Bill Text: MI HB5140 | 2013-2014 | 97th Legislature | Engrossed
Bill Title: Liquor; licenses; intercounty and intracounty transfers of escrowed specially designated distributor licenses; allow. Amends sec. 531 of 1998 PA 58 (MCL 436.1531).
Spectrum: Partisan Bill (Republican 1-0)
Status: (Passed) 2013-12-31 - Assigned Pa 237'13 With Immediate Effect 2013 Addenda [HB5140 Detail]
Download: Michigan-2013-HB5140-Engrossed.html
HB-5140, As Passed House, November 14, 2013
HOUSE BILL No. 5140
November 7, 2013, Introduced by Rep. Walsh 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 531 (MCL 436.1531), as amended by 2012 PA 212.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 531. (1) A public license shall not be granted for the
sale of alcoholic liquor for consumption on the premises in excess
of 1 license for each 1,500 of population or major fraction
thereof. An on-premises escrowed license issued under this
subsection may be transferred, subject to local legislative
approval under section 501(2), to an applicant whose proposed
operation is located within any local governmental unit in a county
in which the escrowed license was located. If the local
governmental unit within which the former licensee's premises were
located spans more than 1 county, an escrowed license may be
transferred, subject to local legislative approval under section
501(2), to an applicant whose proposed operation is located within
any local governmental unit in either county. If an escrowed
license is activated within a local governmental unit other than
that local governmental unit within which the escrowed license was
originally issued, the commission shall count that activated
license against the local governmental unit originally issuing the
license. This quota does not bar the right of an existing licensee
to renew a license or transfer the license and does not bar the
right of an on-premises licensee of any class to reclassify to
another class of on-premises license in a manner not in violation
of law or this act, subject to the consent of the commission. The
upgrading of a license resulting from a request under this
subsection is subject to approval by the local governmental unit
having jurisdiction.
(2) In a resort area, the commission may issue no more than
550 licenses for a period not to exceed 12 months without regard to
a limitation because of population and with respect to the resort
license the commission, by rule, shall define and classify resort
seasons by months and may issue 1 or more licenses for resort
seasons without regard to the calendar year or licensing year.
(3) In addition to the resort licenses authorized in
subsection (2), the commission may issue not more than 5 additional
licenses per year to establishments whose business and operation,
as determined by the commission, is designed to attract and
accommodate tourists and visitors to the resort area, whose primary
purpose is not for the sale of alcoholic liquor, and whose capital
investment in real property, leasehold improvement, and fixtures
for the premises to be licensed is $75,000.00 or more. Further, the
commission shall issue 1 license under this subsection per year to
an applicant located in a rural area that has a poverty rate, as
defined by the latest decennial census, greater than the statewide
average, or that is located in a rural area that has an
unemployment rate higher than the statewide average for 3 of the 5
preceding years. In counties having a population of less than
50,000, as determined by the last federal decennial census or as
determined under subsection (11) and subject to subsection (16) in
the case of a class A hotel or a class B hotel, the commission
shall not require the establishments to have dining facilities to
seat more than 50 persons. The commission may cancel the license if
the resort is no longer active or no longer qualifies for the
license. Before January 16 of each year the commission shall
transmit to the legislature a report giving details as to all of
the following:
(a) The number of applications received under this subsection.
(b) The number of licenses granted and to whom.
(c) The number of applications rejected and the reasons they
were rejected.
(d) The number of the licenses revoked, suspended, or other
disciplinary action taken and against whom and the grounds for
revocation, suspension, or disciplinary action.
(4) In addition to any licenses for the sale of alcoholic
liquor for consumption on the premises that may be available in the
local governmental unit under subsection (1) and the resort
licenses authorized in subsections (2) and (3), the commission may
issue not more than 15 resort economic development licenses per
year. A person is eligible to apply for a resort economic
development license under this subsection upon submitting an
application to the commission and demonstrating all of the
following:
(a) The establishment's business and operation, as determined
by the commission, is designed to attract and accommodate tourists
and visitors to the resort area.
(b) The establishment's primary business is not the sale of
alcoholic liquor.
(c) The capital investment in real property, leasehold
improvement, fixtures, and inventory for the premises to be
licensed is in excess of $1,500,000.00.
(d) The establishment does not allow or permit casino gambling
on the premises.
