DEPARTMENT OF LABOR AND ECONOMIC GROWTH

                      LIQUOR CONTROL COMMISSION

                       LICENSING QUALIFICATIONS

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


R 436.1101  Rescinded.

  History: 1979 AC; 


R 436.1103   Application for license; forms; required information.
  Rule 3. (1) An application for a license shall be made to the commission in 
Lansing on forms approved by the commission.
  (2) An applicant for a license  shall  provide  to   the   commission,   or 
representatives  of  the  commission,  all    information    necessary    for 
investigation and processing of the application.

  History: 1979 AC.


R 436.1105  Application for license; denial; grounds.
  Rule 5.  (1)  An applicant for a license shall  provide  evidence  in   the 
application of, or demonstrate at a hearing, all of the following:
  (a)  Any of the following:
  (i) If an  individual,  that  the  applicant  is  the  legal  age  for  the 
consumption of alcoholic liquor in this state.
  (ii)  If a  partnership,  that  all  partners  are  the  legal   age    for 
the consumption of alcoholic liquor in this state.
  (iii)  If a privately held corporation,  that  all  stockholders  are   the 
legal age for the consumption of alcoholic liquor in this state,  unless  the 
stock of the stockholders is held in a fiduciary relationship.
  (iv)  If a limited liability company, that all members are the  legal   age 
for the consumption of alcoholic liquor in this state.
  (b)   The  existence  of  adequate  legitimate  and  verifiable   financial 
resources for the  establishment  and  operation  of  the  proposed  licensed 
business in proportion to the type and size of the proposed licensed business.
  (c)  The existence of an adequate physical plant or plans for an   adequate 
physical plant appropriate for the type and size  of  the  proposed  licensed 
business.
  (d)  That the location of the proposed licensed business shall   adequately 
service the public.
  (2)  The commission  shall  consider  all  of  the  following  factors   in 
determining whether an applicant may be issued a license or permit:
  (a)   The  applicant's  management  experience  in  the  alcoholic   liquor 
business.
  (b)  The applicant's general management experience.
  (c)  The applicant's general business reputation.
  (d)  The opinions of the local residents, local legislative body, or  local 
law enforcement agency with regard to the proposed business.
  (e)  The applicant's moral character.
  (f)  The order in  which  the  competing  initial  application  forms   are 
submitted to the commission; however, this subdivision shall not apply to  an 
application for a resort license authorized by section 531 of 1998 PA 58, MCL 
436.1531.
  (g)  Past convictions of the applicant for any of the following:
  (i)  A felony.
  (ii)  A crime involving the excessive use of alcoholic liquor.
  (iii)  A crime involving any of the following:
  (a)  Gambling.
  (b)  Prostitution.
  (c)  Weapons.
  (d)  Violence.
  (e)  Tax evasion.
  (g)  Fraudulent activity.
  (h)  Controlled substances.
  (iv)  A misdemeanor of such a nature that it may impair the ability of  the 
applicant to operate a licensed business in a safe and competent manner.
  (v)  Sentencing for any of the offenses specified in this subrule after   a 
plea of nolo contendere.
  (h)  The applicant's excessive use of alcoholic liquor.
  (i)  The effects that the issuance of a license would have on the  economic 
development of the area.
  (j)  The effects that the issuance of a license would have on the   health, 
welfare, and safety of the general public.
  (3)  An application for a new license, an application for any  transfer  of 
interest in an existing license, or an application for a transfer of location 
of an existing license shall be denied if  the  commission  is  notified,  in 
writing, that the application does not meet all appropriate state  and  local 
building, plumbing, zoning, fire, sanitation, and health laws and  ordinances 
as certified to the commission by the appropriate law enforcement officials.
The commission may accept a temporary or permanent certificate  of  occupancy 
for public accommodation issued by the appropriate officials as  evidence  of 
compliance with this subrule.

  History: 1979 AC; 1985 AACS; 1995 AACS; 1998-2000 AACS; 2004 AACS.


R 436.1107 Renewal of license.
  Rule 7.  (1)  A license that is not in active operation shall be placed  in 
escrow with the commission.
  (2)  A licensee shall have only 5 licensing  years  after  the   expiration 
date of the escrowed license to put the license into  active  operation.   If 
the licensee fails  to  put  the  license  into  active  operation  within  5 
licensing years after its expiration, then all rights to  the  license  shall 
terminate unless the commission has received written verification  of  either 
of the following:
  (a)  That the license or an interest in the  license  is  the  subject   of 
litigation or estate or  bankruptcy  proceedings  in  a  court  of  competent 
jurisdiction.
  (b)  That the license was placed into escrow as a result  of   damage    to 
the licensed premises by fire, flood, tornado or other natural  event    that 
makes the licensed premises unsuitable for the operation of the business  and 
unsafe for public accommodation.
  (3)  If the commission extends the length of time for which a licensee  may 
renew the license during the pendency of litigation or estate  or  bankruptcy 
proceedings or as a result of damage to the licensed premises for the reasons 
as stated in subrule (2) of this  rule,  then  the  licensee  shall  pay  the 
required license fee for each  elapsed  licensing  year  before  placing  the 
license in active operation.
  (4)  Except as provided in subrule (3) of this rule,  a  license  held   in 
escrow with the commission shall be renewed in the same manner as  an  active 
license, including payment of all required license fees, each year  by  April 
30.
  (5)  A licensee who places a license in escrow with the  commission   shall 
be responsible for providing the commission with current contact information, 
in writing, for all correspondence, which includes the name, mailing address, 
and telephone number.
  (6)  Not later than 90 days after the effective date  of  this  rule,   the 
commission shall provide or attempt to provide each licensee whose license is 
in escrow with a copy of this rule.
  (7)  A license that is held in escrow with the commission on the  effective 
date of this rule begins the 5-year period allowed by  subrule  (2)  of  this 
rule for a license to be held in escrow on the effective date of this rule.

