HB-5925, As Passed Senate, June 27, 2008

SUBSTITUTE FOR

HOUSE BILL NO. 5925

A bill to amend 1998 PA 58, entitled

"Michigan liquor control code of 1998,"

by amending sections 111, 525, 537, 603, 607, 906, and 1027 (MCL

436.1111, 436.1525, 436.1537, 436.1603, 436.1607, 436.1906, and

436.2027), section 525 as amended by 2006 PA 539, sections 537 and

607 as amended by 2005 PA 269, section 906 as amended by 2008 PA

11, and section 1027 as amended by 2001 PA 46, and by adding

section 534.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

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

limited partnership, association, limited liability company, or

corporation.

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

spirits, the distiller, producer, owner of the commodity at the

time it becomes a marketable product, or bottler, or the exclusive

agent of any such person and, in the case of spirits imported into

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

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

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

the bottler.

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

person by a class C licensee or tavern licensee whose major

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

to the person for not more than 30 days.

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

permanently.

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

sells to the consumer in accordance with rules promulgated by the

commission.

(6) "Sacramental wine" means wine containing not more than 24%

of alcohol by volume which is used for sacramental purposes.

(7) "Sale" includes the exchange, barter, traffic, furnishing,

or giving away of alcoholic liquor. In the case of a sale in which

a shipment or delivery of alcoholic liquor is made by a common or

other carrier, the sale of the alcoholic liquor is considered to be

made in the county within which the delivery of the alcoholic

liquor is made by that carrier to the consignee or his or her agent

or employee, and venue for the prosecution for that sale may be in

the county or city where the seller resides or from which the

shipment is made or at the place of delivery.

(8) "School" includes buildings used for school purposes to

provide instruction to children in grades kindergarten through 12,

when that instruction is provided by a public, private,

denominational, or parochial school, except those buildings used

primarily for adult education or college extension courses. School

does not include a proprietary trade or occupational school.

(9) "Small distiller" means a manufacturer of spirits annually

manufacturing in Michigan not exceeding 60,000 gallons of spirits,

of all brands combined.

(10) ~~(9)~~ "Small wine maker" means a wine maker manufacturing

or bottling not more than 50,000 gallons of wine in 1 calendar

year.

(11) ~~(10)~~ "Special license" means a contract between the

commission and the special licensee granting authority to that

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

license shall be granted only to such persons and such organization

and for such period of time as the commission shall determine so

long as the person or organization is able to demonstrate an

existence separate from an affiliated umbrella organization. If

such an existence is demonstrated, the commission shall not deny a

special license solely by the applicant's affiliation with an

organization that is also eligible for a special license.

(12) ~~(11)~~ "Specially designated distributor" means, subject to

section 534, a person engaged in an established business licensed

by the commission to distribute spirits and mixed spirit drink in

the original package for the commission for consumption off the

premises.

(13) ~~(12)~~ "Specially designated merchant" means a person to

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

at retail for consumption off the licensed premises.

(14) ~~(13)~~ "Spirits" means a beverage that contains alcohol

obtained by distillation, mixed with potable water or other

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

alcoholic content of more than 21% by volume, except sacramental

wine and mixed spirit drink.

(15) ~~(14)~~ "State liquor store" means a store established by

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

original package for consumption off the premises.

(16) ~~(15)~~ "Supplier of spirits" means a vendor of spirits, a

manufacturer of spirits, or a primary source of supply.

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

section, the following license fees shall be paid at the time of

filing applications or as otherwise provided in this act:

(a) Manufacturers of spirits, but not including makers,

blenders, and rectifiers of wines containing 21% or less alcohol by

volume, $1,000.00.

(b) Manufacturers of beer, $50.00 per 1,000 barrels, or

fraction of a barrel, production annually with a maximum fee of

$1,000.00, and in addition $50.00 for each motor vehicle used in

delivery to retail licensees. A fee increase does not apply to a

manufacturer of less than 15,000 barrels production per year.

this state, $1,000.00.

(d) Wine makers, blenders, and rectifiers of wine, including

makers, blenders, and rectifiers of wines containing 21% or less

alcohol by volume, $100.00. The small wine maker license fee is

$25.00.

(e) Outstate seller of wine, delivering or selling wine in

this state, $300.00.

(f) Outstate seller of mixed spirit drink, delivering or

selling mixed spirit drink in this state, $300.00.

