Substitute For
HOUSE BILL NO. 5342
A bill to amend 1998 PA 58, entitled
"Michigan liquor control code of 1998,"
by amending section 203 (MCL 436.1203), as amended by 2016 PA 520.
the people of the state of michigan enact:
Sec. 203. (1) Except as provided in this section and
section 301, a person shall not sell, deliver, or import alcoholic liquor,
including alcoholic liquor for personal use, in this state unless the sale,
delivery, or importation is made by the commission, the commission's authorized
agent or distributor, an authorized distribution agent approved by order of the
commission, a person licensed by the commission, or by prior written order of
the commission.
(2) Notwithstanding R
436.1011(7)(b) and R 436.1527 of the Michigan Administrative Code and except as
provided in subsections (3), (12), (13), (14), (15), and (16), a retailer shall
not deliver alcoholic liquor to a consumer in this state at the home or
business of the consumer or at any location away from the licensed premises of
the retailer. The purpose of this subsection is to exercise this state's
authority under section 2 of amendment XXI of the constitution of the United
States, to maintain the inherent police powers to regulate the transportation
and delivery of alcoholic liquor, and to promote a transparent system for the
transportation and delivery of alcoholic liquor. The regulation described in
this subsection is considered necessary for both of the following reasons:
(a) To promote the public
health, safety, and welfare.
(b) To maintain strong,
stable, and effective regulation by having beer and wine sold by retailers to
consumers in this state by passing through the 3-tier distribution system
established under this act.
(3) For purposes of
subsection (1), a retailer that holds a specially designated merchant license
located in this state may use a common carrier to deliver wine to a consumer in
this state. A retailer that uses a common carrier to deliver wine to a consumer
under this subsection shall comply with all of the following:
(a) Pay any applicable
taxes to the commission and pay any applicable taxes to the department of
treasury as directed by the department of treasury. On the request of the
department of treasury, a retailer shall furnish an affidavit to verify
payment.
(b) Comply with all laws
of this state, including, but not limited to, the prohibition on sales to
minors.
(c) Verify the age of the
individual placing the order by obtaining from him or her a copy of a photo
identification issued by this state, another state, or the federal government
or by using an identification verification service. The person receiving and
accepting the order on behalf of the retailer shall record the name, address,
date of birth, and telephone number of the individual placing the order on the
order form or other verifiable record of a type and generated in a manner
approved by the commission and provide a duplicate to the commission.
(d) On request of the
commission, make available to the commission any document used to verify the
age of the individual ordering or receiving the wine from the retailer.
(e) Stamp, print, or
label on the outside of the shipping container that the package "Contains
Alcohol. Must be delivered to a person 21 years of age or older". The
recipient at the time of the delivery shall provide identification verifying
his or her age and sign for the delivery.
(f) Place a label on the
top panel of the shipping container containing the name and address of the
individual placing the order and the name of the designated recipient if
different from the name of the individual placing the order.
(4) For purposes of
subsection (1), a direct shipper may sell, deliver, or import wine to consumers
in this state by means of any mail order, internet, telephone, computer,
device, or other electronic means, or sell directly to a consumer on the winery
premises. A direct shipper that sells, delivers, or imports wine to a consumer
under this subsection shall comply with all of the following:
(a) Hold a direct shipper
license.
(b) Pay any applicable
taxes to the commission and pay any applicable taxes to the department of
treasury as directed by the department of treasury. On the request of the
department of treasury, a direct shipper shall furnish an affidavit to verify
payment.
(c) Comply with all laws
of this state, including, but not limited to, the prohibition on sales to
minors.
(d) Verify the age of the
individual placing the order by obtaining from him or her a copy of a photo
identification issued by this state, another state, or the federal government
or by using an identification verification service. The person receiving and
accepting the order on behalf of the direct shipper shall record the name, address,
date of birth, and telephone number of the individual placing the order on the
order form or other verifiable record of a type and generated in a manner
approved by the commission and provide a duplicate to the commission.
(e) On request of the
commission, make available to the commission any document used to verify the
age of the individual ordering or receiving the wine from the direct shipper.
(f) Stamp, print, or
label on the outside of the shipping container that the package "Contains
Alcohol. Must be delivered to a person 21 years of age or older." The
recipient at the time of the delivery shall provide photo identification
verifying his or her age and sign for the delivery.
