Bill Text: MI SB0579 | 2017-2018 | 99th Legislature | Engrossed
Bill Title: Liquor; other; mark-up on spirits; revise based on distiller's production amount. Amends sec. 233 of 1998 PA 58 (MCL 436.1233).
Spectrum: Partisan Bill (Republican 1-0)
Status: (Engrossed - Dead) 2018-12-12 - Referred To Second Reading [SB0579 Detail]
Download: Michigan-2017-SB0579-Engrossed.html
SB-0579, As Passed Senate, November 29, 2018
SUBSTITUTE FOR
SENATE BILL NO. 579
A bill to amend 1998 PA 58, entitled
"Michigan liquor control code of 1998,"
by amending section 233 (MCL 436.1233).
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 233. (1) The commission shall establish uniform prices
for
the sale of alcoholic liquor in state liquor stores and by
specially
designated distributors. The Except
as otherwise provided
in
this subsection, the prices shall must return
a gross profit to
the commission of not less than 51% and not greater than 65%. If
alcoholic liquor purchased by the commission has not met sales
standards established by the commission for a period of 6 months,
the commission may sell the alcoholic liquor at a price to be
approved by the state administrative board. Except as otherwise
provided in this section and subject to prices approved by the
state administrative board under this subsection, the commission
shall establish uniform prices under this subsection that will
return a gross profit to the commission as follows:
(a) For 2018, not greater than 65%.
(b) For 2019, not greater than 64.5%.
(c) For 2020, not greater than 64.5% unless the 2019 total
sales of spirits in this state increased by at least 2% from the
2018 sales. If the 2019 total sales of spirits in this state
increased as described in this subdivision, beginning with the
second quarterly price for 2020, the commission shall establish
uniform prices that will return a profit of 64%.
(d) For 2021, not greater than the percentage established by
the commission for 2020 unless the 2020 sales of spirits in this
state increased by at least 2% from the 2019 sales. If the 2020
sales of spirits in this state increased as described in this
subdivision, beginning with the second quarterly price for 2021,
the commission shall establish uniform prices that will reduce the
percentage of gross profit by 0.5 from the previous year.
(e) For 2022, not greater than the percentage established by
the commission for 2021 unless the 2021 sales of spirits in this
state increased by at least 2% from the 2020 sales. If the 2021
sales of spirits in this state increased as described in this
subdivision, beginning with the second quarterly price for 2022,
the commission shall establish uniform prices that will reduce the
percentage of gross profit by 0.5 from the previous year.
(f) For 2023 and each year thereafter, the percentage
established in subdivision (e).
(2) Notwithstanding subsection (1), the commission may
establish by rule prices for the sale of alcoholic liquor to
hospitals, charitable institutions, and military establishments
located in this state.
(3)
There shall be allowed a discount of 17% deducted from the
sale
price established by the commission on the sale of Specially
designated distributors and on-premises licensees are entitled to a
17% discount from the uniform price described under subsection (1)
on
alcoholic liquor made by the purchased from this state. liquor
stores
to specially designated distributors and establishments
licensed
to sell for consumption on the premises.
(4) Not later than February 1, 2019 and each February 1
thereafter, a small distiller may file an application with the
department of agriculture and rural development to be certified as
a qualified small distiller. An application under this subsection
must be on a form prescribed and furnished by the department of
agriculture and rural development. The department of agriculture
and rural development may charge a reasonable certification fee.
(5) Beginning January 1, 2020, for each bottle of spirits
produced by a qualified small distiller, the price for each bottle
must return a gross profit to the commission of 32.5%.
(6) The department of agriculture and rural development shall
certify that an applicant under subsection (4) is a qualified small
distiller if the department of agriculture and rural development
determines that at least 40% of the small distiller's base
distillate is distilled from distilled grain grown and harvested in
this state.
(7) Not later than October 1, 2019 and each October 1
thereafter, the department of agriculture and rural development
shall submit a report to the commission. A report under this
subsection must include the name of each qualified small distiller
certified under subsection (6).
(8) A qualified small distiller certificate expires on
February 1 following the date of issuance.
(9) A small distiller that supplies false information to the
department of agriculture and rural development or the commission
under this section is guilty of a misdemeanor punishable by
imprisonment for not more than 1 year or a fine of not more than
$3,000.00, or both. A small distiller that supplies false
information as described in this subsection shall pay the
commission the difference between the gross profit the commission
would have received under subsection (1) if the small distiller was
not a qualified small distiller, as determined by the commission.
(10) A qualified small distiller shall keep a complete and
accurate set of records and accounts of all transactions pertaining
to the operation of its distillery, including, but not limited to,
records and accounts of all distilled grain received in or
withdrawn from the distillery, all acknowledgment forms and
Michigan certification of origination statements in the qualified
small distiller's possession, copies of all contracts, and
acknowledgment forms returned to and settled by the qualified small
distiller. The department of agriculture and rural development and
the commission may examine the records and accounts pertaining to
the qualified small distiller's distilled grain handling business
at any time during normal business hours.
(11) As used in this section:
(a) "Acknowledgment form" means a scale weight ticket, a load
slip, or any other evidence of deposit issued by a small distiller
or the small distiller's authorized representative to a depositor
that identifies the distilled grain being transferred from
possession of the depositor to the possession of the small
distiller.
(b) "Depositor" means either of the following:
(i) A person that delivers distilled grain to a small
distiller for storage, processing, shipment, or sale and that has
title to distilled grain at the time of delivery.
(ii) A person that owns or that is the legal holder of an
acknowledgment form issued by a depositor for distilled grain.
(c) "Distilled grain" means any of the following:
(i) Dry barley.
(ii) Malted barley.
(iii) Oats.
(iv) A small grain.
(v) A cereal grain.
(vi) Potato.
(vii) Corn.
(viii) Fruit.
(d) "Michigan certification of origination statement" means a
signed statement from a depositor or producer on an acknowledgement
form that deposited distilled grain was grown and harvested in this
state.
(e) "Qualified small distiller" means a small distiller
certified by the department of agriculture and rural development
under this section as having at least 40% of the small distiller's
base distillate distilled from distilled grain grown and harvested
in this state.
