Information on Changes to Specially Designated Merchant (SDM) Licenses and SDM Fuel Pump Requirements

Specially Designated Merchant Quota

Pursuant to the enactment of Public Act 434 of 2016 (Senate Bill 929), effective January 4, 2017, Specially Designated Merchant (SDM) licenses are quota licenses based on one (1) SDM license for every 1,000 of population in a local governmental unit.  The amended statute provides for several exemptions or waivers from the quota for qualified applicants.

Details of these exemptions and waivers may be found in the Specially Designated Merchant information sheet on the Retail Licensing frequently asked questions webpage.  A chart of the types of Specially Designated Merchant license exemptions and waivers may be viewed below.

Details of the eligibility requirements and required documents for a complete application may be found in the updated Retail License & Permit Application (LCC-100).  Applicants for a conditional license in conjunction with a new Specially Designated Merchant license should used the updated Conditional License Application - New SDM (LCC-104).

Specially Designated Merchant License Motor Vehicle Fuel Pump Requirements

If an existing Specially Designated Merchant licensee has fuel pumps with an inventory requirement under MCL 436.1541(1) or (3) ($10,000 or $250,000.00), the licensee does not have to meet the inventory requirement anymore, pursuant to new subsection (11) under MCL 436.1533:

(11) An applicant for or the holder of a specially designated merchant license that owns or operates a motor vehicle fuel pump on or adjacent to the licensed premises is not required to meet the conditions under section 541 as that section existed before the effective date of the amendatory act that added subsection (5).

The SDM licensee does not need to do anything other than comply with the provisions of new subsection (6) of MCL 436.1541 which requires "the site of payment of alcoholic liquor and selection of alcoholic liquor" to be not less than 5 feet from the fuel pumps.

If the Specially Designated Merchant license held is in conjunction with a Specially Designated Distributor (SDD) license at the same location and fuel pumps were approved with a $12,500.00 or $250,000.00 inventory requirement for the SDD, then the inventory requirement is still in place as long as the SDD license is held there. Also, the $250,000.00 inventory requirement for a SDM licensee with a Secondary Location Permit is still in place.

Statute Section

Quota
License

Location Transferable

MCL 436.1533(5)

One (1) Specially Designated Merchant license may be issued for every 1,000 in population in a local governmental unit.  The applicant must hold a retail food establishment license or extended retail food establishment license as required under MCL 436.1533(1)(a) or (b).  A Specially Designated Distributor licensee may also be issued a SDM license under the quota pursuant to MCL 436.1533(1)(c), as long as the SDM licensee is an also approved type business under MCL 436.1533(1)(a) or (b).

Yes

Yes

MCL 436.1533(5)

The Commission may waive the quota requirement if the applicant is not located within 2 miles of another SDM licensee and the applicant is an approved type business under MCL 436.1533(1)(a) or (b) pursuant to MCL 436.1533(6).

Yes No

MCL 436.1533(5)(a)

Applicant holds or is approved for Class C, A Hotel, B Hotel, Club, Tavern, G-1, or G-2 license as described in MCL 436.1533(1)(d) to (j).

Exempt from Quota

No

MCL 436.1533(5)(b)(i)

Applicant’s licensed establishment is at least 20,000 square feet and at least 20% of gross receipts are derived from the sale of food and the applicant is an approved type business under MCL 436.1533(1)(a) or (b).

Exempt from Quota

No

MCL 436.1533(5)(b)(ii)

Applicant’s licensed establishment is a pharmacy and the applicant is an approved type business under MCL 436.1533(1)(a) or (b).

Exempt from Quota

No

MCL 436.1533(5)(e)

Applicant is a marina under MCL 436.1539 and the applicant is an approved type business under MCL 436.1533(1)(a) or (b).

Exempt from Quota

Yes, if applicant at new location qualifies under MCL 436.1539

MCL 436.1533(7)

Applicant applies within 60 days of the enactment of the law (January 5, 2017 to March 5, 2017) and holds a retail dealer license under the Motor Fuels Quality Act and the applicant is an approved type business under MCL 436.1533(1)(a) or (b).

Commission Shall Waive Quota

Yes, if applicant at new location qualifies as a retail dealer under Motor Fuels Quality Act



Related Documents
Specially Designated Merchant Licensing Information PDF icon
Retail License & Permit Application (LCC-100) PDF icon
Conditional License Application - New SDM (LCC-104) PDF icon