January 27, 2015, Introduced by Reps. Dianda, Greig, Liberati and Howrylak and referred to the Committee on Regulatory Reform.
A bill to amend 1998 PA 58, entitled
"Michigan liquor control code of 1998,"
by amending sections 525 and 529 (MCL 436.1525 and 436.1529),
section 525 as amended by 2014 PA 353.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 525. (1) Except as otherwise provided in this section,
the following license fees shall be paid at the time of filing
applications or as otherwise provided in this act and are subject
to allocation under section 543:
(a) Manufacturers of spirits, 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 whether the location is 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 $1.00 for each bedroom in excess of 20, but not more
than $500.00 total.
(m) Hotels of class B selling beer, wine, mixed spirit drink,
and spirits, a minimum fee of $600.00 and $3.00 for each bedroom in
excess of 20. If a hotel of class B sells beer, wine, mixed spirit
drink, and spirits in more than 1 public bar, a fee of $350.00
shall be paid for each additional public bar, other than a bedroom.
(n) Taverns, selling beer and wine, $250.00.
(o) Class C license selling beer, wine, mixed spirit drink,
and spirits, $600.00. Subject to section 518(2), 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 accredited members and $1.00
for each member in excess of 150. Clubs shall submit a list of
members by a sworn affidavit 30 days before the closing of the
license year. The sworn affidavit shall be used only for
determining the license fees to be paid under this subdivision.
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 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 a special license or permit issued to any a 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 an
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, the amount as described and
determined under section 518(2).
(z) Small distiller, $100.00.
(aa) Wine auction license, $50,000.00.
(bb) Nonpublic continuing care retirement center license,
$600.00.
(cc) Conditional license approved under subsection (6) and
issued under subsection (7), $300.00.
(2) The fees provided in this act for the various types of
licenses
shall not be prorated on a
quarterly basis for a portion
of the effective period of the license based upon the approval date
of the application. An applicant or licensee that has submitted an
application for a license that will be effective for less than 9
months shall pay a prorated license fee and submit that prorated
license fee after approval of the application and upon issuance of
the license. Notwithstanding subsection (1), the initial license
fee for any licenses issued under section 531(3) or (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) If the commission requires an applicant to submit
fingerprints, the applicant shall have the fingerprints taken by a
local law enforcement agency, the department of state police, or
any other person qualified to take fingerprints as determined by
the department of state police. The applicant shall submit the
fingerprints and the appropriate state and federal fees, which
shall be borne by the applicant, to the department of state police
and the federal bureau of investigation for a criminal history
check. After conducting the criminal history check, the department
of state police shall provide the commission with a report of the
criminal history check. The report shall contain criminal history
record information concerning the person who is the subject of the
criminal history check that is maintained by the department of
state police. If a criminal arrest fingerprint card is subsequently
submitted to the department of state police and matches against a
fingerprint that was submitted pursuant to this act and stored in
its automated fingerprint identification system (AFIS) database,
the department of state police shall notify the commission.
(4)
Except in the case of any for
a resort or resort economic
development license issued under section 531(2), (3), (4), or (5)
or a license issued under section 521a, the commission shall issue
an initial or renewal license not later than 90 days after the
applicant files a completed application. The application is
considered to be received the date the application is received by
any agency or department of this state. If the commission
determines that an application is incomplete, 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 is not 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 for the following periods under any of the
following circumstances:
(a) If notice is sent by the commission of a deficiency in the
application, until the date all of the requested information is
received by the commission.
(b) For the time required to complete actions required by a
person, other than the applicant or the commission, including, but
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.
(5) 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.
(6) If, in addition to a completed application under this
section, an applicant submits a separate form requesting a
conditional license with an acceptable proof of financial
responsibility form under section 803, and an executed property
document, the commission shall, after considering the arrest and
conviction records or previous violation history in the management,
operation, or ownership of a licensed business, approve or deny a
conditional license. A conditional license issued under subsection
(7) for the transfer of an existing license at the same location
shall
must include any existing permits and approvals held in
connection with that license. The following applicants may request
a conditional license:
(a) An applicant seeking to transfer ownership of or interest
in an existing license at the same location to sell alcoholic
liquor for consumption on or off the premises.
(b) An applicant seeking an initial license other than a
specially designated distributor license or a license for the sale
of alcoholic liquor for consumption on the premises.
(7) The commission shall issue a conditional license to
applicants approved under subsection (6) within 20 business days
after receipt of a completed application and a completed
conditional license request form and documentation for a
conditional license at a single location. The commission may take
up to 30 business days to issue conditional licenses to approved
applicants seeking conditional licenses at multiple locations.
(8) A conditional license approved under subsection (6) and
issued under subsection (7) is nontransferable and nonrenewable. A
conditional license approved under subsection (6) and issued under
subsection (7) expires when the commission issues an order of
denial of the license application that serves as the basis for the
conditional license after all administrative remedies before the
commission have been exhausted, expires 20 business days after the
commission issues an order of approval of the license application
that serves as the basis for the conditional license, expires when
the licensee or conditional licensee notifies the commission in
writing that the initial application should be canceled, or expires
1 year after the date the conditional license was issued, whichever
occurs first. If a conditionally approved licensee fails to
maintain acceptable proof of its financial responsibility, the
commission shall, after due notice and proper hearing, suspend the
conditional license until the licensee files an acceptable proof of
financial responsibility form under section 803. If a conditional
license is revoked, the conditional licensee shall not recover from
a unit of local government any compensation for property, future
income, or future economic loss due to the revocation.
