HOUSE BILL No. 6489 November 7, 2002, Introduced by Rep. Koetje 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 2001 PA 223. THE PEOPLE OF THE STATE OF MICHIGAN ENACT: 1 Sec. 531. (1) A public license shall not be granted for the 2 sale of alcoholic liquor for consumption on the premises in 3 excess of 1 license for each 1,500 of population or major frac- 4 tion thereof. On-premises escrowed licenses issued under this 5 subsection may be transferred subject to local legislative 6 approval under section 501(2) to an applicant whose proposed 7 operation is located within any local governmental unit in a 8 countywith a population of under 500,000 or a county with a9population of over 700,000in which the escrowed license was 10 located. If the local governmental unit within which the former 07757'02 LBO 2 1 licensee's premises were located spans more than 1 county, an 2 escrowed license is available subject to local legislative 3 approval under section 501(2) to an applicant whose proposed 4 operation is located within any local governmental unit in either 5 county. If an escrowed license is activated within a local gov- 6 ernmental unit other than that local governmental unit within 7 which the escrowed license was originally issued, the commission 8 shall count that activated license against the local governmental 9 unit originally issuing the license. This quota does not bar the 10 right of an existing licensee to renew a license or transfer the 11 license and does not bar the right of an on-premise licensee of 12 any class to reclassify to another class of on-premises license 13 in a manner not in violation of law or this act, subject to the 14 consent of the commission. The upgrading of a license resulting 15 from a request under this subsection shall be approved by the 16 local governmental unit having jurisdiction. 17 (2) In a resort area, the commission may issue 1 or more 18 licenses for a period not to exceed 12 months without regard to a 19 limitation because of population, but not in excess of 550, and 20 with respect to the resort license the commission, by rule, shall 21 define and classify resort seasons by months and may issue 1 or 22 more licenses for resort seasons without regard to the calendar 23 year or licensing year. 24 (3) In addition to the resort licenses authorized in subsec- 25 tion (2), the commission may issue not more than 10 additional 26 licenses per year for the years 2001 and 2002 to establishments 27 whose business and operation, as determined by the commission, is 07757'02 3 1 designed to attract and accommodate tourists and visitors to the 2 resort area, whose primary purpose is not for the sale of alco- 3 holic liquor, and whose capital investment in real property, 4 leasehold improvement, and fixtures for the premises to be 5 licensed is $75,000.00 or more. Further, the commission shall 6 issue 1 license under this subsection for the years 2001 and 2002 7 to an applicant located in a rural area that has a poverty rate, 8 as defined by the latest decennial census, greater than the 9 statewide average, or that is located in a rural area that has an 10 unemployment rate higher than the statewide average for 3 of the 11 5 preceding years. In counties having a population of less than 12 50,000, as determined by the last federal decennial census or as 13 determined pursuant to subsection (11) and subject to subsection 14 (16) in the case of a class A hotel or a class B hotel, the com- 15 mission shall not require the establishments to have dining 16 facilities to seat more than 50 persons. The commission may 17 cancel the license if the resort is no longer active or no longer 18 qualifies for the license. Before January 16 of each year the 19 commission shall transmit to the legislature a report giving 20 details as to the number of applications received under this sub- 21 section; the number of licenses granted and to whom; the number 22 of applications rejected and the reasons; and the number of the 23 licenses revoked, suspended, or other disciplinary action taken 24 and against whom and the grounds for revocation, suspension, or 25 disciplinary action. 26 (4) In addition to any licenses for the sale of alcoholic 27 liquor for consumption on the premises that may be available in 07757'02 4 1 the local governmental unit under subsection (1) and the resort 2 licenses authorized in subsections (2) and (3), the commission 3 may issue not more than 20 resort economic development licenses 4 per year for the years 2001 and 2002. A person is eligible to 5 apply for a resort economic development license under this sub- 6 section upon submitting an application to the commission and 7 demonstrating all of the following: 8 (a) The establishment's business and operation, as deter- 9 mined by the commission, is designed to attract and accommodate 10 tourists and visitors to the resort area. 11 (b) The establishment's primary business is not the sale of 12 alcoholic liquor. 