Bill Text: MI SB1138 | 2019-2020 | 100th Legislature | Introduced
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-Introduced.html
SENATE BILL NO. 1138
September 22, 2020, Introduced by Senators
SCHMIDT, MOSS and VANDERWALL 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 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 Amendment
XXI of the constitution 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 wine to a consumer in
this state. A qualified retailer that uses a
common carrier to 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 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 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 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.
(4) 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. 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.
(5) For a delivery of wine 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) All spirits for sale, use, storage, or distribution in
this state shall 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
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,
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 producer and bottler manufacturer 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 of the United States Department of Treasury and a
license to manufacture wine in its state of domicile
and that does not hold a license in another state that is the substantial
equivalent to a retailer license.
(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 and any renewal 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
acquiring a retail license in another state is grounds for
revocation or denial of the an initial application or renewal application for 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 received
alcohol server training through successfully
completed a server training program approved
by the commission.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 received alcohol server training through successfully completed a server training program approved by the commission.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 ,
or outstate seller of mixed spirit drink 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 ,
or outstate seller of mixed spirit drink does not aid or assist a 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 a 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 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 ,
or outstate seller of mixed spirit drinks 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 ,
or outstate seller of mixed spirit drinks 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 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 to a retailer licensed to purchase and sell spirits in
this state if both of the following conditions are met:
(a)
The spirits are sold and delivered by an employee of the qualified small
distiller, not an agent, and is transported and delivered using a vehicle owned
by the qualified small distiller.
(b)
The qualified small distiller 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 spirits to
retailers.
(ii) Vehicles used to deliver spirits to retailers.
(iii) State pricing and taxes.
(21)
(20) 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)
(21) 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)
(22) A third party
facilitator service shall maintain the books, records, and documents supporting
a report submitted under subsection (21)
(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)
(23) A report
submitted under subsection (19) or (21)
(22) is subject to disclosure
under the freedom of information act, 1976 PA 442, MCL 15.231 to 15.246.
(25)
(24) 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 a person who either of the following:
(i) A wine manufacturer that sells, delivers,
or imports wine it has manufactured, bottled, and registered
with the commission, 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.
(ii) A wine manufacturer that purchases wine from
another wine manufacturer and further manufactures or bottles the wine and
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)
"Distribution center" means a location owned by a retailer, including
an individually licensed retail location that is open to the public, that is
used to store, sell, and fulfill online, phone, or electronic orders of any
kind from consumers for alcoholic beverages for 2 or more commonly or
separately owned licensed retail locations.
(k)
(j) "Facilitate"
means, subject to subdivision (k), (l), 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.
(l) (k) "Facilitate" does not include web designing,
operating an internet search engine, or publishing an internet version of a
newspaper.
(m) (l) "Identification verification service" means an
internet-based service approved by the commission specializing in age and
identity verification.
(n) (m) "Mobile
application" means a specialized software program downloaded onto a
wireless communication device.
(o) "Qualified retailer" means a retailer licensed
for off-premises sales that is open to the public and conducts face to face
sales transactions of alcoholic liquor, packaged food, and other products to
consumers. A location used as a distribution center is not a qualified retailer.
(p) "Qualified small distiller" means a small
distiller, or another state's substantial equivalent, that does not have
spirits listed in the State of Michigan price book and that sells under 3,000
gallons of spirits per calendar year to retailers whether located in this state
or other states.
(q) (n) "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 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 retailer that holds a specially designated distributor
license located in this state.
Enacting section
1. This amendatory act does not take effect unless both of the following bills
of the 100th Legislature are enacted into law:
(a) Senate Bill No. 1139.
(b) Senate Bill No. 1140.