(g) Place a label on the
top panel of the shipping container containing the name and address of the
individual placing the order and the name of the designated recipient if
different from the name of the individual placing the order. The direct shipper
must have received a registration number of approval from the commission for
any wine imported into this state. However, the registration number of approval
from the commission is not required to be on the invoice or on the label of the
wine that the direct shipper sells, delivers, or imports to a consumer in this
state.
(h) Direct ship not more
than 1,500 9-liter cases, or 13,500 liters in total, of wine in a calendar year
to consumers in this state. If a direct shipper, whether located in this state
or outside this state, owns, in whole or in part, or commonly manages 1 or more
direct shippers, it shall not in combination ship to consumers in this state
more than 13,500 liters of wine in the aggregate.
(i) Pay wine taxes
quarterly and report to the commission quarterly the total amount of wine, by
type, brand, and price, shipped to consumers in this state during the preceding
calendar quarter, and the order numbers.
(j) Authorize and allow
the commission and the department of treasury to conduct an audit of the direct
shipper's records.
(k) Consent and submit to
the jurisdiction of the commission, the department of treasury, and the courts
of this state concerning enforcement of this section and any related laws,
rules, and regulations.
(5) For a delivery of
wine through the use of a common carrier under subsection (3), a person taking
the order on behalf of the retailer shall comply with subsection (3)(b) to (f).
For a sale, delivery, or importation of wine occurring by any means described
in subsection (4), a person taking the order on behalf of the direct shipper
shall comply with subsection (4)(c) to (g).
(6) A person that
delivers the wine for a direct shipper under this section shall verify that the
individual accepting delivery is 21 years of age or older and is the individual
who placed the order or the designated recipient, is an individual 21 years of
age or older currently occupying or present at the address, or is an individual
otherwise authorized through a rule promulgated under this act by the
commission to receive alcoholic liquor under this section. If the delivery person,
after a diligent inquiry, determines that the purchaser or designated recipient
is not 21 years of age or older, the delivery person shall return the wine to
the direct shipper. A delivery person who returns wine to the direct shipper
because the purchaser or designated recipient is not 21 years of age or older
is not liable for any damages suffered by the purchaser or direct shipper.
(7) All spirits for sale,
use, storage, or distribution in this state shall originally be purchased by
and imported into the state by the commission, or by prior written authority of
the commission.
(8) This section does not
apply to alcoholic liquor brought into this state for personal or household use
in an amount permitted by federal law by an individual 21 years of age or older
at the time of reentry into this state from without outside the territorial limits of the United States
if the individual has been outside the territorial limits of the United States
for more than 48 hours and has not brought alcoholic liquor into the United
States during the preceding 30 days.
(9) An individual 21
years of age or older may do either of the following in relation to alcoholic
liquor that contains less than 21% alcohol by volume:
(a) Personally transport
from another state, once in a 24-hour period, not more than 312 ounces of
alcoholic liquor for that individual's personal use, notwithstanding subsection
(1).
(b) Ship or import from
another state alcoholic liquor for that individual's personal use if that
personal importation is done in compliance with subsection (1).
(10) A direct shipper
shall not sell, deliver, or import wine to a consumer unless it applies for and
is granted a direct shipper license from the commission. This subsection does
not prohibit wine tasting or the selling at retail by a wine maker of wines he
or she produced and bottled or wine manufactured for that wine maker by another
wine maker, if done in compliance with this act. Only the following persons
qualify for the issuance of a direct shipper license:
(a) A wine maker.
(b) A wine producer and
bottler located inside this country but outside of this state holding both a
federal basic permit issued by the Alcohol and Tobacco Tax and Trade Bureau of
the United States Department of Treasury and a license to manufacture wine in
its state of domicile.
(11) An applicant for a
direct shipper license shall submit an application to the commission in a
written or electronic format provided by the commission and accompanied by an
application and initial license fee of $100.00. The application must be
accompanied by a copy or other evidence of the existing federal basic permit or
license, or both, held by the applicant. The direct shipper may renew its
license annually by submission of a license renewal fee of $100.00 and a
completed renewal application. The commission shall use the fees collected
under this section to conduct investigations and audits of direct shippers. The
failure to renew, or the revocation or suspension of, the applicant's existing
Michigan license, federal basic permit, or license to manufacture wine in its
state of domicile is grounds for revocation or denial of the direct shipper
license. If a direct shipper is found guilty of violating this act or a rule
promulgated by the commission, the commission shall notify both the alcoholic
liquor control agency in the direct shipper's state of domicile and the Alcohol
and Tobacco Tax and Trade Bureau of the United States Department of Treasury of
the violation.
