Bill Text: MI HB4073 | 2015-2016 | 98th Legislature | Introduced

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Bill Title: Liquor; licenses; licensing and transfer fees; allow to prorate quarterly. Amends secs. 525 & 529 of 1998 PA 58 (MCL 436.1525 & 436.1529).

Spectrum: Slight Partisan Bill (Democrat 3-1)

Status: (Introduced - Dead) 2015-02-25 - Referred To Second Reading [HB4073 Detail]

Download: Michigan-2015-HB4073-Introduced.html

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HOUSE BILL No. 4073

 

January 27, 2015, Introduced by Reps. Dianda, Greig, Liberati and Howrylak 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 525 and 529 (MCL 436.1525 and 436.1529),

 

section 525 as amended by 2014 PA 353.

 

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 

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

 

the following license fees shall be paid at the time of filing

 

applications or as otherwise provided in this act and are subject

 

to allocation under section 543:

 

     (a) Manufacturers of spirits, 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.

 

     (c) Outstate seller of beer, delivering or selling beer in

 

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 whether the location is 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 $1.00 for each bedroom in excess of 20, but not more

 

than $500.00 total.

 

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

 

and spirits, a minimum fee of $600.00 and $3.00 for each bedroom in

 

excess of 20. If a hotel of class B sells beer, wine, mixed spirit

 

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

 

shall be paid for each additional public bar, other than a bedroom.

 

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

 

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

 

and spirits, $600.00. Subject to section 518(2), 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 accredited members and $1.00

 

for each member in excess of 150. Clubs shall submit a list of

 

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

 

license year. The sworn affidavit shall be used only for

 

determining the license fees to be paid under this subdivision.

 

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 a special license or permit issued to any a 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 an

 

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, the amount as described and

 

determined under section 518(2).

 

     (z) Small distiller, $100.00.

 

     (aa) Wine auction license, $50,000.00.

 

     (bb) Nonpublic continuing care retirement center license,

 

$600.00.

 

     (cc) Conditional license approved under subsection (6) and

 

issued under subsection (7), $300.00.

 

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

 

licenses shall not be prorated on a quarterly basis for a portion

 

of the effective period of the license based upon the approval date

 

of the application. An applicant or licensee that has submitted an

 

application for a license that will be effective for less than 9

 

months shall pay a prorated license fee and submit that prorated

 

license fee after approval of the application and upon issuance of

 

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

 

fee for any licenses issued under section 531(3) or (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) If the commission requires an applicant to submit

 

fingerprints, the applicant shall have the fingerprints taken by a

 

local law enforcement agency, the department of state police, or

 

any other person qualified to take fingerprints as determined by

 

the department of state police. The applicant shall submit the

 

fingerprints and the appropriate state and federal fees, which

 

shall be borne by the applicant, to the department of state police

 

and the federal bureau of investigation for a criminal history

 

check. After conducting the criminal history check, the department

 

of state police shall provide the commission with a report of the

 

criminal history check. The report shall contain criminal history

 

record information concerning the person who is the subject of the

 

criminal history check that is maintained by the department of

 

state police. If a criminal arrest fingerprint card is subsequently

 

submitted to the department of state police and matches against a

 

fingerprint that was submitted pursuant to this act and stored in

 

its automated fingerprint identification system (AFIS) database,

 

the department of state police shall notify the commission.

 

     (4) Except in the case of any for a resort or resort economic

 

development license issued under section 531(2), (3), (4), or (5)

 

or a license issued under section 521a, the commission shall issue

 

an initial or renewal license not later than 90 days after the

 

applicant files a completed application. The application is

 

considered to be received the date the application is received by

 

any agency or department of this state. If the commission

 

determines that an application is incomplete, 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 is not 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 for the following periods under any of the

 

following circumstances:

 

     (a) If notice is sent by the commission of a deficiency in the

 

application, until the date all of the requested information is

 

received by the commission.

 

     (b) For the time required to complete actions required by a

 

person, other than the applicant or the commission, including, but

 

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.

 

     (5) 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.

