Bill Text: MI HB6426 | 2009-2010 | 95th Legislature | Engrossed
Bill Title: Liquor; distribution; distribution of spirits, certain samplings of spirits, and illegal importation of spirits; clarify and regulate. Amends secs. 205, 525, 543, 609, 901, 903, 909 & 1027 of 1998 PA 58 (MCL 436.1205 et seq.) & adds secs. 1029 & 1031. TIE BAR WITH: HB 6427'10
Spectrum: Partisan Bill (Democrat 2-0)
Status: (Passed) 2010-10-06 - Assigned Pa 175'10 With Immediate Effect [HB6426 Detail]
Download: Michigan-2009-HB6426-Engrossed.html
HB-6426, As Passed Senate, September 22, 2010
SUBSTITUTE FOR
HOUSE BILL NO. 6426
A bill to amend 1998 PA 58, entitled
"Michigan liquor control code of 1998,"
by amending sections 205, 525, 543, 609, 901, 903, 909, and 1027
(MCL 436.1205, 436.1525, 436.1543, 436.1609, 436.1901, 436.1903,
436.1909, and 436.2027), section 205 as amended by 2001 PA 274,
sections 525 and 1027 as amended by 2008 PA 218, section 543 as
amended by 2005 PA 269, section 901 as amended by 2008 PA 11, and
section 903 as amended by 2000 PA 431, and by adding sections 1029
and 1031.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec.
205. (1) If the commission privatizes any portion of the
system
existing on December 19, 1996 under which spirits are
warehoused
or distributed, the The commission shall, as provided in
section 203(1), by order appoint authorized distribution agents to
engage in the warehousing and delivery of spirits in this state so
as to ensure that all retail licensees continue to be 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 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 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.
After September 24, 1996, an authorized distribution agent or an
applicant to become an authorized distribution agent who directly
or indirectly becomes licensed subsequently as a wholesaler shall
not be appointed to sell a brand of wine in a county or part of a
county for which a wholesaler has been appointed to sell that brand
under an agreement required by this act. A wholesaler who directly
or indirectly becomes an authorized distribution agent shall not
sell or be appointed to sell a brand of wine to a retailer in a
county or part of a county for which another wholesaler has been
appointed to sell that brand under an agreement required by this
act, unless that wholesaler was appointed to sell and was actively
selling that brand to retailers in that county or part of that
county prior to September 24, 1996, or unless the sale and
appointment is the result of an acquisition, purchase, or merger
with the existing wholesaler who was selling that brand to a
retailer in that county or part of that county prior to September
24, 1996.
(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. Until the system established by the commission
under
section 206 is activated, the authorized distribution agent
shall
provide retailers access to a computer application that
includes
the capability to determine whether certain spirits are
currently
available for delivery. Beginning on the date the system
is
established by the commission under section 206, the 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 effective 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 calendar year which order shall be made available to the
retail licensee within 18 hours of the placing of the order. 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 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 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 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 with a supplier of spirits or other
authorized distribution agent for the warehousing and delivery of
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
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 to an on-
premises licensee up to 9 liters of spirits during any 1-month
period and an on-premises licensee may purchase, collectively 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.
(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 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.
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.
Sec. 525. (1) Except as otherwise provided for in this
section, the following license fees shall be paid at the time of
filing applications or as otherwise provided in this act:
(a) Manufacturers of spirits, but 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 the fact that the location may be a
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, for all bedrooms in excess of 20, $1.00 for each
additional bedroom, but not more than $500.00.
(m) Hotels of class B selling beer, wine, mixed spirit drink,
and spirits, a minimum fee of $600.00 and, for all bedrooms in
excess of 20, $3.00 for each additional bedroom. If a hotel of
class B sells beer, wine, mixed spirit drink, and spirits in more
than 1 public bar, the fee entitles the hotel to sell in only 1
public bar, other than a bedroom, and a license shall be secured
for each additional public bar, other than a bedroom, the fee for
which is $350.00.
(n) Taverns, selling beer and wine, $250.00.
(o) Class C license selling beer, wine, mixed spirit drink,
and spirits, $600.00. If a class C licensee sells beer, wine, mixed
spirit drink, and spirits in more than 1 bar, a fee of $350.00
shall be paid for each additional bar. In municipally owned or
supported facilities in which nonprofit organizations operate
concession stands, a fee of $100.00 shall be paid for each
additional bar.
