Bill Text: MI SB1138 | 2019-2020 | 100th Legislature | Enrolled
Bill Title: Liquor: spirits; definition of mixed spirit drink; modify, and modify eligibility for direct shipper license and retailer delivery. Amends sec. 203 of 1998 PA 58 (MCL 436.1203). TIE BAR WITH: SB 1140'20, SB 1139'20
Spectrum: Slight Partisan Bill (Republican 2-1)
Status: (Enrolled - Dead) 2020-12-30 - Pocket Veto 01/05/2021 [SB1138 Detail]
Download: Michigan-2019-SB1138-Enrolled.html
state of michigan
100th Legislature
Regular session of 2020
Introduced by Senators
Schmidt, Moss and VanderWall
ENROLLED SENATE BILL No. 1138
AN ACT to amend 1998 PA 58, entitled “An act to create a commission for the control of the alcoholic beverage traffic within this state, and to prescribe its powers, duties, and limitations; to provide for powers and duties for certain state departments and agencies; to impose certain taxes for certain purposes; to provide for the control of the alcoholic liquor traffic within this state and to provide for the power to establish state liquor stores; to prohibit the use of certain devices for the dispensing of alcoholic vapor; to provide for the care and treatment of alcoholics; to provide for the incorporation of farmer cooperative wineries and the granting of certain rights and privileges to those cooperatives; to provide for the licensing and taxation of activities regulated under this act and the disposition of the money received under this act; to prescribe liability for retail licensees under certain circumstances and to require security for that liability; to provide procedures, defenses, and remedies regarding violations of this act; to provide for the enforcement and to prescribe penalties for violations of this act; to provide for allocation of certain funds for certain purposes; to provide for the confiscation and disposition of property seized under this act; to provide referenda under certain circumstances; and to repeal acts and parts of acts,” by amending section 203 (MCL 436.1203), as amended by 2020 PA 106.
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 and except as provided in subsections (3), (12),
(13), (14), (15), and (16), 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 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 qualified retailer that
holds a specially designated merchant license located in this state may use a
common carrier to deliver beer and wine to a consumer in this state. A
qualified retailer that holds a specially designated distributor license
located in this state may use a common carrier to deliver spirits to a consumer
in this state. A qualified retailer that uses a common carrier to deliver beer, wine, or
spirits 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 qualified retailer shall
furnish an affidavit to verify payment.
(b) Comply with all laws of this state, including, but not
limited to, the prohibition on sales to minors.
(c) 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 using an identification
verification service. The person receiving and accepting the order on behalf of
the qualified 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 beer, wine, or spirits from the qualified 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.
(g) For a qualified retailer that has been issued licenses at 2 or more locations, the shipment of the wine must be fulfilled from the location nearest to the consumer unless that location does not have the wine ordered in stock.
(4) For purposes of subsection (1), a direct shipper may
sell, deliver, or import wine other than wine as defined in section
113(9)(b) or 113a(9)(b) 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. On the request of the department of treasury, a direct shipper shall
furnish an affidavit to verify payment.
(c) Comply with all laws of this state, including, but not
limited to, the prohibition on 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 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) 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 and sign for the
delivery.
(g) 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. The direct shipper must have received a registration number
of approval from the commission for any wine imported into this state. However,
the registration number of approval from the commission is not required to be on
the invoice or on the label of the wine that the direct shipper sells,
delivers, or imports to a consumer in this state.
(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.
(l) For a direct shipper that is a wine manufacturer
as described in subsection (10)(b), direct ship only the wine that the wine
manufacturer has manufactured and registered with the commission, wine
purchased from another wine manufacturer and further manufactured or bottled
and registered with the commission, or shiners purchased from another
manufacturer in compliance with section 204a and registered with the
commission.
(5) For a delivery of beer, wine, or spirts through the use
of a common carrier under subsection (3), a person taking the order on behalf
of the qualified retailer shall comply with subsection (3)(b) to (f). For a
sale, delivery, or importation of wine occurring by any means described in
subsection (4), a person taking the order on behalf of the direct shipper shall
comply with subsection (4)(c) to (g).
(6) 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) Except as provided in subsection (20), all spirits for sale,
use, storage, or distribution in this state must originally be purchased by and
imported into the state by the commission, or by prior written authority of the
commission.
(8) 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 outside 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) 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) A direct shipper shall not sell, deliver, or import wine
as defined in section 113(9)(a) or 113a(9)(a) 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 manufacturer, if done in compliance with this act. Only the
following persons qualify for the issuance of a direct shipper license:
(a) A wine maker that does not hold a license in
another state that is the substantial equivalent to a retailer license.
(b) A wine manufacturer that is located inside this country but outside of this state and that holds both a federal basic permit issued by the 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) 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 initial application must be accompanied by a copy or other verifiable
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 or holding the
substantial equivalent of a retail license not including a direct shipper
license in a state outside its state of domicile is grounds for revocation or denial
of a 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 of the United
States Department of Treasury of the violation.
(12) A retailer
that holds a specially designated merchant license, 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.
(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 successfully completed a server training program as
provided for in section 906.