(g) Dining cars or other railroad or Pullman cars selling

alcoholic liquor, $100.00 per train.

(h) Wholesale vendors other than manufacturers of beer,

$300.00 for the first motor vehicle used in delivery to retail

licensees and $50.00 for each additional motor vehicle used in

delivery to retail licensees.

(i) Watercraft, licensed to carry passengers, selling

alcoholic liquor, a minimum fee of $100.00 and a maximum fee of

$500.00 per year computed on the basis of $1.00 per person per

passenger capacity.

(j) Specially designated merchants, for selling beer or wine

for consumption off the premises only but not at wholesale, $100.00

for each location regardless of the fact that the location may be a

part of a system or chain of merchandising.

(k) Specially designated distributors licensed by the

commission to distribute spirits and mixed spirit drink in the

original package for the commission for consumption off the

premises, $150.00 per year, and an additional fee of $3.00 for each

$1,000.00 or major fraction of that amount in excess of $25,000.00

of the total retail value of merchandise purchased under each

license from the commission during the previous calendar year.

(l) Hotels of class A selling beer and wine, a minimum fee of

$250.00 and, for all bedrooms in excess of 20, $1.00 for each

additional bedroom, but not more than $500.00.

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

and spirits, a minimum fee of $600.00 and, for all bedrooms in

excess of 20, $3.00 for each additional bedroom. If a hotel of

class B sells beer, wine, mixed spirit drink, and spirits in more

than 1 public bar, the fee entitles the hotel to sell in only 1

public bar, other than a bedroom, and a license shall be secured

for each additional public bar, other than a bedroom, the fee for

which is $350.00.

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

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

and spirits, $600.00. If a class C licensee sells beer, wine, mixed

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

shall be paid for each additional bar. In municipally owned or

supported facilities in which nonprofit organizations operate

concession stands, a fee of $100.00 shall be paid for each

additional bar.

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

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

$1.00 for each additional member. The membership list for the

purpose only of determining the license fees to be paid under this

subdivision shall be the accredited list of members as determined

by a sworn affidavit 30 days before the closing of the license

year. This subdivision does not prevent the commission from

checking a membership list and making its own determination from

the list or otherwise. The list of members and additional members

is not required of a club paying the maximum fee. The maximum fee

shall not exceed $750.00 for any 1 club.

(q) Warehousers, to be fixed by the commission with a minimum

fee for each warehouse of $50.00.

(r) Special licenses, a fee of $50.00 per day, except that the

fee for that license or permit issued to any bona fide nonprofit

association, duly organized and in continuous existence for 1 year

before the filing of its application, is $25.00. Not more than 12

special licenses may be granted to any organization, including an

auxiliary of the organization, in a calendar year.

(s) Airlines licensed to carry passengers in this state that

sell, offer for sale, provide, or transport alcoholic liquor,

$600.00.

(t) Brandy manufacturer, $100.00.

(u) Mixed spirit drink manufacturer, $100.00.

(v) Brewpub, $100.00.

(w) Class G-1, $1,000.00.

(x) Class G-2, $500.00.

(y) Motorsports event license, $250.00.

(z) Small distiller, $100.00.

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

licenses shall not be prorated for a portion of the effective

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

license fee for any licenses issued under section 531(3) and (4) is

$20,000.00. The renewal license fee shall be the amount described

in subsection (1). However, the commission shall not impose the

$20,000.00 initial license fee for applicants whose license

eligibility was already approved on July 20, 2005.

(3) Beginning July 23, 2004, and except in the case of any

resort or resort economic development license issued under section

531(2), (3), (4), and (5) and a license issued under section 521,

the commission shall issue an initial or renewal license not later

than 90 days after the applicant files a completed application.

Receipt of the application is considered the date the application

is received by any agency or department of the state of Michigan.

If the application is considered incomplete by the commission, the

commission shall notify the applicant in writing, or make the

information electronically available, within 30 days after receipt

of the incomplete application, describing the deficiency and

requesting the additional information. The determination of the

completeness of an application does not operate as an approval of

the application for the license and does not confer eligibility

upon an applicant determined otherwise ineligible for issuance of a

license. The 90-day period is tolled under any of the following

circumstances:

(a) Notice sent by the commission of a deficiency in the

application until the date all of the requested information is

received by the commission.

