conditions are

 

10  met:

 

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

 

12  following:

 

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

 

14  population of 3,500 or less and a county with a population of

 

15  31,000 or more.

 

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

 

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

 

18  less than 31,000.

 

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

 

20  on the premises, excluding alcoholic liquor and motor vehicle

 

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

 

22  services customarily marketed by approved types of businesses.

 

23        (5) A person who that was issued a specially designated

 

24  merchant license or specially designated distributor license at a

 

25  location at which another person owned, operated or maintained

 

26  motor vehicle fuel pumps at the same location may have or acquire

 

27  an interest in the ownership, operation, or maintenance of those

 


 1  motor vehicle fuel pumps.

 

 2        (6) The commission may transfer ownership of a specially

 

 3  designated merchant license or specially designated distributor

 

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

 

 5  motor vehicle fuel pumps already in operation at the same

 

 6  location at which the license is issued.

 

 7        Sec. 543. (1) Quarterly, upon recommendation of the

 

 8  commission, the state shall pay pursuant to appropriation in the

 

 9  manner prescribed by law to the city, village, or township in

 

10  which a full-time police department or full-time ordinance

 

11  enforcement department is maintained or, if a police department

 

12  or full-time ordinance enforcement department is not maintained,

 

13  to the county, to be credited to the sheriff's department of the

 

14  county in which the licensed premises are located, 55% of the

 

15  amount of the proceeds of the retailers' license fees and license

 

16  renewal fees collected in that jurisdiction, for the specific

 

17  purpose of enforcing this act and the rules promulgated under

 

18  this act. Forty-one and one-half percent of the amount of the

 

19  proceeds of retailers' license and license renewal fees collected

 

20  shall be deposited in a special fund to be annually appropriated

 

21  to the commission for carrying out the licensing and enforcement

 

22  provisions of this act. Any unencumbered or uncommitted money in

 

23  the special fund shall revert to the general fund of the state 12

 

24  months after the end of each fiscal year in which the funds were

 

25  collected. The legislature shall appropriate 3-1/2% of the amount

 

26  of the proceeds of retailers' license and license renewal fees

 

27  collected to be credited to a special fund in the state treasury

 


 1  for the purposes of promoting and sustaining programs for the

 

 2  prevention, rehabilitation, care, and treatment of alcoholics.

 

 3  This subsection does not apply to retail license fees collected

 

 4  for railroad or Pullman cars, watercraft, aircraft, or wine

 

 5  auctions or to the transfer fees provided in section 529.

 

 6        (2) All license and license renewal fees, other than retail

 

 7  license and license renewal fees, shall be credited to the grape

 

 8  and wine industry council created in section 303, to be used as

 

 9  provided in section 303. Money credited to the grape and wine

 

10  industry council shall not revert to the state general fund at

 

11  the close of the fiscal year, but shall remain in the account to

 

12  which it was credited to be used as provided in section 303.

 

13        (3) All retail license fees collected for railroad or

 

14  Pullman cars, watercraft, or aircraft and the transfer fees

 

15  provided in section 529 shall be deposited in the special fund

 

16  created in subsection (1) for carrying out the licensing and

 

17  enforcement provisions of this act.

 

18        (4) The license fee enhancement imposed for licenses issued

 

19  under section 531(3), and (4), and (5) shall be deposited into a

 

20  special fund to be annually appropriated to the commission for

 

21  enforcement and other related projects determined appropriate by

 

22  the commission. The money representing that amount of the license

 

23  fees for identical licenses not issued under section 531(3), and

 

24  (4), and (5) shall be allocated and appropriated under subsection

 

25  (1).

 

26        (5) The license fee imposed on direct shipper licenses and

 

27  any violation fines imposed by the commission shall be deposited

 


 1  into the direct shipper enforcement revolving fund. The direct

 

 2  shipper enforcement revolving fund is created within the state

 

 3  treasury. The state treasurer shall direct the investment of the

 

 4  fund. The state treasurer shall credit to the fund interest and

 

 5  earnings from fund investments. Money in the fund at the close of

 

 6  the fiscal year shall remain in the fund and shall not lapse to

 

 7  the general fund. The commission shall expend money from the

 

 8  fund, upon appropriation, only for enforcement of the provisions

 

 9  of section 203 and related projects.

 

10        (6) One hundred percent of the wine auction license fee

 

11  imposed in section 525(1)(aa) 525(1)(z) shall be deposited into

 

12  the general fund.

 

13        (7) As used in this section, "license fee enhancement" means

 

14  the money representing the difference between the license fee

 

15  imposed for a license under section 525(1) and the additional

 

16  amount imposed for resort and resort economic development

 

17  licenses under section 525(2).

 

18        (8) Notwithstanding any other provision of this section, the

 

19  additional $160.00 license fee imposed upon any licensee selling

 

20  alcoholic liquor between the hours of 7 a.m. on Sunday and 12

 

21  noon on Sunday is allocated to the general fund.

 

22        Sec. 547. (1) As used in this section:

 

23        (a) "Private event" means an event where no consideration,

 

24  as defined in section 913, is paid by the guests.

 

25        (b) "Catering permit" means a permit issued by the

 

26  commission to a specially designated distributor, specially

 

27  designated merchant, or holder of a public on-premises license,

 


 1  wine maker, small wine maker, brandy manufacturer, small

 

 2  distiller, or small brewer for the sale of beer, wine, or

 

 3  spirits, or any combination thereof, that is also licensed as a

 

 4  food service establishment or retail food establishment under the

 

 5  food law of 2000, 2000 PA 92, MCL 289.1101 to 289.8111, which

 

 6  permit authorizes the permit holder to sell and deliver beer,

 

 7  wine, and spirits in the original sealed container to a person

 

 8  for off-premises consumption but only if the sale is not by the

 

 9  glass or drink and the permit holder serves the beer, wine, or

 

10  spirits. The permit does not allow the permit holder to deliver,

 

11  but not serve, the beer, wine, or spirits.

