March 8, 2007, Introduced by Rep. Scott and referred to the Committee on Regulatory Reform.
A bill to amend 1998 PA 58, entitled
"Michigan liquor control code of 1998,"
by amending section 531 (MCL 436.1531), as amended by 2005 PA 97.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 531. (1) A public license shall not be granted for the
sale of alcoholic liquor for consumption on the premises in excess
of 1 license for each 1,500 of population or major fraction
thereof. On-premises escrowed licenses issued under this subsection
may be transferred subject to local legislative approval under
section 501(2) to an applicant whose proposed operation is located
within any local governmental unit in a county in which the
escrowed license was located. However, beginning July 8, 2004, and
until July 1, 2009, if the on-premises escrowed license was issued
to a location within a city with a population of over 190,000 but
under 300,000, the on-premises escrowed license shall not be
transferred to an applicant whose proposed operation is located
within any other local governmental unit in the county in which
that city is located and, in addition, an escrowed license located
within any local governmental unit in that county is not
transferable into the city with a population of over 190,000 but
under 300,000. If the local governmental unit within which the
former licensee's premises were located spans more than 1 county,
an escrowed license is available subject to local legislative
approval under section 501(2) to an applicant whose proposed
operation is located within any local governmental unit in either
county. If an escrowed license is activated within a local
governmental unit other than that local governmental unit within
which the escrowed license was originally issued, the commission
shall count that activated license against the local governmental
unit originally issuing the license. This quota does not bar the
right of an existing licensee to renew a license or transfer the
license and does not bar the right of an on-premise licensee of any
class to reclassify to another class of on-premises license in a
manner not in violation of law or this act, subject to the consent
of the commission. The upgrading of a license resulting from a
request under this subsection shall be approved by the local
governmental unit having jurisdiction.
(2) In a resort area, the commission may issue 1 or more
licenses for a period not to exceed 12 months without regard to a
limitation because of population, but not in excess of 550, and
with respect to the resort license the commission, by rule, shall
define and classify resort seasons by months and may issue 1 or
more licenses for resort seasons without regard to the calendar
year or licensing year.
(3) In addition to the resort licenses authorized in
subsection (2), the commission may issue not more than 5 additional
licenses per year to establishments whose business and operation,
as determined by the commission, is designed to attract and
accommodate tourists and visitors to the resort area, whose primary
purpose is not for the sale of alcoholic liquor, and whose capital
investment in real property, leasehold improvement, and fixtures
for the premises to be licensed is $75,000.00 or more. Further, the
commission shall issue 1 license under this subsection per year to
an applicant located in a rural area that has a poverty rate, as
defined by the latest decennial census, greater than the statewide
average, or that is located in a rural area that has an
unemployment rate higher than the statewide average for 3 of the 5
preceding years. In counties having a population of less than
50,000, as determined by the last federal decennial census or as
determined
pursuant to subsection (11) (12) and subject to
subsection
(16) (17) in the case of a class A hotel or a class B
hotel, the commission shall not require the establishments to have
dining facilities to seat more than 50 persons. The commission may
cancel the license if the resort is no longer active or no longer
qualifies for the license. Before January 16 of each year the
commission shall transmit to the legislature a report giving
details as to the number of applications received under this
subsection; the number of licenses granted and to whom; the number
of applications rejected and the reasons; and the number of the
licenses revoked, suspended, or other disciplinary action taken and
against whom and the grounds for revocation, suspension, or
disciplinary action.
(4) In addition to any licenses for the sale of alcoholic
liquor for consumption on the premises that may be available in the
local governmental unit under subsection (1) and the resort
licenses authorized in subsections (2) and (3), the commission may
issue not more than 15 resort economic development licenses per
year. A person is eligible to apply for a resort economic
development license under this subsection upon submitting an
application to the commission and demonstrating all of the
following:
(a) The establishment's business and operation, as determined
by the commission, is designed to attract and accommodate tourists
and visitors to the resort area.
(b) The establishment's primary business is not the sale of
alcoholic liquor.
(c) The capital investment in real property, leasehold
improvement, fixtures, and inventory for the premises to be
licensed is in excess of $1,500,000.00.