(p) Clubs selling beer, wine, mixed spirit drink, and spirits,
$300.00 for clubs having 150 or fewer duly accredited members and
$1.00 for each additional member. The membership list for the
purpose only of determining the license fees to be paid under this
subdivision shall be the accredited list of members as determined
by a sworn affidavit 30 days before the closing of the license
year. 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
House Bill No. 6426 as amended September 22, 2010
is not required of a club paying the maximum fee. The maximum fee
shall 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 that license or permit issued to any bona fide nonprofit
association, duly organized and in continuous existence for 1 year
before the filing of its application, is $25.00. Not more than 12
special licenses may be granted 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, $250.00.
(z) Small distiller, $100.00.
<<
(AA)>> Wine auction license, $50,000.00.
(2) The fees provided in this act for the various types of
licenses shall not be prorated for a portion of the effective
period of the license. Notwithstanding subsection (1), the initial
license fee for any licenses issued under section 531(3) and (4) is
$20,000.00. The renewal license fee shall be 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) Beginning July 23, 2004, and except in the case of any
resort or resort economic development license issued under section
531(2), (3), (4), and (5) and a license issued under section 521,
the commission shall issue an initial or renewal license not later
than 90 days after the applicant files a completed application.
Receipt of the application is considered the date the application
is received by any agency or department of the state of Michigan.
If the application is considered incomplete by the commission, 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 does not operate as an approval of
the application for the license and does not confer eligibility
upon an applicant determined otherwise ineligible for issuance of a
license. The 90-day period is tolled under any of the following
circumstances:
(a) Notice sent by the commission of a deficiency in the
application until the date all of the requested information is
received by the commission.
(b) The time period during which actions required by a party
other than the applicant or the commission are completed that
include, but are 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.
(4) 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 that application, upon completion, shall 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 based upon the fact that the
license fee was refunded or discounted under this subsection.
(5) Beginning October 1, 2005, 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 (3).
(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 (4).
(6) 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 the state of Michigan.
Sec. 543. (1) Quarterly, upon recommendation of the
commission, the state shall pay pursuant to appropriation in the
manner prescribed by law to the city, village, or township in which
a full-time police department or full-time ordinance enforcement
department is maintained or, if a police department or full-time
ordinance enforcement department is not maintained, to the county,
to be credited to the sheriff's department of the county in which
the licensed premises are located, 55% of the amount of the
proceeds of the retailers' license fees and license renewal fees
collected in that jurisdiction, for the specific purpose of
enforcing this act and the rules promulgated under this act. Forty-
one and one-half percent of the amount of the proceeds of
retailers' license and license renewal fees collected shall be
deposited in a special fund to be annually appropriated to the
commission for carrying out the licensing and enforcement
provisions of this act. Any unencumbered or uncommitted money in
the special fund shall revert to the general fund of the state 12
months after the end of each fiscal year in which the funds were
collected. The legislature shall appropriate 3-1/2% of the amount
of the proceeds of retailers' license and license renewal fees
collected to be credited to a special fund in the state treasury
for the purposes of promoting and sustaining programs for the
prevention, rehabilitation, care, and treatment of alcoholics. This
subsection does not apply to retail license fees collected for
railroad
or Pullman cars, watercraft, or aircraft, or wine auctions
or to the transfer fees provided in section 529.
(2) All license and license renewal fees, other than retail
license and license renewal fees, shall be credited to the grape
and wine industry council created in section 303, to be used as
provided in section 303. Money credited to the grape and wine
industry council shall not revert to the state general fund at the
close of the fiscal year, but shall remain in the account to which
it was credited to be used as provided in section 303.
(3) All retail license fees collected for railroad or Pullman
cars,
watercraft, or aircraft , and
the transfer fees provided in
section 529 shall be deposited in the special fund created in
subsection (1) for carrying out the licensing and enforcement
provisions of this act.
(4) The license fee enhancement imposed for licenses issued
under section 531(3) and (4) shall be deposited into a special fund
to be annually appropriated to the commission for enforcement and
other related projects determined appropriate by the commission.