(b) The time period during which actions required by a party

other than the applicant or the commission are completed that

include, but are not limited to, completion of construction or

renovation of the licensed premises; mandated inspections by the

commission or by any state, local, or federal agency; approval by

the legislative body of a local unit of government; criminal

history or criminal record checks; financial or court record

checks; or other actions mandated by this act or rule or as

otherwise mandated by law or local ordinance.

(4) If the commission fails to issue or deny a license within

the time required by this section, the commission shall return the

license fee and shall reduce the license fee for the applicant's

next renewal application, if any, by 15%. The failure to issue a

license within the time required under this section does not allow

the commission to otherwise delay the processing of the

application, and that application, upon completion, shall be placed

in sequence with other completed applications received at that same

time. The commission shall not discriminate against an applicant in

the processing of the application based upon the fact that the

license fee was refunded or discounted under this subsection.

(5) Beginning October 1, 2005, the chair of the commission

shall submit a report by December 1 of each year to the standing

committees and appropriations subcommittees of the senate and house

of representatives concerned with liquor license issues. The chair

of the commission shall include all of the following information in

the report concerning the preceding fiscal year:

(a) The number of initial and renewal applications the

commission received and completed within the 90-day time period

described in subsection (3).

(b) The number of applications denied.

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

under subsection (4).

(6) As used in this section, "completed application" means an

application complete on its face and submitted with any applicable

licensing fees as well as any other information, records, approval,

security, or similar item required by law or rule from a local unit

of government, a federal agency, or a private entity but not from

another department or agency of the state of Michigan.

Sec. 534. (1) Upon application in a manner acceptable to the

commission and payment of the appropriate license fee, the

commission shall issue a small distiller license to a person

annually manufacturing in Michigan spirits in an amount not

exceeding 60,000 gallons, of all brands combined.

(2) A small distiller may only sell at retail from the

licensed premises either or both of the following:

(a) Brands it manufactures on the licensed premises for

consumption off the licensed premises, at a price posted by the

commission under section 233.

(b) Brands it manufactures on the licensed premises for

consumption on the licensed premises.

(3) A small distiller may give samplings or tastings of brands

it manufactures on the licensed premises.

(4) A small distiller shall comply with the server training

requirements of section 906.

(5) This section does not allow the sale of spirits transacted

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

telephone, computer, device, or other electronic means.

Sec. 537. (1) The following classes of vendors may sell

alcoholic liquors at retail as provided in this section:

(a) Taverns where beer and wine may be sold for consumption on

the premises only.

(b) Class C license where beer, wine, mixed spirit drink, and

spirits may be sold for consumption on the premises.

may be sold for consumption on the premises only to bona fide

members where consumption is limited to these members and their

bona fide guests, who have attained the age of 21 years.

(d) Direct shippers where wine may be sold and shipped

directly to the consumer.

(e) Hotels of class A where beer and wine may be sold for

consumption on the premises and in the rooms of bona fide

registered guests. Hotels of class B where beer, wine, mixed spirit

drink, and spirits may be sold for consumption on the premises and

in the rooms of bona fide registered guests.

(f) Specially designated merchants, where beer and wine may be

sold for consumption off the premises only.

(g) Specially designated distributors where spirits and mixed

spirit drink may be sold for consumption off the premises only.

(h) Special licenses where beer and wine or beer, wine, mixed

spirit drink, and spirits may be sold for consumption on the

premises only.

(i) Dining cars or other railroad or Pullman cars, watercraft,

or aircraft, where alcoholic liquor may be sold for consumption on

the premises only, subject to rules promulgated by the commission.

(j) Brewpubs where beer manufactured on the premises by the

licensee may be sold for consumption on or off the premises by any

of the following licensees:

(i) Class C.

(ii) Tavern.

(iii) Class A hotel.

(iv) Class B hotel.

(k) Micro brewers and brewers selling less than 200,000

barrels of beer per year where beer produced by the micro brewer or

brewer may be sold to a consumer for consumption on or off the

brewery premises.

(l) Class G-1 license where beer, wine, mixed spirit drink, and

spirits may be sold for consumption on the premises only to members

required to pay an annual membership fee and consumption is limited

to these members and their bona fide guests.

(m) Class G-2 license where beer and wine may be sold for

consumption on the premises only to members required to pay an

annual membership fee and consumption is limited to these members

and their bona fide guests.

