Bill Text: MI SB1088 | 2015-2016 | 98th Legislature | Introduced

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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Bill Title: Liquor; distribution; retail sale or delivery of beer or wine by a third party; modify. Amends sec. 203 of 1998 PA 58 (MCL 436.1203).

Spectrum: Bipartisan Bill

Status: (Passed) 2016-12-30 - Assigned Pa 0520'16 [SB1088 Detail]

Download: Michigan-2015-SB1088-Introduced.html

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SENATE BILL No. 1088

 

 

September 20, 2016, Introduced by Senator MACGREGOR and referred to the Committee on Regulatory Reform.

 

 

 

     A bill to amend 1998 PA 58, entitled

 

"Michigan liquor control code of 1998,"

 

by amending section 203 (MCL 436.1203), as amended by 2014 PA 50.

 

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 

     Sec. 203. (1) Except as provided in this section and section

 

301, a person shall not sell, deliver, or import alcoholic liquor,

 

including alcoholic liquor for personal use, in this state unless

 

the sale, delivery, or importation is made by the commission, the

 

commission's authorized agent or distributor, an authorized

 

distribution agent approved by order of the commission, a person

 

licensed by the commission, or by prior written order of the

 

commission.

 

     (2) Notwithstanding R 436.1011(7)(b) and R 436.1527 of the

 

Michigan administrative code Administrative Code and except as

 

provided in subsection (11), subsections (3) and (12), a retailer

 

shall not deliver alcoholic liquor to a consumer in this state at

 

the home or business of the consumer or at any location away from

 

the licensed premises of the retailer. The purpose of this

 

subsection is to exercise the state of Michigan's this state's

 

authority under section 2 of amendment XXI of the constitution of

 

the United States, to maintain the inherent police powers to

 

regulate the transportation and delivery of alcoholic liquor, and

 

to promote a transparent system for the transportation and delivery

 

of alcoholic liquor. The regulation described in this subsection is

 

considered necessary for both of the following reasons:

 

     (a) To promote the public health, safety, and welfare.

 

     (b) To maintain strong, stable, and effective regulation by

 

having beer and wine sold by retailers to consumers in this state

 

by passing through the 3-tier distribution system established under

 

this act.

 

     (3) For purposes of subsection (1), a retailer that holds a

 

specially designated merchant license located in this state may use

 

a common carrier to sell and deliver wine to a consumer in this

 

state by means of any mail order, internet, telephone, computer,

 

device, or other electronic means. A retailer that uses a common

 

carrier to sell and deliver wine to a consumer under this

 

subsection shall comply with all of the following:

 

     (a) Pay any applicable taxes to the commission and pay any

 

applicable taxes to the department of treasury as directed by the

 

department of treasury. On the request of the department of

 

treasury, a retailer shall furnish an affidavit to verify payment.

     (b) Comply with all prohibitions of the laws of this state,

 

including, but not limited to, sales to minors.

 

     (c) Verify the age of the individual placing the order by

 

obtaining from him or her an affirmation that he or she is at least

 

21 years of age. The person receiving and accepting the order on

 

behalf of the retailer shall record the name, address, date of

 

birth, and telephone number of the individual placing the order on

 

the order form or other verifiable record of a type and generated

 

in a manner approved by the commission and provide a duplicate to

 

the commission.

 

     (d) On request of the commission, make available to the

 

commission any document used to verify the age of the individual

 

ordering or receiving the wine from the retailer.

 

     (e) Stamp, print, or label on the outside of the shipping

 

container that the package "Contains Alcohol. Must be delivered to

 

a person 21 years of age or older". The recipient at the time of

 

the delivery shall provide identification verifying his or her age

 

and sign for the delivery.

 

     (f) Place a label on the top panel of the shipping container

 

containing the name and address of the individual placing the order

 

and the name of the designated recipient if different from the name

 

of the individual placing the order.

 

     (4) (3) For purposes of subsection (1), a direct shipper may

 

sell, deliver, or import wine , to consumers in this state by means

 

of any mail order, internet, telephone, computer, device, or other

 

electronic means, or sell directly to a consumer on the winery

 

premises. A direct shipper that sells, delivers, or imports wine to

a consumer under this subsection shall comply with all of the

 

following:

 

     (a) Hold a direct shipper license.

 

     (b) Pay any applicable taxes to the commission and pay any

 

applicable taxes to the department of treasury as directed by the

 

department of treasury. Upon On the request of the department of

 

treasury, a direct shipper shall furnish an affidavit to verify

 

payment.

 

     (c) Comply with all prohibitions of the laws of this state,

 

including, but not limited to, sales to minors.

