SENATE BILL NO. 559

June 17, 2021, Introduced by Senator NESBITT and referred to the Committee on Regulatory Reform.

"Michigan liquor control code of 1998,"

by amending sections 233, 537a, and 551 (MCL 436.1233, 436.1537a, and 436.1551), section 233 as amended by 2020 PA 126, section 537a as added by 2020 PA 125, and section 551 as added by 2020 PA 124.

the people of the state of michigan enact:

Sec. 233. (1) The commission shall establish uniform prices for the sale of alcoholic liquor by specially designated distributors. The prices must return a gross profit to the commission of not less than 51% and not greater than 65%. If alcoholic liquor purchased by the commission has not met sales standards established by the commission for 6 months, the commission may sell the alcoholic liquor at a price to be approved by the state administrative board.

(2) Notwithstanding subsection (1), the commission may establish by rule prices for the sale of alcoholic liquor to hospitals, charitable institutions, and military establishments located in this state.

(3) Except as otherwise provided in this subsection, specially designated distributors and on-premises licensees are entitled to a 17% discount from the uniform prices described in subsection (1) on alcoholic liquor purchased from this state. Beginning with the enactment date of the amendatory act that added this sentence until 12 months after the enactment date, July 1, 2020 through July 1, 2021, on-premises licensees are entitled to a 23% discount from the uniform prices described in subsection (1) on alcoholic liquor purchased from this state.

Sec. 537a. (1) Notwithstanding anything in this act to the contrary, a qualified licensee may fill and sell qualified containers with alcoholic liquor for consumption off the premises under the following conditions:

(a) The qualified licensee or his or her agent or employee does not fill the qualified container in advance of the sale.

(b) The qualified licensee complies with all applicable rules promulgated by the commission.

(2) Notwithstanding anything in this act to the contrary, a qualified licensee may deliver alcoholic liquor to a consumer in this state if all of the following conditions are met:

(a) The qualified licensee complies with all laws of this state, including, but not limited to, the prohibition on sales to minors.

(b) The qualified licensee stamps, prints, or labels on the outside of the qualified container "Contains Alcohol. Must be delivered to a person 21 years of age or older.". The recipient at the time of the delivery shall provide identification verifying his or her age.

(d) If the qualified licensee is a retailer, the alcoholic liquor is delivered by the qualified licensee's employee or a third party facilitator service, as that term is defined in section 203.

(e) If the qualified licensee is a manufacturer, the alcoholic liquor is delivered by the qualified licensee's employee.

(3) Except as otherwise allowed under this act, a qualified licensee shall not sell alcoholic liquor in its original package under this section.

(4) This section does not apply after December 31, 2025.

(4) (5) As used in this section:

(a) "Consumer" means that term as defined in section 203.

(b) "Qualified container" means a clean, sealable container that is for the sale of alcoholic liquor for consumption off the premises, that has a liquid capacity that does not exceed 1 gallon, and that, after it is filled, is sealed with a device or material that is used to fully close off the container securely with no perforations or straw holes.

(i) A retailer that holds a license, other than a special license, to sell alcoholic liquor for consumption on the licensed premises.

(ii) A manufacturer with an on-premises tasting room permit issued under section 536.

(iii) A manufacturer that holds an off-premises tasting room license issued under section 536.

(iv) A manufacturer that holds a joint off-premises tasting room license issued under section 536.

Sec. 551. (1) The governing body of a local governmental unit may designate a social district that contains a commons area that may be used by qualified licensees that obtain a social district permit. A governing body of a local governmental unit shall not designate a social district that would close a road unless the governing body receives prior approval from the road authority with jurisdiction over the road. If the governing body of a local governmental unit designates a social district that contains a commons area under this section, the governing body must define and clearly mark the commons area with signs. The governing body shall establish local management and maintenance plans, including, but not limited to, hours of operation, for a commons area and submit those plans to the commission. The governing body shall maintain the commons area in a manner that protects the health and safety of the community. Subject to this subsection, the governing body may revoke the designation if it determines that the commons area threatens the health, safety, or welfare of the public or has become a public nuisance. Before revoking the designation, the governing body must hold at least 1 public hearing on the proposed revocation. The governing body shall give notice as required under the open meetings act, 1976 PA 267, MCL 15.261 to 15.275, of the time and place of the public hearing before the public hearing. The governing body shall file the designation or the revocation of the designation with the commission. As used in this subsection:

(a) "Local road agency" means a county road commission or designated county road agency or city or village that is responsible for the construction or maintenance of public roads within this state.

(b) "Road authority" means a local road agency or the state transportation department.

(2) Subject to subsection (3), the holder of a social district permit may sell alcoholic liquor for consumption within the confines of a commons area if both of the following requirements are met:

(a) The holder of the social district permit only sells and serves alcoholic liquor only on the holder's licensed premises.

(b) The holder of the social district permit only serves alcoholic liquor to be consumed in the commons area only in a container to which all of the following apply:

(i) The container prominently displays the social district permittee's trade name or logo or some other mark that is unique to the social district permittee under the social district permittee's on-premises license.

(ii) The container prominently displays a logo or some other mark that is unique to the commons area.

(iii) The container is not glass.

(iv) The container has a liquid capacity that does not exceed 16 ounces.

(3) If the commission issues a special license to a special licensee located in a social district, the holder of a social district permit shall not sell and serve alcoholic liquor under subsection (2) during the effective period of the special license.

(4) A purchaser may remove a container of alcoholic liquor sold by a holder of a social district permit under subsection (2) from the social district permittee's licensed premises if both of the following conditions are met:

(a) Except as otherwise provided in subdivision (b), the purchaser does not remove the container from the commons area.

(b) While possessing the container, the purchaser does not enter the licensed premises of a social district permittee other than the social district permittee from which the purchaser purchased the container.

(5) The consumption of alcoholic liquor from a container described in subsection (2)(b) in the commons area as allowed under this section may only occur only during the legal hours for the sale of alcoholic liquor by the social district permittee.

(6) A qualified licensee whose licensed premises is shared by and contiguous to a commons area in a social district designated by the governing body of a local governmental unit under this section may obtain from the commission an annual social district permit as provided in this section. The social district permit must be issued for the same period and may be renewed in the same manner as the license held by the applicant. The commission shall develop an application for a social district permit and shall charge a fee of $250.00 for a social district permit. An application for a social district permit must be approved by the governing body of the local governmental unit in which the applicant's place of business is located before the application is submitted to the commission and before the permit is granted by the commission. The $250.00 permit fee under this subsection must be deposited into the liquor control enforcement and license investigation revolving fund under section 543(9).

(7) This section does not apply after December 31, 2024.

(7) (8) As used in this section:

(a) "Commons area" means an area within a social district clearly designated and clearly marked by the governing body of the local governmental unit that is shared by and contiguous to the premises of at least 2 other qualified licensees. Commons area does not include the licensed premises of any qualified licensee.

(b) "Local governmental unit" means a city, township, village, or charter authority.

(i) A retailer that holds a license, other than a special license, to sell alcoholic liquor for consumption on the licensed premises.

(ii) A manufacturer with an on-premises tasting room permit issued under section 536.

(iii) A manufacturer that holds an off-premises tasting room license issued under section 536.

(iv) A manufacturer that holds a joint off-premises tasting room license issued under section 536.