Bill Text: MI HB4174 | 2015-2016 | 98th Legislature | Introduced

---

Bill Title: Liquor; licenses; direct sale of beer and wine from supplier to consumer; allow. Amends sec. 203 of 1998 PA 58 (MCL 436.1203).

Spectrum: Partisan Bill (Republican 2-0)

Status: (Introduced - Dead) 2015-02-11 - Printed Bill Filed 02/11/2015 [HB4174 Detail]

Download: Michigan-2015-HB4174-Introduced.html

---

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

HOUSE BILL No. 4174

 

February 10, 2015, Introduced by Reps. Courser and Gamrat 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 203 (MCL 436.1203), as amended by 2014 PA 50.

 

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 

     Sec. 203. (1) Except as provided in this section and section

 

301, a person shall not sell, deliver, or import alcoholic liquor,

 

including alcoholic liquor for personal use, in this state unless

 

the sale, delivery, or importation is made by the commission, the

 

commission's authorized agent or distributor, an authorized

 

distribution agent approved by order of the commission, a person

 

licensed by the commission, or by prior written order of the

 

commission.

 

     (2) Notwithstanding R 436.1011(7)(b) and R 436.1527 of the

 

Michigan administrative code and except as provided in subsection

 

(11), a retailer shall not deliver alcoholic liquor to a consumer

 

in this state at the home or business of the consumer or at any

 

location away from the licensed premises of the retailer. The

 

purpose of this subsection is to exercise the state of Michigan's

 

this state's authority under section 2 of amendment XXI of the

 

constitution of the United States, to maintain the inherent police

 

powers to regulate the transportation and delivery of alcoholic

 

liquor, and to promote a transparent system for the transportation

 

and delivery of alcoholic liquor. The regulation described in this

 

subsection is considered necessary for both of the following

 

reasons:

 

     (a) To promote the public health, safety, and welfare.

 

     (b) To maintain strong, stable, and effective regulation by

 

having beer and wine sold by retailers to consumers in this state

 

by passing through the 3-tier distribution system established under

 

this act.

 

     (3) For purposes of subsection (1), a direct shipper may sell,

 

deliver, or import wine , to consumers in this state by means of

 

any mail order, internet, Internet, telephone, computer, device, or

 

other electronic means, or sell directly to a consumer on the

 

winery premises. A direct shipper that sells, delivers, or imports

 

wine to a consumer under this subsection shall comply with all of

 

the following:

 

     (a) Hold a direct shipper license.

 

     (b) Pay any applicable taxes to the commission and pay any

 

applicable taxes to the department of treasury as directed by the

 

department of treasury. Upon the request of the department of

 

treasury, a direct shipper shall furnish an affidavit to verify

 

payment.

 

     (c) Comply with all prohibitions of the laws of this state,

 

including, but not limited to, sales to minors.

 

     (d) Verify the age of the individual placing the order by

 

obtaining from him or her a copy of a photo identification issued

 

by this state, another state, or the federal government or by

 

utilizing an identification verification service. The person

 

receiving and accepting the order on behalf of the direct shipper

 

shall record the name, address, date of birth, and telephone number

 

of the individual placing the order on the order form or other

 

verifiable record of a type and generated in a manner approved by

 

the commission and provide a duplicate to the commission.

 

     (e) Upon request of the commission, make available to the

 

commission any document used to verify the age of the individual

 

ordering or receiving the wine from the direct shipper.

 

     (f) Stamp, print, or label on the outside of the shipping

 

container that the package "Contains Alcohol. Must be delivered to

 

a person 21 years of age or older." The recipient at the time of

 

the delivery shall provide photo identification verifying his or

 

her age along with a signature.and sign for the delivery.

 

     (g) Place a label on the top panel of the shipping container

 

containing the direct shipper license number, the order number, the

 

name and address of the individual placing the order, and the name

 

of the designated recipient if different from the name of the

 

individual placing the order.

 

     (h) Direct ship not more than 1,500 9-liter cases, or 13,500

 

liters in total, of wine in a calendar year to consumers in this

 

state. If a direct shipper, whether located in this state or

 

outside this state, owns, in whole or in part, or commonly manages

 

1 or more direct shippers, it shall not in combination ship to

 

consumers in this state more than 13,500 liters of wine in the

 

aggregate.

 

     (i) Pay wine taxes quarterly and report to the commission

 

quarterly the total amount of wine, by type, brand, and price,

 

shipped to consumers in this state during the preceding calendar

 

quarter, and the order numbers.