13 (c) The capital investment in real property, leasehold 14 improvement, fixtures, and inventory for the premises to be 15 licensed is in excess of $1,500,000.00. 16 (d) The establishment does not allow or permit casino gambl- 17 ing on the premises. 18 (5) In governmental units having a population of 50,000 per- 19 sons or less, as determined by the last federal decennial census 20 or as determined pursuant to subsection (11), in which the quota 21 of specially designated distributor licenses, as provided by 22commission ruleSECTION 533, has been exhausted, the commission 23 may issue not more than a total of 10 additional specially desig- 24 nated distributor licenses per year for the years 2001 and 2002 25 to established merchants whose business and operation, as deter- 26 mined by the commission, is designed to attract and accommodate 27 tourists and visitors to the resort area. A specially designated 07757'02 5 1 distributor license issued pursuant to this subsection may be 2 issued at a location within 2,640 feet of existing specially des- 3 ignated distributor license locations. A specially designated 4 distributor license issued pursuant to this subsection shall not 5 bar another specially designated distributor licensee from trans- 6 ferring location to within 2,640 feet of said licensed location. 7 A specially designated distributor license issued pursuant to 8 R 436.1141 of the Michigan administrative code may be located 9 within 2,640 feet of a specially designated distributor license 10 issued pursuant to this subsection. 11 (6) In addition to any licenses for the sale of alcoholic 12 liquor for consumption on the premises that may be available in 13 the local governmental unit under subsection (1), and the resort 14 or resort economic development licenses authorized in subsections 15 (2), (3), and (4), and notwithstanding section 519, the commis- 16 sion may issue not more than 5 additional special purpose 17 licenses in any calendar year for the sale of beer and wine for 18 consumption on the premises. A special purpose license issued 19 pursuant to this subsection shall be issued only for events which 20 are to be held from May 1 to September 30, are artistic in 21 nature, and which are to be held on the campus of a public uni- 22 versity with an enrollment of 30,000 or more students. A special 23 purpose license shall be valid for 30 days or for the duration of 24 the event for which it is issued, whichever is less. The fee for 25 a special purpose license shall be $50.00. A special purpose 26 license may be issued only to a corporation which is all of the 27 following: 07757'02 6 1 (a) Is a nonprofit corporation organized pursuant to the 2 nonprofit corporation act, 1982 PA 162, MCL 450.2101 to 3 450.3192. 4 (b) Has a board of directors constituted of members of whom 5 half are elected by the public university at which the event is 6 scheduled and half are elected by the local governmental unit. 7 (c) Has been in continuous existence for not less than 6 8 years. 9 (7) Notwithstanding the local legislative body approval pro- 10 vision of section 501(2) and notwithstanding the provisions of 11 section 519, the commission may issue, without regard to the 12 quota provisions of subsection (1) and with the approval of the 13 governing board of the university, either a tavern or class C 14 license which may be used only for regularly scheduled events at 15 a public university's established outdoor program or festival at 16 a facility on the campus of a public university having a head 17 count enrollment of 10,000 students or more. A license issued 18 under this subsection may only be issued to the governing board 19 of a public university, a person that is the lessee or conces- 20 sionaire of the governing board of the university, or both. A 21 license issued under this subsection is not transferable as to 22 ownership or location. A license issued under this subsection 23 may not be issued at an outdoor stadium customarily used for 24 intercollegiate athletic events. 25 (8) In issuing a resort or resort economic development 26 license under subsection (3), (4), or (5), the commission shall 27 consider economic development factors of the area in the issuance 07757'02 7 1 of licenses to establishments designed to stimulate and promote 2 the resort and tourist industry. The commission shall not trans- 3 fer a resort or resort economic development license issued under 4 subsection (3), (4), or (5) to another location. If the licensee 5 goes out of business the license shall be surrendered to the 6 commission. 