Bill Summary – FastDemocracy

HOUSE BILL NO. 6093
     November 13, 2024, Introduced by Reps. Glanville, Fitzgerald, Skaggs, Rheingans, Steckloff,
       Weiss, McFall, Hill, O'Neal and Brenda Carter 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 105 and 603 (MCL 436.1105 and 436.1603), as
    amended by 2022 PA 226.
                     THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
       Sec. 105. (1) "Alcohol" means the product of distillation of
 fermented liquid, whether or not rectified or diluted with water,
 but does not mean ethyl or industrial alcohol, diluted or not, that
 has been denatured or otherwise rendered unfit for beverage
 purposes.
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       (2) "Alcohol vapor device" means any device that provides for
 the use of air or oxygen bubbled through alcoholic liquor to
 produce a vapor or mist that allows the user to inhale this
 alcoholic vapor through the mouth or nose.
       (3) "Alcoholic liquor" means any spirituous, vinous, malt, or
 fermented liquor, powder, liquids, and compounds, whether or not
 medicated, proprietary, or patented, and by whatever name called,
 containing 1/2 of 1% or more of alcohol by volume that are fit for
 use for food purposes or beverage purposes as defined and
 classified by the commission according to alcoholic content as
 belonging to 1 of the varieties defined in this chapter.
       (4) "Alternating proprietorship" means 1 of the following:
       (a) An arrangement in which 2 or more wine makers or small
 wine makers take turns using the same space and equipment to
 manufacture wine under section 603(9)(a) and in accordance with 27
 CFR 24.136.
       (b) An arrangement in which 2 or more brewers or micro brewers
 take turns using the same space and equipment to manufacture beer
 under section 603(9)(b) and in accordance with 27 CFR 25.52.
       (c) An arrangement in which 2 or more distillers or small
 distillers take turns using the same space and equipment to
 manufacture spirits under section 603(9)(c) and in accordance with
 27 CFR 19.141.
       (d) An arrangement in which 2 or more mixed spirit
 manufacturers take turns using the same space and equipment to
 manufacture mixed spirit drinks under section 603(9)(d) and in
 accordance with 27 CFR 19.141.
       (5) "Approved tasting room" means a tasting room that is
 approved by the commission. A licensee with an approved tasting
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 room is not a retail licensee as that term is used in this act and
 the rules promulgated under this act except for sections 701, 801,
 803, 815, 905, and 906.
       (6) "Authorized distribution agent" means a person approved by
 the commission to do 1 or more of the following:
       (a) To store spirits owned by a supplier of spirits or the
 commission.
       (b) To deliver spirits sold by the commission to retail
 licensees.
       (c) To perform any function needed to store spirits owned by a
 supplier of spirits or by the commission or to deliver spirits sold
 by the commission to retail licensees.
       (7) "Bar" means a barrier or counter at which alcoholic liquor
 is sold to, served to, or consumed by customers.
       (8) "Beer" means a beverage obtained by alcoholic fermentation
 of an infusion or decoction of barley, malt, hops, sugar, or other
 cereal in potable water.
       (9) "Bottle" or "bottling" means a process, separate from
 manufacturing, using owned or leased equipment to fill and seal a
 container, including a keg, with alcoholic liquor for sale at
 wholesale or retail in accordance with this act. Bottle or bottling
 does not include filling a growler for sale at retail.
       (10) "Brand" means any word, name, group of letters, symbol,
 trademark, or combination, thereof or any word, name, group of
 letters, symbol, trademark adopted and used by a supplier to
 identify a specific beer, malt beverage, wine, mixed wine drink, or
 mixed spirit drink product and to distinguish that product from
 another beer, malt beverage, wine, mixed wine drink, or mixed
 spirit drink product that is produced or marketed by that or
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 another supplier. As used in this subsection, "supplier" means a
 brewer, micro brewer, an outstate seller of beer, a wine maker, a
 small wine maker, an outstate seller of wine, a manufacturer of
 mixed wine drink, an outstate seller of a mixed wine drink, a mixed
 spirit drink manufacturer, or an outstate seller of mixed spirit
 drink.