The money representing that amount of the license fees for
identical licenses not issued under section 531(3) and (4) shall be
House Bill No. 6426 as amended September 22, 2010
allocated and appropriated under subsection (1).
(5) The license fee imposed on direct shipper licenses and any
violation fines imposed by the commission shall be deposited into
the direct shipper enforcement revolving fund. The direct shipper
enforcement revolving fund is created within the state treasury.
The state treasurer shall direct the investment of the fund. The
state treasurer shall credit to the fund interest and earnings from
fund investments. Money in the fund at the close of the fiscal year
shall remain in the fund and shall not lapse to the general fund.
The commission shall expend money from the fund, upon
appropriation, only for enforcement of the provisions of section
203 and related projects.
(6) One hundred percent of the wine auction license fee
imposed in section <<525(1)(aa)>> shall be deposited into the general
fund.
(7) (6)
As used in this section,
"license fee enhancement"
means the money representing the difference between the license fee
imposed for a license under section 525(1) and the additional
amount imposed for resort and resort economic development licenses
under section 525(2).
Sec.
609. Except as provided in section sections 605 and 1029,
a manufacturer, mixed spirit drink manufacturer, warehouser,
wholesaler, outstate seller of beer, outstate seller of wine,
outstate seller of mixed spirit drink, or vendor of spirits shall
not aid or assist any other vendor by gift, loan of money or
property of any description, or other valuable thing, or by the
giving of premiums or rebates, and a vendor shall not accept the
same. However, if manufacturers of spirits reduce the price of
their products, the manufacturer of spirits may refund the amount
of the price reductions to specially designated distributor
licensees in a manner prescribed by the commission.
Sec. 901. (1) A person, directly or indirectly, himself or
herself or by his or her clerk, agent, or employee, shall not
manufacture, manufacture for sale, sell, offer or keep for sale,
barter, furnish, import, import for sale, transport for hire,
transport, or possess any alcoholic liquor unless the person
complies with this act.
(2) A licensee shall not allow unlawful gambling on the
licensed premises and shall not allow on the licensed premises any
gaming devices prohibited by law.
(3) A licensee shall not sell, offer or keep for sale,
furnish, possess, or allow a customer to consume alcoholic liquor
that is not authorized by the license issued to the licensee by the
commission.
(4) A person, whether or not a licensee, shall not sell,
deliver, or import spirits unless the sale, delivery, or
importation is made by the commission, the commission's authorized
agent or distributor, an authorized distribution agent certified by
order of the commission, a person licensed by the commission, or by
prior written order of the commission. A person who violates this
subsection is subject to the sanctions and penalties contained in
section 909(4) and, in the case of a violation of section
909(4)(a), is subject to forfeiture of proceeds or an
instrumentality as provided for in chapter XXVA of the Michigan
penal code, 1931 PA 328, MCL 750.159f to 750.159x.
(5) (4)
A licensee shall not sell or
furnish alcoholic liquor
to a person who maintains, operates, or leases premises that are
not licensed by the commission and upon which other persons
unlawfully engage in the sale or consumption of alcoholic liquor
for consideration as prohibited by section 913.
(6) (5)
A retail licensee shall not, on his
or her licensed
premises, sell, offer for sale, accept, furnish, possess, or allow
the consumption of alcoholic liquor that has not been purchased by
the retail licensee from the commission, the commission's
authorized agent or distributor, an authorized distribution agent
certified
by order of the commission, or from a
licensee of the
commission authorized to sell that alcoholic liquor to a retail
licensee. This subsection does not apply to the consumption of
alcoholic liquor in the bedrooms or suites of registered guests of
licensed hotels or in the bedrooms or suites of bona fide members
of licensed clubs.