(d) The establishment does not allow or permit casino gambling
on the premises.
(5) In governmental units having a population of 50,000
persons or less, as determined by the last federal decennial census
or
as determined pursuant to subsection (11) (12), in which the
quota of specially designated distributor licenses, as provided by
section 533, has been exhausted, the commission may issue not more
than a total of 10 additional specially designated distributor
licenses per year to established merchants whose business and
operation, as determined by the commission, is designed to attract
and accommodate tourists and visitors to the resort area. A
specially designated distributor license issued pursuant to this
subsection may be issued at a location within 2,640 feet of
existing specially designated distributor license locations. A
specially designated distributor license issued pursuant to this
subsection shall not bar another specially designated distributor
licensee from transferring location to within 2,640 feet of said
licensed location. A specially designated distributor license
issued pursuant to section 533 may be located within 2,640 feet of
a specially designated distributor license issued pursuant to this
subsection.
(6) In addition to any licenses for the sale of alcoholic
liquor for consumption on the premises that may be available in the
local governmental unit under subsection (1), and the resort or
resort economic development licenses authorized in subsections (2),
(3), and (4), and notwithstanding section 519, the commission may
issue not more than 5 additional special purpose licenses in any
calendar year for the sale of beer and wine for consumption on the
premises. A special purpose license issued pursuant to this
subsection shall be issued only for events which are to be held
from May 1 to September 30, are artistic in nature, and which are
to be held on the campus of a public university with an enrollment
of 30,000 or more students. A special purpose license shall be
valid for 30 days or for the duration of the event for which it is
issued, whichever is less. The fee for a special purpose license
shall be $50.00. A special purpose license may be issued only to a
corporation which is all of the following:
(a) Is a nonprofit corporation organized pursuant to the
nonprofit corporation act, 1982 PA 162, MCL 450.2101 to 450.3192.
(b) Has a board of directors constituted of members of whom
half are elected by the public university at which the event is
scheduled and half are elected by the local governmental unit.
(c) Has been in continuous existence for not less than 6
years.
(7) In addition to any licenses for the sale of alcoholic
liquor on the premises that may be available in the local
governmental unit under subsection (1), and the resort or resort
economic development licenses authorized under subsections (2),
(3), (4), and (6), and notwithstanding section 519, the commission
may issue not more than 60 special purpose arts and cultural
licenses, in any fiscal year, to the arts and culture clients of
the Michigan council for arts and cultural affairs for the purposes
of beer and wine consumption on the licensed premises. An arts and
cultural license shall be issued only for events that are
considered by the commission to be artistic in nature and are held
on the premises of a recognized and eligible nonprofit client of
the Michigan council for arts and cultural affairs. The commission
shall charge a license fee of $300.00. The license is valid for not
more than 24 2-day events. To be considered eligible, an applicant
shall meet the following conditions as determined by the
commission:
(a) Is a funded client of the Michigan council for arts and
cultural affairs during the fiscal year within which the license is
to be issued.
(b) Is a nonprofit corporation under the nonprofit corporation
act, 1982 PA 162, MCL 450.2101 to 450.3192.
(c) Has been in continuous existence for at least 2 years, as
determined by the commission.
(8) (7)
Notwithstanding the local legislative body approval
provision of section 501(2) and notwithstanding the provisions of
section 519, the commission may issue, without regard to the quota
provisions of subsection (1) and with the approval of the governing
board of the university, either a tavern or class C license which
may be used only for regularly scheduled events at a public
university's established outdoor program or festival at a facility
on the campus of a public university having a head count enrollment
of 10,000 students or more. A license issued under this subsection
may only be issued to the governing board of a public university, a
person that is the lessee or concessionaire of the governing board
of the university, or both. A license issued under this subsection
is not transferable as to ownership or location. A license issued
under this subsection may not be issued at an outdoor stadium
customarily used for intercollegiate athletic events.