       (11) "Brand extension" means any brand that incorporates all
 or a substantial part of the unique features of a preexisting
 brand, regardless of whether the extension is beer, wine, mixed
 wine drink, or mixed spirit drink.
       (12) "Brandy" means an alcoholic liquor as defined in 27 CFR
 5.22(d).
       (13) "Brandy manufacturer" means a wine maker or a small wine
 maker licensed under this act to manufacture brandy. A wine maker
 or small wine maker authorized to manufacture brandy shall not
 manufacture any other spirits. The commission may approve a brandy
 manufacturer to sell brandy that it manufactures at retail in
 accordance with section 537.
       (14) "Brewer" means a person located in this state that is
 licensed to manufacture beer and sell at retail in accordance with
 section 537 and to licensed wholesalers beer manufactured by the
 person.
       (15) "Brewpub" means a license issued in conjunction with a
 class C, tavern, class A hotel, or class B hotel license that
 authorizes the person licensed with the class C, tavern, class A
 hotel, or class B hotel license to manufacture and brew not more
 than 18,000 barrels of beer per calendar year in this state and
 sell at its licensed premises the beer produced for consumption on
 or off the licensed brewery premises in the manner provided for in
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 sections 405, 407, and 537.
       Sec. 603. (1) Except as provided in subsections (5) to (9),
 subsections (14) to (16), and section 605, a supplier, warehouser,
 or wholesaler shall not have any direct or indirect financial
 interest in the establishment, maintenance, operation, or promotion
 of the business of any other vendor.
       (2) Except as provided in subsections (5) to (9), subsections
 (14) to (16), and section 605, a supplier, warehouser, or
 wholesaler or a stockholder of a supplier, warehouser, or
 wholesaler shall not have any direct or indirect interest by
 ownership in fee, leasehold, mortgage, or otherwise in the
 establishment, maintenance, operation, or promotion of the business
 of any other vendor.
       (3) Except as provided in subsections (5) to (9), subsections
 (14) to (16), and section 605, a supplier, warehouser, or
 wholesaler shall not have any direct or indirect interest by
 interlocking directors in a corporation or by interlocking stock
 ownership in a corporation in the establishment, maintenance,
 operation, or promotion of the business of any other vendor.
       (4) Except as provided in subsections (5) to (9), subsections
 (14) to (16), and section 605, a person shall not buy the stocks of
 a supplier, warehouser, or wholesaler and place the stock in any
 portfolio under an arrangement, written trust agreement, or form of
 investment trust agreement, issue participating shares based on the
 portfolio, trust agreement, or investment trust agreement, and sell
 the participating shares within this state.
       (5) The commission may approve a brandy manufacturer or small
 distiller to sell brandy and spirits made by that brandy
 manufacturer or small distiller in a restaurant for consumption on
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 or off the premises if the restaurant is owned by the brandy
 manufacturer or small distiller or operated by another person under
 an agreement approved by the commission and is located on premises
 where the brandy manufacturer or small distiller is licensed.
 Brandy and spirits sold for consumption off the premises under this
 subsection must be sold at the uniform price established by the
 commission.
       (6) The commission shall allow a small distiller to sell
 brands of spirits it manufactures for consumption on the licensed
 premises at that distillery.
       (7) A brewpub may have an interest in up to 5 other brewpubs
 if the combined production of all the locations in which the
 brewpub has an interest does not exceed 18,000 barrels of beer per
 calendar year.
       (8) This section does not prohibit a supplier from having any
 direct or indirect interest in any other supplier.
       (9) The commission may approve the following under R
 436.1023(3) of the Michigan Administrative Code, subject to the
 written approval of the United States Department of Treasury
 Alcohol and Tobacco Tax and Trade Bureau:
       (a) A wine maker participating with 1 or more wine makers in
 an alternating proprietor operation in accordance with 27 CFR
 24.136.
