HOUSE BILL No. 5133 October 2, 2001, Introduced by Reps. Hardman, Reeves, Garza, Murphy, Williams, Dennis, Jacobs, Daniels, Bovin, Bogardus, Hale and Lemmons 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 701 and 903 (MCL 436.1701 and 436.1903), section 903 as amended by 2000 PA 431. THE PEOPLE OF THE STATE OF MICHIGAN ENACT: 1 Sec. 701. (1) Alcoholic liquor shall not be sold or fur- 2 nished to a minor. Except as otherwise provided in 3 subsection (2) and subject to subsection (4), a person who know- 4 ingly sells or furnishes alcoholic liquor to a minor, or who 5 fails to make diligent inquiry as to whether the person is a 6 minor, is guilty of a misdemeanor. A retail licensee or a retail 7 licensee's clerk, agent, or employee who violates this subsection 8shall be punished in the manner provided for licensees in9section 909. Notwithstanding section 909 and exceptIS GUILTY 10 OF A MISDEMEANOR PUNISHABLE BY IMPRISONMENT FOR NOT MORE THAN 6 05074'01 LBO 2 1 MONTHS, A FINE OF NOT MORE THAN $500.00 ON A FIRST OFFENSE AND 2 NOT MORE THAN $5,000.00 ON A SECOND OR SUBSEQUENT OFFENSE, OR 3 BOTH IMPRISONMENT AND A FINE. EXCEPT as otherwise provided in 4 subsection (2), a person who is not a retail licensee or a retail 5 licensee's clerk, agent, or employee and who violates this sub- 6 sectionshall be finedIS GUILTY OF A MISDEMEANOR PUNISHABLE BY 7 A FINE OF $1,000.00 andmay be sentenced toimprisonment for 8up toNOT MORE THAN 60 days for a first offense,shall be9finedA FINE OF $2,500.00 andshall be sentenced toimprison- 10 ment forup toNOT MORE THAN 90 days for a second or subsequent 11 offense, and may be ordered to perform community service. A 12 suitable sign describing the content of this section and the pen- 13 alties for its violation shall be posted in a conspicuous place 14 in each room where alcoholic liquor is sold. The signs shall be 15 approved and furnished by the commission. 16 (2) A person who is not a retail licensee or the retail 17 licensee's clerk, agent, or employee and who violates 18 subsection (1) is guilty of a felony, punishable by imprisonment 19 for not more than 10 years, or a fine of not more than $5,000.00, 20 or both, if the subsequent consumption of the alcoholic liquor by 21 the minor is a direct and substantial cause of that person's 22 death or an accidental injury that causes that person's death. 23 (3) If a violation occurs in an establishment that is 24 licensed by the commission for consumption of alcoholic liquor on 25 the licensed premises, a person who is a licensee or the clerk, 26 agent, or employee of a licensee shall not be charged with a 27 violation of subsection (1) or section 801(2) unless the licensee 05074'01 3 1 or the clerk, agent, or employee of the licensee knew or should 2 have reasonably known with the exercise of due diligence that a 3 person less than 21 years of age possessed or consumed alcoholic 4 liquor on the licensed premises and the licensee or clerk, agent, 5 or employee of the licensee failed to take immediate corrective 6 action. 7 (4) If the enforcing agency involved in the violation is the 8 state police or a local police agency, a licensee shall not be 9 charged with a violation of subsection (1) or section 801(2) 10 unless enforcement action under section 703 is taken against the 11 minor who purchased or attempted to purchase, consumed or 12 attempted to consume, or possessed or attempted to possess alco- 13 holic liquor and, if applicable, enforcement action is taken 14 under this section against the person 21 years of age or older 15 who sold or furnished the alcoholic liquor to the minor. If the 16 enforcing agency is the commission, then the commission shall 17 recommend to a local law enforcement agency that enforcement 18 action be taken against a violator of this section or section 703 19 who is not a licensee. However, this subsection does not apply 20 under any of the following circumstances: 21 (a) The person against whom enforcement action is taken 22 under section 703 or the person 21 years of age or older who sold 23 or furnished alcoholic liquor to the minor is not alive or is not 24 present in this state at the time the licensee is charged. 25 (b) The violation of subsection (1) is the result of an 26 undercover operation in which the minor purchased or received 27 alcoholic liquor under the direction of the person's employer and 05074'01 4 1 with the prior approval of the local prosecutor's office as part 2 of an employer-sponsored internal enforcement action. 3 (c) The violation of subsection (1) is the result of an 4 undercover operation in which the minor purchased or received 5 alcoholic liquor under the direction of the state police, the 6 commission, or a local police agency as part of an enforcement 7 action. However, any initial or contemporaneous purchase or 8 receipt of alcoholic liquor by the minor shall have been under 9 the direction of the state police, the commission, or the local 10 police agency and shall have been part of the undercover 11 operation. 12 (5) If a minor participates in an undercover operation in 13 which the minor is to purchase or receive alcoholic liquor under 14 the supervision of a law enforcement agency, his or her parents 15 or legal guardian shall consent to the participation if that 16 person is less than 18 years of age. 17 (6) In an action for the violation of this section, proof 18 that the defendant or the defendant's agent or employee demanded 19 and was shown, before furnishing alcoholic liquor to a minor, a 20 motor vehicle operator's or chauffeur's license or a registration 21 certificate issued by the federal selective service, or other 22 bona fide documentary evidence of the age and identity of that 23 person, shall be a defense to an action brought under this 24 section. 25 (7) The commission shall provide, on an annual basis, a 26 written report to the department of state police as to the number 27 of actions heard by the commission involving violations of this 05074'01 5 1 section and section 801(2). The report shall include the 2 disposition of each action and contain figures representing the 3 following categories: 4 (a) Decoy operations. 5 (b) Off-premises violations. 6 (c) On-premises violations. 