Sec. 903. (1) The commission or any commissioner or duly
authorized agent of the commission designated by the chairperson of
the commission, upon due notice and proper hearing, may suspend or
revoke any license upon a violation of this act or any of the rules
promulgated by the commission under this act. The commission or any
commissioner or duly authorized agent of the commission designated
by the chairperson of the commission, may assess a penalty of not
more than $300.00 for each violation of this act or rules
promulgated under this act, or not more than $1,000.00 for each
violation of section 801(2), in addition to or in lieu of
revocation or suspension of the license, which penalty shall be
paid to the commission and deposited with the state treasurer and
shall be credited to the general fund of the state. The commission
shall hold a hearing and order the suspension or revocation of a
license if the licensee has been found liable for 3 or more
separate violations of section 801(2) which violations occurred on
different occasions within a 24-month period unless such violations
for the sale, furnishing, or giving alcoholic liquor to a minor
were discovered by the licensee and disclosed to an appropriate law
enforcement agency immediately upon discovery. A retail licensee
who sells, offers to sell, accepts, furnishes, possesses, or allows
the consumption of spirits in violation of section 901(6) is
subject to an administrative fine of not more than $2,500.00 per
occurrence and the following license sanctions after notice and
opportunity for an administrative hearing under the administrative
procedures act of 1969, 1969 PA 306, MCL 24.201 to 24.328:
(a) For a first violation, a license revocation or suspension
for between 1 and 30 days.
(b) For a second violation, a license revocation or suspension
for between 31 and 90 days.
(c) For a third or subsequent violation, revocation of the
license.
(2) The commission shall provide a procedure by which a
licensee who is aggrieved by any penalty imposed under subsection
(1) and any suspension or revocation of a license ordered by the
commission, a commissioner, or a duly authorized agent of the
commission may request a hearing for the purpose of presenting any
facts or reasons to the commission as to why the penalty,
suspension, or revocation should be modified or rescinded. Any such
request shall be in writing and accompanied by a fee of $25.00. The
commission, after reviewing the record made before a commissioner
or a duly authorized agent of the commission, may allow or refuse
to allow the hearing in accordance with the commission's rules. The
right to a hearing provided in this subsection, however, shall not
be interpreted by any court as curtailing, removing, or annulling
the right of the commission to suspend or revoke licenses as
provided for in this act. A licensee does not have a right of
appeal from the final determination of the commission, except by
leave of the circuit court. Notice of the order of suspension or
revocation of a license or of the assessment of a penalty, or both,
shall be given in the manner prescribed by the commission. The
suspension or revocation of a license or the assessment of a
penalty, or both, by the commission or a duly authorized agent of
the commission does not prohibit the institution of a criminal
prosecution for a violation of this act. The institution of a
criminal prosecution for a violation of this act or the acquittal
or conviction of a person for a violation of this act does not
prevent the suspension or revocation of a license or the assessment
of a penalty, or both, by the commission. In a hearing for the
suspension or revocation of a license issued under this act, proof
that the defendant licensee or an agent or employee of the licensee
demanded and was shown, before furnishing any alcoholic liquor to a
minor, a motor vehicle operator or chauffeur license or a
registration certificate issued by the federal selective service,
or other bona fide documentary evidence of majority and identity of
the person, may be offered as evidence in a defense to a proceeding
for the suspension or revocation of a license issued under this
act. A licensee who has reason to believe that a minor has used
fraudulent identification to purchase alcoholic liquor in violation
of section 703 shall file a police report concerning the violation
with a local law enforcement agency and shall also present the
alleged fraudulent identification to the local law enforcement
agency at the time of filing the report if the identification is in
the possession of the licensee. The commission may promulgate rules
pursuant to the administrative procedures act of 1969, 1969 PA 306,
MCL 24.201 to 24.328, regarding the utilization by licensees of
equipment designed to detect altered or forged driver licenses,
state identification cards, and other forms of identification.
(3) In addition to the hearing commissioners provided for in
section 209, the chairperson of the commission may designate not
more than 2 duly authorized agents to hear violation cases. A
person appointed under this subsection shall be a member in good
standing of the state bar of Michigan.
(4) A duly authorized agent who has been designated by the
chairperson pursuant to subsection (3) shall have, in the hearing
of violation cases, the same authority and responsibility as does a
hearing commissioner under this act and the rules promulgated under
this act.
(5) A duly authorized agent who has been designated by the
chairperson pursuant to subsection (3) shall be ineligible for
appointment to the commission for a period of 1 year after the
person ceases to serve as a duly authorized agent.
Sec. 909. (1) Except as otherwise provided in this act, a
person, other than a person required to be licensed under this act,
who violates this act is guilty of a misdemeanor.