 

     (6) If, in addition to a completed application under this

 

section, an applicant submits a separate form requesting a

 

conditional license with an acceptable proof of financial

 

responsibility form under section 803, and an executed property

 

document, the commission shall, after considering the arrest and

 

conviction records or previous violation history in the management,

 

operation, or ownership of a licensed business, approve or deny a

 

conditional license. A conditional license issued under subsection

 

(7) for the transfer of an existing license at the same location

 

shall must include any existing permits and approvals held in

 

connection with that license. The following applicants may request

 

a conditional license:

 

     (a) An applicant seeking to transfer ownership of or interest

 

in an existing license at the same location to sell alcoholic

 

liquor for consumption on or off the premises.

 

     (b) An applicant seeking an initial license other than a

 

specially designated distributor license or a license for the sale

 

of alcoholic liquor for consumption on the premises.

 

     (7) The commission shall issue a conditional license to

 

applicants approved under subsection (6) within 20 business days

 

after receipt of a completed application and a completed

 

conditional license request form and documentation for a

 

conditional license at a single location. The commission may take

 

up to 30 business days to issue conditional licenses to approved

 

applicants seeking conditional licenses at multiple locations.

 

     (8) A conditional license approved under subsection (6) and

 

issued under subsection (7) is nontransferable and nonrenewable. A

 

conditional license approved under subsection (6) and issued under

 

subsection (7) expires when the commission issues an order of

 

denial of the license application that serves as the basis for the

 

conditional license after all administrative remedies before the

 

commission have been exhausted, expires 20 business days after the

 

commission issues an order of approval of the license application

 

that serves as the basis for the conditional license, expires when

 

the licensee or conditional licensee notifies the commission in

 

writing that the initial application should be canceled, or expires

 

1 year after the date the conditional license was issued, whichever

 

occurs first. If a conditionally approved licensee fails to

 

maintain acceptable proof of its financial responsibility, the

 

commission shall, after due notice and proper hearing, suspend the

 

conditional license until the licensee files an acceptable proof of

 

financial responsibility form under section 803. If a conditional

 

license is revoked, the conditional licensee shall not recover from

 

a unit of local government any compensation for property, future

 

income, or future economic loss due to the revocation.

 

     (9) Upon issuing a conditional license under subsection (7),

 

the commission shall, until the conditional license expires under

 

subsection (8), place an existing license under subsection (4) in

 

escrow in compliance with R 436.1107 of the Michigan administrative

 

code. If the conditional license expires because a transfer of an

 

existing license was denied or because the license was not

 

transferred within the 1-year period, an existing licensee may do 1

 

of the following:

 

     (a) Request that the commission release the license from

 

escrow.

 

     (b) Keep the license in escrow. The escrow date for compliance

 

with R 436.1107 of the Michigan administrative code shall be the

 

date the conditional license expires.

 

     (10) 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 (4).

 

     (b) The number of applications denied.

 

     (c) The number of applicants not issued a license within the

 

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

 

under subsection (5).

 

     (11) 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 this state. of Michigan.

 

     Sec. 529. (1) A license or an interest in a license shall not

 

be transferred from 1 person to another without the prior approval

 

of the commission. For purposes of this section, the transfer in

 

the aggregate to another person during any single licensing year of

 

more than 10% of the outstanding stock of a licensed corporation or

 

more than 10% of the total interest in a licensed limited

 

partnership shall be is considered to be a transfer requiring the

 

prior approval of the commission.

 

     (2) Not later than July 1 of each year, each privately held

 

licensed corporation and each licensed limited partnership shall

 

notify the commission as to whether any of the shares of stock in

 

the corporation, or interest in the limited partnership, have been

 

transferred during the preceding licensing year. The commission may

 

investigate the transfer of any number of shares of stock in a

 

licensed corporation, or any amount of interest in a licensed

 

limited partnership, for the purpose of ensuring compliance with

 

this act and the rules promulgated under this act.

