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Specially Designated Merchant LicenseThe Michigan
Liquor Control Commission (MLCC) exercises complete control of the
alcoholic beverage traffic in The MLCC
Commissioners are appointed by the Governor, with the advice and consent of the
Michigan Senate. Of the five members, no more than three can be of the same
political party. The Commissioners' terms of office are for four years with
rotating expiration dates. Two of the Commissioners (one Democrat and one
Republican) serve as Hearing Commissioners and conduct hearings on violations
of the Michigan Liquor Control Code of 1998 (Code) and Administrative Rules of
the MLCC (Rules). The remaining three Commissioners are designated as the
Administrative Commissioners and are responsible for administering the
provisions of the Code and Rules in the areas of licensing, enforcement, purchasing,
merchandising, and distribution. New! Renewals for these tasks are accessible through the Michigan Business One Stop portal.
Specially Designated
Merchant License
B. STATUTORY AUTHORITY: Constitution of
Michigan of 1963 (Excerpt) Michigan Liquor
Control Code of 1998, Public Act 58 of 1998, as amended
C. APPLICABLE REGULATION: Michigan
Administrative Code Implemented by the Michigan Liquor Control Commission General Rules (R
436.1001 - 436.1063) Licensing
Qualifications, (R 436.1101 - 436.1151) On-Premises Licenses
(R 436.1401 - 436.1438) Hearings and Appeals
Practice Rules (R 436.1901 - 436.1935) Church or School
Hearings (R 436.1951 - 436.1953 Financial
Responsibility (R 436.2001 - 436.2021)
D. SUMMARY OF LICENSE/APPROVAL PROCESS: 1.
Applicability (activities that require the license)
A Specially
Designated Merchant (SDM) license is required for an establishment located in 2.
Pre-Application Requirements
Specially Designated Merchant (SDM) licenses
are not subject to any quota established by the Michigan Liquor Control Code of
1998. However, the Specially Designated Distributor (SDD) license, Class C
license, Class B-Hotel license, Class A-Hotel license, or Tavern license that
may be held in conjunction with the SDM license are subject to a quota
established by the Michigan Liquor Control Code of 1998 and may not be
available for issuance in the city, village, or township where the establishment
is located. In order to obtain an
SDM license, an approved type of business must be operating or propose to be
operating at the establishment to be licensed. The following are approved types
of businesses: o
A grocery store. o
A convenience food store. o
A food specialty store. o
A meat market. o
A delicatessen. o
A drugstore. o
A patent medicine store. o
A tobacconist that does not have motor vehicle fuel
pumps. o
A department store that includes 1 or more of the stores
listed above. o
A Specially Designated Distributor (SDD). o
A Class C. o
A Class B-Hotel. o
A Club. o
A Tavern. o
A Class A-Hotel. 3.
Application Submission Requirements
Completed and
executed Application for New Licenses or Application of Buyers for Transfer of
Ownership or Interest in License (LC-687)
in the name of the applicant individual, applicant
corporation, applicant limited liability company, applicant
general partner, and/or applicant general partner of a limited partnership. Completed and
executed Individual Stockholder, Limited Liability Member or Corporate
Stockholder Questionnaire (LC-621)
for each individual, corporation, and/or limited liability company that is a
stockholder of the applicant corporation or member of the applicant limited
liability company holding 10% or more interest in the applicant corporation or
applicant limited liability company. Completed and
executed Limited Partners, Stockholders, or Members Statement (LC-38)
form for any individual, corporation, limited liability company, general
partner, or limited partner holding less than 10% interest in an applicant
corporation, applicant limited liability company or applicant limited
partnership. Copy of filed
Articles of Incorporation for an applicant corporation
and filed Articles of Organization and Operating Agreement for an applicant
limited liability company and any amendments. If the corporation or limited
liability is incorporated or organized outside the state of Copy
of filed Certificate of Limited Partnership and copy of Limited Partnership
agreement for an applicant limited partnership. If the limited partnership is formed
outside the state of Copy
of Lease, Option to Lease, Purchase Agreement, or Warranty Deed for the
establishment to be licensed. Inspection fees of
$70.00 for each new license type requested and/or each new license type being
transferred must be submitted. If you are applying for a Class B-Hotel license
and a Specially Designated Merchant license the inspection fees would be
$140.00. If you are applying for a Specially Designated Merchant license only
the inspection fees would be $70.00. Please make your check or money order
payable to the STATE OF 4.
