8 PROPOSED ADMINISTRATIVE RULES

 

 

ORR # 2002-033

 

DEPARTMENT OF CONSUMER AND INDUSTRY SERVICES LIQUOR CONTROL COMMISSION

GENERAL RULES

 

Filed with the Secretary of State on

These rules take effect 7 days after filing with the Secretary of State

 

(By  authority  conferred  on  the  liquor  control  commission  by  section  215(1)  of  1998  PA  58,  MCL 436.1215(1))

 

R 436.1001, R 436.1011, R 436.1041, R 436.1049, and R 436.1051 of the Michigan Administrative Code are amended, R 436.1060 is added, and R 436.1037 and R 436.1057 are rescinded, as follows:

 

R 436.1001 Definitions.

Rule 1. (1) As used in these rules:

(a)       “Act” means Act No. 58 of the Public Acts of 1998, as amended, being §436.1101 et seq. of the Michigan Compiled Laws 1998 P.A. 58, MCL 436.1101 et seq.

(b)       “Broker” means a person, other than an individual, who is licensed by the commission and who is employed or otherwise retained by any of the following entities to sell, promote, or otherwise assist in the sale or promotion of alcoholic liquor:

(i)  A manufacturer.

(ii) A vendor of spirits.

(iii) An outstate seller of beer.

(iv) An outstate seller of wine.

(v) An outstate seller of mixed spirit drink.

(vi)  A manufacturer of mixed spirit drink.

(vii) A wholesaler.

(c)         “Co-licensee” means 1 of 2 or more persons whose names appear on any single license issued by the commission, except for a person whose name appears on the license in a fiduciary capacity. All co-licensees on a single license are considered a partnership for purposes of the act and these rules.

(d)      “Cooperative advertising” means a joint effort between licensees or vendors of spirits to advertise alcoholic liquor.

(e)      “Department store” means a retail store that has all of the following:

(i)  More than 15,000 square feet.

(ii)   A minimum of 4 separate and distinct major departments that include at least 1 of the stores listed in R 436.1129(1)(a) to (g).

(iii) A minimum inventory of $250,000.00, at cost.

 

 

(f)        “Drive-in” or “drive-through” means an establishment that allows the sale of alcoholic liquor to a retail customer through a service window or similar aperture without requiring the retail customer to exit his or her vehicle to make the purchase and includes an establishment that allows the retail customer to drive in or through any enclosed building or structure and make a purchase of alcoholic liquor without requiring the retail customer to exit his or her vehicle.

(G)   “DRIVE-UP OR WALK-UP WINDOW” MEANS A SERVICE WINDOW, DOOR, OR OTHER APERTURE THROUGH WHICH A CUSTOMER MAY PURCHASE MERCHANDISE WITHOUT THAT CUSTOMER ENTERING THE LICENSED PREMISES.

(g)(H) “Driver helper” means a person who is not less than 18 years of age and who accompanies and assists, and who may only accompany and assist, a licensed salesperson in delivering alcoholic liquor to a retail licensee. (h)(I) “Licensed premises” means any portion of a building, structure, room, or enclosure on real estate that is owned, leased, used, controlled, or operated by a licensee in the conduct of the business at the location for which the licensee is licensed by the commission, except when otherwise specified by commission rule or written commission order.

(i)(J) “Licensee” means the person to whom a license is issued by the commission to manufacture, sell, import, warehouse, deliver, or promote, or otherwise assist in the sale of, alcoholic liquor.

(j)(K) “Major thoroughfare” means a street or highway which is primarily for through traffic and which has not less than 4 lanes of traffic, excluding any lanes that are used primarily for turning purposes and any lanes in which parking is allowed at any time.

(k)(L)  “Neighborhood  shopping  center”  means  1  commercial  establishment,  or  a  group  of  commercial establishments organized or operated as a unit, which is related in location, size, and type of shop to the trade area that the unit serves, which provides not less than 50,000 square feet of gross leasable retail space, and which provides 5 private off-street parking spaces for each 1,000 square feet of gross leasable retail space. (l)(M) “Off-premises licensee” means a person who is licensed by the commission to sell alcoholic liquor at retail for consumption off the licensed premises.

(m)(N) “On-premises licensee” means a person who is licensed by the commission to sell alcoholic liquor at retail for consumption on the licensed premises.

(n)(O) “Permit” means a contract between the commission and a licensee granting authority to the licensee to perform the functions defined in the act or

commission rules for a specific permit.

(o)(P) “Privately held corporation” means a corporation that does not trade its stock on a stock exchange or in over-the-counter transactions. A subsidiary of a corporation that trades its stock on a stock exchange or in over-the-counter transactions is not a privately held corporation.

