January 21, 2015, Introduced by Rep. Forlini 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 205 and 1027 (MCL 436.1205 and 436.2027),
section 205 as amended by 2010 PA 213 and section 1027 as amended
by 2011 PA 219.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 205. (1) The commission shall, as provided in section
203(1),
by order appoint authorized distribution agents to engage
in
the warehousing and delivery of warehouse
and deliver spirits in
this
state so as to ensure that all retail licensees continue to be
are properly serviced with spirits. An authorized distribution
agent is subject to uniform requirements, including business
operating procedures, that the commission may prescribe by rule,
subject to this section.
(2) A person is eligible for appointment by the commission as
an authorized distribution agent if all of the following
circumstances exist:
(a) The person satisfies all applicable commission rules
prescribing qualifications for licensure promulgated under section
215.
(b) The person has entered into a written agreement or
contract
with a supplier of spirits for the purposes of warehousing
and
delivering to warehouse and
deliver a brand or brands of
spirits of that supplier of spirits.
(c) The person has an adequate warehousing facility located in
this
state for the storing of to
store spirits from which all
delivery of spirits to retail licensees shall be made.
(3) An authorized distribution agent shall not have a direct
or indirect interest in a supplier of spirits or in a retailer. A
supplier of spirits or a retailer shall not have a direct or
indirect interest in an authorized distribution agent. An
authorized distribution agent shall not hold title to spirits.
(4) An authorized distribution agent shall deliver to each
retailer located in its assigned distribution area on at least a
weekly basis if the order meets the minimum requirements. Except
that in those weeks that accompany a state holiday, the commission
may order a modified delivery schedule provided that a retailer
waits not longer than 9 days between deliveries due to a modified
delivery schedule. The commission shall provide for an integrated
on-line ordering system for spirits and shall require the
continuance of any ordering system in existence on the activation
date of the system established under section 206. The minimum
requirements
shall be set by the commission and shall must be a
sufficient number of bottles to comprise not more than 2 cases. A
retailer may pick up the product at the authorized distribution
agent's warehouse. To avoid occasional emergency outages of
spirits, a retail licensee may make up to 12 special emergency
orders
to an authorized distribution agent per in each calendar
year. which
An authorized distribution
agent shall make a special
emergency
order shall be made available to
the retail licensee
within
18 hours of the placing of the order. A An authorized
distribution agent shall make a special emergency order placed on
Saturday
or Sunday shall be made available to the retail licensee
before noon on the following Monday. An authorized distribution
agent may impose a fee of up to $20.00 to deliver a special
emergency order to a retail licensee.
(5) In locations inaccessible to a motor vehicle as that term
is defined by the Michigan vehicle code, 1949 PA 300, MCL 257.1 to
257.923,
the an authorized distribution agent shall arrange that a
delivery of spirits to a retailer be in compliance with the
following procedures:
(a) After processing an order from a retailer, an authorized
distribution agent shall contact a retailer to confirm the quantity
of cases or bottles, or both, and the exact dollar total of the
order.
(b)
The authorized distribution agent shall have has the
responsibility to coordinate with the retailer the date and time a
driver is scheduled to deliver the order to a ferry transport dock,
shall arrange any ferry, drayage, or other appropriate service, and
shall pick up the retailer's payment at that time.
(c) The ferry transport company or company representing any
other form of conveyance shall take the retailer's payment to the
mainland dock and give that payment to the authorized distribution
agent's driver.
(d) The ferry transport company or company representing any
other form of conveyance shall transport the order to the drayage
or other appropriate company at the island dock for immediate
delivery to the retailer.
(e) The drayage or other appropriate company shall deliver the
order to the retailer.
(6)
The An authorized distribution agent is responsible for
the payment of all transportation and delivery charges imposed by
the ferry, drayage, or other conveyance company and is responsible
for all breakage and any shortages, whether attributable to the
ferry, drayage, or other conveyance company or any combination of
those companies, until the order is delivered to the retailer's
establishment.
