Bill Text: MI HB5087 | 2011-2012 | 96th Legislature | Engrossed
Bill Title: Liquor; other; barrel production limit for breweries to sell beer for on-premises consumption; eliminate. Amends secs. 411, 537 & 603 of 1998 PA 58 (MCL 436.1411 et seq.).
Spectrum: Bipartisan Bill
Status: (Passed) 2011-12-28 - Assigned Pa 298'11 With Immediate Effect [HB5087 Detail]
Download: Michigan-2011-HB5087-Engrossed.html
HB-5087, As Passed House, December 8, 2011
HOUSE BILL No. 5087
October 18, 2011, Introduced by Rep. O'Brien 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 411, 537, and 603 (MCL 436.1411, 436.1537, and
436.1603), section 411 as added by 2000 PA 395 and sections 537 and
603 as amended by 2010 PA 213.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec.
411. A brewer that is not licensed as a microbrewer but
produces
under 200,000 barrels of beer per calendar year micro
brewer may sell its beer for on-premises consumption at not more
than 1 location in this state that is on any of its licensed
brewery premises.
Sec. 537. (1) The following classes of vendors may sell
alcoholic
liquors liquor at retail as provided in this section:
(a) Taverns where beer and wine may be sold for consumption on
the premises only.
(b) Class C license where beer, wine, mixed spirit drink, and
spirits may be sold for consumption on the premises.
(c) Clubs where beer, wine, mixed spirit drink, and spirits
may be sold for consumption on the premises only to bona fide
members where consumption is limited to these members and their
bona
fide guests, who have attained the age of are 21 years of age
or older.
(d) Direct shippers where wine may be sold and shipped
directly to the consumer.
(e) Hotels of class A where beer and wine may be sold for
consumption on the premises and in the rooms of bona fide
registered guests. Hotels of class B where beer, wine, mixed spirit
drink, and spirits may be sold for consumption on the premises and
in the rooms of bona fide registered guests.
(f) Specially designated merchants, where beer and wine may be
sold for consumption off the premises only.
(g) Specially designated distributors where spirits and mixed
spirit drink may be sold for consumption off the premises only.
(h) Special licenses where beer and wine or beer, wine, mixed
spirit drink, and spirits may be sold for consumption on the
premises only.
(i) Dining cars or other railroad or Pullman cars, watercraft,
or aircraft, where alcoholic liquor may be sold for consumption on
the premises only, subject to rules promulgated by the commission.
(j) Brewpubs where beer manufactured on the premises by the
licensee may be sold for consumption on or off the premises by any
of the following licensees:
(i) Class C.
(ii) Tavern.
(iii) Class A hotel.
(iv) Class B hotel.
(k)
Micro brewers and brewers selling less than 200,000
barrels
of beer per year where beer
produced by the micro brewer or
brewer may be sold to a consumer for consumption on or off the
brewery premises.
(l) Class G-1 license where beer, wine, mixed spirit drink, and
spirits may be sold for consumption on the premises only to members
required to pay an annual membership fee and consumption is limited
to these members and their bona fide guests.
(m) Class G-2 license where beer and wine may be sold for
consumption on the premises only to members required to pay an
annual membership fee and consumption is limited to these members
and their bona fide guests.
(n) Motorsports event license where beer and wine may be sold
for consumption on the premises during sanctioned motorsports
events only.
(o) Wine maker where wine may be sold by direct shipment, at
retail on the licensed premises, and as provided for in subsections
(2) and (3).
(p) Small distiller selling not more than 60,000 gallons of
spirits manufactured by that licensee to the consumer at retail for
consumption on or off the licensed premises in the manner provided
for in section 534.
(q) Nonpublic continuing care retirement center license, where
beer, wine, mixed spirit drink, mixed wine drink, and spirits may
be sold at retail and served on the licensed premises to residents
and bona fide guests accompanying the resident for consumption only
on the licensed premises.
(2) A wine maker may sell wine made by that wine maker in a
restaurant for consumption on or off the premises if the restaurant
is owned by the wine maker or operated by another person under an
agreement approved by the commission and located on the premises
where the wine maker is licensed.
(3) A wine maker, with the prior written approval of the
commission, may conduct wine tastings of wines made by that wine
maker on the premises where the wine maker is licensed to
manufacture wine. The wine maker may charge for the samples.