(13) A retailer
that holds a specially designated merchant license may 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 distributor license may deliver spirits to
the home or other designated location of a consumer in this state if all of the
following conditions are met:
(a) The spirits
are delivered by the retailer’s employee.
(b) The retailer
or its employee who delivers the spirits verifies that the individual accepting
delivery is at least 21 years of age.
(c) If the
retailer or its employee intends to provide service to consumers, the retailer
or its employee providing the service has successfully completed a server training
program as provided for in section 906.
(15) A qualified
retailer
that holds a specially designated merchant license located in this state may
use a third party facilitator service by means of the internet or mobile
application to facilitate the sale of beer or wine to be delivered to the home
or designated location of a consumer as provided in subsection (12), this
subsection, or, for wine only, subsection (3), and a third party facilitator
service may deliver beer or wine to a consumer on behalf of a qualified retailer that
holds a specially designated merchant license located in this state, if all of
the following conditions are met:
(a) If the third
party facilitator service delivers beer or wine under this subsection, the
third party facilitator service verifies that the individual accepting the
delivery of the beer or wine is at least 21 years of age.
(b) A
manufacturer, warehouser, wholesaler, outstate seller of beer, outstate seller
of wine, or supplier of spirits does not have a direct or indirect
interest in the third party facilitator service.
(c) A manufacturer,
warehouser, wholesaler, outstate seller of beer, outstate seller of wine, or
supplier of
spirits does not aid or assist the third party facilitator service by gift, loan of
money or property of any description, or other valuable thing as defined in section
609, and the third party facilitator service does not accept the same.
(d) The qualified
retailer or
consumer pays the fees associated with deliveries provided for under this
subsection.
(e) The third
party facilitator service offers services for all brands available at the
retail location.
(16) A qualified
retailer
that holds a specially designated distributor license located in this state may
use a third party facilitator service by means of the internet or mobile
application to facilitate the sale of spirits to be delivered to the home or
designated location of a consumer as provided in subsection (14) or this
subsection, and a third party facilitator service may deliver spirits to a
consumer on behalf of a retailer that holds a specially designated distributor
license located in this state, if all of the following conditions are met:
(a) If the third
party facilitator service delivers spirits under this subsection, the third
party facilitator service verifies that the individual accepting the delivery
of the spirits is at least 21 years of age.
(b) A
manufacturer, warehouser, wholesaler, outstate seller of beer, outstate seller
of wine, or supplier of spirits does not have a direct or indirect
interest in the third party facilitator service.
(c) A
manufacturer, warehouser, wholesaler, outstate seller of beer, outstate seller
of wine, or supplier of spirits does not aid or assist a third party
facilitator service by gift, loan of money or property of any description, or
other valuable thing as defined in section 609, and a third party facilitator
service does not accept the same.
(d) The qualified
retailer or
consumer pays the fees associated with deliveries provided for under this
subsection.
(e) The third
party facilitator service offers services for all brands available at the
retail location.
(17) A third
party facilitator service shall not deliver beer, wine, or spirits to a
consumer under subsection (15) or (16), as applicable, and shall not facilitate
the sale of beer, wine, or spirits under subsection (15) or (16), as
applicable, unless it applies for and is granted a third party facilitator
service license by the commission. The commission may charge a reasonable
application fee, initial license fee, and annual license renewal fee. The
commission shall establish a fee under this subsection by written order.
(18) If a third party facilitator service used by a retailer
that holds a specially designated merchant or specially designated distributor
license under subsection (15) or (16), as applicable, violates this section,
the commission shall not treat the third party facilitator service’s violation
as a violation by the retailer.
(19) 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 the
alcoholic
liquor.
(b) The name and address of the recipient of the alcoholic liquor.
(c) The weight of the alcoholic liquor delivered to a
consignee.
(d) The date of the delivery.
(20) For purposes of subsection (1), a qualified small distiller or an out-of-state entity that is the substantial equivalent of a qualified small distiller may sell and deliver spirits that it manufactured to a retailer licensed to purchase and sell spirits in this state if all of the following conditions are met:
(a) The spirits are sold and delivered by an employee of the qualified small distiller or an out-of-state entity that is the substantial equivalent of a qualified small distiller, not an agent, and are transported and delivered using a vehicle owned by the qualified small distiller or the out-of-state entity that is the substantial equivalent of a qualified small distiller.
(b) The qualified small distiller or an out-of-state entity that is the substantial equivalent of a qualified small distiller complies with all 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 spirits to retailers.
(ii) Vehicles used to deliver spirits to retailers.
(iii) Uniform pricing established by the commission under section 233.
(iv) Labeling and registration of spirits under R 436.1829 of the Michigan Administrative Code.
(v) Payment of taxes.
(c) The spirits are not listed in the State of Michigan price book.
(21) A common carrier described in subsection (19) shall maintain
the books, records, and documents supporting a report submitted under
subsection (19) 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.
(22) A third party facilitator service that delivers beer, wine,
or spirits to a consumer under subsection (15) or (16), as applicable, 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
beer, wine, or spirits.
(b) The name and address of the recipient of beer, wine, or
spirits.
(c) The weight of beer, wine, or spirits delivered to a
consignee.