This subsection does not in any way prevent the
authorized distribution agent from seeking reimbursement or damages
from any company conveying the authorized distribution agent's
product.
(7) Except as otherwise provided in subsection (4), an
authorized distribution agent shall not charge a delivery fee or a
split-case fee for delivery of spirits sold by the commission to a
retailer.
(8) An authorized distribution agent or prospective authorized
distribution agent shall maintain and make available to the
commission
or its representatives, upon on
notice, any contract or
written
agreement it may have has with a supplier of spirits or
other authorized distribution agent for the warehousing and
delivery
of delivering spirits in this state. An authorized
distribution agent shall maintain a daily record of spirits
received and delivered by the authorized distribution agent. No
later than the fifteenth day of the month following that for which
the report is rendered, an authorized distribution agent shall, in
a form as prescribed by the commission, submit a monthly report to
the commission that includes, at a minimum, all of the following
information for the immediately preceding month:
(a) The total amount of spirits being stored by the authorized
distribution agent on the first of the month.
(b) The total amount of spirits received from a supplier of
spirits, including the product name and quantity of each received.
(c) The total amount of spirits delivered to retail licensees,
including the product name and quantity of each delivered.
(d) The total amount of spirits delivered to an out-of-state
entity, including the product name and quantity of each delivered.
(e) The total amount of spirits lost and disposed of due to
spoilage or broken or damaged containers of spirits while in
storage or transit.
(f) The total amount of samples and any other bottle or
container of spirits provided to induce the sale of that product,
including the product name and quantity of each, and to whom those
samples and bottles were provided. As used in this subdivision,
"sample" means any container of spirits that bears the word
"sample" and that is not more than 1 liter or 33.82 United States
fluid ounces. If a product is not available in a container of 1
liter or less, then the next larger size may be substituted.
However, a container shall not be more than 3 liters.
(9) For any violation of this act, rules promulgated under
this act, or the terms of an order appointing an authorized
distribution
agent, an authorized distribution agent shall be is
subject to the suspension, revocation, forfeiture, and penalty
provisions of sections 903(1) and 907 in the same manner in which a
licensee would be subject to those provisions. An authorized
distribution agent aggrieved by a penalty imposed by the commission
may invoke the hearing and appeal procedures of section 903(2) and
rules promulgated under that section.
(10) A specially designated distributor may sell to an on-
premises licensee up to 9 liters of spirits during any 1-month
period and an on-premises licensee may purchase, collectively from
specially designated distributors, up to that amount during any 1-
month period. Notwithstanding any other provision of this act or
rule promulgated under this act, a specially designated distributor
is only liable for knowingly violating this section. Records
verifying these purchases shall be maintained by the on-premises
licensee and be available to the commission upon request.
(11)
An authorized distribution agent shall demonstrate that
it
has made a good faith effort to provide employment to those
former
state employees who were terminated due to the privatization
of
the liquor distribution system. A good faith effort is
demonstrated
by the authorized distribution agent performing at
least
the following actions:
(a)
Seeking from the commission a list of names and resumes of
all
such former state employees who have indicated a desire for
continued
employment in the distribution of liquor in Michigan.
(b)
Providing a list of employment opportunities created by
the
authorized distribution agent in the distribution of liquor in
Michigan
to each individual whose name and resume is transmitted
from
the commission.
(c)
Providing an opportunity for application and interview to
any
terminated state worker who indicates an interest in pursuing a
job
opportunity with the authorized distribution agent.
(d)
Providing a priority in hiring for those individuals who
apply
and interview under this process.
(12)
Any former state employees terminated due to
privatization
who have reason to believe that an authorized
distribution
agent has not made a good faith effort to provide him
or
her with employment opportunities as described in subsection
(11)
may file a complaint with the commission who shall hear the
complaint
and make a determination on its validity. If the
commission
determines that the complaint is valid, the violation
may
be treated as a violation of this act and the authorized
distribution
agent may be subject to the suspension, revocation,
forfeiture,
and penalty provisions of sections 903(1) and 907.