Procedures and Time-Frame for Obtaining Permit or Approval
The application is
submitted to the Michigan Liquor Control Commission, Upon receipt of all
required forms, documents, and fees the MLCC Licensing Division authorizes the
application for investigation. The application file is generally authorized for
investigation within 5 to 7 business days after all the required forms,
documents, and fees are received. The application file is then forwarded to the
MLCC Enforcement Division District Office where it is assigned to an
Enforcement investigator. Upon receipt of the application file, the
investigator contacts the applicant and advises them of the documentation
necessary to be provided for review. The Enforcement investigator generally
contacts the applicant within 3 to 5 business days from the receipt of the assigned
application file. The Enforcement investigator also contacts the current
licensee if the application is to transfer ownership of an existing Specially
Designated Merchant license and advises the current licensee of the
documentation necessary to be provided for review. When the applicant and the
current licensee have gathered the requested documentation, the Enforcement
investigator is contacted to schedule an appointment to conduct the
investigation. The Enforcement investigator also releases forms and fingerprint
cards to the local law enforcement agency. The local law enforcement agency's
investigation is independent of the MLCC investigation. It is the
responsibility of the applicant to follow-up with the local law enforcement
agency to ensure compliance with all local requirements. The local law
enforcement agency forwards its recommendations directly to the The investigation
conducted by the MLCC Enforcement investigator covers a variety of areas
including but not limited to business ownership structure; background of
individuals; projected cost of the project/transaction; source of finances,
including source of any money lender's finances; present ownership
verification; and physical inspection of the establishment, if the physical
premises is built and available for inspection. Upon completion of
the investigation, the MLCC Enforcement investigator will prepare and submit a
preliminary investigation report to the MLCC Enforcement supervisor for review.
Upon review and determination by the Enforcement supervisor that the
investigation report is complete, the application file is returned to the MLCC
Licensing Division in Upon receipt of the
investigation report from the MLCC Enforcement Division, and the Police
Investigation Report and fingerprint cards, if required, from the local law
enforcement agency, the completed application file is prepared for review and
consideration by the MLCC Administrative Commissioners at a regularly scheduled
Licensing Meeting. The MLCC Administrative Commissioners review the information
provided in the application files to determine whether the application should
be approved, denied, or held for further information. The MLCC Administrative
Commissioners advise the Licensing Division of their decision at the regularly
scheduled Licensing Meeting. The MLCC Licensing
Division then prepares an Order based upon the decision of the MLCC
Administrative Commissioners. The applicant is advised of the decisions of the
MLCC Administrative Commissioners as follows: o
If approved a Fee Statement letter or Checklist is
prepared requesting the forms, documents and fees required to complete the
application. o
If denied a Notice of Denial together with the MLCC Order
advising of the basis of the denial and the right to an appeal hearing is sent
to the applicant. The applicant, if
approved, then completes and returns all requested forms, documents and fees to
the MLCC Lansing office. This includes proceeding with plans to purchase or
lease property, complete the purchase of the existing Specially Designated
Merchant licensed business, and/or complete any required inspections of the
proposed licensed establishment by the MLCC Enforcement Division, the local law
enforcement agency, and/or the local governmental body. The applicant, if
denied, determines whether to request an appeal of the denial of the licensing
application. The request for a hearing must be received in the MLCC Lansing
office within 20 days from the date of the mailing of the decision of the
denial. Appeal hearings of licensing decisions are generally held in the MLCC
Lansing office on Tuesdays and in the MLCC Farmington office on Thursdays. 5.
Operational Requirements
The license must be
renewed each year by May 1. The license is effective May 1 through April 30.
