Bill Text: MI HB4079 | 2017-2018 | 99th Legislature | Introduced

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Bill Title: Liquor; licenses; restrictions on the issuance or transfer of specially designated distributor licenses; modify. Amends sec. 531 of 1998 PA 58 (MCL 436.1531).

Spectrum: Partisan Bill (Republican 1-0)

Status: (Introduced - Dead) 2017-01-25 - Bill Electronically Reproduced 01/24/2017 [HB4079 Detail]

Download: Michigan-2017-HB4079-Introduced.html

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HOUSE BILL No. 4079

 

 

January 24, 2017, Introduced by Rep. Kesto 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 2014 PA 135.

 

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 

     Sec. 531. (1) A The commission shall not issue a public

 

license shall not be granted for the sale of alcoholic liquor for

 

consumption on the premises if the issuance would result in excess

 

of more than 1 license for each 1,500 of population or major

 

fraction thereof. of 1,500 of population. An on-premises escrowed

 

license 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. If the

 

local governmental unit within which the former licensee's premises

 

were located spans more than 1 county, an escrowed license 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 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 The quota under this subsection 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-premises 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 is subject to approval by the

 

local governmental unit having jurisdiction.

 

     (2) In a resort area, the commission may issue no more than

 

550 licenses for a period not to exceed 12 months without regard to

 

a limitation because of population 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 under subsection (11) and subject to subsection (16) in

 

the case of for 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 all of

 

the following:

 

     (a) The number of applications received under this subsection.

 

     (b) The number of licenses granted and to whom.

 

     (c) The number of applications rejected and the reasons they

 

were rejected.

 

     (d) The number of the licenses revoked, suspended, or as to

 

which other disciplinary action was taken, and against whom the

 

names of the licensees, 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 on 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 or

 

less, as determined by the last federal decennial census or as

 

determined under subsection (11), 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

 

15 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 under 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 under this subsection shall does not bar another specially

 

designated distributor licensee from transferring location to

 

within 2,640 feet of that licensed location. A specially designated

 

distributor license issued under section 533 may be located within

 

2,640 feet of a specially designated distributor license issued

 

under this subsection. The person signing the application for a

 

specially designated distributor license under this subsection

 

shall state that he or she attempted to secure an escrowed

 

specially designated distributor license or quota license and that,

 

to the best of his or her knowledge, an escrowed specially

 

designated distributor license or quota license is not readily

 

available within the county in which the applicant for the

 

specially designated distributor license under this subsection

 

proposes to operate.

 

     (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 The commission may only issue a special purpose license

 

issued under this subsection shall be issued only for events that

 

are to be held from May 1 to September 30, are artistic in nature,

 

and that are to be held on the campus of a public university with

an enrollment of 30,000 or more students. A special purpose license

 

is 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

 

is $50.00. A special purpose license may be issued only to a

 

corporation that meets all of the following requirements:

 

     (a) Is The corporation is a nonprofit corporation organized

 

under the nonprofit corporation act, 1982 PA 162, MCL 450.2101 to

 

450.3192.

 

     (b) Has The corporation 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 The corporation has been in continuous existence for

 

not less than 6 years.

 

     (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

 

that 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 The commission may only issue 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. Except as otherwise provided in this

 

subsection, a license issued under this subsection may not be

 

issued at an outdoor stadium customarily used for intercollegiate

 

athletic events. A license may be issued at an outdoor stadium

 

customarily used for intercollegiate athletic events for not more

 

than 30 consecutive days to a concessionaire of an entity granted

 

exclusive use of a public university's property in conjunction with

 

a hockey game sanctioned by an unincorporated not-for-profit

 

association that operates a major professional ice hockey league

 

consisting of teams located in Canada and in the United States or

 

in conjunction with a professional international soccer match

 

between 2 international soccer clubs as part of a tournament

 

sanctioned by a not-for-profit association that is the governing

 

body for soccer in the United States and organized and promoted by

 

a match agent that is licensed by the international governing body

 

for soccer if the concessionaire has entered into an agreement

 

granting it control of the licensed premises for the purposes of

 

complying with this act and rules promulgated under this act

 

regarding the sale of alcoholic liquor. A nationally televised game

 

between 2 professional hockey teams or 2 professional international

 

soccer clubs played outdoors is considered an established outdoor

 

program for the purposes of this subsection. Notwithstanding any

 

provision of this act or any rule promulgated under this act, a

 

concessionaire obtaining a license under this subsection may share

 

the profits generated from that license with an unincorporated not-

 

for-profit association that operates a major professional ice

 

hockey league consisting of teams located in Canada and in the

United States or an affiliated entity under a written contract

 

reviewed by the commission or with a licensed match agent and a

 

promoter that organizes and promotes international soccer matches

 

under a written contract reviewed by the commission. If the

 

established outdoor program is a nationally televised game between

 

2 professional hockey teams or 2 professional international soccer

 

clubs, the commission may allow the promotion and advertising of

 

alcoholic liquor brands on the campus of a public university where

 

a concessionaire has been issued a license under this subsection

 

for the duration of the license.