(5) In governmental units having a population of 50,000 or
less, as determined by the last federal decennial census or as
determined under subsection (11), in which the quota of specially
designated distributor licenses, as provided by section 533, has
been exhausted, the commission may issue not more than a total of
10 additional specially designated distributor licenses per year to
established merchants whose business and operation, as determined
by the commission, is designed to attract and accommodate tourists
and visitors to the resort area. A specially designated distributor
license issued under this subsection may be issued at a location
within 2,640 feet of existing specially designated distributor
license locations. A specially designated distributor license
issued under this subsection shall not bar another specially
designated distributor licensee from transferring location to
within 2,640 feet of that licensed location. A specially designated
distributor license issued under section 533 may be located within
2,640 feet of a specially designated distributor license issued
under this subsection.
(6) In addition to any licenses for the sale of alcoholic
liquor for consumption on the premises that may be available in the
local governmental unit under subsection (1), and the resort or
resort economic development licenses authorized in subsections (2),
(3), and (4), and notwithstanding section 519, the commission may
issue not more than 5 additional special purpose licenses in any
calendar year for the sale of beer and wine for consumption on the
premises. A special purpose license issued under this subsection
shall be issued only for events that are to be held from May 1 to
September 30, are artistic in nature, and that are to be held on
the campus of a public university with an enrollment of 30,000 or
more students. A special purpose license is valid for 30 days or
for the duration of the event for which it is issued, whichever is
less. The fee for a special purpose license is $50.00. A special
purpose license may be issued only to a corporation that meets all
of the following requirements:
(a) Is a nonprofit corporation organized under the nonprofit
corporation act, 1982 PA 162, MCL 450.2101 to 450.3192.
(b) Has a board of directors constituted of members of whom
half are elected by the public university at which the event is
scheduled and half are elected by the local governmental unit.
(c) Has been in continuous existence for not less than 6
years.
(7) Notwithstanding the local legislative body approval
provision of section 501(2) and notwithstanding the provisions of
section 519, the commission may issue, without regard to the quota
provisions of subsection (1) and with the approval of the governing
board of the university, either a tavern or class C license which
may be used only for regularly scheduled events at a public
university's established outdoor program or festival at a facility
on the campus of a public university having a head count enrollment
of 10,000 students or more. A license issued under this subsection
may only be issued to the governing board of a public university, a
person that is the lessee or concessionaire of the governing board
of the university, or both. A license issued under this subsection
is not transferable as to ownership or location. Except as
otherwise provided in this subsection, a license issued under this
subsection may not be issued at an outdoor stadium customarily used
for intercollegiate athletic events. A license may be issued at an
outdoor stadium customarily used for intercollegiate athletic
events for not more than 30 consecutive days to a concessionaire of
an entity granted exclusive use of a public university's property
in conjunction with a hockey game sanctioned by an unincorporated
not-for-profit association that operates a major professional ice
hockey league consisting of teams located in Canada and in the
United States if the concessionaire has entered into an agreement
granting it control of the licensed premises for the purposes of
complying with this act and rules promulgated under this act
regarding the sale of alcoholic liquor. A nationally televised game
between 2 professional hockey teams played outdoors is considered
an established outdoor program for the purposes of this subsection.
Notwithstanding any provision of this act or any rule promulgated
under this act, a concessionaire obtaining a license under this
subsection may share the profits generated from that license with
an unincorporated not-for-profit association that operates a major
professional ice hockey league consisting of teams located in
Canada and in the United States or an affiliated entity under a
written contract reviewed by the commission. If the established
outdoor program is a nationally televised game between 2
professional hockey teams, the commission may allow the promotion
and advertising of alcoholic liquor brands on the campus of a
public university where a concessionaire has been issued a license
under this subsection for the duration of the license.
(8) In issuing a resort or resort economic development license
under subsection (3), (4), or (5), the commission shall consider
economic development factors of the area in issuing licenses to
establishments designed to stimulate and promote the resort and
tourist industry. The commission shall not transfer a resort or
resort economic development license issued under subsection (3),
(4), or (5) to another location. If the licensee goes out of
business the license shall be surrendered to the commission.
(9) The limitations and quotas of this section are not
applicable to issuing a new license to a veteran of the armed
forces of the United States who was honorably discharged or
released under honorable conditions from the armed forces of the
United States and who had by forced sale disposed of a similar
license within 90 days before or after entering or while serving in
the armed forces of the United States, as a part of the person's
preparation for that service if the application for a new license
is submitted for the same governmental unit in which the previous
license was issued and within 60 days after the discharge of the
applicant from the armed forces of the United States.