(12) A retailer that
holds a specially designated merchant license, a brewpub, a micro brewer, or an
out-of-state entity that is the substantial equivalent of a brewpub or micro
brewer may deliver beer and wine to the home or other designated location of a
consumer in this state if all of the following conditions are met:
(a) The beer or wine, or
both, is delivered by the retailer's, brewpub's, or micro brewer's employee.
(b) The retailer,
brewpub, or micro brewer or its employee who delivers the beer or wine, or
both, verifies that the individual accepting delivery is at least 21 years of
age.
(c) If the retailer,
brewpub, or micro brewer or its employee intends to provide service to
consumers, the retailer, brewpub, or micro brewer or its employee providing the
service has received alcohol server training through a server training program
approved by the commission.
(13) A retailer that
holds a specially designated merchant license may use a third party that
provides delivery service to municipalities in this state that are surrounded
by water and inaccessible by motor vehicle to deliver beer and wine to the home
or other designated location of that consumer if the delivery service is
approved by the commission and agrees to verify that the individual accepting
delivery of the beer and wine is at least 21 years of age.
(14) A retailer that
holds a specially designated distributor license may deliver spirits to the
home or other designated location of a consumer in this state if all of the
following conditions are met:
(a) The spirits are
delivered by the retailer's employee.
(b) The retailer or its
employee who delivers the spirits verifies that the individual accepting
delivery is at least 21 years of age.
(c) If the retailer or
its employee intends to provide service to consumers, the retailer or its
employee providing the service has received alcohol server training through a
server training program approved by the commission.
(15) A retailer that
holds a specially designated merchant license located in this state may use a
third party facilitator service by means of the internet or mobile application
to facilitate the sale of beer or wine to be delivered to the home or
designated location of a consumer as provided in subsection (12), or this subsection, or, for wine only, subsection (3), and a third party
facilitator service may deliver beer or wine to a consumer on behalf of a
retailer that holds a specially designated merchant license located in this
state, if all of the following conditions are met:
(a) If the third party
facilitator service delivers beer or wine under this subsection, the third
party facilitator service verifies that the individual accepting the delivery
of the beer or wine is at least 21 years of age.
(b) A manufacturer,
warehouser, wholesaler, outstate seller of beer, outstate seller of wine,
supplier of spirits, or outstate seller of mixed spirit drinks drink does not have a direct or indirect
interest in the third party facilitator service.
(c) A manufacturer,
warehouser, wholesaler, outstate seller of beer, outstate seller of wine,
supplier of spirits, or outstate seller of mixed spirit drinks drink does not aid or assist a third
party facilitator service by gift, loan of money or property of any
description, or other valuable thing as defined in section 609, and a third
party facilitator service does not accept the same.
(d) The retailer or
consumer pays the fees associated with deliveries provided for under this
subsection.
(e) The third party
facilitator service offers services for all brands available at the retail
location.
(16) A retailer that
holds a specially designated distributor license located in this state may use
a third party facilitator service by means of the internet or mobile
application to facilitate the sale of spirits to be delivered to the home or
designated location of a consumer as provided in subsection (14) or this
subsection, and a third party facilitator service may deliver spirits to a
consumer on behalf of a retailer that holds a specially designated distributor
license located in this state, if all of the following conditions are met:
(a) If the third party
facilitator service delivers spirits under this subsection, the third party
facilitator service verifies that the individual accepting the delivery of the
spirits is at least 21 years of age.
(b) A manufacturer,
warehouser, wholesaler, outstate seller of beer, outstate seller of wine,
supplier of spirits, or outstate seller of mixed spirit drinks does not have a
direct or indirect interest in the third party facilitator service.
(c) A manufacturer,
warehouser, wholesaler, outstate seller of beer, outstate seller of wine,
supplier of spirits, or outstate seller of mixed spirit drinks does not aid or
assist a third party facilitator service by gift, loan of money or property of
any description, or other valuable thing as defined in section 609, and a third
party facilitator service does not accept the same.