7 (d) Repeat offenses within the 3 years preceding the date of 8 that report. 9 (8) As used in this section: 10 (a) "Corrective action" means action taken by a licensee or 11 a clerk, agent, or employee of a licensee designed to prevent a 12 minor from further possessing or consuming alcoholic liquor on 13 the licensed premises. Corrective action includes, but is not 14 limited to, contacting a law enforcement agency and ejecting the 15 minor and any other person suspected of aiding and abetting the 16 minor. 17 (b) "Diligent inquiry" means a diligent good faith effort to 18 determine the age of a person, which includes at least an exami- 19 nation of an official Michigan operator's or chauffeur's license, 20 an official Michigan personal identification card, or any other 21 bona fide picture identification which establishes the identity 22 and age of the person. 23 Sec. 903. (1) The commission or any commissioner or duly 24 authorized agent of the commission designated by the chairperson 25 of the commission, upon due notice and proper hearing, may sus- 26 pend or revoke any license upon a violation of this act or any of 27 the rules promulgated by the commission under this act. The 05074'01 6 1 commission or any commissioner or duly authorized agent of the 2 commission designated by the chairperson of the commission, may 3 assess a penalty of not more than $300.00 for each violation of 4 this act or rules promulgated under this act, or not more than 5 $1,000.00 for each violation of section 801(2), in addition to or 6 in lieu of revocation or suspension of the license, which penalty 7 shall be paid to the commission and deposited with the state 8 treasurer and shall be credited to the general fund of the 9 state. The commission shall hold a hearing and order the suspen- 10 sion or revocation of a license if the licensee has been found 11 liable for32 or more separate violations of section 801(2) 12 which violations occurred on different occasions within a 13 24-month period unless such violations for the sale, furnishing, 14 or giving alcoholic liquor to a minor were discovered by the 15 licensee and disclosed to an appropriate law enforcement agency 16 immediately upon discovery. 17 (2) The commission shall provide a procedure by which a 18 licensee who is aggrieved by any penalty imposed under subsection 19 (1) and any suspension or revocation of a license ordered by the 20 commission, a commissioner, or a duly authorized agent of the 21 commission may request a hearing for the purpose of presenting 22 any facts or reasons to the commission as to why the penalty, 23 suspension, or revocation should be modified or rescinded. Any 24 such request shall be in writing and accompanied by a fee of 25 $25.00. The commission, after reviewing the record made before a 26 commissioner or a duly authorized agent of the commission, may 27 allow or refuse to allow the hearing in accordance with the 05074'01 7 1 commission's rules. The right to a hearing provided in this 2 subsection, however, shall not be interpreted by any court as 3 curtailing, removing, or annulling the right of the commission to 4 suspend or revoke licenses as provided for in this act. A 5 licensee does not have a right of appeal from the final determi- 6 nation of the commission, except by leave of the circuit court. 7 Notice of the order of suspension or revocation of a license or 8 of the assessment of a penalty, or both, shall be given in the 9 manner prescribed by the commission. The suspension or revoca- 10 tion of a license or the assessment of a penalty, or both, by the 11 commission or a duly authorized agent of the commission does not 12 prohibit the institution of a criminal prosecution for a viola- 13 tion of this act. The institution of a criminal prosecution for 14 a violation of this act or the acquittal or conviction of a 15 person for a violation of this act does not prevent the suspen- 16 sion or revocation of a license or the assessment of a penalty, 17 or both, by the commission. In a hearing for the suspension or 18 revocation of a license issued under this act, proof that the 19 defendant licensee or an agent or employee of the licensee 20 demanded and was shown, before furnishing any alcoholic liquor to 21 a minor, a motor vehicle operator or chauffeur license or a reg- 22 istration certificate issued by the federal selective service, or 23 other bona fide documentary evidence of majority and identity of 24 the person, may be offered as evidence in a defense to a proceed- 25 ing for the suspension or revocation of a license issued under 26 this act. A licensee who has reason to believe that a minor has 27 used fraudulent identification to purchase alcoholic liquor in 05074'01 8 1 violation of section 703 shall file a police report concerning 2 the violation with a local law enforcement agency and shall also 3 present the alleged fraudulent identification to the local law 4 enforcement agency at the time of filing the report if the iden- 5 tification is in the possession of the licensee. The commission 6 may promulgate rules pursuant to the administrative procedures 7 act of 1969, 1969 PA 306, MCL 24.201 to 24.328, regarding the 8 utilization by licensees of equipment designed to detect altered 9 or forged driver licenses, state identification cards, and other 10 forms of identification. 11 (3) In addition to the hearing commissioners provided for in 12 section 209, the chairperson of the commission may designate not 13 more than 2 duly authorized agents to hear violation cases. A 14 person appointed under this subsection shall be a member in good 15 standing of the state bar of Michigan. 16 (4) A duly authorized agent who has been designated by the 17 chairperson pursuant to subsection (3) shall have, in the hearing 18 of violation cases, the same authority and responsibility as does 19 a hearing commissioner under this act and the rules promulgated 20 under this act. 21 (5) A duly authorized agent who has been designated by the 22 chairperson pursuant to subsection (3) shall be ineligible for 23 appointment to the commission for a period of 1 year after the 24 person ceases to serve as a duly authorized agent. 05074'01 Final page. LBO