7 (9) The limitations and quotas of this section are not 8 applicable to the issuance of a new license to a veteran of the 9 armed forces of the United States who was honorably discharged or 10 released under honorable conditions from the armed forces of the 11 United States and who had by forced sale disposed of a similar 12 license within 90 days before or after entering or while serving 13 in the armed forces of the United States, as a part of the 14 person's preparation for that service if the application for a 15 new license is made for the same governmental unit in which the 16 previous license was issued and within 60 days after the dis- 17 charge of the applicant from the armed forces of the United 18 States. 19 (10) The limitations and quotas of this section shall not be 20 applicable to the issuance of a new license or the renewal of an 21 existing license where the property or establishment to be 22 licensed is situated in or on land on which an airport owned by a 23 county or in which a county has an interest is situated. 24 (11) For purposes of implementing this section a special 25 state census of a local governmental unit may be taken at the 26 expense of the local governmental unit by the federal bureau of 27 census or the secretary of state under section 6 of the home rule 07757'02 8 1 city act, 1909 PA 279, MCL 117.6. The special census shall be 2 initiated by resolution of the governing body of the local gov- 3 ernmental unit involved. The secretary of state may promulgate 4 additional rules necessary for implementing this section pursuant 5 to the administrative procedures act of 1969, 1969 PA 306, 6 MCL 24.201 to 24.328. 7 (12) Before granting an approval as required in 8 section 501(2) for a license to be issued under subsection (2), 9 (3), or (4), a local legislative body shall disclose the avail- 10 ability of transferable licenses held in escrow for more than 1 11 licensing year within that respective local governmental unit. 12 Public notice of the meeting to consider the granting of the 13 license by the local governmental unit shall be made 2 weeks 14 before the meeting. 15 (13) The person signing the application for an on-premise 16 resort or resort economic development license shall state and 17 verify that he or she attempted to secure an on-premise escrowed 18 or quota license and that, to the best of his or her knowledge, 19 an on-premise escrowed or quota license is not readily available 20 within the local governmental unit in which the applicant for the 21 on-premise resort or resort economic development license proposes 22 to operate. 23 (14) The commission shall not issue an on-premise resort or 24 resort economic development license if the local governmental 25 unit within which the resort or resort economic development 26 license applicant proposes to operate has not issued all 27 on-premise licenses available under subsection (1) or if an 07757'02 9 1 on-premise escrowed license exists and is readily available 2 within the local governmental unit in which the applicant for the 3 on-premise resort or resort economic development license proposes 4 to operate. The commission may waive the provisions of this sub- 5 section upon a showing of good cause. 6 (15) The commission shall annually report to the legislature 7 the names of the businesses issued licenses under this section 8 and their locations. 9 (16) The commission shall not require a class A hotel or a 10 class B hotel licensed pursuant to subsection (2), (3), or (4) to 11 provide food service to registered guests or to the public. 12 (17) Subject to the limitation and quotas of subsection (1) 13 and to local legislative approval under section 501(2), the com- 14 mission may approve the transfer of ownership and location of an 15 on-premises escrowed license within the same county to a class 16 G-1 or class G-2 license or may approve the reclassification of 17 an existing on-premises license at the location to be licensed to 18 a class G-1 license or to a class G-2 license, subject to subsec- 19 tion (1). Resort or economic development on-premises licenses 20 created under subsection (3) or (4) may not be issued as, or 21 reclassified to, a class G-1 or class G-2 license. 22 (18) As used in this section: 23 (a) "Escrowed license" means a license in which the rights 24 of the licensee in the license or to the renewal of the license 25 are still in existence and are subject to renewal and activation 26 in the manner provided for in R 436.1107 of the Michigan 27 administrative code. 07757'02 10 1 (b) "Readily available" means available under a standard of 2 economic feasibility, as applied to the specific circumstances of 3 the applicant, that includes, but is not limited to, the 4 following: 5 (i) The fair market value of the license, if determinable. 6 (ii) The size and scope of the proposed operation. 7 (iii) The existence of mandatory contractual restrictions or 8 inclusions attached to the sale of the license. 07757'02 Final page. LBO