 

     (d) Verify the age of the individual placing the order by

 

obtaining from him or her a copy of a photo identification issued

 

by this state, another state, or the federal government or by

 

utilizing using an identification verification service. The person

 

receiving and accepting the order on behalf of the direct shipper

 

shall record the name, address, date of birth, and telephone number

 

of the individual placing the order on the order form or other

 

verifiable record of a type and generated in a manner approved by

 

the commission and provide a duplicate to the commission.

 

     (e) Upon On request of the commission, make available to the

 

commission any document used to verify the age of the individual

 

ordering or receiving the wine from the direct shipper.

 

     (f) Stamp, print, or label on the outside of the shipping

 

container that the package "Contains Alcohol. Must be delivered to

 

a person 21 years of age or older." The recipient at the time of

 

the delivery shall provide photo identification verifying his or

 

her age along with a signature.and sign for the delivery.

     (g) Place a label on the top panel of the shipping container

 

containing the direct shipper license number, the order number, the

 

name and address of the individual placing the order, and the name

 

of the designated recipient if different from the name of the

 

individual placing the order.

 

     (h) Direct ship not more than 1,500 9-liter cases, or 13,500

 

liters in total, of wine in a calendar year to consumers in this

 

state. If a direct shipper, whether located in this state or

 

outside this state, owns, in whole or in part, or commonly manages

 

1 or more direct shippers, it shall not in combination ship to

 

consumers in this state more than 13,500 liters of wine in the

 

aggregate.

 

     (i) Pay wine taxes quarterly and report to the commission

 

quarterly the total amount of wine, by type, brand, and price,

 

shipped to consumers in this state during the preceding calendar

 

quarter, and the order numbers.

 

     (j) Authorize and allow the commission and the department of

 

treasury to conduct an audit of the direct shipper's records.

 

     (k) Consent and submit to the jurisdiction of the commission,

 

the department of treasury, and the courts of this state concerning

 

enforcement of this section and any related laws, rules, and

 

regulations.

 

     (5) (4) Notwithstanding subsection (3), in the case of For a

 

sale or delivery of alcoholic liquor occurring by any means

 

described in subsection (3), a person taking the order on behalf of

 

the retailer shall comply with subsection (3)(b) to (f). For a

 

sale, delivery, or importation of alcoholic liquor occurring by any

means described in subsection (3), (4), a person taking the order

 

on behalf of the direct shipper shall comply with subsection (3)(c)

 

through (4)(c) to (g).

 

     (6) (5) A person that delivers the wine for a direct shipper

 

under this section shall verify that the individual accepting

 

delivery is 21 years of age or older and is the individual who

 

placed the order or the designated recipient, is an individual 21

 

years of age or older currently occupying or present at the

 

address, or is an individual otherwise authorized through a rule

 

promulgated under this act by the commission to receive alcoholic

 

liquor under this section. If the delivery person, after a diligent

 

inquiry, determines that the purchaser or designated recipient is

 

not 21 years of age or older, the delivery person shall return the

 

wine to the direct shipper. A delivery person who returns wine to

 

the direct shipper because the purchaser or designated recipient is

 

not 21 years of age or older is not liable for any damages suffered

 

by the purchaser or direct shipper.

 

     (7) (6) All spirits for sale, use, storage, or distribution in

 

this state , shall originally be purchased by and imported into the

 

state by the commission, or by prior written authority of the

 

commission.

 

     (8) (7) This section does not apply to alcoholic liquor

 

brought into this state for personal or household use in an amount

 

permitted by federal law by an individual 21 years of age or older

 

at the time of reentry into this state from without the territorial

 

limits of the United States if the individual has been outside the

 

territorial limits of the United States for more than 48 hours and

has not brought alcoholic liquor into the United States during the

 

preceding 30 days.

 

     (9) (8) An individual 21 years of age or older may do either

 

of the following in relation to alcoholic liquor that contains less

 

than 21% alcohol by volume:

 

     (a) Personally transport from another state, once in a 24-hour

 

period, not more than 312 ounces of alcoholic liquor for that

 

individual's personal use, notwithstanding subsection (1).

 

     (b) Ship or import from another state alcoholic liquor for

 

that individual's personal use if that personal importation is done

 

in compliance with subsection (1).

 

     (10) (9) A direct shipper shall not sell, deliver, or import

 

wine to a consumer unless it applies for and is granted a direct

 

shipper license from the commission. This subsection does not

 

prohibit wine tasting or the selling at retail by a wine maker of

 

wines he or she produced and bottled or wine manufactured for that

 

wine maker by another wine maker, if done in compliance with this

 

act. Only the following persons qualify for the issuance of a

 

direct shipper license:

 

     (a) A wine maker.