The license is generally renewed upon application and payment of the renewal
fee, unless there is a hold on the renewal of the license for violations,
objection to renewal by the Michigan Department of Treasury, dissolution of the
licensed corporation, and other such things which would prevent the timely
renewal of the license. If the reason for the hold on the renewal of the
license is not resolved by May 1, the sale of alcoholic beverages must cease
until the reason for the hold is resolved and the license is renewed. The
license renewal fee is the same as the license fee. License or renewal fees
are not prorated. A licensee must
maintain proof of financial responsibility on file with the MLCC in the amount
of at least $50,000 for security for liability (Dram Shop liability) for an
individual who suffers damage or who is personally injured by a person under
the age of 21 or a visibly intoxicated person by reason of the unlawful
selling, giving or furnishing of alcoholic liquor to the person under 21 years
of age or the visibly intoxicated person. The method most often used by
licensees to meet this requirement is the purchase of a liquor liability
insurance policy worth at least $50,000. Other acceptable means of complying
with this requirement include depositing $50,000 in cash with the MLCC or
obtaining an irrevocable letter of credit which is pledged to the State of A licensee is
prohibited from selling alcoholic beverages between the hours of 2:00 a.m. and
7:00 a.m. of any day and 2:00 a.m. and 12 noon on
Sundays. Pursuant to the Michigan Liquor Control Code of 1998, 12 Noon on
Sunday is considered 12 Noon on Sunday, EST, for any licensee located in the
central time zone. Beer and wine may be sold after noon on Sundays without a
Sunday Sales Permit unless prohibited by the county or local government. A sale or purchase of
alcoholic beverages shall be for cash only except for a customer's charge
account with a Specially Designated Merchant who is not a holder of a license
authorizing the sale of alcoholic beverages for consumption on the premises;
the sale to an industrial account if the extension of credit does not exceed 30
days; or a sale to a person holding an authorized credit card from a credit
card agency. A licensee must
obtain approval from the MLCC to transfer the license or an interest in the
license from one person to another. This includes the transfer or issuance of
stock in a corporation; the transfer or assignment of a membership interest in
limited liability company; and/or the transfer or
assignment of a partnership interest, including the adding or dropping of
partners. A privately held
licensed corporation must immediately notify the MLCC, in writing, of changes
made in its officers or directors or of amendments made to the articles of
incorporation. A limited liability
company shall immediately notify the MLCC, in writing, of changes made in its
managers or assignees or of amendments made to the articles of organization,
operating agreement, or by-laws. A licensee shall
comply with all state and local building, plumbing, zoning, sanitation, and
health laws, rules, and ordinances. A licensee shall
maintain accurate records of purchases and sales of alcoholic beverages for a
4-year period of time. A licensee shall maintain records sufficient to
determine ownership of the licensed business and to whom the profits or losses
of the business accrue for a 4-year period of time. A licensee shall make
the licensed premises available for inspection and search by an MLCC
investigator or law enforcement officer during regular business hours or when
the licensed premises are occupied by the license or a clerk, servant, agent,
or employee of the licensee. A licensee shall sign
and frame under transparent material the license(s) and permit document issued
by the MLCC. A licensee shall prominently display the license(s) and permit
document in the licensed premises. A licensee shall not
directly, individually, or by a clerk, agent, or servant sell, furnish, or give
alcoholic beverages to a person under the age of 21. A licensee shall not
directly or indirectly, individually, or by a clerk, agent, or servant sell,
furnish, or give alcoholic beverages or to a person who is visibly intoxicated.
A licensee shall not
obtain the license for the use and benefit of a person whose name does not
appear on the license. A licensee shall not
lease, sell, or transfer possession of the licensed premises without the prior
written approval of the MLCC. A license shall not
add or drop any space from the physical structure of the licensed premises
without prior approval of the MLCC. A licensee shall not
close the licensed business for more than 30 days without returning the license
to the A licensee shall not
participate in or sponsor any contest that requires the use or consumption of
alcoholic beverages or features alcoholic beverages as a prize in connection
with a contest. An off-premises
licensee who is not licensed as an on-premises licensee shall not have
any open containers of alcoholic beverages on the licensed premises unless it
is a defective or sample bottle or can; a returnable container returned by a
customer of the off-premises licensee for a refund of the deposit on the
container; or an off premises licensee has obtained approval from the MLCC for
open alcoholic beverages used in the preparation of bakery or deli items by the
employees of the off-premises licensee. An off-premises
licensee shall not change the nature of the business for which the
off-premises license was issued without the prior approval of the MLCC. A licensee or the
clerk, servant, agent, or employee of the licensee shall not make
payment to the MLCC or the State of A licensee shall not
give away any alcoholic beverages at any time in connection with the licensed
business. 6.
Fees
$70 Inspection Fee $100 License Fee 7.
Appeal Process
If a license
application is denied, the aggrieved license applicant may request an appeal
hearing. This request must be made in writing to the The Hearings and
Appeals Section of the Executive Services Division will notify the applicant of
the day, date, and time of the scheduled appeal hearing. Appeal hearings of
licensing decisions are generally held in the MLCC Lansing office on Tuesdays
and in the MLCC Farmington office on Thursdays. 8.
Public Input Opportunities
The MLCC also
considers the opinions of the local residents at the time of review and
consideration of the completed application.
Creation/Revision Date: October 12, 2010 | |||||
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