  History: 1979 AC; 2004 AACS.


R 436.1109  Application for license by corporation; requirements.
  Rule 9.  (1)  A corporation applying for a license  shall  file  with   the 
commission all of the following, as applicable:
  (a)  If incorporated outside of this state, a copy of its current  articles 
of incorporation, a current certificate of good standing from  the  state  of 
incorporation, and a copy of the authorization to do business in  this  state 
issued by the Michigan department of labor and economic growth.
  (b)  If a  Michigan  corporation,  a  copy  of  the  current  articles   of 
incorporation as approved by the Michigan department of  labor  and  economic 
growth.
  (c)  A certified copy of  the  minutes  of  a  meeting  of  its  board   of 
directors or a statement signed by an officer of the corporation  naming  the 
persons authorized by corporate resolution to sign the application and  other 
documents required by the commission.
  (d)  A signed statement providing the identity of  its  current   corporate 
officers and the members of the board of directors.
  (e)  A signed statement indicating whether or not  the  corporation  is   a 
privately  held  corporation.   If  the  corporation  is  a  privately   held 
corporation, then it shall also file, with the commission, a signed statement 
that includes all of the following information:
  (i)  The number of shares of stock that it has issued.
  (ii)  To whom the stock was issued.
  (iii)  The amount of stock issued to each stockholder.
  (iv)  The date of the issuance of the stock.
  (v)   The individual certificate numbers of the stock issued.
  (2)  The commission shall not renew a license of a corporation unless   the 
corporate charter is current.
  (3)  The commission shall suspend  the  license  of  a  corporation   whose 
corporate charter is not current.
  (4) A corporate licensee applying for another license is required to   meet 
the provisions of this rule only once if the licensee amends  its  filing  to 
keep it current under this rule.

  History: 1979 AC; 1998-2000 AACS; 2004 AACS.


R 436.1110 Application for license by limited liability company;  receipt  of 
distributions by assignee of membership interest  in  company;  approval  for 
reorganization or realignment  of  company;  transfer  fee;  notification  of 
changes  in  managers,  members,  assignees,  articles  of  organization,  or 
operating agreement; investigation of company; company  authorization  to  do 
business in state required.
  Rule 10.  (1)  A limited liability company applying for  a  license   shall 
file all of the following items with the commission, as applicable:
  (a)  If a foreign limited liability company, a copy of the certificate   of 
authority issued by the Michigan department of labor and economic growth.
  (b)  If a domestic limited liability company, a copy of  the  articles   of 
organization filed with the Michigan department of labor and economic growth.
  (c)  A copy of the operating agreement or  agreements  or  bylaws   entered 
into by the members under 1993 PA 23, MCL 450.4101 et seq.
  (d)  A copy of any amendments to its articles of organization.
  (e)  A copy of the most recent annual statement, if  any,  filed  with  the 
Michigan department of labor and economic growth.
  (f)  A signed statement that includes the full names and addresses of   its 
current members, managers, and assignees of membership interest.
  (g)  A statement signed by a manager of the limited liability  company   or 
by at least 1 member if management is reserved  to  the  members  naming  the 
person authorized to sign the application and other documents required by the 
commission.  If a foreign limited liability company, a  person  who  has  the 
authority to sign under the laws of  the  jurisdiction  of  its  organization 
shall sign the statement and shall indicate the capacity in which the  person 
signs the statement.
  (2)  An  assignee  of  any  membership  interest  in  a  licensed   limited 
liability company shall not receive the distributions to which  the  assignor 
would be entitled,  unless  the  assignee  has  received  the  prior  written 
approval of the commission.
  (3)  Any reorganization or realignment  of  a  limited  liability   company 
within a single licensing year that results in a transfer of more than 10% of 
the total interest in the limited liability company is considered a  transfer 
requiring prior approval of the commission under section 529 of 1998 P.A. 58, 
MCL 436.1529.
  (4)  A transfer, in the aggregate, of 50% or more of the total interest  in 
a limited liability company during any licensing year shall,  upon   approval 
by the commission, require the payment of a  transfer  fee   in    accordance 
with section 529 of 1998 P.A. 58, MCL 436.1529.
  (5)  A licensed limited liability company  shall  immediately  notify   the 
commission, in writing, of any change in any of the following:
  (a)  Managers.
  (b)  Members.
  (c)  Assignees of membership interest.
  (d)  Articles of organization.
  (e)  Operating agreement.
  (6)  The commission may investigate any transfer of interest in a   limited 
liability company or any proposed member, manager, or assignee of  membership 
interest in a limited liability company.
  (7)  A licensed limited  liability  company  shall  be  authorized  to   do 
business under the laws of this state.

  History: 1995 AACS; 1998-2000 AACS; 2004 AACS.


R 436.1111   Application for license by partnership; requirements.
  Rule 11. (1) Each general  partner  of  a  partnership   shall   sign   the 
application, bond, and other papers filed in connection   with   securing   a 
new license or transferring an existing license. This  requirement   may   be 
waived by the commission upon a showing of good cause.
  (2) A limited partnership applying for a license shall furnish  a  copy  of 
the partnership agreement.

