Bill Text: MI HB5578 | 2013-2014 | 97th Legislature | Engrossed
Bill Title: Liquor; authorized distribution agents; cap on the per case distribution fee; eliminate. Amends sec. 205 of 1998 PA 58 (MCL 436.1205).
Spectrum: Partisan Bill (Republican 1-0)
Status: (Introduced - Dead) 2014-12-02 - Referred To Committee Of The Whole With Substitute S-1 [HB5578 Detail]
Download: Michigan-2013-HB5578-Engrossed.html
HB-5578, As Passed House, October 2, 2014
SUBSTITUTE FOR
HOUSE BILL NO. 5578
A bill to amend 1998 PA 58, entitled
"Michigan liquor control code of 1998,"
by amending section 205 (MCL 436.1205), as amended by 2010 PA 213.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 205. (1) The commission shall, as provided in section
203(1),
by order appoint authorized distribution agents to engage
in
the warehousing and delivery of warehouse
and deliver spirits in
this
state so as to ensure that all retail licensees continue to be
are properly serviced with spirits. An authorized distribution
agent is subject to uniform requirements, including business
operating procedures, that the commission may prescribe by rule,
subject to this section.
(2) A person is eligible for appointment by the commission as
an authorized distribution agent if the following circumstances
exist:
(a) The person satisfies all applicable commission rules
prescribing qualifications for licensure promulgated under section
215.
(b) The person has entered into a written agreement or
contract
with a supplier of spirits for the purposes of warehousing
and
delivering to warehouse and
deliver a brand or brands of
spirits of that supplier of spirits.
(c) The person has an adequate warehousing facility located in
this
state for the storing of to
store spirits from which all
delivery of spirits to retail licensees shall be made.
(3) An authorized distribution agent shall not have a direct
or indirect interest in a supplier of spirits or in a retailer. A
supplier of spirits or a retailer shall not have a direct or
indirect interest in an authorized distribution agent. An
authorized distribution agent shall not hold title to spirits.
(4) An authorized distribution agent shall deliver to each
retailer located in its assigned distribution area on at least a
weekly basis if the order meets the minimum requirements. Except
that in those weeks that accompany a state holiday, the commission
may order a modified delivery schedule provided that a retailer
waits not longer than 9 days between deliveries due to a modified
delivery schedule. The commission shall provide for an integrated
on-line ordering system for spirits and shall require the
continuance of any ordering system in existence on the activation
date of the system established under section 206. The minimum
requirements shall be set by the commission and shall be a
sufficient number of bottles to comprise not more than 2 cases. A
retailer may pick up the product at the authorized distribution
agent's warehouse. To avoid occasional emergency outages of
spirits, a retail licensee may make up to 12 special emergency
orders
to an authorized distribution agent per in each calendar
year. which
order shall be made An
authorized distribution agent
shall make a special emergency order available to the retail
licensee
within 18 hours of the placing of the order. A An
authorized distribution agent shall make a special emergency order
placed
on Saturday or Sunday shall be made available to the retail
licensee before noon on the following Monday. An authorized
distribution agent may impose a fee of up to $20.00 to deliver a
special emergency order to a retail licensee.
(5) In locations inaccessible to a motor vehicle as that term
is defined by the Michigan vehicle code, 1949 PA 300, MCL 257.1 to
257.923,
the an authorized distribution agent shall arrange that a
delivery of spirits to a retailer be in compliance with the
following procedures:
(a) After processing an order from a retailer, an authorized
distribution agent shall contact a retailer to confirm the quantity
of cases or bottles, or both, and the exact dollar total of the
order.
(b)
The authorized distribution agent shall have has the
responsibility to coordinate with the retailer the date and time a
driver is scheduled to deliver the order to a ferry transport dock,
shall arrange any ferry, drayage, or other appropriate service, and
shall pick up the retailer's payment at that time.
(c) The ferry transport company or company representing any
other form of conveyance shall take the retailer's payment to the
mainland dock and give that payment to the authorized distribution
agent's driver.
(d) The ferry transport company or company representing any
other form of conveyance shall transport the order to the drayage
or other appropriate company at the island dock for immediate
delivery to the retailer.