(d) The date of the delivery.
(23) A third party facilitator service shall maintain the books,
records, and documents supporting a report submitted under subsection (22)
for 3 years
unless the commission notifies the third party facilitator service in writing
that the books, records, and supporting documents may be destroyed. Within 30
days after the commission’s request, the third party facilitator service 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 third party facilitator service shall also
make the books, records, and documents available for inspection to a local law
enforcement agency or local governmental unit where the third party facilitator
service resides or does business.
(24) A report submitted under subsection (19) or (22) is subject to
disclosure under the freedom of information act, 1976 PA 442, MCL 15.231 to
15.246.
(25) As used in this section:
(a) “Common carrier” means a company that transports goods,
on reasonable request, on regular routes and at set rates.
(b) “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) “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) “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) “Computer system” means a set of related, connected or
unconnected, computer equipment, devices, software, or hardware.
(f) “Consumer” means an individual who purchases beer, wine,
or spirits for personal consumption and not for resale.
(g) “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) “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) “Direct shipper” means either of the following:
(i) A wine manufacturer that sells, delivers, or imports wine other than wine as defined in section 113(9)(b) or 113a(9)(b) it has manufactured, bottled, and registered with the commission, to consumers in this state or 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.
(ii) A wine manufacturer that purchases wine other than wine as defined in section 113(9)(b) or 113a(9)(b) from another wine manufacturer and further manufactures or bottles the wine or purchases shiners of wine other than wine as defined in section 113(9)(b) or 113a(9)(b) from another wine manufacturer in compliance with section 204a, registers the wine with the commission and sells the wine to consumers in this state 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) “Facilitate” means, subject to subdivision (k), advertising on behalf of a retailer, by means of the
internet or mobile application, and pursuant to a written or oral agreement,
the brands and prices of beer, wine, or spirits products sold by a retailer and
1 or more of the following:
(i) Assisting the
retailer, in any manner, in the arrangement of delivery as allowed in this
section.
(ii) Assisting the retailer, in any manner, in the processing of
payment by the consumer for the beer, wine, or spirits.
(iii) Transmitting customer information to the retailer.
(iv) Assisting the retailer by providing customer service.
(v) If the retailer maintains supervision and control over the
day-to-day operation of its business, providing other normal and customary
operational services.
(k) “Facilitate” does not include web designing, operating an
internet search engine, or publishing an internet version of a newspaper.
(l)
“Identification verification service” means an
internet-based service approved by the commission specializing in age and
identity verification.
(m) “Mobile application” means a specialized software program downloaded onto a wireless communication device.
(n) “Qualified retailer” means a retailer licensed to sell alcoholic liquor for consumption off the premises that complies with all of the following:
(i) The retailer maintains physical licensed premises that are open to the general public for face to face sales transactions of alcoholic liquor, packaged food, and other products to consumers.
(ii) At least 25% of the retailer’s annual gross sales
of alcoholic liquor must be from face to face sales transactions with consumers
on the premises described in subparagraph (i) unless the retailer’s physical
licensed premises is less than 15,000 square feet in total.
(iii) The retailer holds and maintains either of the following for the premises described in subparagraph (i):
(A) A retail food establishment license issued under the food law, 2000 PA 92, MCL 289.1101 to 289.8111. As used in this sub-subparagraph, “retail food establishment” means that term as defined in section 1111 of the food law, 2000 PA 92, MCL 289.1111.
(B) An extended retail food establishment license issued under the food law, 2000 PA 92, MCL 289.1101 to 289.8111. As used in this sub-subparagraph, “extended retail food establishment” means that term as defined in section 1107 of the food law, 2000 PA 92, MCL 289.1107.
(o) “Qualified small distiller” means a small distiller, or an out-of-state entity that is the substantial equivalent of a small distiller, that sells under 3,000 gallons of spirits per calendar year to retailers located in this state or out-of-state entities that are the substantial equivalent of retailers. If a small distiller or an out-of-state entity that is the substantial equivalent of a qualified small distiller manufactures spirits at more than 1 location, the total number of gallons of spirits sold to retailers or out-of-state entities that are the substantial equivalent of retailers from all locations must be combined to determine the 3,000-gallon threshold.
(p) “Third party facilitator
service” means a person licensed by the commission to do any of the following:
(i) Facilitate the sale of beer or wine to a consumer as
provided in subsection (15) on behalf of a qualified retailer that holds a specially designated merchant license
located in this state.
(ii) Facilitate the sale of spirits to a consumer as provided in
subsection (16) on behalf of a qualified retailer
that holds a specially designated distributor license located in this state.
(iii) Deliver beer or wine to a consumer as provided in
subsection (15) on behalf of a qualified retailer
that holds a specially designated merchant license located in this state.
(iv) Deliver spirits to a consumer as provided in subsection
(16) on behalf of a qualified retailer that holds a specially designated
distributor license located in this state.
Enacting section 1. This amendatory act does not take effect unless all of the following bills of the 100th Legislature are enacted into law:
(a) Senate Bill No. 1139.
Secretary of the Senate
Clerk of the House of Representatives
Approved___________________________________________
____________________________________________________
Governor