 

     (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 issuing 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 must be surrendered to the commission.

 

     (9) The limitations and quotas of this section are not

 

applicable to issuing 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.

 

     (10) The limitations and quotas of this section are not

 

applicable to issuing a new license or renewing an existing license

 

where if 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.

 

     (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 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 must 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 under the administrative

 

procedures act of 1969, 1969 PA 306, MCL 24.201 to 24.328.

 

     (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. The local

 

governmental unit shall provide public notice of the meeting to

 

consider the granting of the license by the local governmental unit

 

2 weeks before the meeting.

 

     (13) The person signing the application for an on-premises

 

resort or resort economic development license shall state and

verify that he or she attempted to secure an on-premises escrowed

 

license or quota license and that, to the best of his or her

 

knowledge, an on-premises escrowed license or quota license is not

 

readily available within the county in which the applicant for the

 

on-premises resort or resort economic development license proposes

 

to operate.

 

     (14) The commission shall not issue an on-premises 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-premises licenses available under

 

subsection (1) or if an on-premises escrowed license exists and is

 

readily available within the local governmental unit in which the

 

applicant for the on-premises resort or resort economic development

 

license proposes to operate. The commission may waive the

 

provisions of this subsection upon on a showing of good cause.

 

     (15) The commission shall annually report to the legislature

 

the names of the businesses issued licenses under this section and

 

their locations.

 

     (16) The commission shall not require a class A hotel or a

 

class B hotel licensed under subsection (2), (3), or (4) to provide

 

food service to registered guests or to the public.

 

     (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.

 

     (18) An escrowed specially designated distributor license may

 

be transferred, with the consent of the commission, to an applicant

 

whose proposed operation is located within any local governmental

 

unit in a county in which the specially designated distributor

 

license is located. If the local governmental unit within which the

 

escrowed specially designated distributor license is located spans

 

more than 1 county, the license may be transferred to an applicant

 

whose proposed operation is located within any local governmental

 

unit in either county. If the specially designated distributor

 

license is activated within a local governmental unit other than

 

that local governmental unit within which the specially designated

 

distributor license was originally issued, the commission shall

 

count that activated license against the local governmental unit

 

originally issuing the specially designated distributor license.

 

     (19) Subsection (8) of R 436.1135 of the Michigan

 

administrative code Administrative Code does not apply to a

 

transfer under subsection (18).

 

     (20) Notwithstanding R 436.1133 of the Michigan Administrative

 

Code and except as otherwise provided under this subsection, the

 

commission shall not approve an application for a new specially

 

designated distributor license or for the transfer of location of

 

an existing specially designated distributor license if there is an

 

existing specially designated distributor license located within

2,640 feet of the address where the applicant proposes to operate.

 

For purposes of this subsection, the measurement of distance shall

 

be determined as provided in section 503. The commission may

 

approve an application for a new specially designated distributor

 

license or for the transfer of location of an existing specially

 

designated distributor license even if there is an existing

 

specially designated distributor license located within 2,640 feet

 

of the address where the applicant proposes to operate if any of

 

the following conditions exist:

 

     (a) The existing specially designated distributor licensee has

 

purchased less than $52,000.00 in spirits from the commission

 

during the last full calendar year. The threshold amount under this

 

subdivision must be increased annually by 3%.

 

     (b) The existing specially designated distributor has a class

 

B hotel or a class A hotel license.

 

     (c) The applicant's proposed location and the existing

 

specially designated distributor's establishment are separated by a

 

major thoroughfare of not less than 4 marked lanes for vehicle

 

traffic, inclusive of designated turn lanes.

 

     (d) The applicant's proposed licensed establishment meets all

 

of the following requirements:

 

     (i) Is larger than 20,000 square feet.

 

     (ii) Is located in a neighborhood shopping center.

 

     (iii) Is an existing licensed specially designated merchant

 

establishment.

 

     (iv) Is a retail food store.

 

     (21) Subsection (20) does not apply to retailers that are

licensed as specially designated distributors on the effective date

 

of the amendatory act that added this subsection and those licenses

 

are valid for purposes of this section.

 

     (22) (20) As used in this section:

 

     (a) "Escrowed license" means a license in as to 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.Administrative Code.

 

     (b) "Neighborhood shopping center" means 1 commercial

 

establishment or a group of commercial establishments, organized or

 

operated as a unit that are related in location, size, and type of

 

shop to the trade area that the unit serves, that provides not less

 

than 50,000 square feet of gross leasable retail space, and that

 

provides at least 5 private off-street parking spaces for each

 

1,000 square feet of gross leasable retail space.

 

     (c) (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.

 

     (d) "Retail food store" means that term as defined in 7 USC

 

2012.