  History: 1979 AC.


R 436.1113   Wholesale  license;  minimum  qualifications;  corporate   stock 
transfer.
  Rule 13. (1) Before the issuance of a wholesale license, an applicant shall 
meet all of the following minimum qualifications, as applicable:
  (a) The applicant shall hold the required basic  permit  issued  under  the 
federal alcohol administration act of 1935, 27 U.S.C., §201 et seq.
  (b) If an individual, the applicant shall be of good moral character; if  a 
partnership, each partner shall be of good  moral  character;  if  a  limited 
liability company, each member shall be of good  moral  character;  or  if  a 
privately held corporation, all stockholders, officers, and  members  of  the 
board of directors shall be of good moral character.
  (c) The applicant shall have facilities in which to store beer and wine  on 
the licensed premises.
  (d) If an individual, submit his or her  fingerprints;  if  a  partnership, 
submit the fingerprints of each partner;  if  a  limited  liability  company, 
submit the fingerprints of each member and manager who owns 10%  or  more  of 
the total interest of the limited liability company; or if a  privately  held 
corporation, submit the fingerprints of stockholders who own 10% or  more  of 
the corporate stock and the fingerprints of all officers.
  (2) If a person who has not been fingerprinted by the commission applies to 
transfer to himself or herself 10% or more of the  corporate  stock,  in  the 
aggregate, of a privately held licensed wholesale corporation or 10% or  more 
of the total interest, in the aggregate, of  a  wholesale  limited  liability 
company, then the commission shall investigate  and  fingerprint  the  person 
before the commission approves the stock transfer.

  History: 1979 AC; 2000 AACS.


R 436.1115  Retail license; minimum qualifications; corporate stock transfer.
  Rule 15. (1) Before the issuance of a retail license,  an  applicant  shall 
meet both of the following minimum qualifications, if applicable:
  (a) If an applicant is an individual, the applicant shall be of good  moral 
character; if an applicant is a partnership, each partner shall  be  of  good 
moral character; if an applicant is a limited liability company, each  member 
shall be of good moral character; and if an applicant  is  a  privately  held 
corporation,  all  stockholders,  officers,  and  members  of  the  board  of 
directors shall be of good moral character.
  (b) If an applicant is an individual, he or she shall submit  fingerprints; 
if an applicant is a partnership,  other  than  a  limited  partnership,  the 
applicant shall submit the fingerprints of each partner; if an applicant is a 
limited partnership, the applicant shall  submit  the  fingerprints  of  each 
general partner;  if  an  applicant  is  a  limited  liability  company,  the 
applicant shall submit the fingerprints of each member and manager  who  owns 
10% or more of the total interest of the limited liability company; and if an 
applicant is a privately held corporation, the  applicant  shall  submit  the 
fingerprints of those stockholders who own 10% or more of the corporate stock.
  (2) If a person who is a stockholder in an applicant  corporation  and  who 
has not been fingerprinted by the commission applies to transfer  to  himself 
or herself 10% or more of  the  corporate  stock,  in  the  aggregate,  of  a 
privately  held  licensed  retail  corporation,  then  the  commission  shall 
fingerprint and investigate the person before the commission grants  approval 
of the stock transfer.
  (3) If a person who is a member of a limited liability company and who  has 
not been fingerprinted by the commission applies to transfer  to  himself  or 
herself 10% or more of the total interest  in  the  retail  licensed  limited 
liability company, then the commission shall fingerprint and investigate  the 
person before the commission grants approval of the transfer of interest.

  History: 1979 AC; 1998-2000 AACS.


R 436.1117  Retail license; participating agreement.
  Rule 17.  (1)  An applicant for a retail  license  or  a  retail   licensee 
shall not enter into a participating  agreement,  except  in  either  of  the 
following situations:
  (a)  If the  commission  approves  the  participating  agreement  after   a 
showing of good cause by the applicant.
  (b)  If the nonlicensee receives not more than 10% of the gross  sales   of 
the licensed business.
  (2)  The compensation included in a participating agreement shall  not   be 
computed on the gross or net profits of the licensed business.
  (3)  The participating agreement shall be in  writing  and  available   for 
review by the commission.

  History: 1979 AC; 1998-2000 AACS; 2004 AACS.


R 436.1119  Retail license; agreements.
  Rule 19. (1) An agreement to buy and sell a business   licensed   to   sell 
alcoholic liquor at retail, wherein there is not a  total  cash  transaction, 
and which includes both the personal property and the  real   estate,   shall 
include a separate statement listing the personal property   and   the   real 
estate and the terms and price of each.
  (2) A retail licensee shall not include alcoholic liquor  in   a   security 
agreement or in a financing statement filed pursuant to Act No.  174  of  the 
Public Acts of 1962, as amended, being S440.1101 et seq.  of   the   Michigan 
Compiled Laws, and known as the uniform commercial code.

  History: 1979 AC; 1984 AACS; 1987 AACS.


