PER-CASE LIQUOR FEES H.B. 4581 (H-3):
SUMMARY OF BILL
REPORTED FROM COMMITTEE
House Bill 4581 (Substitute H-3 as reported without amendment)
Sponsor: Representative Kathy Crawford
House Committee: Regulatory Reform
Senate Committee: Regulatory Reform
CONTENT
The bill would amend the Michigan Liquor Control Code to increase from $7.50 to $8.25 the maximum allowed per-case offset fee that the Liquor Control Commission may pay when it purchases a case of spirits from a vendor of spirits.
The Code permits the Commission to pay a vendor of spirits a per-case offset fee in addition to the acquisition price for the purchase of spirits. The fee is used to offset the costs being incurred by a vendor of spirits in contracting with an authorized distribution agent for warehousing and delivering spirits to retailers. The fee may not be less than $4.50 or more than $7.50 per case. The bill would increase the maximum to $8.25.
(A vendor of spirits is a manufacturer registered with the Commission to sell its spirit products to the Commission. A manufacturer must contract with an authorized distribution agent (ADA) to warehouse and deliver spirits to retailers. An ADA is a person approved by the Commission to do one or more of the following: store spirits owned by a supplier of spirits or the Commission; deliver spirits sold by the Commission to retail licensees; and/or perform any function needed to store spirits owned by a supplier or by the Commission or to deliver spirits sold by the Commission to retail licensees.)
The bill would take effect 90 days after enactment.
MCL 436.1205 Legislative Analyst: Drew Krogulecki
FISCAL IMPACT
The bill could have a negative fiscal impact on the State General Fund, and no fiscal impact on either the Michigan Liquor Control Commission (MLCC) within the Department of Licensing and Regulatory Affairs or local units of government. Under the bill, the MLCC would be allowed to increase the statutory per-case payment to authorized distribution agents for the warehousing and delivery of spirits from $7.50 per case to $8.25 per case. These payments are made from the Liquor Purchase Revolving Fund (LPRF) which is the enterprise fund used by the MLCC for the purchase and sale of all spirits in Michigan. Each year the LPRF generates a profit that lapses to the State General Fund. In FY 2013-14, that lapse was about $176.5 million. An increase in what the MLCC pays to ADAs would reduce the amount of future LPRF lapses. In FY 2013-14, the MLCC paid a total of $57.8 million in these fees; if the fee had been $8.25 per case, that amount would have been $63.6 million, which would have reduced the lapse to the State General Fund by about $5.8 million.
Date Completed: 12-4-15 Fiscal Analyst: Josh Sefton
This analysis was prepared by nonpartisan Senate staff for use by the Senate in its deliberations and does not constitute an official statement of legislative intent.