DEPARTMENT OF LICENSING AND REGULATORY AFFAIRS

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), and Executive Reorganization Order No. 2011-4, MCL

445.2030)

R 436.1101 Rescinded.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.

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(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.

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(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 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) The commission may extend the length of time for which a licensee may renew

the license upon written order of the commission after a showing of good cause.

(5) 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.

(6) 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.

(7) The commission shall provide or attempt to provide each licensee whose license

is in escrow with a copy of this rule.

(8) 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 on March 24,

2004.

History: 1979 AC; 2004 AACS; 2010 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.

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(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.

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(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

commission, in writing, of any change in any of the following:

(a) Managers.

the

(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

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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.

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History: 1979 AC; 1998-2000 AACS.

R 436.1117 Rescinded.

History: 1979 AC; 1998-2000 AACS; 2004 AACS; 2017 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:

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(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.

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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

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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

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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 Rescinded.

History: 1979 AC; 2004 AACS; 2018 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

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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.

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(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.

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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

establishment.

shall

show the exterior of the proposed licensed

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).

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(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

the

governmental unit, but whose application was not processed pursuant to

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

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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.

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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.

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