 

     (b) A wine producer and bottler located inside this country

 

but outside of this state holding both a federal basic permit

 

issued by the alcohol and tobacco tax and trade bureau Alcohol and

 

Tobacco Tax and Trade Bureau of the United States Department of

 

Treasury and a license to manufacture wine in its state of

 

domicile.

 

     (11) (10) An applicant for a direct shipper license shall

submit an application to the commission in a written or electronic

 

format provided by the commission and accompanied by an application

 

and initial license fee of $100.00. The application shall must be

 

accompanied by a copy or other evidence of the existing federal

 

basic permit or license, or both, held by the applicant. The direct

 

shipper may renew its license annually by submission of a license

 

renewal fee of $100.00 and a completed renewal application. The

 

commission shall use the fees collected under this section to

 

conduct investigations and audits of direct shippers. The failure

 

to renew, or the revocation or suspension of, the applicant's

 

existing Michigan license, federal basic permit, or license to

 

manufacture wine in its state of domicile is grounds for revocation

 

or denial of the direct shipper license. If a direct shipper is

 

found guilty of violating this act or a rule promulgated by the

 

commission, the commission shall notify both the alcoholic liquor

 

control agency in the direct shipper's state of domicile and the

 

alcohol and tobacco tax and trade bureau Alcohol and Tobacco Tax

 

and Trade Bureau of the United States department of treasury

 

Department of Treasury of the violation.

 

     (12) (11) Except as otherwise provided under subsection (12),

 

(13) or (14), a retailer that holds a specially designated merchant

 

license, in this state; an out-of-state retailer that holds its

 

state's substantial equivalent license; or a brewpub, a micro

 

brewer, or an out-of-state entity that is the substantial

 

equivalent of a brewpub or micro brewer may deliver beer and wine

 

to the home or other designated location of a consumer in this

 

state if all of the following conditions are met:

     (a) The beer or wine, or both, is delivered by the retailer's,

 

brewpub's, or micro brewer's employee and not by an agent or by a

 

third party delivery service.

 

     (b) The retailer, brewpub, or micro brewer or its employee who

 

delivers the beer or wine, or both, verifies that the individual

 

accepting delivery is at least 21 years of age.

 

     (c) If the retailer, brewpub, or micro brewer or its employee

 

intends to provide service to consumers, the retailer, brewpub, or

 

micro brewer or its employee providing the service has received

 

alcohol server training through a server training program approved

 

by the commission.

 

     (13) (12) A retailer that holds a specially designated

 

merchant license in this state or an out-of-state retailer that

 

holds its state's substantial equivalent license may utilize use a

 

third party that provides delivery service to municipalities in

 

this state that are surrounded by water and inaccessible by motor

 

vehicle to deliver beer and wine to the home or other designated

 

location of that consumer if the delivery service is approved by

 

the commission and agrees to verify that the individual accepting

 

delivery of the beer and wine is at least 21 years of age.

 

     (14) A retailer that holds a specially designated merchant

 

license may use a third party delivery service by means of the

 

internet or a mobile application to facilitate the sale of or to

 

deliver, or both, beer or wine to the home or designated location

 

of a consumer if all of the following conditions are met:

 

     (a) The third party delivery service verifies that the

 

individual accepting delivery of the beer or wine is at least 21

years of age.

 

     (b) A manufacturer, warehouser, wholesaler, outstate seller of

 

beer, or outstate seller of wine does not have a direct or indirect

 

interest in the third party delivery service.

 

     (c) A manufacturer, warehouser, wholesaler, outstate seller of

 

beer, or outstate seller of wine does not aid or assist a third

 

party delivery service by gift, loan of money, property, or any

 

description, or other valuable thing as defined in section 609, and

 

a third party delivery service does not accept the same.

 

     (d) The retailer or consumer pays the fees associated with

 

deliveries provided for under this subsection.

 

     (e) The third party delivery service offers services for all

 

brands.

 

     (f) The third party delivery service makes its services

 

reasonably available to any retailer in the third party delivery

 

service's area.

 

     (15) A third party delivery service shall not deliver beer or

 

wine to a consumer as provided in subsection (14) unless it applies

 

for and is granted a third party delivery service license by the

 

commission. The commission may charge a reasonable application fee,

 

initial license fee, and annual license renewal fee.

 

     (16) (13) For purposes of subsection (1), a qualified micro

 

brewer or an out-of-state entity that is the substantial equivalent

 

of a qualified micro brewer may sell and deliver beer to a retailer

 

in this state if all of the following conditions are met:

 

     (a) The retailer is not located in a sales territory for which

 

the qualified micro brewer has granted exclusive sales rights to a

wholesaler pursuant to under sections 401 and 403 for the sale of

 

any brand or brands of beer produced by that micro brewer.