(p)(Q) “Public room” means a room that is open for use by the general public for eating, drinking, or amusement. “Public room” does not mean any of the following:

(i)  A restroom.

(ii) A kitchen.

(iii) A storage room.

(iv) An office.

(v)  A boiler room.

(vi) A hallway.

(vii) A landing.

(viii)A stairway.

(ix) An elevator.

(x)  A dance floor.

 

 

(xi) A stage.

(xii)  An area similar to the areas specified in this subdivision.

(q)(R) “Release” means a document in which written permission is granted by the commission to ship alcoholic liquor into this state.

(r)(S) “Salesperson” means a person who is employed by any of the following entities and who is licensed by the commission to sell, deliver, or promote, or otherwise assist in the sale of, alcoholic liquor in this state:

(i)  A vendor of spirits.

(ii) A broker.

(iii) A manufacturer of beer or wine.

(iv) An outstate seller of beer or wine.

(v)  A wholesaler.

(s)(T) “Sample of alcoholic liquor” means a container which bears the word “sample” and which 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.

(t)(U) “Sports/entertainment venue” means a facility which is licensed to sell alcoholic liquor for on-premises consumption, which has a seating capacity of 4,500 or more, which is primarily used for sporting events or other entertainment, and which is not located on the campus of a 2- or 4-year college or university.

(u)(V) “Temporary bin display” means a freestanding device which is constructed of any material that is used for the exhibition of beer, wine, or

spirits on the premises of a retail licensee who is licensed for off-premises sales only and which must be removed from the retail licensed premises not later than 120 days after installation.

(v)(W) “Vendor of spirits” means a person who sells spirits to the commission. (w)(X) “Vendor representative” means a person who is licensed by the

commission and who is authorized by a manufacturer of beer or wine, an outstate seller of beer or wine, or a vendor of spirits to represent the respective employer or principal in transactions with the commission.

(2)      Terms defined in the act have the same meanings when used in these rules.

(3)      Terms defined in the act and these rules have the same meanings when used in rules previously or hereafter promulgated by the commission.

 

R 436.1011 Prohibited conduct of licensees, agents, or employees.

Rule 11. (1) The clerk, servant, agent, or employee of a licensee shall not engage in an illegal occupation or illegal act on the licensed premises. A certified copy of a conviction is prima facie evidence of a violation.

(2)  A licensee, an officer of a licensed corporation, a stockholder of a privately held corporation, or a member or manager of a limited liability company shall not, on or off its licensed premises, commit ANY OF THE FOLLOWING:

(a)  A felony.

(b)  A crime involving the excessive use of alcoholic liquor.

(c)  A crime involving gambling, prostitution, weapons, violence, tax evasion, fraudulent activity, or controlled substances.

(d)  A misdemeanor of such a nature that it impairs, or may impair, the ability of the person to operate the licensed business in a safe and competent manner.

(e)  Any of the offenses specified in this subrule which results in sentencing after a plea of nolo contendere and for which the licensee is subject to the penalties in section 903 of the act. A certified copy of a conviction is prima facie evidence of a violation.

 

 

(3)  THE PROVISIONS OF SUBRULES (1) AND (2) OF THIS RULE APPLY TO THE PERSON, THE OFFICER  OF  A  CORPORATE  ENTITY,  THE  STOCKHOLDER  OF  A  PRIVATELY  HELD CORPORATE ENTITY, OR THE MEMBER OR MANAGER OF A LIMITED LIABILITY ENTITY OF THE PERSON NAMED AS A PARTICIPANT ON THE LICENSEE’S PARTICIPATION PERMIT.  (3)(4) A licensee, or the clerk, servant, agent, or employee of the licensee, shall not hinder or obstruct a law enforcement officer or commission inspector or investigator in the course of making an investigation or inspection of the premises and shall not refuse, fail, or neglect to cooperate with a law enforcement officer or a commission inspector or investigator in the

performance of his or her duties to enforce the act or commission rules.

(4)(5) A licensee, or the clerk, servant, agent, or employee of a licensee, shall not impersonate a commission employee, a commission investigator, or a law enforcement officer empowered to enforce the act or commission rules.

(5)(6) A licensee, or the clerk, servant, agent, or employee of the licensee, shall not do any of the following:

(a)  Allow, on the licensed premises, the annoying or molesting of customers or employees by other customers or employees.

(b)  Knowingly allow the licensed premises to be used by any person for the purposes of accosting or soliciting another person to commit prostitution.