(9) Upon issuing a conditional license under subsection (7),
the commission shall, until the conditional license expires under
subsection (8), place an existing license under subsection (4) in
escrow in compliance with R 436.1107 of the Michigan administrative
code. If the conditional license expires because a transfer of an
existing license was denied or because the license was not
transferred within the 1-year period, an existing licensee may do 1
of the following:
(a) Request that the commission release the license from
escrow.
(b) Keep the license in escrow. The escrow date for compliance
with R 436.1107 of the Michigan administrative code shall be the
date the conditional license expires.
(10) 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 (4).
(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 (5).
(11) 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 this
state. of Michigan.
Sec. 529. (1) A license or an interest in a license shall not
be transferred from 1 person to another without the prior approval
of the commission. For purposes of this section, the transfer in
the aggregate to another person during any single licensing year of
more than 10% of the outstanding stock of a licensed corporation or
more than 10% of the total interest in a licensed limited
partnership
shall be is considered to be a transfer requiring the
prior approval of the commission.
(2) Not later than July 1 of each year, each privately held
licensed corporation and each licensed limited partnership shall
notify the commission as to whether any of the shares of stock in
the corporation, or interest in the limited partnership, have been
transferred during the preceding licensing year. The commission may
investigate the transfer of any number of shares of stock in a
licensed corporation, or any amount of interest in a licensed
limited partnership, for the purpose of ensuring compliance with
this act and the rules promulgated under this act.
(3)
Except as otherwise provided in subdivisions (a) through
to
(f), upon after approval
by the commission of a transfer subject
to
subsection (1), there shall be paid to an applicant or licensee
shall pay the commission a transfer fee equal to the fee provided
in this act for the class of license being transferred. A transfer
fee
shall not be prorated on a
quarterly basis for a portion of the
effective period of the license based upon the approval date of the
application. The prorated transfer fee shall be paid on issuance of
the license. If a person holding more than 1 license or more than 1
interest in a license at more than 1 location, but in the name of a
single legal entity, transfers all of the licenses or interests in
licenses simultaneously to another single legal entity, the
transfers
shall be are considered 1 transfer for purposes of
determining a transfer fee, payable in an amount equal to the
highest license fee provided in this act for any of the licenses,
or
interests in licenses, being transferred. A transfer fee shall
is
not be required in regard to any
of the following:
(a) The transfer, in the aggregate, of less than 50% of the
outstanding shares of stock in a licensed corporation or less than
50% of the total interest in a licensed limited partnership during
any licensing year.
(b) The exchange of the assets of a licensed sole
proprietorship, licensed general partnership, or licensed limited
partnership for all outstanding shares of stock in a corporation in
which either the sole proprietor, all members of the general
partnership, or all members of the limited partnership are the only
stockholders of that corporation. An exchange under this
subdivision
shall is not be considered an application for a
license
for the purposes of section 501.
(c) The transfer of the interest in a licensed business of a
deceased licensee, a deceased stockholder, or a deceased member of
a general or limited partnership to the deceased person's spouse or
children.
(d) The removal of a member of a firm, a stockholder, a member
of a general partnership or limited partnership, or association of
licensees from a license.
(e) The addition to a license of the spouse, son, daughter, or
parent of any of the following:
(i) A licensed sole proprietor.
(ii) A stockholder in a licensed corporation.
(iii) A member of a licensed general partnership, licensed
limited partnership, or other licensed association.
(f) The occurrence of any of the following events:
(i) A corporate stock split of a licensed corporation.
(ii) The issuance to a stockholder of a licensed corporation of
previously unissued stock as compensation for services performed.
(iii) The redemption by a licensed corporation of its own stock.
(4)
A The applicant or
licensee shall pay a nonrefundable
inspection
fee of $70.00 shall be paid to the commission by an
applicant
or licensee at the time of filing
any of the following:
(a) An application for a new license or permit.
(b) A request for approval of a transfer of ownership or
location of a license.
(c) A request for approval to increase or decrease the size of
the licensed premises, or to add a bar.
(d) A request for approval of the transfer in any licensing
year of any of the shares of stock in a licensed corporation from 1
person to another, or any part of the total interest in a licensed
limited partnership from 1 person to another.
(5)
An inspection fee shall be returned to the person by whom
it
was paid who paid the fee if the purpose of the inspection was
to inspect the physical premises of the licensee, and the
inspection
was not actually conducted. An inspection fee shall not
be
is not required for any of the following:
(a) The issuance or transfer of a special license, salesperson
license, limited alcohol buyer license, corporate salesperson
license, hospital permit, military permit, or Sunday sale of
spirits permit.
(b) The issuance of a new permit, or the transfer of an
existing permit, if the permit is issued or transferred
simultaneously with the issuance or transfer of a license or an
interest in a license.
(c) The issuance of authorized but previously unissued
corporate stock to an existing stockholder of a licensed
corporation.
(d) The transfer from a corporation to an existing stockholder
of any of the corporation's stock that is owned by the corporation
itself.
(6)
All inspection fees collected under this section shall
must
be deposited in the special fund in required under section 543
for carrying out of the licensing and enforcement provisions of
this act.