(9) (8)
In issuing a resort or resort economic development
license under subsection (3), (4), or (5), the commission shall
consider economic development factors of the area in the issuance
of licenses to establishments designed to stimulate and promote the
resort and tourist industry. The commission shall not transfer a
resort or resort economic development license issued under
subsection (3), (4), or (5) to another location. If the licensee
goes out of business the license shall be surrendered to the
commission.
(10) (9)
The limitations and quotas of this section are not
applicable to the issuance of a new license to a veteran of the
armed forces of the United States who was honorably discharged or
released under honorable conditions from the armed forces of the
United States and who had by forced sale disposed of a similar
license within 90 days before or after entering or while serving in
the armed forces of the United States, as a part of the person's
preparation for that service if the application for a new license
is submitted for the same governmental unit in which the previous
license was issued and within 60 days after the discharge of the
applicant from the armed forces of the United States.
(11) (10)
The limitations and quotas of this section shall not
be applicable to the issuance of a new license or the renewal of an
existing license where the property or establishment to be licensed
is situated in or on land on which an airport owned by a county or
in which a county has an interest is situated.
(12) (11)
For purposes of implementing this section a special
state census of a local governmental unit may be taken at the
expense of the local governmental unit by the federal bureau of
census or the secretary of state under section 6 of the home rule
city act, 1909 PA 279, MCL 117.6. The special census shall be
initiated by resolution of the governing body of the local
governmental unit involved. The secretary of state may promulgate
additional rules necessary for implementing this section pursuant
to the administrative procedures act of 1969, 1969 PA 306, MCL
24.201 to 24.328.
(13) (12)
Before granting an approval as required in section
501(2) for a license to be issued under subsection (2), (3), or
(4), a local legislative body shall disclose the availability of
transferable licenses held in escrow for more than 1 licensing year
within that respective local governmental unit. Public notice of
the meeting to consider the granting of the license by the local
governmental unit shall be made 2 weeks before the meeting.
(14) (13)
The person signing the application for an on-premise
resort or resort economic development license shall state and
verify that he or she attempted to secure an on-premise escrowed
license or quota license and that, to the best of his or her
knowledge, an on-premise escrowed license or quota license is not
readily available within the county in which the applicant for the
on-premise resort or resort economic development license proposes
to operate, except that until July 1, 2009, and in the case
involving a city with a population of over 190,000 but under
300,000 that verification is not required.
(15) (14)
The commission shall not issue an on-premise resort
or resort economic development license if the county within which
the resort or resort economic development license applicant
proposes to operate has not issued all on-premise licenses
available under subsection (1) or if an on-premise escrowed license
exists and is readily available within the local governmental unit
in which the applicant for the on-premise resort or resort economic
development license proposes to operate, except until July 1, 2009,
in the case involving a city with a population of over 190,000 but
under 300,000. The commission may waive the provisions of this
subsection upon a showing of good cause.
(16) (15)
The commission shall annually report to the
legislature the names of the businesses issued licenses under this
section and their locations.
(17) (16)
The commission shall not require a class A hotel or
a class B hotel licensed pursuant to subsection (2), (3), or (4) to
provide food service to registered guests or to the public.
(18) (17)
Subject to the limitation and quotas of subsection
(1) and to local legislative approval under section 501(2), the
commission may approve the transfer of ownership and location of an
on-premises escrowed license within the same county to a class G-1
or class G-2 license or may approve the reclassification of an
existing on-premises license at the location to be licensed to a
class G-1 license or to a class G-2 license, subject to subsection
(1). Resort or economic development on-premises licenses created
under subsection (3) or (4) may not be issued as, or reclassified
to, a class G-1 or class G-2 license.
(19) (18)
As used in this section:
(a) "Escrowed license" means a license in which the rights of
the licensee in the license or to the renewal of the license are
still in existence and are subject to renewal and activation in the
manner provided for in R 436.1107 of the Michigan administrative
code.
(b) "Readily available" means available under a standard of
economic feasibility, as applied to the specific circumstances of
the applicant, that includes, but is not limited to, the following:
(i) The fair market value of the license, if determinable.
(ii) The size and scope of the proposed operation.
(iii) The existence of mandatory contractual restrictions or
inclusions attached to the sale of the license.