(4) A wine maker, with the prior written approval of the
commission, may conduct wine tastings of wines made by that wine
maker and may sell the wine made by that wine maker for consumption
off the premises at a location other than the premises where the
wine maker is licensed to manufacture wine, under the following
conditions:
(a) The premises upon which the wine tasting occurs conforms
to local and state sanitation requirements.
(b) Payment of a $100.00 fee per location is made to the
commission.
(c)
The wine tasting locations shall be are considered
licensed premises, and the wine maker may include a charge for the
samples.
(d)
Wine The wine tasting takes place during the legal hours
for the sale of alcoholic liquor by the licensee.
(e) The premises and the licensee comply with and are subject
to all applicable rules promulgated by the commission.
(5) Notwithstanding section 1025(1), an outstate seller of
beer, an outstate seller of wine, a wine maker, a brewer, a micro
brewer, or a specially designated merchant, or an agent of any of
those persons, who does not hold a license allowing the consumption
of alcoholic liquor on the premises at the same licensed address,
may conduct beer and wine tastings on the licensed premises of a
specially designated merchant under the following conditions:
(a) A customer is not charged for the tasting of beer or wine.
(b) The tasting samples provided to a customer do not exceed 3
servings at up to 3 ounces per serving of beer or 3 servings at up
to 2 ounces of wine. A customer shall not be provided more than a
total of 3 samples of beer or wine within a 24-hour period per
licensed premises.
(c) The specially designated merchant, outstate seller of
beer, outstate seller of wine, wine maker, micro brewer, or brewer
has first obtained an annual beer and wine tasting permit approved
by the commission.
(d) The commission is notified, in writing, a minimum of 10
working
days prior to before the event, regarding the date, time,
and location of the event.
(6) During the time a beer or wine tasting is conducted under
subsection (5), a specially designated merchant, outstate seller of
beer, outstate seller of wine, wine maker, micro brewer, or brewer,
or its agent or employee who has successfully completed a server
training program as provided for in section 906, shall devote full
time to the beer and wine tasting activity and shall perform no
other duties, including the sale of alcoholic liquor for
consumption off the licensed premises. Beer and wine used for the
tasting must come from the specially designated merchant's
inventory, and all open bottles must be removed from the premises
on the same business day or resealed and stored in a locked,
separate storage compartment on the licensed premises when not
being used for the activities allowed by the permit.
(7)
A wholesaler is prohibited from conducting or
participating
shall not conduct or
participate in beer and wine
tastings
allowed by the under a permit created in issued under
subsection (5).
(8) A beer and wine tasting under subsection (5) may only be
conducted during the legal hours for the sale of alcoholic liquor
by the licensee.
(9) A brandy manufacturer or small distiller, with the prior
written approval of the commission, may conduct tastings of brandy
and spirits made by that brandy manufacturer or small distiller and
may sell the brandy and spirits made by that brandy manufacturer or
small distiller for consumption off the licensed premises at a
location other than the licensed premises where the brandy
manufacturer or small distiller is licensed to manufacture brandy
or spirits under the following conditions:
(a) The premises upon which the brandy and spirits tastings
occur conform to local and state sanitation requirements.
(b) Payment of a $100.00 fee per location is made to the
commission.
(c)
The brandy and spirits tasting locations shall be are
considered licensed premises.
(d)
Brandy The brandy and spirits tasting shall take takes
place
during the legal hours for selling the sale of alcoholic
liquor by the licensee.
(e) The premises and the license comply with and are subject
to all applicable rules promulgated by the commission.
Sec. 603. (1) Except as provided in subsections (6) to (14)
and
section 605, a manufacturer, mixed spirit drink manufacturer,
supplier,
warehouser, or wholesaler ,
outstate seller of beer,
outstate
seller of wine, outstate seller of mixed spirit drink, or
vendor
of spirits shall not have any direct or indirect financial
interest ,
directly or indirectly, in the
establishment,
maintenance, operation, or promotion of the business of any other
vendor.
(2) Except as provided in subsections (6) to (14) and section
605,
a manufacturer, mixed spirit drink manufacturer, supplier,
warehouser,
or wholesaler , outstate seller of beer, outstate
seller
of wine, outstate seller of mixed spirit drink, or vendor of
spirits
or a stockholder of a manufacturer,
mixed spirit drink
manufacturer,
supplier, warehouser, or
wholesaler ,
outstate seller
of
beer, outstate seller of wine, outstate seller of mixed spirit
drink,
or vendor of spirits shall not have
an any direct or
indirect interest by ownership in fee, leasehold, mortgage, or
otherwise ,
directly or indirectly, in the
establishment,
maintenance, operation, or promotion of the business of any other
vendor.