 

12        (2) Spirits sold by a specially designated distributor,

 

13  specially designated merchant, small distiller, or on-premises

 

14  licensee under a catering permit shall not be sold at less than

 

15  the minimum retail selling price fixed by the commission,

 

16  including under rules promulgated by the commission for specially

 

17  designated distributors under section 229.

 

18        (3) The commission may issue a catering permit to a

 

19  specially designated distributor, specially designated merchant,

 

20  wine maker, small wine maker, brandy manufacturer, small

 

21  distiller, small brewer, or public on-premises licensee, as a

 

22  supplement to that license, to allow the sale and delivery of

 

23  beer, wine, or spirits in the original sealed container at

 

24  locations other than the licensed premises and to require the

 

25  catering permit holder to serve beer, wine, or spirits at the

 

26  private event where the alcoholic liquor is not resold to guests.

 

27  The commission shall not issue a catering permit to an applicant

 


 1  who delivers beer, wine, or spirits but does not serve the beer,

 

 2  wine, or spirits.

 

 3        (4) This section does not limit the number of catering

 

 4  permits the commission may issue within any local unit of

 

 5  government.

 

 6        (5) This section does not prevent a catering permit holder

 

 7  from using the catering permit at multiple locations and events

 

 8  during the same time period.

 

 9        (6) This section does not prohibit a catering permit holder

 

10  from selling beer, wine, or spirits to a person who that has

 

11  obtained a special license if that catering permit holder serves

 

12  the beer, wine, or spirits and complies with all catering permit

 

13  rules promulgated by the commission.

 

14        (7) An applicant for a catering permit shall apply on a form

 

15  approved and provided by the commission and pay an application

 

16  and processing fee of $70.00 and a catering permit fee of $100.00

 

17  on the issuance of the catering permit. The applicant shall also

 

18  pay the catering permit fee on renewal of the specially

 

19  designated distributor, specially designated merchant, or on-

 

20  premises licensee.

 

21        (8) The person delivering the beer, wine, or spirits under a

 

22  catering permit shall verify that the individual accepting

 

23  delivery is at least 21 years of age. The catering permit holder

 

24  may utilize a third party that provides delivery service to

 

25  municipalities in this state that are surrounded by water and

 

26  inaccessible by motor vehicle to deliver beer, wine, or spirits

 

27  to the designated location of the private event if the delivery

 


 1  service is approved by the commission and agrees to verify that

 

 2  the individual accepting delivery of the beer, wine, or spirits

 

 3  is at least 21 years of age.

 

 4        (9) A catering permit holder providing the service, or an

 

 5  employee of the catering permit holder, shall successfully

 

 6  complete a server training program approved by the commission

 

 7  before providing the service.

 

 8        (10) A catering permit holder delivering the beer, wine, or

 

 9  spirits, or an employee of the catering permit holder, shall have

 

10  in his or her possession while delivering the beer, wine, or

 

11  spirits documentation demonstrating that the beer, wine, or

 

12  spirits being delivered are for a private event being conducted

 

13  under this section.

 

14        (11) A catering permit holder who that prepares food or

 

15  drink for direct consumption through service on the premises or

 

16  elsewhere shall comply with the requirements for food service

 

17  establishments under the food law of 2000, 2000 PA 92, MCL

 

18  289.1101 to 289.8111.

 

19        (12) A catering permit holder is subject to all sanctions,

 

20  liabilities, and penalties provided under this act or under law.

 

21        Sec. 603. (1) Except as provided in subsections (6) to (14)

 

22  (5) to (12) and section 605, a supplier, warehouser, or

 

23  wholesaler shall not have any direct or indirect financial

 

24  interest in the establishment, maintenance, operation, or

 

25  promotion of the business of any other vendor.

 

26        (2) Except as provided in subsections (6) to (14) (5) to

 

27  (12) and section 605, a supplier, warehouser, or wholesaler or a

 


 1  stockholder of a supplier, warehouser, or wholesaler shall not

 

 2  have any direct or indirect interest by ownership in fee,

 

 3  leasehold, mortgage, or otherwise in the establishment,

 

 4  maintenance, operation, or promotion of the business of any other

 

 5  vendor.

 

 6        (3) Except as provided in subsections (6) to (14) (5) to

 

 7  (11) and section 605, a supplier, warehouser, or wholesaler shall

 

 8  not have any direct or indirect interest by interlocking

 

 9  directors in a corporation or by interlocking stock ownership in

 

10  a corporation in the establishment, maintenance, operation, or

 

11  promotion of the business of any other vendor.

 

12        (4) Except as provided in subsections (6) to (14) (5) to

 

13  (11) and section 605, a person shall not buy the stocks of a

 

14  supplier, warehouser, or wholesaler and place the stock in any

 

15  portfolio under an arrangement, written trust agreement, or form

 

16  of investment trust agreement, issue participating shares based

 

17  upon the portfolio, trust agreement, or investment trust

 

18  agreement, and sell the participating shares within this state.

 

19        (5) The commission may approve a brandy manufacturer or

 

20  small distiller to sell brandy and spirits made by that brandy

 

21  manufacturer or small distiller in a restaurant for consumption

 

22  on or off the premises if the restaurant is owned by the brandy

 

23  manufacturer or small distiller or operated by another person

 

24  under an agreement approved by the commission and is located on

 

25  premises where the brandy manufacturer or small distiller is

&nb