(e) The drayage or other appropriate company shall deliver the
order to the retailer.
(6)
The An authorized distribution agent is responsible for
the payment of all transportation and delivery charges imposed by
the ferry, drayage, or other conveyance company and is responsible
for all breakage and any shortages, whether attributable to the
ferry, drayage, or other conveyance company or any combination of
those companies, until the order is delivered to the retailer's
establishment.
This subsection does not in any way prevent the
authorized distribution agent from seeking reimbursement or damages
from any company conveying the authorized distribution agent's
product.
(7) Except as otherwise provided in subsection (4), an
authorized distribution agent shall not charge a delivery fee or a
split-case fee for delivery of spirits sold by the commission to a
retailer.
(8) An authorized distribution agent or prospective authorized
distribution agent shall maintain and make available to the
commission or its representatives, upon notice, any contract or
written
agreement it may have has with a supplier of spirits or
other authorized distribution agent for the warehousing and
delivery
of delivering spirits in this state.
(9) For any violation of this act, rules promulgated under
this act, or the terms of an order appointing an authorized
distribution
agent, an authorized distribution agent shall be is
subject to the suspension, revocation, forfeiture, and penalty
provisions of sections 903(1) and 907 in the same manner in which a
licensee would be subject to those provisions. An authorized
distribution agent aggrieved by a penalty imposed by the commission
may invoke the hearing and appeal procedures of section 903(2) and
rules promulgated under that section.
(10) A specially designated distributor may sell spirits to an
on-premises
licensee up to 9 liters of spirits during any 1-month
period
and an on-premises licensee may
purchase , collectively
spirits
from specially designated distributors. ,
up to that amount
during
any 1-month period. Notwithstanding any other provision of
this
act or rule promulgated under this act, a specially designated
distributor
is only liable for knowingly violating this section.
Records
verifying these purchases shall be maintained by the on-
premises
licensee and be available to the commission upon request.
(11)
An authorized distribution agent shall demonstrate that
it
has made a good faith effort to provide employment to those
former
state employees who were terminated due to the privatization
of
the liquor distribution system. A good faith effort is
demonstrated
by the authorized distribution agent performing at
least
the following actions:
(a)
Seeking from the commission a list of names and resumes of
all
such former state employees who have indicated a desire for
continued
employment in the distribution of liquor in Michigan.
(b)
Providing a list of employment opportunities created by
the
authorized distribution agent in the distribution of liquor in
Michigan
to each individual whose name and resume is transmitted
from
the commission.
(c)
Providing an opportunity for application and interview to
any
terminated state worker who indicates an interest in pursuing a
job
opportunity with the authorized distribution agent.
(d)
Providing a priority in hiring for those individuals who
apply
and interview under this process.
(12)
Any former state employees terminated due to
privatization
who have reason to believe that an authorized
distribution
agent has not made a good faith effort to provide him
or
her with employment opportunities as described in subsection
(11)
may file a complaint with the commission who shall hear the
complaint
and make a determination on its validity. If the
commission
determines that the complaint is valid, the violation
may
be treated as a violation of this act and the authorized
distribution
agent may be subject to the suspension, revocation,
forfeiture,
and penalty provisions of sections 903(1) and 907.
(11) (13)
In addition to paying a vendor of
spirits the
acquisition price for purchasing spirits, the commission may pay a
vendor
of spirits an additional amount of not less than $4.50 and
not
more than $7.50 for each case of
spirits purchased as an offset
to the costs being incurred by that vendor of spirits in
contracting
with an authorized distribution agent for the
warehousing
and delivery of delivering
spirits to retailers. The
payment described in this subsection shall not be included in the
cost of purchasing spirits by the commission and shall not be
subject to the commission's markup, special taxes, or state sales
tax. The per-case offset established by this subsection may be
increased by the state administrative board each January to reflect
reasonable increases in the authorized distribution agent's cost of
warehousing
and delivery. delivering. As used in this subsection,
"case" means a container holding twelve 750 ml bottles of spirits
or other containers containing spirits which are standard to the
industry.
