Bill Text: MI HB4518 | 2019-2020 | 100th Legislature | Introduced

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Bill Title: Liquor; licenses; prorated fees; provide for. Amends secs. 525 & 529 of 1998 PA 58 (MCL 436.1525 & 436.1529).

Spectrum: Partisan Bill (Republican 3-0)

Status: (Introduced - Dead) 2019-04-30 - Bill Electronically Reproduced 04/25/2019 [HB4518 Detail]

Download: Michigan-2019-HB4518-Introduced.html

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HOUSE BILL No. 4518

 

 

April 25, 2019, Introduced by Reps. Steven Johnson, LaFave and Bellino 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 2016 PA 434.

 

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 

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

 

the following license fees must 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 must

 

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 must be paid for each additional bar.

 

In municipally owned or supported facilities in which nonprofit

 

organizations operate concession stands, a fee of $100.00 must 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 an affidavit 30 days before the closing of the license

 

year. The affidavit must 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 must 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 the license or permit issued to a bona fide nonprofit

 

association, organized and in continuous existence for 1 year

 

before the filing of its application, is $25.00. The commission

 

shall not grant more than 12 special licenses to any 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 must not be prorated on a quarterly basis for a portion of

 

the effective period of the license. Notwithstanding subsection

 

(1), the initial license fee for a license issued under section

 

531(3) or (4) is $20,000.00. The renewal license fee is 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 must 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 must include

 

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 under this act and

stored in its automated fingerprint identification system (AFIS)

 

database, the department of state police shall notify the

 

commission.

 

     (4) Except 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 an 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 on 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 the application, on completion, must 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 because 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, an executed property

 

document, and, for an application to transfer the location of an

 

existing retailer license other than specially designated

 

distributor license, a church or school proximity affidavit on a

 

form prescribed by the commission attesting that the proposed

 

location is not within 500 feet of a church or school building

 

using the method of measurement required under section 503, 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) must

 

only include any existing permits and approvals held in connection

 

with the license, other than permits or approvals for which the

 

conditional applicant does not meet the requirements in this act or

 

rules promulgated under this act, or permits or approvals that the

 

conditional applicant has requested to cancel as part of the

 

application that serves as the basis for the conditional license.

 

The commission shall not issue a new permit with a conditional

 

license issued under subsection (7). The following applicants may

 

request a conditional license:

 

     (a) An applicant seeking to transfer ownership of an existing

 

retailer license at the same location to sell alcoholic liquor for

 

consumption on or off the premises.

 

     (b) An applicant seeking to transfer the ownership and

 

location of an existing retailer license, other than a specially

 

designated distributor license, to sell alcoholic liquor for

 

consumption on or off the premises.

 

     (c) An applicant seeking a new specially designated merchant

 

license, other than a specially designated merchant license issued

 

under section 533(6), not to be held in conjunction with 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.

 

However, for an applicant described under this subsection that is

 

seeking a specially designated merchant license under section

 

533(7), the commission may take up to 45 business days to issue a

 

conditional license. Notwithstanding the applicant's submission of

 

a church or school proximity affidavit under subsection (6), if the

 

commission determines that a conditional license in conjunction

 

with an application to transfer the location of an existing

 

retailer license has been issued under this subsection at a

 

proposed location that is within 500 feet of a church or school

 

building, the commission shall suspend the conditional license and

 

notify the church or school of the proposed location under the

 

rules promulgated under this act. If the commission issues a

 

conditional license under this subsection based on a church or

 

school proximity affidavit under subsection (6) without knowledge

 

that the representations included in the affidavit are incorrect,

 

this state is not liable to any person for the commission's

 

issuance of the conditional license. The commission may assume

 

without inquiry the existence of the facts contained in the

 

affidavit.

 

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

 

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

 

conditional licensee is required to comply with the server training

 

requirements in section 501(1) beginning on the date a conditional

 

license is issued under subsection (7) regardless of whether the

 

conditional licensee is actively operating under the conditional

license.

 

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

 

issued under subsection (7) expires when the first of the following

 

occurs:

 

     (a) The commission issues an order of denial of the license

 

application that serves as the basis for the conditional license

 

and all administrative remedies before the commission have been

 

exhausted.

 

     (b) The commission issues the license under subsection (4) for

 

which the applicant submitted the license application that serves

 

as the basis for the conditional license.

 

     (c) The licensee or conditional licensee notifies the

 

commission in writing that the initial or conditional application

 

should be canceled.

 

     (d) One year passes after the date the conditional license was

 

issued, notwithstanding any suspension of the conditional license

 

by the commission.

 

     (10) If a conditional licensee fails to maintain acceptable

 

proof of its financial responsibility as required under section

 

803, the commission shall summarily suspend the conditional license

 

under section 92(2) of the administrative procedures act of 1969,

 

1969 PA 306, MCL 24.292, until the conditional 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 this state or a unit of local government any

 

compensation for property, future income, or future economic loss

 

because of the revocation.

     (11) On issuing a conditional license under subsection (7),

 

the commission shall, until the conditional license expires under

 

subsection (9), place the existing license under subsection (4) for

 

which the applicant submitted the application that serves as the

 

basis for the conditional license in escrow in compliance with R

 

436.1107 of the Michigan Administrative Code. If the conditional

 

license expires under subsection (9), 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 is the date the

 

conditional license expires.

 

     (12) 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).

 

     (13) 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 this state.

 

     Sec. 529. (1) A license or an interest in a license shall must

 

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 must be prorated on a quarterly basis for a portion

 

of the effective period 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 must be returned to the person by

 

whom it was paid that 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.