(10) The limitations and quotas of this section are not
applicable to issuing a new license or renewing an existing license
where the property or establishment to be licensed is situated in
or on land on which an airport owned by a county or in which a
county has an interest is situated.
(11) For purposes of implementing this section a special state
census of a local governmental unit may be taken at the expense of
the local governmental unit by the federal bureau of census or the
secretary of state under section 6 of the home rule city act, 1909
PA 279, MCL 117.6. The special census shall be initiated by
resolution of the governing body of the local governmental unit
involved. The secretary of state may promulgate additional rules
necessary for implementing this section pursuant to the
administrative procedures act of 1969, 1969 PA 306, MCL 24.201 to
24.328.
(12) Before granting an approval as required in section 501(2)
for a license to be issued under subsection (2), (3), or (4), a
local legislative body shall disclose the availability of
transferable licenses held in escrow for more than 1 licensing year
within that respective local governmental unit. The local
governmental unit shall provide public notice of the meeting to
consider the granting of the license by the local governmental unit
2 weeks before the meeting.
(13) The person signing the application for an on-premises
resort or resort economic development license shall state and
verify that he or she attempted to secure an on-premises escrowed
license or quota license and that, to the best of his or her
knowledge, an on-premises escrowed license or quota license is not
readily available within the county in which the applicant for the
on-premises resort or resort economic development license proposes
to operate.
(14) The commission shall not issue an on-premises resort or
resort economic development license if the county within which the
resort or resort economic development license applicant proposes to
operate has not issued all on-premises licenses available under
subsection (1) or if an on-premises escrowed license exists and is
readily available within the local governmental unit in which the
applicant for the on-premises resort or resort economic development
license proposes to operate. The commission may waive the
provisions of this subsection upon a showing of good cause.
(15) The commission shall annually report to the legislature
the names of the businesses issued licenses under this section and
their locations.
(16) The commission shall not require a class A hotel or a
class B hotel licensed under subsection (2), (3), or (4) to provide
food service to registered guests or to the public.
House Bill No. 5140 as amended November 13, 2013
(17) Subject to the limitation and quotas of subsection (1)
and to local legislative approval under section 501(2), the
commission may approve the transfer of ownership and location of an
on-premises escrowed license within the same county to a class G-1
or class G-2 license or may approve the reclassification of an
existing on-premises license at the location to be licensed to a
class G-1 license or to a class G-2 license, subject to subsection
(1). Resort or economic development on-premises licenses created
under subsection (3) or (4) may not be issued as, or reclassified
to, a class G-1 or class G-2 license.
(18) [Notwithstanding R 436.1135(8) of the Michigan administrative
code, an escrowed ] specially
designated distributor license may be transferred, with the consent
of the commission and subject to local legislative approval under
section 501(2) and the limitations provided in this subsection, to
an applicant whose proposed operation is located within any local
governmental unit in a county in which the specially designated
distributor license was located. If the local governmental unit
within which the former licensee's premises were located spans more
than 1 county, the license may be transferred, subject to local
legislative approval under section 501(2) and the limitations
provided in this subsection, to an applicant whose proposed
operation is located within any local governmental unit in either
county. If the specially designated distributor license is
activated within a local governmental unit other than that local
governmental unit within which the specially designated distributor
license was originally issued, the commission shall count that
activated license against the local governmental unit originally
issuing the specially designated distributor license. The number of
specially designated distributor licenses that may be transferred
within a county pursuant to this subsection during the first 3
years after the effective date of the amendatory act that added
this subsection shall not exceed the following:
(a) For the first year, 10.
(b) For the second year, 20.
(c) For the third year, 30.
(19) (18)
As used in this section:
(a) "Escrowed license" means a license in which the rights of
the licensee in the license or to the renewal of the license are
still in existence and are subject to renewal and activation in the
manner provided for in R 436.1107 of the Michigan administrative
code.
(b) "Readily available" means available under a standard of
economic feasibility, as applied to the specific circumstances of
the applicant, that includes, but is not limited to, the following:
(i) The fair market value of the license, if determinable.
(ii) The size and scope of the proposed operation.
(iii) The existence of mandatory contractual restrictions or
inclusions attached to the sale of the license.