(n) Motorsports event license where beer and wine may be sold

for consumption on the premises during sanctioned motorsports

events only.

(o) Wine maker where wine may be sold by direct shipment, at

retail on the licensed premises, and as provided for in subsections

(2) and (3).

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

spirits manufactured by that licensee to the consumer at retail for

consumption on or off the licensed premises in the manner provided

for in section 534.

(2) A wine maker may sell wine made by that wine maker in a

restaurant for consumption on or off the premises if the restaurant

is owned by the wine maker or operated by another person under an

agreement approved by the commission and located on the premises

where the wine maker is licensed.

(3) A wine maker, with the prior written approval of the

commission, may conduct wine tastings of wines made by that wine

maker and may sell the wine made by that wine maker for consumption

off the premises at a location other than the premises where the

wine maker is licensed to manufacture wine, under the following

conditions:

(a) The premises upon which the wine tasting occurs conforms

to local and state sanitation requirements.

(b) Payment of a $100.00 fee per location is made to the

commission.

premises.

(d) Wine tasting does not take place between the hours of 2

a.m. and 7 a.m. Monday through Saturday, or between 2 a.m. and 12

noon on Sunday.

(e) The premises and the licensee comply with and are subject

to all applicable rules promulgated by the commission.

Sec. 603. (1) Except as provided in subsection (6) and section

605, a manufacturer, mixed spirit drink manufacturer, warehouser,

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

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

not have any financial interest, directly or indirectly, in the

establishment, maintenance, operation, or promotion of the business

of any other vendor.

(2) Except as provided in subsection (6) and section 605, a

manufacturer, mixed spirit drink manufacturer, warehouser,

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

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

stockholder of a manufacturer, mixed spirit drink manufacturer,

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

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

shall not have an interest by ownership in fee, leasehold,

mortgage, or otherwise, directly or indirectly, in the

establishment, maintenance, operation, or promotion of the business

of any other vendor.

(3) Except as provided in subsection (6) and section 605, a

manufacturer, mixed spirit drink manufacturer, warehouser,

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

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

not have an interest directly or indirectly by interlocking

directors in a corporation or by interlocking stock ownership in a

corporation in the establishment, maintenance, operation, or

promotion of the business of any other vendor.

(4) Except as provided in subsection (6) and section 605, a

person shall not buy the stocks of a manufacturer, mixed spirit

drink manufacturer, warehouser, wholesaler, outstate seller of

beer, outstate seller of wine, outstate seller of mixed spirit

drink, or vendor of spirits and place the stock in any portfolio

under an arrangement, written trust agreement, or form of

investment trust agreement and issue participating shares based

upon the portfolio, trust agreement, or investment trust agreement,

and sell the participating shares within this state.

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

brandy made by that brandy manufacturer in a restaurant for

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

the brandy manufacturer or operated by another person under an

agreement approved by the commission and is located on the premises

where the brandy manufacturer is licensed. Brandy sold for

consumption off the premises under this subsection shall be sold at

the uniform price established by the commission.

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

brands of spirits it manufactures for consumption on the licensed

premises at that distillery.

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

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

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

beer per calendar year.

Sec. 607. (1) Except as provided in section 537(2), a

warehouser, mixed spirit drink manufacturer, wholesaler, outstate

seller of beer, outstate seller of wine, outstate seller of mixed

spirit drink, or vendor of spirits shall not be licensed as a

specially designated merchant or a specially designated

distributor. A person licensed as a small distiller is not

considered to be a specially designated distributor. Beginning on

~~the effective date of the amendatory act that added this sentence~~

December 23, 2007 and in addition to the persons described in this

subsection, a wine maker and a small wine maker shall also not be

licensed as a specially designated merchant or a specially

designated distributor. Any wine maker or small wine maker holding

a specially designated merchant or specially designated distributor

license on ~~the effective date of the amendatory act that added this~~

~~sentence~~ December 23, 2007 may continue to hold a specially

designated merchant or specially designated distributor license.

