SB-0625, As Passed House, December 6, 2005

SUBSTITUTE FOR

SENATE BILL NO. 625

     A bill to amend 1998 PA 58, entitled

"Michigan liquor control code of 1998,"

by amending section 203 (MCL 436.1203), as amended by 2000 PA 289.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

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

301, a sale, delivery, or importation of alcoholic liquor,

including alcoholic liquor for personal use, shall not be made in

this state unless the sale, delivery, or importation is made by the

commission, the commission's authorized agent or distributor, an

authorized distribution agent approved by order of the commission,

a person licensed by the commission, or by prior written order of

the commission.

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

importation of alcoholic liquor, except as otherwise provided in

subsection (3), includes, but is not limited to, the sale,

delivery, or importation of alcoholic liquor transacted or caused

to be transacted by means of any mail order, internet, telephone,

computer, device, or other electronic means. Subject to subsection

(3)  (4), if a retail sale, delivery, or importation of alcoholic

liquor occurs by any such means, the retailer must comply with all

of the following:

     (a) Be appropriately licensed under the laws of this state.

     (b) Pay any applicable taxes to the commission or the

department of treasury.

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

including, but not limited to, sales to minors.

     (d) Verify the age of the individual placing the order by

obtaining from him or her an affirmation that he or she is of legal

age to purchase alcoholic liquor. The person receiving and

accepting the order shall record the name, address, date of birth,

and telephone number of the person placing the order on the order

form or other verifiable record of a type and generated in a manner

approved by the commission.

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

commission any document used to verify the age of the individual

ordering the alcoholic liquor from the retail seller.

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

container language that clearly establishes in a prominent fashion

that the package contains alcoholic liquor and that the recipient

at the time of the delivery is required to provide identification

verifying his or her age along with a signature.

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

containing the name and address of the individual placing the order

and the name of the designated recipient, if any.

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

importation of wine, to consumers in this state, by a person who

both produces and bottles the wine or wine that is manufactured by

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

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

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

directly to a consumer on the winery premises, shall only be done

by a direct shipper. If a retail sale, delivery, or importation of

wine occurs by any means described in this subsection, the direct

shipper must comply with all of the following:

     (a) Hold a direct shipper license.

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

applicable taxes to the department of treasury as directed by the

department of treasury. Upon the request of the department of

treasury, a direct shipper shall furnish an affidavit to verify

payment.

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

including, but not limited to, sales to minors.

     (d) Verify the age of the individual placing the order by

obtaining from him or her a copy of a photo identification issued

by this state, another state, or the federal government or by

utilizing an identification verification service. The person

receiving and accepting the order on behalf of the direct shipper

shall record the name, address, date of birth, and telephone number

of the person placing the order on the order form or other

verifiable record of a type and generated in a manner approved by

the commission and provide a duplicate to the commission.

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

commission any document used to verify the age of the individual

ordering or receiving the wine from the direct shipper.

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

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

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

the delivery is required to provide photo identification verifying

his or her age along with a signature.

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

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

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

of the designated recipient if different from the name of the

individual placing the order.

     (h) Direct ship not more than 1,500 9-liter cases, or 13,500

liters in total, of wine in a calendar year to Michigan consumers.

If a direct shipper, whether located in this state or outside this

state, owns, in whole or in part, or commonly manages 1 or more

direct shippers, it shall not in combination ship to consumers in

this state more than 13,500 liters of wine in the aggregate.

     (i) Pay wine taxes quarterly and report to the commission

quarterly the total amount of wine, by type, brand, and price,

shipped to consumers in this state during the preceding calendar

quarter, and the order numbers.

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

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

     (k) Consent and submit to the jurisdiction of the commission,

the department of treasury, and the courts of this state concerning

enforcement of this section and any related laws, rules, and

regulations.

(4)  (3) Notwithstanding subsection (2) or (3), in the case

of a retail sale, delivery, or importation of alcoholic liquor

occurring by any means described in subsection (2) or (3), a person

taking the order on behalf of the retailer must comply with

subsection (2)(c) through (g) and subsection (3)(c) through (g).