R 436.1121  On-premises license; requirements.
  Rule 21. (1) An applicant for an on-premises license, except for a  special 
license, shall have a minimum down payment of 10% of the  purchase  price  of 
the proposed licensed business, excluding the real estate and  any  alcoholic 
liquor.
The commission may waive the down payment requirement upon a showing of  good 
cause.
  (2) All funds used in  purchasing  the  proposed  licensed  business  shall 
belong to the applicant individually and shall come from any of the following 
approved sources:
  (a) Money accumulated by  the  applicant  from  legitimate  and  verifiable 
sources.
  (b) Money derived from state or federally approved lending institutions.
  (c) Gifts or loans, or  both,  derived  from  members  of  the  applicant's 
immediate family, if the gifts or loans have come from other approved sources 
and the family member giving the gift or loan is of good moral character.
  (d) Loans derived from the federal veterans administration.
  (e) Any combination of the sources of funds specified in this subrule.
  (f) Any other source approved by the commission after  a  showing  of  good 
cause by the applicant.

  History: 1979 AC; 1998-2000 AACS.


R 436.1123 Resort license; minimum qualifications.
  Rule 23.  (1)  An applicant for a resort  license  or  a  resort   economic 
development license that allows the consumption of alcoholic  liquor  on  the 
premises shall meet 1 of the following minimum qualifications:
  (a)  The proposed licensed establishment shall be in compliance  with   all 
of the following provisions:
  (i)  Be a full service restaurant that is open to the public and   prepares 
food on the premises.
  (ii)  Have dining facilities to seat not  less  than  100  patrons   unless 
exempted under section 531(3) of 1998 P.A. 58, MCL 436.1531(3).
  (iii)  Be open for food service not less than 5 hours per day, 5 days   per 
week.
  (iv)  Not less than 50% of the gross receipts of the business are   derived 
from the sale of food and beverages for  consumption  on  the  premises,  not 
including the sale of alcoholic liquor.
  (b)  The proposed licensed establishment has sleeping  facilities  with   a 
minimum of 25 bedrooms, meeting or conference rooms capable of  accommodating 
not less than 200 patrons, or convention facilities capable of  accommodating 
not less than 200 persons.
  (c)  The proposed licensed establishment is a sports/entertainment venue.
  (d)  The proposed licensed establishment is located on a golf course  which 
is open to the public and which has not less than 18 holes  that,  in  total, 
measure not less than 5000 yards.
  (2)  An applicant for a resort  license  or  resort  economic   development 
license shall submit 2 pictures, measuring 5  inches  by  7  inches,  to  the 
commission if the application is for a completed building.  One picture shall 
show the interior of the proposed licensed establishment and 1 picture  shall 
show the exterior of the proposed licensed establishment.  If the application 
is  made  for  a  proposed  licensed  establishment  which  is  still  to  be 
constructed, then the applicant shall submit 1 copy of the floor plan of  the 
proposed licensed establishment.

  History: 1979 AC; 1985 AACS; 2004 AACS.


R 436.1125   Resort license; limitation.
  Rule 25. The commission shall not  consider  issuing   a   resort   license 
which allows the consumption of alcoholic liquor on the  premises  where   an 
on-premises license is available under the quota provisions  of  the  act.
The commission may waive this rule upon a showing of good cause.

  History: 1979 AC; 1985 AACS.


R 436.1127   Club license; requirements.
  Rule 27. (1) An applicant  for  a  club  license  shall   file   with   the 
commission all of the following:
  (a) A certified copy of the resolution requesting a license  adopted  at  a 
bona fide club meeting.
  (b) A copy of the constitution, charter, and bylaws of the club.
  (c) An affidavit certifying that there are  no   racial   disqualifications 
for membership or guest privileges contained in  the  charter,  constitution, 
franchise, bylaws, membership  application,  or   related   documents   under 
which the club operates.
  (2) An applicant for a club license shall have its  minutes   recorded   in 
English and available for inspection.

  History: 1979 AC.