 

     (j) Authorize and allow the commission and the department of

 

treasury to conduct an audit of the direct shipper's records.

 

     (k) Consent and submit to the jurisdiction of the commission,

 

the department of treasury, and the courts of this state concerning

 

enforcement of this section and any related laws, rules, and

 

regulations.

 

     (4) Notwithstanding subsection (3), in the case of for a sale,

 

delivery, or importation of alcoholic liquor occurring by any means

 

described in subsection (3), a person taking the order on behalf of

 

the direct shipper shall comply with subsection (3)(c) through to

 

(g).

 

     (5) A person that delivers the wine for a direct shipper under

 

this section shall verify that the individual accepting delivery is

 

21 years of age or older and is the individual who placed the order

 

or the designated recipient, is an individual 21 years of age or

 

older currently occupying or present at the address, or is an

 

individual otherwise authorized through a rule promulgated under

 

this act by the commission to receive alcoholic liquor under this

 

section. If the delivery person, after a diligent inquiry,

 

determines that the purchaser or designated recipient is not 21

 

years of age or older, the delivery person shall return the wine to

 

the direct shipper. A delivery person who returns wine to the

 

direct shipper because the purchaser or designated recipient is not

 

21 years of age or older is not liable for any damages suffered by

 

the purchaser or direct shipper.

 

     (6) All spirits for sale, use, storage, or distribution in

 

this state , shall originally be purchased by and imported into the

 

state by the commission, or by prior written authority of the

 

commission.

 

     (7) This section does not apply to alcoholic liquor brought

 

into this state for personal or household use in an amount

 

permitted by federal law by an individual 21 years of age or older

 

at the time of reentry into this state from without the territorial

 

limits of the United States if the individual has been outside the

 

territorial limits of the United States for more than 48 hours and

 

has not brought alcoholic liquor into the United States during the

 

preceding 30 days.

 

     (8) An individual 21 years of age or older may do either of

 

the following in relation to alcoholic liquor that contains less

 

than 21% alcohol by volume:

 

     (a) Personally transport from another state, once in a 24-hour

 

period, not more than 312 ounces of alcoholic liquor for that

 

individual's personal use, notwithstanding subsection (1).

 

     (b) Ship or import from another state alcoholic liquor for

 

that individual's personal use if that personal importation is done

 

in compliance with subsection (1).

 

     (9) A direct shipper shall not sell, deliver, or import wine

 

to a consumer unless it applies for and is granted a direct shipper

 

license from the commission. This subsection does not prohibit wine

 

tasting or the selling at retail by a wine maker of wines he or she

 

produced and bottled or wine manufactured for that wine maker by

 

another wine maker, if done in compliance with this act. Only the

 

following persons qualify for the issuance of a direct shipper

 

license:

 

     (a) A wine maker.

 

     (b) A wine producer and bottler located inside this country

 

but outside of this state holding both a federal basic permit

 

issued by the alcohol and tobacco tax and trade bureau and a

 

license to manufacture wine in its state of domicile.

 

     (10) An applicant for a direct shipper license shall submit an

 

application to the commission in a written or electronic format

 

provided by the commission and accompanied by an application and

 

initial license fee of $100.00. The application shall must be

 

accompanied by a copy or other evidence of the existing federal

 

basic permit or license, or both, held by the applicant. The direct

 

shipper may renew its license annually by submission of a license

 

renewal fee of $100.00 and a completed renewal application. The

 

commission shall use the fees collected under this section to

 

conduct investigations and audits of direct shippers. The failure

 

to renew, or the revocation or suspension of, the applicant's

 

existing Michigan license, federal basic permit, or license to

 

manufacture wine in its state of domicile is grounds for revocation

 

or denial of the direct shipper license. If a direct shipper is

 

found guilty of violating this act or a rule promulgated by the

 

commission, the commission shall notify both the alcoholic liquor

 

control agency in the direct shipper's state of domicile and the

 

alcohol and tobacco tax and trade bureau Alcohol and Tobacco Tax

 

and Trade Bureau of the United States department of treasury

 

Department of Treasury of the violation.

 

     (11) Except as otherwise provided under subsection (12), a

 

retailer that holds a specially designated merchant license in this

 

state; an out-of-state retailer that holds its state's substantial

 

equivalent license; or a brewpub, micro brewer, or an out-of-state

 

entity that is the substantial equivalent of a brewpub or micro

 

brewer may deliver beer and wine to the home or other designated

 

location of a consumer in this state if all of the following

 

conditions are met:

 

     (a) The beer or wine, or both, is delivered by the retailer's,

 

brewpub's, or micro brewer's employee and not by an agent or by a

 

third party delivery service.