(11) (13)
In addition to paying a vendor of
spirits the
acquisition price for purchasing spirits, the commission may pay a
vendor of spirits an additional amount of not less than $4.50 and
not more than $7.50 for each case of spirits purchased as an offset
to the costs being incurred by that vendor of spirits in
contracting
with an authorized distribution agent for the
warehousing
and delivery of delivering
spirits to retailers. The
commission shall not include the payment described in this
subsection
shall not be included in the cost of purchasing spirits,
by
the commission and shall the payment is not be subject to the
commission's markup, special taxes, or state sales tax. The per-
case offset established by this subsection may be increased by the
state administrative board each January to reflect reasonable
increases in the authorized distribution agent's cost of
warehousing and delivery. As used in this subsection, "case" means
a container holding twelve 750 ml bottles of spirits or other
containers containing spirits which are standard to the industry.
Sec. 1027. (1) Unless otherwise provided by rule of the
commission, a person shall not conduct samplings or tastings of any
alcoholic liquor for a commercial purpose except at premises that
are licensed by the commission for the sale and consumption of
alcoholic liquor on the premises.
(2) Notwithstanding section 1025(1) or (2), a retailer
licensed by the commission for consumption on the premises may
allow customers to sample beer, wine, and spirits if the retailer
does not charge for the samples provided to customers. Sample
serving
sizes shall must not exceed 3 ounces for beer, 2 ounces for
wine, and 1/2 ounce for spirits. A customer shall not be provided
more than 2 samples within a 24-hour period per licensed premises.
(3) This section does not prohibit any of the following:
(a) A vendor of spirits, brewer, wine maker, mixed spirit
drink manufacturer, small wine maker, outstate seller of beer,
outstate seller of wine, or outstate seller of mixed spirit drink,
or a bona fide market research organization retained by 1 of the
persons named in this subsection, from conducting samplings or
tastings of an alcoholic liquor product before it is approved for
sale
in this state if the sampling or tasting is conducted pursuant
to
under prior written approval of the commission.
(b) An on-premises licensee from giving a sampling or tasting
of alcoholic liquor to an employee of the licensee during the legal
hours for consumption for the purpose of educating the employee
regarding 1 or more types of alcoholic liquor if the employee is at
least 21 years of age.
(c) A small distiller licensee from giving a sampling or
tasting of brands it manufactures on the licensed premises or an
off-site tasting facility operated by that small distiller.
(d) A micro brewer, brewpub, or on-premises licensee from
allowing the sampling and consumption on the licensed premises of
beer, wine, mead, honey-based beer, or cider produced by 1 or more
home brewers at a meeting of home brewers, or a club composed
primarily of home brewers, under the following circumstances:
(i) The sampling or consumption is for the purpose of
exhibitions or competitions involving home brewers.
(ii) The beer, honey-based beer, or cider is served in portions
that do not exceed 3 ounces. The wine or mead is served in portions
that do not exceed 2 ounces.
(iii) The beer, wine, mead, honey-based beer, or cider produced
by the home brewer is only consumed by the home brewer, the home
brewer's family, a club member, a judge, or a guest speaker and is
not sold to members of the general public.
(iv) The participants in the sampling or consumption otherwise
comply with applicable state and federal law and applicable
regulatory provisions of this act and rules adopted by the
commission under this act.
(v) The participants in the sampling or consumption are not
charged for the sampling or consumption of the beer, wine, mead,
honey-based beer, or cider.
(4) A vendor of spirits or a manufacturer may conduct a
consumer sampling event on the premises of a holder of a specially
designated distributor license upon submission of a completed
application to the commission.
(5) The holder of a consumer sampling event license shall
comply with the following:
(a) The commission must be notified in writing a minimum of 10
working days before the event with the date, time, and location of
the event.
(b) The consumer sampling event is limited to 3 events per
vendor of spirits or manufacturer per specially designated
distributor license per month.