(c)  Allow, on the licensed premises, fights, brawls, or the improper use of firearms, knives, or other weapons.

(d)  Allow the sale, possession, or consumption on the licensed premises of any controlled substances that are prohibited by Act No. 368 of the Public Acts of 1978, as amended, being §333.1101 et seq. 1978 P.A. 368, MCL 333.1101 ET SEQ.

(e)  Allow narcotics paraphernalia to be used, stored, exchanged, or sold on the licensed premises. (6)(7) A retail licensee shall not sell any alcoholic liquor off the licensed premises, except as follows:

(a)   An on-premises licensee may provide out-of-doors service if done in accord with the provisions of R 436.1419.

(b)  An off-premises licensee may deliver a preordered quantity of alcoholic liquor to a customer; however, the licensee shall not make a delivery to a customer on the campus of a 2- or 4-year college or university, unless the customer is licensed by the commission.

(c)   An off-premises licensee may provide out-of-doors service if done in accord with the provisions of R 436.1521.

 

R 436.1037 Licensee’s interest in restaurant equipment or bar equipment business prohibited; exception. RESCINDED.

Rule 37. A licensee shall not have a direct or indirect interest in the business or management of a restaurant equipment or bar equipment business, except upon prior written order of the commission.

 

R 436.1041 Obtaining a license for use or benefit of another.

(2)       The provisions of subrule (1) of this rule do not apply to a participating agreement where the commission approves the participating agreement after a showing of good cause by the on-premise licensee or where a person not licensed by the commission receives 10% or less of the gross sales of the licensed business.

 

 

(3)             THE PROVISIONS OF SUBRULE (1) OF THIS RULE DO NOT APPLY TO PERSONS APPROVED BY THE COMMISSION AND NAMED ON A PARTICIPATION PERMIT ISSUED TO THE LICENSEE. UPON WRITTEN REQUEST OF THE LICENSEE, THE COMMISSION MAY ISSUE A PARTICIPATION PERMIT TO A LICENSEE WHO MEETS ALL OF THE FOLLOWING QUALIFICATIONS:

(A)  THE NON-LICENSED PERSON WHO RECEIVES USE OR BENEFIT FROM THE LICENSEE’S LICENSE OR WHO RECEIVES GROSS OR NET PROFITS FROM A LICENSED BUSINESS SHALL MEET THE SAME QUALIFICATIONS AS A LICENSEE AS PRESCRIBED BY R 436.1101.

(B)        THE LICENSEE MAKES APPLICATION AND EITHER CANCELS AN EXISTING PARTICIPATION PERMIT OR RECEIVES A NEW PARTICIPATION PERMIT BEFORE ADDING OR DELETING ANY PARTICIPATING NON-LICENSED PERSON. FOR THE PURPOSES OF THIS SUBRULE, THE ADDITION OR DELETION OF A PARTICIPANT INCLUDES ANY OF THE FOLLOWING:

(I)    TRANSFER OR TRANSFER OF INTEREST FROM 1 PERSON TO ANOTHER.

(II) THE TRANSFER IN THE AGGREGATE TO ANOTHER PERSON DURING ANY

SINGLE LICENSING YEAR OF MORE THAN10% OF THE OUTSTANDING STOCK OF A CORPORATE PARTICIPANT.

(III)   THE TRANSFER OF MORE THAN10% OF THE TOTAL INTEREST IN A PARTICIPANT WHICH IS A PARTNERSHIP.

(IV)  THE TRANSFER OF MORE THAN 10% IN THE AGGREGATE OF THE MEMBERSHIP OF A LIMITED LIABILITY COMPANY.

 

R 436.1049 Transfer of license or corporate stock while an alleged violation is pending final disposition.

Rule 49. (1) If the licensee has been cited in a violation report, a transfer of a license shall not be completed prior to BEFORE final disposition of the alleged violation.

(2)      If the licensee has been cited in a violation report, a transfer of more than 10% in the aggregate of the stock of a licensed corporation OR A TRANSFER OF 10% OR MORE IN THE AGGREGATE OF THE MEMBERSHIP IN A LIMITED LIABILITY COMPANY shall not be completed prior to BEFORE final disposition of the alleged violation.

(3)       A LICENSEE SHALL NOT TRANSFER A LICENSE, TRANSFER AN INTEREST IN A LICENSE, OR REMOVE A LICENSE FROM ESCROW WITH THE COMMISSION UNTIL THAT LICENSEE HAS PAID ALL OUTSTANDING FINES, FEES, OR CHARGES LEVIED BY THE COMMISSION, EXCEPT UPON PRIOR WRITTEN ORDER OF THE COMMISSION.