(d) The retailer or
consumer pays the fees associated with deliveries provided for under this
subsection.
(e) The third party
facilitator service offers services for all brands available at the retail
location.
(17) A third party
facilitator service shall not deliver beer, wine, or spirits to a consumer
under subsection (15) or (16), as applicable, and shall not facilitate the sale
of beer, wine, or spirits under subsection (15) or (16), as applicable, unless
it applies for and is granted a third party facilitator service license by the
commission. The commission may charge a reasonable application fee, initial
license fee, and annual license renewal fee. The commission shall establish a
fee under this subsection by written order.
(18) If a third party
facilitator service used by a retailer that holds a specially designated
merchant or specially designated distributor license under subsection (15) or (16),
as applicable, violates this section, the commission shall not treat the third
party facilitator service's violation as a violation by the retailer.
(19)
For purposes of subsection (1), a qualified micro brewer or an out-of-state
entity that is the substantial equivalent of a qualified micro brewer may sell
and deliver beer to a retailer in this state if all of the following conditions
are met:
(a)
The retailer is not located in a sales territory for which the qualified micro
brewer has granted exclusive sales rights to a wholesaler under sections 401
and 403 for the sale of any brand or brands of beer produced by that micro
brewer.
(b)
The beer is sold and delivered by an employee of the qualified micro brewer,
not an agent, and is transported and delivered using a vehicle owned by the
qualified micro brewer.
(c)
The qualified micro brewer is in compliance with applicable state and federal
law and applicable regulatory provisions of this act and rules adopted by the
commission under this act including, but not limited to, those requirements
related to each of the following:
(i) Employees that
sell and deliver beer to retailers.
(ii) Vehicles used to deliver beer to
retailers.
(iii) Price schedules and temporary price
reductions.
(19) (20) A common carrier that carries or transports
alcoholic liquor into this state to a person in this state shall submit
quarterly reports to the commission. A report required under this subsection
must include all of the following about each delivery to a consumer in this state
during the preceding calendar quarter:
(a) The name and business address of the person that ships
alcoholic liquor.
(b) The name and address of the recipient of alcoholic
liquor.
(c) The weight of alcoholic liquor delivered to a consignee.
(d) The date of the delivery.
(20) (21) A common carrier described in subsection (20) (19) shall maintain the
books, records, and documents supporting a report submitted under subsection (20) (19) for 3 years unless
the commission notifies the common carrier in writing that the books, records,
and supporting documents may be destroyed. Within 30 days after the
commission's request, the common carrier shall make the books, records, and
documents available for inspection during normal business hours. Within 30 days
after a local law enforcement agency's or local governmental unit's request,
the common carrier shall also make the books, records, and documents available
for inspection to a local law enforcement agency or local governmental unit
where the carrier resides or does business.
(21) (22) A third party facilitator service that delivers
beer, wine, or spirits to a consumer under subsection (15) or (16), as
applicable, shall submit quarterly reports to the commission. A report required
under this subsection must include all of the following about each delivery to
a consumer in this state during the preceding calendar quarter:
(a) The name and business address of the person that ships
beer, wine, or spirits.
(b) The name and address of the recipient of beer, wine, or
spirits.
(c) The weight of beer, wine, or spirits delivered to a
consignee.
(d) The date of the delivery.
(22) (23) A third party facilitator service shall
maintain the books, records, and documents supporting a report submitted under
subsection (22) (21) for 3 years unless
the commission notifies the third party facilitator service in writing that the
books, records, and supporting documents may be destroyed. Within 30 days after
the commission's request, the third party facilitator service shall make the books,
records, and documents available for inspection during normal business hours.
Within 30 days after a local law enforcement agency's or local governmental
unit's request, the third party facilitator service shall also make the books,
records, and documents available for inspection to a local law enforcement
agency or local governmental unit where the third party facilitator service
resides or does business.
(23) (24) A report submitted under subsection (20) (19) or (22) (21) is subject to
disclosure under the freedom of information act, 1976 PA 442, MCL 15.231 to
15.246.
(24) (25) As used in this section:
(a) "Common carrier" means a company that
transports goods, on reasonable request, on regular routes and at set rates.
