Bill
HB 5117
The bill narrows or expands population-based quotas for specially designated liquor licenses and creates exemptions/waivers for large retailers and certain license-holders.
Status / timeline
- Introduced March 13, 2025; electronically reproduced October 23, 2025.
- Read first time April 7, 2025 and again October 23, 2025; referred to committee (Judiciary & Civil Jurisprudence on April 7; Committee on Regulatory Reform on October 23).
- Public hearings and related committee activity occurred earlier in 2025 (see bill file for details).
Purpose
- To amend section 533 of the Michigan Liquor Control Code of 1998 (MCL 436.1533) to define who qualifies for specially designated merchant licenses and specially designated distributor licenses and to set, clarify, and provide exceptions/waivers to population-based quotas for those licenses.
Key provisions and changes
- Eligibility (who may receive/hold a specially designated merchant license):
- Applicant must be an approved business type, which includes (but is not limited to) retail food establishments or extended retail food establishments (under the Food Law, 2000 PA 92), specially designated distributors, Class A/B hotel, Class C, club, tavern, Class G‑1, G‑2 licensees.
- Specially designated distributor to merchant conversion:
- A specially designated distributor may apply for a specially designated merchant license.
- Quotas (population-based limits):
- Specially designated distributors: generally limited to one license per 3,000 population (or fraction) in cities, incorporated villages, or townships. The Liquor Control Commission (LCC) may waive the quota if no existing distributor is within 2 miles measured along the nearest traffic route.
- Specially designated merchants: generally limited to one license per 1,000 population (or fraction). The LCC may waive this quota if no existing specially designated merchant is within 2 miles.
- Exemptions to quotas:
- Large-format grocery/retail stores: specially designated distributor quota does not apply if the licensed establishment meets all of the following:
- At least 25,000 square feet sales floor area;
- Offers USDA-inspected or USDA-organic meat/poultry, fresh fruit, fresh vegetables, and dairy products;
- At least 25% of retail sales floor area devoted to those listed food products.
- Specially designated merchant quota exemptions include:
- Applicants who already hold certain on‑premises licenses (Class C, hotels, clubs, taverns, G‑1/G‑2, etc.);
- Establishments with at least 20,000 sq ft and at least 20% of gross receipts from food;
- Establishments that are pharmacies (as defined in the Public Health Code);
- Secondary location permits, licenses issued under specified subsections, and marina licenses.
- Special waiver for motor fuel retail dealers who applied within 60 days after January 4, 2017 and hold a motor fuels retail dealer license (procedural requirement: include copy of that license).
- Transfer and renewal rules:
- Licenses may be transferred within local governmental units in the same county (with rules on counting transferred licenses against the original issuing unit).
- Generally, quotas do not prevent an existing specially designated merchant from renewing or transferring a license issued before, on, or after January 4, 2017, except that licenses issued after January 4, 2017 to certain categories or granted under the waiver cannot be transferred to another location.
- Additional provisions:
- A specially designated merchant or applicant that owns/operates a motor fuel pump adjacent to the premises is not required to meet certain conditions under section 541 (text truncated in provided copy — consult bill text for full detail).
Who is affected
- Retailers seeking to sell liquor under specially designated merchant or distributor licenses, including supermarkets, large-format food retailers, taverns, hotels, clubs, marinas, pharmacies, and specially designated distributors.
- The Michigan Liquor Control Commission, which implements quota waivers, approvals, transfers, and enforcement.
- Local governmental units, since quotas and transfers are counted against local allocations.
Potential impacts
- Clarifies and preserves population-based licensing quotas while expanding and clarifying numerous exemptions and waiver paths (notably for very large food retailers and specified license-holders).
- Could enable larger retailers and certain existing license-holders to obtain or retain on‑site liquor privileges without being blocked by local quota limits.
- Affects competition among food retailers, convenience stores, hotels, taverns and liquor distributors in local markets; may shift where new liquor-permitted retail operations can locate.
Note
- The bill text provided is the amended language of MCL 436.1533 (section 533). For detailed application procedures, exact cross-references, and truncated provisions (e.g., the remainder of subsection (11)), consult the full bill document and the Michigan Compiled Laws.
Compiled from official sources — confirm details with the bill’s official record.
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