(2) Except as otherwise provided in this act, a licensee who
violates this act, or a rule or regulation promulgated under this
act, is guilty of a misdemeanor punishable by imprisonment for not
more than 6 months or a fine of not more than $500.00, or both.
(3) A person who performs any act for which a license is
required under this act without first obtaining that license or who
sells alcoholic liquor in a county that has prohibited the sale of
alcoholic liquor under section 1107 is guilty of a felony
punishable by imprisonment for not more than 1 year or by a fine of
not more than $1,000.00, or both.
(4) A person, whether or not a licensee, who violates section
901(4) is subject to the following penalties or sanctions:
(a) A person who sells, delivers, or imports spirits in
violation of section 901(4) in the amount of at least 80,000
milliliters is guilty of a felony punishable by imprisonment for
not more than 4 years or a fine of not more than $5,000.00, or
both.
(b) A person who sells, delivers, or imports spirits in
violation of section 901(4) in the amount of at least 8,000
milliliters but less than 80,000 milliliters is guilty of a
misdemeanor punishable by imprisonment for not more than 93 days or
a fine of not more than $2,500.00, or both.
(c) A person who sells, delivers, or imports spirits in
violation of section 901(4) in the amount of less than 8,000
milliliters is responsible for a state civil infraction and may be
ordered to pay a civil fine of not more than $1,000.00.
(5) The remedies under this act are cumulative and
independent. The use of 1 remedy by a person does not bar the use
of other lawful remedies by that person or the use of a lawful
remedy by another person.
(6) (4)
It is the intent of the legislature
that the court, in
imposing punishment under this section, should discriminate between
casual or slight violations and habitual sales of alcoholic liquor
or attempts to commercialize violations of this act or the rules or
regulations promulgated under this act.
Sec. 1027. (1) Unless otherwise provided by rule of the
commission, a person shall not conduct samplings or tastings of any
alcoholic liquor for a commercial purpose except at premises that
are licensed by the commission for the sale and consumption of
alcoholic liquor on the premises.
(2) This section does not prevent either of the following:
(a) A vendor of spirits, brewer, wine maker, mixed spirit
drink manufacturer, small wine maker, outstate seller of beer,
outstate seller of wine, or outstate seller of mixed spirit drink,
or a bona fide market research organization retained by 1 of the
persons named in this subsection, from conducting samplings or
tastings of an alcoholic liquor product before it is approved for
sale in this state if the sampling or tasting is conducted pursuant
to prior written approval of the commission.
(b) An on-premises licensee from giving a sampling or tasting
House Bill No. 6426 (H-1) as amended September 16, 2010
as amended September 22, 2010
of alcoholic liquor to an employee of the licensee during the legal
hours for consumption for the purpose of educating the employee
regarding 1 or more types of alcoholic liquor so long as the
employee is at least 21 years of age.
(c) A small distiller licensee from giving a sampling or
tasting of brands it manufactures on the licensed premises.
(3) A vendor of spirits or a manufacturer may conduct a
consumer sampling event on the premises of a holder of a specially
designated distributor license upon submission of a completed
application to the commission <<
.>>
(4) The holder of the consumer sampling event license shall
comply with the following:
(a) The commission must be notified in writing a minimum of 10
working days prior to the event with the date, time, and location
of the event.
[(b) The consumer sampling event is limited to 3 events per vendor
of spirits or manufacturer per specially designated distributor license
per month.]
(c) The vendor of spirits or manufacturer conducting the
consumer sampling event must have a licensed representative present
at the specially designated distributor's establishment.
(d) Licensed representatives or an authorized representative
may distribute merchandise, not to exceed $100.00 in value, to
consumers 21 years of age or older during the event.
(e) Participating specially designated distributor licensees
do not receive any fee or other valuable consideration for
participating in the event.
(f) Each consumer is limited to 3 samples, which total no more
than 1/3 ounce of distilled spirits per serving.
(g) The consumer is not charged for and does not purchase any
sample.
(h) The alcoholic liquor used in the consumer sampling event
is provided by the vendor of spirits or manufacturer, and purchased
at the minimum retail selling price fixed by the commission from
the specially designated distributor on whose premises the event is
located. The vendor of spirits or manufacturer shall remove any
unfinished product from the premises at which the event is held
upon completion of the event.