       (b) A brewer participating with 1 or more brewers in an
 alternating proprietor operation in accordance with 27 CFR 25.52.
       (c) A distiller or small distiller participating with 1 or
 more distillers or small distillers in an alternating proprietor
 operation in accordance with 27 CFR 19.141.
       (d) A mixed spirit manufacturer participating with 1 or more
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 mixed spirit manufacturers in an alternating proprietor operation
 in accordance with 27 CFR 19.141.
       (10) A manufacturer shall not have any direct or indirect
 interest in a wholesaler.
       (11) A wine maker shall not collectively deliver wine, with
 any other wine maker, to retailers.
       (12) Except for a warehouser, all licensees in this state must
 be separated into 3 distinct and independent tiers composed of the
 following:
       (a) Supplier tier, comprising suppliers.
       (b) Wholesaler tier, comprising wholesalers.
       (c) Retailer tier, comprising retailers.
       (13) Except as otherwise provided in subsection (14), the
 commission shall not allow any of the following:
       (a) A retailer to hold, directly or indirectly, a license in
 the wholesaler or supplier tier.
       (b) A wholesaler to hold, directly or indirectly, a license in
 the retailer or supplier tier.
       (c) A supplier to hold, directly or indirectly, a license in
 the wholesaler or retailer tier.
       (14) Subsection (13) does not prohibit a class C, tavern,
 class A hotel, or class B hotel licensee from receiving a brewpub
 license or a micro brewer or brewer from having an on-site
 restaurant.
       (15) A person licensed in the supplier tier may manufacture a
 private label of beer, wine, or mixed spirit drink for a retailer
 if the commission determines that all the following requirements
 are met:
       (a) The supplier registers the private label with the
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 commission as required under R 436.1611, R 436.1719, and R 436.1829
 of the Michigan Administrative Code.
       (b) The supplier, independent of the retailer's involvement,
 appoints 1 or more wholesalers to distribute the private label as
 required under section 307 or 401, as applicable. However, if the
 supplier is a micro brewer, the supplier may distribute the private
 label in accordance with section 203a.
       (c) The supplier complies with and does not violate section
 305 or 403, as applicable.
       (d) The wholesaler engages in commercially reasonable efforts
 to make the private label available to a retailer that places an
 order for the private label beer, wine, or mixed spirit drink.
       (e) An appointed wholesaler remains the wholesaler for the
 private label and any brand extensions of the private label
 regardless of whether the retailer switches the supplier that
 manufactures the private label, unless the wholesaler is terminated
 under section 305 or 403, as applicable.
       (16) The commission shall not issue a wholesaler license to a
 producer of nonalcoholic beverages or an entity that the producer
 of nonalcoholic beverages has a direct or indirect ownership or
 financial interest in, if the producer of nonalcoholic beverages or
 the entity the producer of nonalcoholic beverages has a direct or
 indirect ownership or financial interest in has a direct or
 indirect ownership or financial interest in a person licensed in
 the supplier tier.
       (17) As used in this section:
       (a) "Manufacturer" means, notwithstanding section 109(2), a
 wine maker, small wine maker, brewer, micro brewer, manufacturer of
 spirits, distiller, small distiller, brandy manufacturer, mixed
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 spirit drink manufacturer, direct shipper, a licensee with an
 approved tasting room, or a person licensed by the commission to
 perform substantially similar functions.
       (b) "Private label" means a brand of beer, wine, or mixed
 spirit drink that is manufactured by a supplier on behalf of a
 retailer using the retailer's recipe or intellectual property.
       (c) "Supplier" means a manufacturer, mixed spirit drink
 manufacturer, outstate seller of beer, outstate seller of wine,
 outstate seller of mixed spirit drink, and or vendor of spirits or
 a person licensed by the commission to perform substantially
 similar functions, but does not include a master distributor.
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Statutes affected: 
House Introduced Bill: 436.1105, 436.1603