R 436.1051 Notice of changes affecting control of privately held corporation.

Rule 51. (1) A privately held licensed corporation shall immediately notify the commission, in writing, of changes made in its officers or directors or of amendments made to the articles of incorporation.

(2) A LIMITED LIABILITY COMPANY SHALL IMMEDIATELY NOTIFY THE COMMISSION, IN WRITING, OF CHANGES MADE IN ITS MANAGERS OR ASSIGNEES OR OF AMENDMENTS MADE TO THE ARTICLES OF ORGANIZATION, OPERATING AGREEMENT, OR BY-LAWS.

 

R 436.1057 Deliveries of beer or wine into state ; license or approval of commission required. RESCINDED.

 

 

Rule 57. A person shall not deliver, ship, or transport into this state beer, wine, or spirits without a license authorizing such action, except in accordance with R 436.1722, or without the prior written approval of the commission.

 

R 436.1060 SERVER TRAINING; REQUIREMENTS.

RULE 60. (1) AS USED IN THIS RULE, ALL TERMS AND PHRASES SHALL HAVE THE SAME MEANING AS DEFINED IN SECTION 906(1) OF THE ACT.

(2)   IF THE COMMISSION CONDITIONALLY APPROVES THE ISSUANCE OF A LICENSE FOR THE PURPOSE OF MEETING THE SERVER TRAINING REQUIREMENTS OF THAT APPROVAL, THEN THE TIME PERIOD ALLOWED FOR MEETING THE SERVER TRAINING REQUIREMENTS SHALL COMMENCE ON THE DATE THE LICENSE IS ISSUED.

(3)      AN ADMINISTRATOR OF A SERVER TRAINING PROGRAM APPROVED BY THE COMMISSION SHALL ADMINISTER A COMPREHENSIVE EXAMINATION TO PARTICIPANTS OF THE PROGRAM, INCLUDING INDIVIDUALS SEEKING CERTIFICATION AS INSTRUCTORS WITHIN THE PROGRAM. THE EXAMINATION SHALL THOROUGHLY TEST THE INDIVIDUAL’S KNOWLEDGE AND COMPETENCY IN THE CURRICULUM TOPICS REQUIRED BY SECTION 906(6) OF THE ACT. THE MINIMUM PASSING GRADE FOR THE EXAMINATION, FOR INSTRUCTOR CERTIFICATION, AND FOR ALL OTHER PARTICIPANTS IN THE PROGRAM SHALL BE NOT LESS THAN 70%, BUT SHALL BE NOT LESS THAN 85% FOR INSTRUCTORS IF ADMINISTERED THE SAME EXAMINATION AS OTHER PARTICIPANTS IN THE PROGRAM. EXAMINATIONS ADMINISTERED IN OTHER THAN A WRITTEN FORM MUST BE APPROVED BY THE COMMISSION. EXAMINATION MAY BE PROCTORED BY SOMEONE OTHER THAN A CERTIFIED INSTRUCTOR OF THE SERVER TRAINING PROGRAM IF THE PROCTOR IS AN AGENT OF THE ADMINISTRATOR OF THE SERVER TRAINING PROGRAM AND IS ACCEPTABLE TO THE COMMISSION.

(4)        IF SERVER TRAINING OR INSTRUCTOR TRAINING IS CONDUCTED BY THE ADMINISTRATOR OF A SERVER TRAINING PROGRAM APPROVED BY THE COMMISSION BY MEANS OTHER THAN CLASSROOM TRAINING, THEN THE ALTERNATIVE TRAINING METHOD MUST FIRST BE APPROVED BY THE COMMISSION.

(5)  CERTIFICATION ISSUED BY THE ADMINISTRATOR OF AN APPROVED SERVER TRAINING PROGRAM FOR INSTRUCTORS AND OTHER PARTICIPANTS SHALL EXPIRE NOT MORE THAN 3 YEARS FROM THE DATE OF ISSUANCE.

(6)   A LICENSEE, FOR PURPOSES OF MEETING THE REQUIREMENTS OF SECTION 906(10) OF THE ACT, SHALL HAVE EMPLOYED OR HAVE PRESENT

ON THE LICENSED PREMISES ON EACH SHIFT AND DURING ALL HOURS ALCOHOLIC LIQUOR IS SERVED SUPERVISORY PERSONNEL WHO MAINTAIN ACTIVE, UNEXPIRED SERVER TRAINING CERTIFICATION OR CURRENT RECOGNITION BY A SERVER TRAINING PROGRAM APPROVED BY THE COMMISSION.