 

     (b) The retailer, brewpub, or micro brewer or its employee who

 

delivers the beer or wine, or both, verifies that the individual

 

accepting delivery is at least 21 years of age.

 

     (c) If the retailer, brewpub, or micro brewer or its employee

 

intends to provide service to consumers, the retailer, brewpub, or

 

micro brewer or its employee providing the service has received

 

alcohol server training through a server training program approved

 

by the commission.

 

     (12) A retailer that holds a specially designated merchant

 

license in this state or an out-of-state retailer that holds its

 

state's substantial equivalent license may utilize a third party

 

that provides delivery service to municipalities in this state that

 

are surrounded by water and inaccessible by motor vehicle to

 

deliver beer and wine to the home or other designated location of

 

that consumer if the delivery service is approved by the commission

 

and agrees to verify that the individual accepting delivery of the

 

beer and wine is at least 21 years of age.

 

     (13) For purposes of subsection (1), a qualified micro brewer

 

or an out-of-state entity that is the substantial equivalent of a

 

qualified micro brewer may sell and deliver beer to a retailer in

 

this state if all of the following conditions are met:

 

     (a) The retailer is not located in a sales territory for which

 

the qualified micro brewer has granted exclusive sales rights to a

 

wholesaler pursuant to under sections 401 and 403 for the sale of

 

any brand or brands of beer produced by that micro brewer.

 

     (b) The beer is sold and delivered by an employee of the

 

qualified micro brewer, not an agent, and is transported and

 

delivered utilizing a vehicle owned by the qualified micro brewer,

 

not by a third party delivery service.

 

     (c) The qualified micro brewer is in compliance with

 

applicable state and federal law and applicable regulatory

 

provisions of this act and rules adopted by the commission under

 

this act including, but not limited to, those requirements related

 

to each of the following:

 

     (i) Employees that sell and deliver beer to retailers.

 

     (ii) Vehicles used to deliver beer to retailers.

 

     (iii) Price schedules and temporary price reductions.

 

     (14) A brewer may sell its beer directly to a consumer.

 

     (15) A winemaker may sell its wine directly to a consumer.

 

     (16) (14) As used in this section:

 

     (a) "Computer" means any connected, directly interoperable or

 

interactive device, equipment, or facility that uses a computer

 

program or other instructions to perform specific operations

 

including logical, arithmetic, or memory functions with or on

 

computer data or a computer program and that can store, retrieve,

 

alter, or communicate the results of the operations to a person,

 

computer program, computer, computer system, or computer network.

 

     (b) "Computer network" means the interconnection of hardwire

 

or wireless communication lines with a computer through remote

 

terminals, or a complex consisting of 2 or more interconnected

 

computers.

 

     (c) "Computer program" means a series of internal or external

 

instructions communicated in a form acceptable to a computer that

 

directs the functioning of a computer, computer system, or computer

 

network in a manner designed to provide or produce products or

 

results from the computer, computer system, or computer network.

 

     (d) "Computer system" means a set of related, connected or

 

unconnected, computer equipment, devices, software, or hardware.

 

     (e) "Consumer" means an individual who purchases beer or wine

 

for personal consumption and not for resale.

 

     (f) "Device" includes, but is not limited to, an electronic,

 

magnetic, electrochemical, biochemical, hydraulic, optical, or

 

organic object that performs input, output, or storage functions by

 

the manipulation of electronic, magnetic, or other impulses.

 

     (g) "Diligent inquiry" means a diligent good faith effort to

 

determine the age of an individual, that includes at least an

 

examination of an official Michigan operator's or chauffeur's

 

license, an official Michigan personal identification card, or any

 

other bona fide picture identification that establishes the

 

identity and age of the individual.

 

     (h) "Direct shipper" means a person who sells, delivers, or

 

imports wine, to consumers in this state, that he or she produces

 

and bottles or wine that is manufactured by a wine maker for

 

another wine maker and that is transacted or caused to be

 

transacted through the use of any mail order, internet, Internet,

 

telephone, computer, device, or other electronic means, or sells

 

directly to consumers on the winery premises.

 

     (i) "Identification verification service" means any internet-

 

based Internet-based service approved by the commission

 

specializing in age and identity verification.

 

     (j) "Qualified micro brewer" means a micro brewer that

 

produces in total less than 1,000 barrels of beer per year. In

 

determining the 1,000-barrel threshold, all brands and labels of a

 

micro brewer, whether brewed in this state or outside this state,

 

shall must be combined.