(2) A specially designated distributor or specially designated

merchant or any other retailer shall not hold a mixed spirit drink

manufacturer, wholesale, warehouse, outstate seller of beer,

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

license. Beginning ~~on the effective date of the amendatory act that~~

~~added this sentence~~ December 23, 2007, a specially designated

distributor or specially designated merchant shall not hold a wine

maker or small wine maker license in addition to being prohibited

from holding any other license described in this subsection. Any

specially designated distributor or specially designated merchant

holding a wine maker or small wine maker license on ~~the effective~~

~~date of the amendatory act that added this sentence~~ December 23,

2007 may continue to hold a wine maker or small wine maker license.

(3) A brewer, warehouser, or wholesaler shall not be licensed

as a specially designated merchant. This subsection does not affect

the operation of a brewery hospitality room.

(4) A wholesaler may sell or deliver beer and alcoholic liquor

to hospitals, military establishments, governments of federal

Indian reservations, and churches requiring sacramental wines and

may sell to the wholesaler's own employees to a limit of 2 cases of

24 12-ounce units or its equivalent of malt beverage per week, or 1

case of 12 1-liter units or its equivalent of wine or mixed spirit

drink per week.

Sec. 906. (1) As used in this section:

(a) "Administrator" means a qualifying company, postsecondary

educational institution, or trade association authorized by the

commission to offer server training programs and instructor

certification classes in compliance with this section and to

certify to the commission that those persons meet the requirements

of this section.

(b) "Instructor" means an individual certified by an

administrator and approved by the commission to teach server

training programs. An instructor may be a licensee or an employee

of a licensee.

employee of a licensee to a visibly intoxicated person or to a

minor, or both.

(d) "Responsible vendor" means a designation by the commission

of a retail licensee meeting the standards of this section.

(e) "Server training program" means an educational program

whose curriculum has been approved by the commission under the

standards described in this section and is offered by an

administrator or instructor to a retail licensee, or a licensee

operating a tasting room or providing samples of alcoholic liquor,

for its employees.

(2) The commission shall approve the establishing of a server

training program designed for all new on premises licensees or

transferees of more than a 50% interest in an on premises license

on or after the commencement of the mandatory server training

program, and for any existing retail licensees the commission

determines to be in need of training due to the frequency or types

of violations of this act involving the serving of alcoholic

liquor. This subsection does not apply to special licenses except

that the commission may require server training for certain special

licensees based upon the size and nature of the licensed event. The

commission may adopt the existing standards and programmatic

framework of private entities and may delegate nondiscretionary

administrative functions to outside private entities.

(3) The commission shall establish a program in which the

commission designates certain retail licensees, except special

licenses, as responsible vendors. The commission may adopt the

existing standards and programmatic framework of private entities

and may delegate nondiscretionary administrative functions to

outside private entities.

(4) The commission shall designate as a responsible vendor a

retail licensee who makes available to all full-time and part-time

retail employees, within 60 days after being hired, a server

training program and who is also free of convictions or

administrative determinations involving prohibited sales for not

less than 12 months before applying for the designation. The

designation continues until suspended by the commission.

(5) A person may apply to the commission for qualification as

an administrator for the offering of server training programs and

instructor certification classes.

(6) The commission shall approve a curriculum for a server

training program presented by a certified instructor in a manner

considered by the commission to be adequate that includes, but is

not limited to, all of the following topics:

(a) The identification of progressive stages of intoxication

and the visible signs associated with each stage.

(b) The identification of the time delay between consumption

and visibility of signs of progressive intoxication.

drinks containing alcoholic liquor.

(d) Variables associated with visible intoxication, including

the rate of drinking, experience, weight, food consumption, sex,

and use of other drugs.

(e) Personal skills to handle slow-down of service and

intervention procedures.

(f) Procedures for monitoring consumption and maintaining

incident reports.

(g) The understanding of acceptable forms of personal

identification, techniques for determining the validity of

identification, and procedures for dealing with fraudulent

identification.

(h) Assessment of the need to ask for identification based on

appearance or company policy.

(i) The identification of potential second-party sales and

furnishing of alcoholic liquor to minors by persons 21 years of age

or over.

(j) The understanding of possible legal, civil, and

administrative consequences of violations of this act, the rules of

the commission, and other pertinent state laws.

(k) The understanding of Michigan laws pertaining to minors

attempting to purchase, minors in possession, and second-party

sales or furnishing of alcoholic liquor from adults to minors.

(l) Knowledge of the legal hours of alcoholic liquor service

and occupancy.

(m) The identification of signs of prohibited activities, such

as gambling, solicitation for prostitution, and drug sales.