(b) "Computer" means any connected, directly
interoperable or interactive device, equipment, or facility that uses a
computer program or other instructions to perform specific operations including
logical, arithmetic, or memory functions with or on computer data or a computer
program and that can store, retrieve, alter, or communicate the results of the
operations to a person, computer program, computer, computer system, or
computer network.
(c) "Computer network" means the interconnection of
hardwire or wireless communication lines with a computer through remote
terminals, or a complex consisting of 2 or more interconnected computers.
(d) "Computer program" means a series of internal
or external instructions communicated in a form acceptable to a computer that
directs the functioning of a computer, computer system, or computer network in
a manner designed to provide or produce products or results from the computer,
computer system, or computer network.
(e) "Computer system" means a set of related,
connected or unconnected, computer equipment, devices, software, or hardware.
(f) "Consumer" means an individual who purchases
beer, wine, or spirits for personal consumption and not for resale.
(g) "Device" includes, but is not limited to, an
electronic, magnetic, electrochemical, biochemical, hydraulic, optical, or
organic object that performs input, output, or storage functions by the
manipulation of electronic, magnetic, or other impulses.
(h) "Diligent inquiry" means a diligent good faith
effort to determine the age of an individual, that includes at least an
examination of an official Michigan operator's or chauffeur's license, an
official Michigan personal identification card, or any other bona fide picture
identification that establishes the identity and age of the individual.
(i) "Direct shipper" means a person who sells,
delivers, or imports wine, to consumers in this state, that he or she produces
and bottles or wine that is manufactured by a wine maker for another wine maker
and that is transacted or caused to be transacted through the use of any mail
order, internet, telephone, computer, device, or other electronic means, or
sells directly to consumers on the winery premises.
(j) "Facilitate" means, subject to subdivision (k),
advertising on behalf of a retailer, by means of the internet or mobile
application, and pursuant to a written or oral agreement, the brands and prices
of beer, wine, or spirits products sold by a retailer and 1 or more of the
following:
(i) Assisting the retailer, in any manner,
in the arrangement of delivery as allowed in this section.
(ii) Assisting the retailer, in any manner,
in the processing of payment by the consumer for the beer, wine, or spirits.
(iii) Transmitting customer information to the
retailer.
(iv) Assisting the retailer by providing
customer service.
(v) If the retailer maintains supervision
and control over the day-to-day operation of its business, providing other
normal and customary operational services.
(k) "Facilitate" does not include web designing,
operating an internet search engine, or publishing an internet version of a
newspaper.
(l) (j) "Identification verification service"
means an internet-based service approved by the commission specializing in age
and identity verification.
(m) (k) "Mobile application" means a
specialized software program downloaded onto a wireless communication device.
(l) "Qualified micro brewer" means
a micro brewer that produces in total less than 1,000 barrels of beer per year.
In determining the 1,000-barrel threshold, all brands and labels of a micro
brewer, whether brewed in this state or outside this state, must be combined.
(n) (m) "Third party facilitator service"
means a person licensed by the commission to do any of the following:
(i) Facilitate the
sale of beer or wine to a consumer as provided in subsection (15) on behalf of
a retailer that holds a specially designated merchant license located in this
state.
(ii) Facilitate the
sale of spirits to a consumer as provided in subsection (16) on behalf of a
retailer that holds a specially designated distributor license located in this
state.
(iii) Deliver beer or
wine to a consumer as provided in subsection (15) on behalf of a retailer that
holds a specially designated merchant license located in this state.
(iv) Deliver spirits
to a consumer as provided in subsection (16) on behalf of a retailer that holds
a specially designated distributor license located in this state.
Enacting section 1. This amendatory act does not take effect unless all of the following bills of the of the 100th Legislature are enacted into law:
(a) House Bill No. 5341.
(b) House Bill No. 5343.
(c) House Bill No. 5344.
(d) House Bill No. 5345.
(e) House Bill No. 5346.
(f) House Bill No. 5347.
(g) House Bill No. 5348.
(h) House Bill No. 5349.
(i) House Bill No. 5350.
(j) House Bill No. 5351.
(k) House Bill No. 5352.
(l) House Bill No. 5353.
(m) House Bill No. 5354.
(n) House Bill No. 5355.
(o) House Bill No. 5400.