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.