Liquor Licensing/Jan 13, 2014

Changes on Horizon for Michigan Liquor Control Code

If you believe Michigan’s liquor licensing laws could use some updating, apparently you are not alone. Both the Senate and the House recently passed several bills that will reform the Michigan Liquor Control Code (MLCC). The proposed changes will affect consumers, brewers, and liquor licensees alike, and will transform everything from increasing the number of barrels produced by micro brewers to allowing inter-county transfers of liquor licenses.  Many of the bills resulted from recommendations made by the Michigan Office of Regulatory Reinvention (ORR), a committee created by Gov. Rick Snyder in April 2011, with the purpose of streamlining Michigan’s regulations for better business growth and job creation.

Of the several bills passed by the House and Senate on November 14, 2013, the following bills are of particular interest to business owners and consumers:

HB 4257 allows the Liquor Control Commission (LCC) to issue public, on-premises liquor licenses within redevelopment project areas or development districts within any municipality, including all cities, townships, villages, and counties. Currently, these licenses are only offered within cities. These licenses would be in addition to those allowed by quota of one per 1,500 residents in a municipality. This bill was referred to the Committee on Regulatory Reform on December 3, 2013.

HB 4277 allows the LCC to issue a conditional liquor license to an applicant seeking to transfer ownership of or an interest in an existing license at the same location or an applicant seeking an initial license. For a new applicant, the conditional liquor license would apply only to a license to sell liquor for consumption on or off the premises, and would not apply to a specially designated distributor license (for the purpose of selling package liquor for off-premises consumption). The fee for a conditional license would be $300, and the license would expire upon the earliest of the LCC’s approval or denial of the underlying license, one year after its issue, or upon cancellation of the underlying application. This bill was signed into law and went into effect on December 31, 2013.

HB 5046 allows on-premises licensees (entities licensed to sell liquor at retail for consumption on the licensed premises) to allow consumers to bring in their own bottles of wine for consumption on the premises. Consumers would be charged at least a $25 fee per bottle and could not leave with a partially full bottle unless the licensee reinserts the cork to be level with the lip of the bottle. This bill was signed into law and went into effect on December 31, 2013.

HB 5140 allows holders of specially designated distributor (SDD) liquor licenses to transfer the SDD license anywhere within the county, or even outside the county if the local unit of government where the SDD license holder’s premises was located spans more than one county. Currently SDD license holders are restricted to transfers within the same local unit of government that issued the original license. All transfers would be subject to the approval of the LCC and the local unit of government. And such transfers will be capped for the first three years at 10 for the first year, 20 for the second year, and 30 for the third year. This bill was signed into law and went into effect on December 31, 2013.

Another proposed change, introduced by Senate Bill 216 in February 2013, seeks to amend Section 541 of the MLCC. This section, often referred to as the “Gas Pump Rule,” affects applicants or license holders who operate vehicle fuel pumps on or adjacent to the licensed premises. The proposal would eliminate the requirement that gas pumps must be at least 50 feet from the spot where alcohol is purchased. Additionally, the change would reduce the general inventory threshold from $250,000 to $50,000. The proposed change, which has already drawn the attention of those in opposition to the lower inventory requirements, would largely benefit smaller businesses that cannot meet the $250,000 inventory threshold required under the current law.

Use the following link to view the entire list of Liquor Control Commission recommendations made by the ORR:

http://www.michigan.gov/lara/0,4601,7-154-35738-271902–,00.html

For additional information about the ORR and its mission, visit the Michigan Department of Licensing and Regulatory Affairs website at:

https://www.michigan.gov/lara/0,4601,7-154-35738—,00.html

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