R 436.1129    Specially  designated  merchant   license;   issuance    and    
transfer; limitation; waiver; applicability.
  Rule 29.  (1)  For the issuance of a new, or the transfer of  location   of 
an existing, specially designated merchant license, all of the following  are 
approved types of businesses:
  (a)  A grocery store.
  (b)  A convenience food store.
  (c)  A food specialty store.
  (d)  A meat market.
  (e)  A delicatessen.
  (f)  A drugstore.
  (g)  A patent medicine store.
  (h)  A tobacconist that is in compliance with subrule (3)(e) of this rule.
  (i)  A department store that includes 1 or more of the  stores  listed   in 
subdivisions (a) to (h) of this subrule.
  (j) A specially designated distributor.
  (k) A class C.
  (l) A class B hotel.
  (m) A club.
  (n) A tavern.
  (o) A class A hotel licensed establishment.
  (2)  The commission shall not issue a new,  or  transfer  location  of   an 
existing, specially designated merchant license to an applicant operating  an 
approved type of business who also holds, or a partner or stockholder  of  an 
applicant who holds, an interest, directly or indirectly,  in  a  nonapproved 
type of business on, or contiguous to, the proposed licensed premises, unless 
60% or more  of  the  combined  monthly  gross  sales  of  the  approved  and 
nonapproved businesses are of goods and services customarily marketed by  the 
approved type of business.   For  the  purposes  of  this  subrule,  combined 
monthly gross sales are sales exclusive of all taxes collected by a  retailer 
on sales and are computed for an accounting  period  of  not  less  than  180 
consecutive days.  The commission may approve an application under this  rule 
subject to the condition that the applicant shall demonstrate compliance with 
this subrule at the end of the 180-day  accounting  period.   The  commission 
shall cancel the license if the  licensee  has  failed  to  comply  with  the 
provisions of this subrule at the end of the 180-day accounting period.
  (3) The commission shall not issue a specially designated merchant  license 
to any of the following entities and shall not allow  any  of  the  following 
entities to change the nature of an existing business that  has  a  specially 
designated merchant license:
  (a) An applicant who owns motor vehicle fuel pumps which are at  the   same 
location as, which are operated in conjunction with, or which are a part  of, 
the proposed licensed business.
  (b) An applicant who holds any financial interest, directly or  indirectly, 
in the establishment, maintenance, operation, or promotion  of  the  sale  of 
motor vehicle fuel at the proposed location of, in conjunction with, or as  a 
part of, the proposed licensed business.
  (c) An applicant who  holds  any  interest,  directly  or  indirectly,   by 
ownership in fee, leasehold, mortgage, or otherwise,  in  the  establishment, 
maintenance, operation, or promotion of the sale of motor vehicle fuel at the 
proposed location of, in conjunction with, or as  a  part  of,  the  proposed 
licensed business.
  (d) An applicant who holds any interest, directly or  indirectly,   through 
interlocking  stock  ownership  in  a  corporation  or  through  interlocking 
directors  in  a  corporation  engaged  in  the  establishment,  maintenance, 
operation, or promotion of the sale of motor vehicle  fuel  at  the  proposed 
location of, in conjunction with, or as a  part  of,  the  proposed  licensed 
business.
  (e) An applicant at any location at which motor vehicle fuel  is  sold   or 
offered for sale by any person, whether or not the applicant has any interest 
or derives any profit from the sale.
  (4) In determining the qualifications of an applicant for or the holder  of 
a specially designated merchant license to own or operate motor vehicle  fuel 
pumps on or adjacent to the licensed premises under the provisions of section 
541(1) of 1998 PA 58, MCL 436.1541(1), the following shall apply:
  (a) The minimum inventory required shall exclude  alcoholic  liquor,  motor 
vehicle fuel, and any merchandise acquired on a  consignment  basis  and  not 
less than 60% of this inventory shall consist of goods and services which, in 
themselves, would qualify the applicant or  licensee  for  licensure  under   
subrule  (1)  of this rule.
  (b) In the case of a department store, as defined in  R  436.1001(e),   the 
inventory attributable to that department which qualifies  the  business  for 
licensure shall consist of not less than 60% of goods and services which,  in 
themselves, would qualify the business for licensure  under  subrule  (1)  of 
this rule.
  (c) The distance between the motor vehicle fuel  pumps  and  the  site   of 
payment and selection of alcoholic liquor shall be  determined  by  measuring 
from the motor vehicle fuel pump nearest the licensed premises to  that  part 
of the licensed premises nearest the motor vehicle fuel pumps.
  (5) In a city, incorporated village, or township that has a population   of 
3,000 or fewer people, the commission  may,  in  its  discretion,  waive  the 
provisions of subrules (1), (2), and (3) of this rule if the applicant for  a 
license has and maintains a minimum  inventory  on  the  premises,  excluding 
alcoholic liquor, of not less than $10,000.00, at  cost,  of  the  goods  and 
services  customarily  marketed  by  approved  types  of   businesses.    The 
commission shall accept the means prescribed in R 436.1141(1) as a method for 
determining the population of a city, incorporated village, or township.
  (6) In a township which is comprised of 72 square miles or more  and  which 
has a population of 7,500  or  fewer  people,  the  commission  may,  in  its 
discretion, waive the provisions of subrule (3) of this rule if the applicant 
for a license  has  and  maintains  a  minimum  inventory  on  the  premises, 
excluding alcoholic liquor, of not less than  $10,000.00,  at  cost,  of  the 
goods and services customarily marketed by approved types of businesses.
  (7) The commission shall not issue a specially designated merchant  license 
to an applicant who operates a drive-in or  drive-through  establishment  and 
shall not allow  an  applicant  who  operates  a  drive-in  or  drive-through 
establishment to change the  nature  of  an  existing  business  that  has  a 
specially designated merchant license.
  (8) The commission shall not issue a specially designated merchant  license 
to an applicant who operates a drive-up or walk-up window  for  the  sale  of 
alcoholic liquor at the proposed location and shall not allow  a  person  who 
holds a specially designated merchant license to change  the  nature  of  the 
existing licensed business to include a  drive-up  or  walk-up  window  which 
permits the sale of alcoholic liquor through the drive-up or walk-up window.
  (9) This rule does not apply to  the  renewal  of  an  existing   specially 
designated merchant license that is in operation before the effective date of 
this rule and does not apply to a new specially designated  merchant  license 
or the transfer of  location  of  a  specially  designated  merchant  license 
conditionally approved by the commission before the effective  date  of  this 
rule.

  History: 1979 AC; 1985 AACS; 1998-2000 AACS; 2004 AACS; 2005 AACS.


R 436.1131   Rescinded.

  History: 1979 AC; 1998-2000 AACS.