(n) Any other pertinent laws as determined by the commission.

(7) The commission shall issue an instructor certification to

an individual presenting evidence acceptable to the commission of

having successfully completed instructor certification classes and

shall issue an identification card indicating that certification by

the commission.

(8) Upon approval by the commission of a server training

program, the commission shall appoint the person sponsoring the

server training program as an administrator of that program. The

administrator shall provide a certification to the commission that

a retail licensee has successfully completed the server training

program offered by a certified instructor and approved by the

commission and shall recommend that the commission designate the

licensee as a responsible vendor.

(9) A certified instructor who is a licensee or an employee of

a licensee may offer server training programs approved by the

commission to the employees of the licensee and certify to the

commission those persons who successfully completed the program.

(10) An on premises licensee whose license was issued or who

was the transferee of more than a 50% interest in an on premises

license on or after the commencement of the mandatory server

training program or an on premises licensee determined by the

commission to be in need of training due to the frequency or types

of violations of this act involving the serving of alcoholic liquor

must have employed or present on the licensed premises, at a

minimum, supervisory personnel who have successfully completed a

server training program on each shift and during all hours in which

alcoholic liquor is served. An on premises licensee must keep a

copy of the responsible vendor designation or proof of completion

of server training on the licensed premises to facilitate the

verification of such designation by the commission, agent of the

commission, or law enforcement officer. An on premises licensee

determined by the commission to have violated this subsection is

subject to revocation, suspension, or other sanction as provided

for in section 903. A violation of this subsection is not a

violation of section 909.

(11) As a condition of the designation of a licensee as a

responsible vendor, the licensee shall make available to the

administrator in not less than 60-day time increments records

sufficient to verify the names and social security numbers of his

or her employees. The administrator shall provide to the commission

a list of names and social security numbers of individuals who have

successfully completed the server training program and shall

monitor the licensee in a manner approved by the commission in

order to verify continued compliance of the licensee's status as a

responsible vendor. The administrator shall notify the commission

in writing as soon as it determines that the licensee has failed to

maintain the standards for server training or has failed to

cooperate with the administrator's verification procedure. Upon

receipt of such a notice from the administrator, the commission

shall suspend the licensee's designation as a responsible vendor.

(12) The commission may suspend the designation of a retail

licensee as a responsible vendor upon a conviction or

administrative determination of a prohibited sale on the licensee's

licensed premises. The retail licensee losing such a designation

may reapply for designation as a responsible vendor upon the

passage of 12 months from the date of the conviction or

administrative determination of a prohibited sale if the licensee

is not convicted or administratively determined to have engaged in

a prohibited sale on the licensed premises. After the first

instance of a retail licensee losing its designation as a

responsible vendor, that retail licensee is not eligible to reapply

for such a designation until an additional 3 months for each

subsequent conviction or determination. The 3-month time periods

are to be in addition to the 12-month period described in this

subsection.

(13) A responsible vendor is not considered to be in violation

of the prohibition contained in section 707(4) regarding allowing

an intoxicated person to frequent or loiter on the licensed

premises unless the facts demonstrate otherwise.

Sec. 1027. (1) Unless otherwise provided by rule of the

commission, a person shall not conduct samplings or tastings of any

alcoholic liquor for a commercial purpose except at premises that

are licensed by the commission for the sale and consumption of

alcoholic liquor on the premises.

(2) This section does not prevent either of the following:

(a) A vendor of spirits, brewer, wine maker, mixed spirit

drink manufacturer, small wine maker, outstate seller of beer,

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

or a bona fide market research organization retained by 1 of the

persons named in this subsection, from conducting samplings or

tastings of an alcoholic liquor product before it is approved for

sale in this state if the sampling or tasting is conducted pursuant

to prior written approval of the commission.

(b) An on-premises licensee from giving a sampling or tasting

of alcoholic liquor to an employee of the licensee during the legal

hours for consumption for the purpose of educating the employee

regarding 1 or more types of alcoholic liquor so long as the

employee is at least 21 years of age.

tasting of brands it manufactures on the licensed premises.

(3) A sampling or tasting of any alcoholic liquor in a home or

domicile for other than a commercial purpose is not subject to this

section.

(4) For purposes of this section, "commercial purpose" means a

purpose for which monetary gain or other remuneration could

reasonably be expected.