(c) The vendor of spirits or manufacturer conducting the
consumer sampling event must have a licensed representative present
at the specially designated distributor's establishment.
(d) Licensed representatives or an authorized representative
may distribute merchandise, not to exceed $100.00 in value, to
consumers 21 years of age or older during the event.
(e) Participating specially designated distributor licensees
do not receive any fee or other valuable consideration for
participating in the event.
(f) Each consumer is limited to 3 samples, which total no more
than 1/3 ounce of spirits per serving.
(g) The consumer is not charged for and does not purchase any
sample.
(h) The alcoholic liquor used in the consumer sampling event
is provided by the vendor of spirits or manufacturer, and purchased
at the minimum retail selling price fixed by the commission from
the specially designated distributor on whose premises the event is
located. The vendor of spirits or manufacturer shall remove any
unfinished product from the premises at which the event is held
upon completion of the event.
(i) A consumer sampling event shall not be allowed if the sale
of alcoholic liquor is otherwise prohibited on the premises at
which the event is conducted.
(j) Samples are not to be offered to, or allowed to be
consumed by, any person under the legal age for consuming alcoholic
liquor.
(k) A consumer sampling event may be advertised in any type of
media and the advertisements may include the date, time, location,
and other information regarding the event.
(l) The participating vendor of spirits or manufacturer and
specially designated distributor licensees must comply with this
act and commission rules.
(m) The vendor of spirits or manufacturer must demonstrate
that the individual actually conducting the sampling has
successfully completed the server training program in the manner
provided for in section 906 and rules promulgated by the
commission.
(6) Violation of this section subjects the vendor of spirits
or manufacturer to the sanctions and penalties as provided for
under this act.
(7) The commission, by rule or issuance of an order, may
further define eligibility for licensure and processes for
conducting consumer sampling events.
(8) A sampling or tasting of any alcoholic liquor in a home or
domicile for other than a commercial purpose is not subject to this
section.
(9) Before a micro brewer, brewpub, or on-premises licensee
allows an event to be held under subsection (3)(d), the micro
brewer, brewpub, or on-premises licensee shall enter into a written
agreement with the home brewers or home brewers club stating all of
the following:
(a) The date and time the event will be held.
(b) The location of the event.
(c) Either of the following:
(i) A statement that the micro brewer, brewpub, or on-premises
licensee acknowledges that it is not in control of an unregulated
alcoholic beverage at its establishment and agrees to assume
liability under section 801(3) for the event.
(ii) Proof that the home brewers or home brewers club has
obtained a bond or liability insurance equal to that required under
section 803(1).
(10) A vendor representative or salesperson that provides a
retail licensee with a sample bottle of spirits or any other bottle
or container of spirits for the retail licensee's personal sampling
is responsible for the payment of the specific taxes levied and
imposed under chapter 12 and shall remit payment of the taxes at
the time he or she takes possession of any sample or other bottle
or container of spirits.
(11) (10)
As used in this section:
(a) "Broker" means a person, other than an individual, who is
licensed by the commission and who is employed or otherwise
retained by a manufacturer of spirits or a vendor of spirits to
sell, promote, or otherwise assist in the sale or promotion of
spirits.
(b)
(a) "Commercial purpose" means a purpose for
which
monetary gain or other remuneration could reasonably be expected.
(c) (b)
"Home brewer" means an
individual who manufactures
beer, wine, mead, honey-based beer, or cider at his or her
dwelling.
(d) "Salesperson" means a person who is employed by a vendor
of spirits or broker and who is licensed by the commission to sell,
deliver, or promote, or otherwise assist in the sale of, spirits in
this state.
(e) "Sample" means any container of spirits that bears the
word "sample" and that is not more than 1 liter or 33.82 United
States fluid ounces. If a product is not available in a container
of 1 liter or less, then the next larger size may be substituted.
However, a container shall not be more than 3 liters.
(f) "Vendor representative" means a person who is licensed by
the commission and who is authorized by a vendor of spirits to
represent the respective employer or principal in transactions with
the commission.