Section 436.1802. Authorized distribution agents generally.

Rule 2. (1) As used in this rule, "authorized distribution agent" means a person who has entered into a  contractual   relationship  with  1   or  more manufacturers or suppliers of spirits or with another authorized distribution agent for warehousing or distribution, or both, of spirits and who has been certified, in writing, by the commission, to act as the commission's agent for the warehousing and distribution of spirits to retail licensees of the commission.

(2)   A person shall apply for certification as an authorized distribution agent to the commission in Lansing on forms, and in the manner,  approved  by the commission.

(3)  An applicant for certification as an authorized distribution agent shall provide both of the following to the commission:

(a)   A technical plan for the importation, transportation, warehousing, and delivery of spirits in this state.

(b)   Any information or documentation required by the commission relating to the honesty and integrity of any applicant or any principal in the corporation, company, association, limited liability company, or partnership applying for certification as an authorized distribution agent.

(4)    An authorized distribution agent or prospective authorized distribution agent shall maintain, and make available to the  commission   or  its representative upon being given notice, any contract or written agreement or proposed contract or written agreement that the authorized distribution agent or prospective authorized distribution agent may have with a manufacturer, supplier of spirits, or other authorized distribution agent for the importation, warehousing, delivery, or sale of spirits in this state.

(5)   An authorized distribution agent shall maintain an adequate physical plant and proper equipment to perform the functions for which the authorized distribution agent is certified.

(6)    The commission may inspect, during normal business hours, any facility or equipment used in  conjunction  with  the  business  of  an  authorized distribution  agent or applicant  for  certification   as   an   authorized distribution agent.

(7)     An authorized  distribution  agent  or   prospective  authorized distribution agent shall make available, for inspection by the commission and its representatives, all financial and accounting records pertinent to the operation of the authorized distribution  agent  or  prospective authorized distribution agent.

(8)   An authorized distribution agent shall maintain, at its expense, insurance approved by the commission to protect against claims resulting from business operations or activities, including insurance on alcoholic beverages in storage or transit.

(9)    An authorized distribution agent shall obtain and maintain a blanket bond payable to the state of Michigan in an amount equal to the risk of loss to the state as determined by the commission.

(10)   An authorized distribution agent shall not have a direct or indirect interest in a retail alcoholic beverage license issued by the state of Michigan as enumerated in section 537 of Act No. 8 58 of the Public Acts of 1998, as amended, being §436.1537 of the Michigan Compiled Laws.

(11)   An authorized distribution agent may not subcontract any of the business functions or activities specified in the agent's contract or agreement with the manufacturer or supplier of spirits without the  prior written consent of the commission and certification of the subcontractor as an authorized distribution agent of the commission.

(12)         The commission  may  rescind  the   certification  of  an  authorized distribution agent who fails to comply with any and all federal, state, or local codes, laws, ordinances, rules, or regulations applicable to the agent's operations or fails to comply with Act No. 8 58 of the Public Acts of 1998, as amended, being §436.1101 et seq. of the Michigan Compiled Laws, commission rules, certification requirements, or commission order, including an order that establishes further business operating procedures   for

authorized distribution agents.

(13)      Certification of an authorized distribution agent  shall  terminate automatically and without any act of the commission if the contract or agreement between the authorized distribution agent and the manufacturer or supplier of spirits or another authorized distribution agent expires or is terminated. Certification shall also terminate automatically upon modification of the system of warehousing and distribution of spirits by the legislature or the commission that eliminates the need for the  authorized  distribution  agent certification.

(14)     The commission may, by order, establish further business operating procedures for authorized distribution agents relative to the wholesaling and distribution of spirits.

History: 1996 AACS; 1998-2000 AACS.