(5)  (4) The person who delivers the alcoholic liquor shall

verify that the individual accepting delivery is of legal age and

is  either the individual who placed the order or the designated

recipient,  residing at the same address  is an individual of legal

age currently occupying or present at the address, or is an

individual otherwise authorized through a rule promulgated under

this act by the commission to receive alcoholic liquor under this

section. If the delivery person, after a diligent inquiry,

determines that the purchaser or designated recipient is not of

legal age, the delivery person shall return the alcoholic liquor to

the retailer or direct shipper. A delivery person who returns

alcoholic liquor to the retailer or direct shipper due to inability

to obtain the purchaser's or designated recipient's legal age is

not liable for any damages suffered by the purchaser,  or

retailer, or direct shipper.

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

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

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

commission.

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

alcoholic liquor brought into this state for personal or household

use in an amount permitted by federal law by a person of legal age

to purchase alcoholic liquor at the time of reentry into this state

from without the territorial limits of the United States if the

person has been outside the territorial limits of the United States

for more than 48 hours and has not brought alcoholic liquor into

the United States during the preceding 30 days.

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

liquor may do either of the following in relation to alcoholic

liquor that contains less than 21% alcohol by volume:

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

period, not more than 312 ounces of alcoholic liquor for that

person's personal use, notwithstanding subsection (1).

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

that person's personal use so long as that personal importation is

done in compliance with subsection (1).

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

or importation of wine to a consumer unless it applies for and is

granted a direct shipper license from the commission. This

subsection does not prohibit wine tasting or the selling at retail

by a wine maker of wines he or she produced and bottled or wine

manufactured for that wine maker by another wine maker, if done in

compliance with this act. Only the following persons qualify for

the issuance of a direct shipper license:

     (a) A licensed wine maker.

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

but outside of this state holding both a federal basic permit

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

license to manufacture wine in its state of domicile.

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

application to the commission in a written or electronic format

provided by the commission and accompanied by an application and

initial license fee of $100.00. The application shall be

accompanied by a copy or other evidence of the existing federal

basic permit or license, or both, held by the applicant. The direct

shipper may renew its license annually by submission of a license

renewal fee of $100.00 and a completed renewal application. The

commission shall use the fees collected under this section to

conduct investigations and audits of direct shippers. The failure

to renew, or the revocation or suspension of, the applicant's

existing Michigan license, federal basic permit, or license to

manufacture wine in its state of domicile is grounds for revocation

or denial of the direct shipper license. If a direct shipper is

found guilty of violating this act or a rule promulgated by the

commission, the commission shall notify both the alcoholic liquor

control agency in the direct shipper's state of domicile and the

alcohol and tobacco tax and trade bureau of the United States

department of treasury of the violation.

(11)  (8) As used in this section:

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

interactive device, equipment, or facility that uses a computer

program or other instructions to perform specific operations

including logical, arithmetic, or memory functions with or on

computer data or a computer program and that can store, retrieve,

alter, or communicate the results of the operations to a person,

computer program, computer, computer system, or computer network.

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

or wireless communication lines with a computer through remote

terminals, or a complex consisting of 2 or more interconnected

computers.

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

instructions communicated in a form acceptable to a computer that

directs the functioning of a computer, computer system, or computer

network in a manner designed to provide or produce products or

results from the computer, computer system, or computer network.

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

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

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

personal consumption and not for resale.

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

electronic, magnetic, electrochemical, biochemical, hydraulic,

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

functions by the manipulation of electronic, magnetic, or other

impulses.

(g)  (f) "Diligent inquiry" means a diligent good faith

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

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

license, an official Michigan personal identification card, or any

other bona fide picture identification  which  that establishes the

identity and age of the person.

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

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

he or she produces and bottles or wine that is manufactured by a

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

to be transacted through the use of any mail order, internet,

telephone, computer, device, or other electronic means, or sells

directly to consumers on the winery premises.

     (i) "Identification verification service" means any internet-

based service approved by the commission specializing in age and

identity verification.

     Enacting section 1. This amendatory act does not take effect

unless House Bill No. 4959 of the 93rd Legislature is enacted into

law.

     Enacting section 2. If an appellate court declares this

amendatory act unconstitutional, then it is the intent of the

legislature that a good faith effort be made to amend section 305

of the Michigan liquor control code of 1998, 1998 PA 58, MCL

436.1305, to make it less burdensome for a small winery to

terminate an agreement with a wholesaler.