 

     (b) The beer is sold and delivered by an employee of the

 

qualified micro brewer, not an agent, and is transported and

 

delivered utilizing using a vehicle owned by the qualified micro

 

brewer, not by a third party delivery service.

 

     (c) The qualified micro brewer is in compliance with

 

applicable state and federal law and applicable regulatory

 

provisions of this act and rules adopted by the commission under

 

this act including, but not limited to, those requirements related

 

to each of the following:

 

     (i) Employees that sell and deliver beer to retailers.

 

     (ii) Vehicles used to deliver beer to retailers.

 

     (iii) Price schedules and temporary price reductions.

 

     (17) A common carrier that carries or transports alcoholic

 

liquor into this state to a person in this state shall submit

 

quarterly reports to the commission. A report required under this

 

subsection must include all of the following about each delivery to

 

a consumer in this state during the preceding calendar quarter:

 

     (a) The name and business address of the person that ships

 

alcoholic liquor.

 

     (b) The name and address of the recipient of alcoholic liquor.

 

     (c) The quantity of alcoholic liquor delivered to a consignee.

 

     (d) The date of the delivery.

 

     (18) A common carrier described in subsection (17) shall

 

maintain the books, records, and documents supporting a report

 

submitted under subsection (17) for 3 years unless the commission

notifies the common carrier in writing that the books, records, and

 

supporting documents may be destroyed. Within 30 days after the

 

commission's request, the common carrier shall make the books,

 

records, and documents available for inspection during normal

 

business hours. Within 30 days after a local law enforcement

 

agency's or local governmental unit's request, the common carrier

 

shall also make the books, records, and documents available for

 

inspection to a local law enforcement agency or local governmental

 

unit where the carrier resides or does business.

 

     (19) A report submitted under subsection (17) is subject to

 

disclosure under the freedom of information act, 1976 PA 442, MCL

 

15.231 to 15.246.

 

     (20) (14) As used in this section:

 

     (a) "Common carrier" means a person that transports

 

individuals or property for a fee.

 

     (b) (a) "Computer" means any connected, directly interoperable

 

or interactive device, equipment, or facility that uses a computer

 

program or other instructions to perform specific operations

 

including logical, arithmetic, or memory functions with or on

 

computer data or a computer program and that can store, retrieve,

 

alter, or communicate the results of the operations to a person,

 

computer program, computer, computer system, or computer network.

 

     (c) (b) "Computer network" means the interconnection of

 

hardwire or wireless communication lines with a computer through

 

remote terminals, or a complex consisting of 2 or more

 

interconnected computers.

 

     (d) (c) "Computer program" means a series of internal or

external instructions communicated in a form acceptable to a

 

computer that directs the functioning of a computer, computer

 

system, or computer network in a manner designed to provide or

 

produce products or results from the computer, computer system, or

 

computer network.

 

     (e) (d) "Computer system" means a set of related, connected or

 

unconnected, computer equipment, devices, software, or hardware.

 

     (f) (e) "Consumer" means an individual who purchases beer or

 

wine for personal consumption and not for resale.

 

     (g) (f) "Device" includes, but is not limited to, an

 

electronic, magnetic, electrochemical, biochemical, hydraulic,

 

optical, or organic object that performs input, output, or storage

 

functions by the manipulation of electronic, magnetic, or other

 

impulses.

 

     (h) (g) "Diligent inquiry" means a diligent good faith effort

 

to determine the age of an individual, that includes at least an

 

examination of an official Michigan operator's or chauffeur's

 

license, an official Michigan personal identification card, or any

 

other bona fide picture identification that establishes the

 

identity and age of the individual.

 

     (i) (h) "Direct shipper" means a person who sells, delivers,

 

or imports wine, to consumers in this state, that he or she

 

produces and bottles or wine that is manufactured by a wine maker

 

for another wine maker and that is transacted or caused to be

 

transacted through the use of any mail order, internet, telephone,

 

computer, device, or other electronic means, or sells directly to

 

consumers on the winery premises.

     (j) (i) "Identification verification service" means any an

 

internet-based service approved by the commission specializing in

 

age and identity verification.

 

     (k) "Mobile application" means a specialized software program

 

downloaded onto a wireless communication device.

 

     (l) (j) "Qualified micro brewer" means a micro brewer that

 

produces in total less than 1,000 barrels of beer per year. In

 

determining the 1,000-barrel threshold, all brands and labels of a

 

micro brewer, whether brewed in this state or outside this state,

 

shall must be combined.

 

     (m) "Third party delivery service" means a person licensed by

 

the commission that facilitates the sale of or delivers, or both,

 

beer or wine to a consumer as provided in subsection (14). A third

 

party delivery service does not include a common carrier or a third

 

party that provides delivery service described in subsection (13).