R 436.1133 SDD license; prohibited issuance or transfer.
  Rule 33.  An  application  for  a  new  specially  designated   distributor 
license or for the transfer of location of an existing  specially  designated 
distributor license shall not be approved by the commission if  there  is  an 
existing specially designated distributor license located within  2,640  feet 
of the proposed site.  The method of measurement shall be  as  prescribed  in 
section 503 of 1998 PA 58, MCL 436.1503.  This rule  may  be  waived  by  the 
commission for any of the following reasons:
  (a)  If the existing specially designated distributor has  purchased   less 
than $10,000.00 in spirits from the commission during the last full  calendar 
year.
  (b)  If the existing specially designated distributor  has  a  B-hotel   or 
A-hotel license.
  (c)  If the  proposed  location  and  the  existing  specially   designated 
distributor's licensed establishment are separated by a major thoroughfare of 
not less than 4 lanes of traffic.
  (d)  If the proposed licensed establishment is located in  a   neighborhood 
shopping  center  which  does  not  have  an  existing  specially  designated 
distributor's  licensed  establishment   and   if   the   proposed   licensed 
establishment is located not less than 1,000 feet from any existing specially 
designated distributor's licensed establishment.  The method  of  measurement 
shall be as prescribed in section 503 of 1998 PA 58, MCL 436.1503.
  (e)  If an existing specially designated distributor licensee  is   located 
within 2,640 feet of 1 or  more  existing  specially  designated  distributor 
licensees and requests a transfer of location, which location is within 2,640 
feet of the  same  existing  specially  designated  distributor  licensee  or 
licensees, upon a showing of good cause by the licensee who is requesting the 
transfer of location.

  History: 1979 AC; 2004 AACS.


R 436.1135   Specially  designated  distributor  license;  limitations   upon 
issuance or transfer; waiver; applicability.
  Rule 35.  (1)  For the issuance of a new, or the transfer of  location   of 
an existing, specially designated distributor license, all of  the  following 
are approved types of businesses:
  (a)  A grocery store.
  (b)  A convenience food store.
  (c)  A food specialty store.
  (d)  A meat market.
  (e)  A delicatessen.
  (f)  A drugstore.
  (g)  A patent medicine store.
  (h) A tobacconist that is in compliance with subrule (3)(e) of this rule.
  (i)  A department store that includes 1 or more of the  stores  listed   in 
subdivisions (a) to (h) of this subrule.
  (j) A hotel.   
  (2) The commission shall not issue a new,  or  transfer  location   of   an 
existing, specially designated distributor license to an applicant  operating 
an approved type of business who also holds, or a partner or  stockholder  of 
the  applicant  who  holds,  an  interest,  directly  or  indirectly,  in   a 
nonapproved type of business on, or  contiguous  to,  the  proposed  licensed 
premises, unless 60% or more of the  combined  monthly  gross  sales  of  the 
approved and nonapproved businesses are of  goods  and  services  customarily 
marketed by the approved type of business.  For the purposes of this subrule, 
combined monthly gross sales are  exclusive  of  all  taxes  collected  by  a 
retailer on sales and are computed for an accounting period of not less  than 
180 consecutive days.  The commission may approve an application  under  this 
rule subject to the condition that the applicant shall demonstrate compliance 
with this  subrule  at  the  end  of  the  180-day  accounting  period.   The 
commission shall cancel the license if the licensee has failed to comply with 
the provisions of this subrule at the end of the 180-day accounting period.
  (3) The commission shall not issue  a  specially   designated   distributor 
license to any of the following entities and  shall  not  allow  any  of  the 
following entities to change the nature of an existing business  that  has  a 
specially designated distributor license:
  (a)  An applicant who owns motor vehicle fuel pumps which are at  the  same 
location as, which are operated in conjunction with, or which are a part  of, 
the proposed licensed business.
  (b)   An  applicant  who  holds  any  financial  interest,   directly    or 
indirectly, in the establishment, maintenance, operation, or promotion of the 
sale of motor vehicle fuel at the proposed location of, in conjunction  with, 
or as a part of, the proposed licensed business.
  (c) An applicant who  holds  any  interest,  directly  or  indirectly,   by 
ownership in fee, leasehold, mortgage, or otherwise,  in  the  establishment, 
maintenance, operation, or promotion of the sale of motor vehicle fuel at the 
proposed location of, or in conjunction with, or as a part of,  the  proposed 
licensed business.
  (d) An applicant who holds any interest, directly or  indirectly,   through 
interlocking  stock  ownership  in  a  corporation  or  through  interlocking 
directors  in  a  corporation  engaged  in  the  establishment,  maintenance, 
operation, or promotion of the sale of motor vehicle  fuel  at  the  proposed 
location of, in conjunction with, or as a  part  of,  the  proposed  licensed 
business.
  (e) An applicant at any location at which motor vehicle fuel  is  sold   or 
offered for sale by any person, whether or not the applicant has any interest 
or derives any profit from the sale.
  (4) In determining the qualifications of an applicant for or the holder  of 
a specially designated distributor license to own or  operate  motor  vehicle 
fuel pumps on or adjacent to the licensed premises under  the  provisions  of 
section 541(1) of 1998 PA 58, MCL 436.1541(1), the following shall apply:
  (a) The minimum inventory required shall exclude alcoholic  liquor,   motor 
vehicle fuel, and any merchandise acquired on a  consignment  basis  and  not 
less than 60% of this inventory shall consist of goods and services which, in 
themselves, would qualify the  applicant  or  licensee  for  licensure  under 
subrule (1) of this rule.
  (b) In the case of a department store, as defined in  R  436.1001(e),   the 
inventory attributable to that department which qualifies  the  business  for 
licensure shall consist of not less than 60% of goods and services which,  in 
themselves, would qualify the business for licensure  under  subrule  (1)  of 
this rule.
  (c) The distance between the motor vehicle fuel  pumps  and  the  site   of 
payment and selection of alcoholic liquor shall be  determined  by  measuring 
from the motor vehicle fuel pump nearest the licensed premises to  that  part 
of the licensed premises nearest the motor vehicle fuel pumps.
  (5) In a city, incorporated village, or township that has a population   of 
3,000 or fewer people, the commission  may,  in  its  discretion,  waive  the 
provisions of subrules (1), (2) and (3) of this rule if the applicant  for  a 
license has and maintains a minimum  inventory  on  the  premises,  excluding 
alcoholic liquor, of not less than $12,500.00, at  cost,  of  the  goods  and 
services  customarily  marketed  by  approved  types  of   businesses.    The 
commission shall accept the means prescribed in R 436.1141(1) as a method for 
determining the population of a city, incorporated village, or township.
  (6) In a township which is comprised of 72 square miles or more  and  which 
has a population of 7,500 or fewer  people,  the  commission  may  waive  the 
provisions of subrule (3) of this rule if the applicant for a license has and 
maintains a minimum inventory on the premises, excluding alcoholic liquor, of 
not less than $12,500.00, at cost, of  the  goods  and  services  customarily 
marketed by approved types of businesses.  The commission  shall  accept  the 
means  prescribed  in  R  436.1141(1)  as  the  method  for  determining  the 
population of a township.
  (7) Subrules (1), (2), (3), (4), (5), and (10) of this rule do  not   apply 
to the renewal of an existing specially  designated  distributor  license  in 
operation before the effective date of this rule and do not apply  to  a  new 
specially designated distributor license or the transfer  of  location  of  a 
specially  designated  distributor  license  conditionally  approved  by  the 
commission before the effective date of this rule.
  (8) The commission shall  not  approve  the  transfer  of  location  of   a 
specially designated distributor license outside the  governmental  unit  for 
which it was issued, except upon a showing of good cause by the applicant.
  (9) Upon a showing of good cause by  the  applicant,  the  commission   may 
waive the quota restrictions of R 436.1141 if all of the following conditions 
are met:
  (a) The applicant is in a city, incorporated village,  or   township   that 
has a population of 3,000 or fewer people.  The commission shall  accept  the 
means prescribed in R 436.1141(1) as a method for determining the  population 
of a city, incorporated village, or township.
  (b) The only existing specially designated distributor license is  held  in 
conjunction with a class A or class B hotel license.
  (c) The commission may grant only 1 waiver of  quota  restrictions   in   a 
city, incorporated village, or township.
  (10) The commission shall not issue  a  specially  designated   distributor 
license  to  an  applicant  who  operates   a   drive-in   or   drive-through 
establishment and shall not allow the applicant to change the  nature  of  an 
existing business that has a specially designated distributor license.
  (11) The commission shall not issue  a  specially  designated   distributor 
license to an applicant who operates a drive-up or  walk-up  window  for  the 
sale of alcoholic liquor at the proposed  location  and  shall  not  allow  a 
person who holds a specially designated distributor  license  to  change  the 
nature of the existing licensed business to include  a  drive-up  or  walk-up 
window which permits the sale of alcoholic liquor  through  the  drive-up  or 
walk-up window.