 

     (3) Except as otherwise provided in subdivisions (a) through

 

to (f), upon after approval by the commission of a transfer subject

 

to subsection (1), there shall be paid to an applicant or licensee

 

shall pay the commission a transfer fee equal to the fee provided

 

in this act for the class of license being transferred. A transfer

 

fee shall not be prorated on a quarterly basis for a portion of the

 

effective period of the license based upon the approval date of the

 

application. The prorated transfer fee shall be paid on issuance of

 

the license. If a person holding more than 1 license or more than 1

 

interest in a license at more than 1 location, but in the name of a

 

single legal entity, transfers all of the licenses or interests in

 

licenses simultaneously to another single legal entity, the

 

transfers shall be are considered 1 transfer for purposes of

 

determining a transfer fee, payable in an amount equal to the

 

highest license fee provided in this act for any of the licenses,

 

or interests in licenses, being transferred. A transfer fee shall

 

is not be required in regard to any of the following:

 

     (a) The transfer, in the aggregate, of less than 50% of the

 

outstanding shares of stock in a licensed corporation or less than

 

50% of the total interest in a licensed limited partnership during

 

any licensing year.

 

     (b) The exchange of the assets of a licensed sole

 

proprietorship, licensed general partnership, or licensed limited

 

partnership for all outstanding shares of stock in a corporation in

 

which either the sole proprietor, all members of the general

 

partnership, or all members of the limited partnership are the only

 

stockholders of that corporation. An exchange under this

 

subdivision shall is not be considered an application for a license

 

for the purposes of section 501.

 

     (c) The transfer of the interest in a licensed business of a

 

deceased licensee, a deceased stockholder, or a deceased member of

 

a general or limited partnership to the deceased person's spouse or

 

children.

 

     (d) The removal of a member of a firm, a stockholder, a member

 

of a general partnership or limited partnership, or association of

 

licensees from a license.

 

     (e) The addition to a license of the spouse, son, daughter, or

 

parent of any of the following:

 

     (i) A licensed sole proprietor.

 

     (ii) A stockholder in a licensed corporation.

 

     (iii) A member of a licensed general partnership, licensed

 

limited partnership, or other licensed association.

 

     (f) The occurrence of any of the following events:

 

     (i) A corporate stock split of a licensed corporation.

 

     (ii) The issuance to a stockholder of a licensed corporation of

 

previously unissued stock as compensation for services performed.

 

     (iii) The redemption by a licensed corporation of its own stock.

 

     (4) A The applicant or licensee shall pay a nonrefundable

 

inspection fee of $70.00 shall be paid to the commission by an

 

applicant or licensee at the time of filing any of the following:

 

     (a) An application for a new license or permit.

 

     (b) A request for approval of a transfer of ownership or

 

location of a license.

 

     (c) A request for approval to increase or decrease the size of

 

the licensed premises, or to add a bar.

 

     (d) A request for approval of the transfer in any licensing

 

year of any of the shares of stock in a licensed corporation from 1

 

person to another, or any part of the total interest in a licensed

 

limited partnership from 1 person to another.

 

     (5) An inspection fee shall be returned to the person by whom

 

it was paid who paid the fee if the purpose of the inspection was

 

to inspect the physical premises of the licensee, and the

 

inspection was not actually conducted. An inspection fee shall not

 

be is not required for any of the following:

 

     (a) The issuance or transfer of a special license, salesperson

 

license, limited alcohol buyer license, corporate salesperson

 

license, hospital permit, military permit, or Sunday sale of

 

spirits permit.

 

     (b) The issuance of a new permit, or the transfer of an

 

existing permit, if the permit is issued or transferred

 

simultaneously with the issuance or transfer of a license or an

 

interest in a license.

 

     (c) The issuance of authorized but previously unissued

 

corporate stock to an existing stockholder of a licensed

 

corporation.

 

     (d) The transfer from a corporation to an existing stockholder

 

of any of the corporation's stock that is owned by the corporation

 

itself.

 

     (6) All inspection fees collected under this section shall

 

must be deposited in the special fund in required under section 543

 

for carrying out of the licensing and enforcement provisions of

 

this act.