(i) A consumer sampling event shall not be allowed when the
sale of alcoholic liquor is otherwise prohibited on the premises at
which the event is conducted.
(j) Samples are not to be offered to, or allowed to be
consumed by, any person under the legal age for consuming alcoholic
liquor.
(k) A consumer sampling event may be advertised in any type of
media and the advertisements may include the date, time, location,
and other information regarding the event.
(l) The participating vendor of spirits or manufacturer and
specially designated distributor licensees must comply with this
act and commission rules.
(m) The vendor of spirits or manufacturer must demonstrate
that the individual actually conducting the sampling has
successfully completed the server training program in the manner
provided for in section 906 and rules promulgated by the
commission.
(5) Violation of this subsection subjects the vendor of
spirits or manufacturer to the sanctions and penalties as provided
for under this act.
(6) The commission, by rule or issuance of an order, may
further define eligibility for licensure and processes for
conducting consumer sampling events.
(7) (3)
A sampling or tasting of any
alcoholic liquor in a
home or domicile for other than a commercial purpose is not subject
to this section.
(8) (4)
For purposes of this section,
"commercial purpose"
means a purpose for which monetary gain or other remuneration could
reasonably be expected.
Sec. 1029. (1) The commission, by promulgation of a rule,
issuance of an order, or execution of a memorandum of understanding
with the department of treasury, or any combination thereof, may
allow the conduct by a manufacturer or out-state seller of spirits
of a preapproved program for marketing spirits by inclusion of
nonalcoholic carbonated beverages to be packaged with spirits. The
commission may, in conjunction with the department of treasury,
adopt a program that disallows the redemption of returnable
containers from the commission but otherwise allows redemption of
Michigan-sold returnable containers at other venues, and shall
allow for a system of appropriate allocation of funds under 1976 IL
1, MCL 445.571 to 445.576, by means of the issuance of an order or
by adoption of a rule.
(2) The commission shall provide for a system of non-mail-in
House Bill No. 6426 as amended September 22, 2010
or instant coupon transactions that does not diminish the spirit
product margins allocated to the state under this act by means of
the issuance of an order or by adoption of a rule.
Sec. 1031. (1) As used in this section, "wine auction license"
means a license issued by the commission to sell wine by auction,
subject to the following:
(a) The wine is sold through an auction by a person licensed
as a specially designated merchant or through a seller partnering
with a specially designated merchant, as evidenced by a written
agreement of the parties.
(b) The owner of the wine is not licensed under this act.
(c) The wine is part of a private collection owned by a person
not licensed under this act.
(d) The specially designated merchant ensures that each bottle
sold from the private collection has a permanently affixed tag or
label stating that the wine was acquired from a private collection.
(2) Upon submission of a completed application and the license
fee described in section <<525(1)(aa)>>, the commission shall issue a
wine auction license to a person licensed as a specially designated
merchant, or a seller partnering with a specially designated
merchant, who is arranging for the sale of wine by an owner that is
not licensed under this act. The commission shall issue the license
for a term of 1 year. The license allows the licensee to hold not
more than 12 auctions per license year.
(3) The license restrictions as prescribed under this section
and under this act are in addition to those requirements and
prescriptions imposed by any local law or ordinance, or resolution
House Bill No. 6426 as amended September 22, 2010
of the local unit of government.
(4) The holder of the wine auction license is responsible for
the payment of any applicable sales or excise taxes regarding the
sale of the wine by auction.
(5) The holder of the wine auction license is responsible for
the delivery, storing, and warehousing of the wine offered for sale
and for the delivery of the wine to the purchasers.
(6) A person licensed to sell wine at wholesale or retail may
purchase any wine offered at an auction under this section and may
resell that wine in accordance with the terms of his or her
license, so long as the tag or label remains permanently affixed to
the bottle upon sale.
(7) The sale and resale of wine purchased at auction is
subject to this act and any rules of the commission promulgated
under this act.
(8) A person holding a wine auction license is not required to
demonstrate compliance with the <<registration>> requirements of
article
29 of the occupational code, 1980 PA 299, MCL 339.2901 to 339.2919.
Enacting section 1. This amendatory act does not take effect
unless House Bill No. 6427 of the 95th Legislature is enacted into
law.