  History: 1979 AC; 1985 AACS; 1998-2000 AACS; 2004 AACS; 2005 AACS.


R 436.1137   SDD license; photographs.
  Rule 37. An applicant for a  specially   designated   distributor   license 
shall submit 2 pictures, measuring 5 inches by 7 inches, to the commission if 
the application is for a completed  building.  One  picture  shall  show  the 
interior of the proposed licensed establishment and 1  picture   shall   show 
the exterior of the proposed licensed establishment.

  History: 1979 AC.


R 436.1139   SDD license; initial minimum purchase.
  Rule 39. An applicant for a new specially  designated  distributor  license 
shall agree to purchase an initial minimum order of  $5,000.00   of   spirits 
divided among not  less  than  50  brands  as  a   condition   precedent   to 
receiving a license.

  History: 1979 AC.


R 436.1141   SDD license; population requirement.
  Rule 41. (1) In cities, incorporated  villages,  or   townships,   only   1 
specially designated distributor license shall be issued  by  the  commission 
for every 3,000 population, or  fraction  thereof.   The   commission   shall 
accept any 1 of the following means of determining  the   population   of   a 
city, incorporated village, or township:
  (a) Federal decennial census.
  (b) Special census taken pursuant to section 6 of  Act  No.  279   of   the 
Public Acts of 1909, being S117.6 of the Michigan Compiled Laws.
  (c) Special census taken pursuant to section 7 of  Act  No.  245   of   the 
Public Acts of 1975, being S141.907 of the Michigan Compiled Laws.
  (d) Latest population estimates and projections prepared  by   the   United 
States  department   of   commerce,   social    and    economic    statistics 
administration, bureau of the census.
  (2) The quota requirement  may  be  waived  at  the   discretion   of   the 
commission if  there  is  no  existing   specially   designated   distributor 
licensee within 2 miles, measured along the nearest traffic  route,  of   the 
applicant.

  History: 1979 AC.