(3) Except as provided in subsections (6) to (14) and section
605,
a manufacturer, mixed spirit drink manufacturer, supplier,
warehouser,
or wholesaler , outstate seller of beer, outstate
seller
of wine, outstate seller of mixed spirit drink, or vendor of
spirits
shall not have an any direct or indirect interest directly
or
indirectly by interlocking
directors in a corporation or by
interlocking stock ownership in a corporation in the establishment,
maintenance, operation, or promotion of the business of any other
vendor.
(4) Except as provided in subsections (6) to (14) and section
605,
a person shall not buy the stocks of a manufacturer, mixed
spirit
drink manufacturer, supplier,
warehouser, or wholesaler ,
outstate
seller of beer, outstate seller of wine, outstate seller
of
mixed spirit drink, or vendor of spirits and place the stock in
any portfolio under an arrangement, written trust agreement, or
form
of investment trust agreement, and issue participating shares
based upon the portfolio, trust agreement, or investment trust
agreement, and sell the participating shares within this state.
(5) The commission may approve a brandy manufacturer or small
distiller to sell brandy and spirits made by that brandy
manufacturer or small distiller in a restaurant for consumption on
or off the premises if the restaurant is owned by the brandy
manufacturer or small distiller or operated by another person under
an agreement approved by the commission and is located on premises
where the brandy manufacturer or small distiller is licensed.
Brandy and spirits sold for consumption off the premises under this
subsection shall be sold at the uniform price established by the
commission.
(6) The commission shall allow a small distiller to sell
brands of spirits it manufactures for consumption on the licensed
premises at that distillery.
(7) A brewpub may have an interest in up to 2 other brewpubs
so
long as if the combined production of all the locations in
which
the brewpub has an interest does not exceed 5,000 barrels of beer
per calendar year.
(8) This section does not prohibit a supplier from having any
direct
or indirect interest ,
directly or indirectly, in any
other
supplier.
(9)
The commission may approve the following pursuant to under
R 436.1023(3) of the Michigan administrative code, subject to the
written approval of the United States department of treasury,
bureau of alcohol and tobacco tax and trade:
(a) A wine maker participating with 1 or more wine makers in
an
alternating proprietor operation in accordance with 27 CFR part
24,
subpart D, section 24.136.
(b) A brewer participating with 1 or more brewers in an
alternating
proprietor operation in accordance with 27 CFR part 25,
subpart
F, section 25.52.
(10)
A manufacturer is prohibited from having shall not have
any
direct or indirect interest
, directly or indirectly, in a
wholesaler.
(11)
A wine maker is prohibited from shall
not collectively
delivering
deliver wine, with any other wine maker, to retail
licensees.
(12) Except in the case of a licensed warehouser, all
licensees in this state shall be separated into 3 distinct and
independent tiers composed of the following:
(a)
Supplier tier, comprising manufacturers and suppliers.
(b) Wholesaler tier, comprising wholesalers.
(c) Retailer tier, comprising retailers.
(13)
Beginning Except as
otherwise provided in subsection
(14), beginning April 30, 2011, the commission shall not allow any
of the following:
(a) A retailer to hold, directly or indirectly, a license in
the wholesaler or supplier tier.
(b) A wholesaler to hold, directly or indirectly, a license in
the retailer or supplier tier.
(c) A supplier to hold, directly or indirectly, a license in
the wholesaler or retailer tier.
(14) Subsection (13) shall not be interpreted in a manner that
would prohibit a class C, tavern, class A hotel, or class B hotel
licensee from receiving a brewpub license or that would prohibit a
micro
brewer or brewer producing less than 200,000 barrels per year
from having an on-site restaurant.
(15) As used in this section:
(a) "Manufacturer" means, notwithstanding section 109(1), a
wine maker, small wine maker, brewer, micro brewer, manufacturer of
spirits, distiller, small distiller, brandy manufacturer, mixed
spirit drink manufacturer, direct shipper, or a person licensed by
the commission to perform substantially similar functions.
(b) "Supplier" means a manufacturer, mixed spirit drink
manufacturer, outstate seller of beer, outstate seller of wine,
outstate seller of mixed spirit drink, and vendor of spirits or a
person licensed by the commission to perform substantially similar
functions
but shall does not include a master distributor.