R 436.1142   SDD license; limitation on applications.
  Rule 42. (1) The commission shall not process an application  for   a   new 
specially designated distributor license in any governmental  unit  in  which 
the number of applications already under consideration  by   the   commission 
equals or exceeds the number of new licenses  available   pursuant   to   the 
quota provisions of R 436.1141(1).
  (2) The commission shall maintain a record for each  governmental  unit  of 
each person who has made an application for  a   new   specially   designated 
distributor license, but whose application was not  processed   pursuant   to 
the provisions of subrule (1) of this rule.
  (3) When all applications for a  new   specially   designated   distributor 
license in any governmental unit have been disposed of  by   the   commission 
and 1 or more new specially  designated  distributor   licenses   are   still 
available, the  commission  shall  provide  written   notification   of   the 
license availability to each person who has made an application  for  a   new 
specially designated distributor license within   that   governmental   unit, 
but whose application was not processed  pursuant  to   the   provisions   of 
subrule (1) of this rule. Such notification shall be made by  mail   to   the 
last known address  of  the  person  which  appears   in   the   commission's 
records. Within 30 days of the date of mailing of such  a   notification,   a 
person shall notify the commission,  in  writing,  and   pay   the   required 
inspection fee if he or  she  is  still  interested  in   obtaining   a   new 
specially designated distributor license. A person who   does   not   respond 
within the  30-day  period  shall  not  be  given   consideration   for   any 
available license. If at the end  of  the  30-day  period   the   number   of 
persons who have notified the commission of their desire  to  be   considered 
for new specially designated distributor licenses  within  the   governmental 
unit equals or exceeds the number of licenses available,  pursuant   to   the 
provisions of  subrule  (1)  of  this  rule   any   additional   applications 
received shall not be processed.
  (4) When an application  for  a  new   specially   designated   distributor 
license is received by the commission for a  location   in   a   governmental 
unit in which  new  specially  designated  distributor   licenses   are   not 
available because the quota established by the provisions  of  R  436.1141(1) 
has been filled, the commission shall notify the  applicant   that   licenses 
are not available.
  (5) The commission shall maintain a record for each  governmental  unit  of 
each person who has made an application for  a   new   specially   designated 
distributor license, but whose application was not  processed   pursuant   to 
the provisions of subrule (4) of this rule.
  (6) When 1 or more specially  designated   distributor   licenses   becomes 
available in a governmental unit in which the  quota   established   by   the 
provisions of R 436.1141(1) had previously  been   filled,   the   commission 
shall provide written notification to each person who applied   for   a   new 
specially designated distributor license within   that   governmental   unit, 
but whose application was not processed pursuant to the  quota  provisions of 
R 436.1141(1). Within 30  days  of  the   date   of   mailing   of   such   a 
notification, a person shall notify the commission, in   writing,   and   pay 
the required inspection fee if he or she is still interested in  obtaining  a 
new specially designated distributor license.   A   person   who   does   not 
respond within the 30-day period shall not be given  consideration  for   any 
available license. If at the end  of  the  30-day  period   the   number   of 
persons who have notified the commission of their desire  to  be   considered 
for new specially designated distributor licenses  within  the   governmental 
unit equals or exceeds the number of licenses available,  pursuant   to   the 
provisions of subrule  (1)  of  this  rule,   any   additional   applications 
received shall not be processed.
  (7) For purposes of determining the order in  which  initial   applications 
for new specially designated distributor licenses  are   submitted   to   the 
commission  as  required  by  the  provisions  of   R  436.1105(2)(f),    the 
commission shall use the date on which a  person  first   applied   for   the 
license, even if the application was not processed at that time  due  to  the 
provisions of subrule (1) or (4) of this rule.

  History: 1990 AACS.


R 436.1143 SDD license; transfer of location.
  Rule 43.  An applicant who requests a transfer of location of an   existing 
specially designated distributor license into an  area  in  which  there  are 
applications for new specially designated distributor licenses on  file  with 
the commission shall not be  given  priority  if  the  proposed  transfer  of 
location is within 2,640 feet of the location of the establishments  proposed 
by the new applicants.  The method of measurement shall be as  prescribed  in 
section 503 of 1998 PA 58, MCL 436.1503.

  History: 1979 AC; 2004 AACS.


R 436.1145   Watercraft license; minimum qualifications.
  Rule 45. An applicant for a watercraft license shall  meet   all   of   the 
following minimum qualifications before being granted a license:
  (a) The watercraft shall have a current certificate of inspection issued by 
either the state waterways commission or the United States coast  guard under 
title 46 of the United States Code.
  (b) The watercraft carries  paying  passengers   on   regularly   scheduled 
routes between predetermined geographical points.
  (c) The license shall only be  used  to  service   paying   passengers   on 
regularly scheduled routes between predetermined geographical points.

  History: 1979 AC.


R 436.1147   Aircraft license; minimum qualifications.
  Rule 47. An applicant for an aircraft license  shall  meet   all   of   the 
following minimum qualifications before being granted a license:
  (a) The aircraft shall be approved by the civil   aeronautics   board   for 
carrying paying passengers on regularly scheduled  routes   or   on   charter 
routes, and shall be in excess of 12,500 pounds gross weight.
  (b) The license shall only be  used  to  service   paying   passengers   on 
regularly scheduled  routes  or  chartered   routes   between   predetermined 
geographical points.

  History: 1979 AC.


R 436.1149 Class C or SDD license; hardship transfer.
  Rule 49.  (1)  The commission shall not consent to a hardship transfer   of 
class C or specially designated distributor licenses under section 501(2)  of 
1998 PA 58, MCL 436.1501(2) if the hardship shown  by  the  licensee  existed 
when the license was issued, except upon a showing of good cause.
  (2)  A person who has been granted approval for  a  hardship  transfer   of 
class C or specially designated distributor licenses under section 501(2)  of 
1998 PA 58, MCL 436.1501(2) shall be prohibited from holding such classes  of 
licenses for a period  of  5  years  thereafter,  as  either  an  individual, 
partner, or stockholder, except upon a showing of good cause.

  History: 1979 AC; 2004 AACS.


R  436.1151  Rescinded.

  History: 1979 AC; 1985 AACS.