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Hotel License - Class B
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.
B - Hotel License
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)
The definition of a Class B-Hotel License is a hotel licensed by the MLCC to sell beer, wine, mixed spirit drink, and spirits for consumption on the premises only, which provides for the rental of, and maintains the availability for rental of, not less than 25 bedrooms if located in a city, village, or township with a population of less than 175,000 or not less than 50 bedrooms if located in a city, village, or township of 175,000 or more. The types of businesses that generally obtain a Class B-Hotel license to serve beer, wine, mixed spirit drink, and spirits for consumption on the premises provide lodging to travelers and temporary residents and may also provide food service and other goods and services to registered guests and to the general public.
2. Pre-Application Requirements
licenses are established under a quota for on premises consumption of alcoholic
beverages of 1 public license for each 1,500 of population or major fraction in
each city, village, and township (local governmental unit) in
This report also indicates whether the sale of mixed spirit drink and spirits have been legalized in the city, village, or township where the establishment to be licensed is located. If the Type column on the far right hand side of the report indicates "Dry", then the sale of mixed spirit drink and spirits is not permitted in that city, village, or township. If the Type column on the far right hand side of the report indicates "Legal", then the sale of mixed spirit drink and spirits is permitted in that city, village, or township.
If the On Premise Availability Report indicates that a quota license is available in the city, village, or township where the premises to be licensed is located, then a resolution of approval "above all others" must be obtained from the city, village, or township board before an application for a Class B-Hotel license can be filed with the MLCC. This resolution should contain the following information:
o The type of meeting (Regular or Special) held by the city, village, or township board.
o The day, date and time of the meeting held by the city, village, or township board.
o The type of license (Class B-Hotel license) requested and the specific address of the premises to be licensed.
o The person (individual, partnership, corporation, limited liability company, limited partnership) that will hold the license and operate the licensed business.
o The approval or disapproval of the city, village, or township board and the number of Yeas, Nays, and Absent votes for the resolution considered.
o Certification of the resolution, signed by the city, village, or township clerk and including the seal if the city, village, or township has a seal.
If a Class B-Hotel license is obtained under the quota, it may not be transferred for three years after issuance unless the licensee clearly and convincingly shows the MLCC that unusual hardship will result if the transfer is not approved.
In the event there are no licenses available under the quota in the city, village, or township where the premises to be licensed is located, a Class B-Hotel license may be obtained through a transfer of ownership of an existing license (at the same location) or a transfer of ownership and location of an existing license. If the Class B-Hotel license is in escrow the license may be transferred, subject to local legislative body, local law enforcement, and MLCC approval, to an establishment located in any city, village, or township within that county. To determine if a transferable on premises license is in escrow with no pending transfers, check the Active and Escrowed License Lists by County or check the Active or Escrow License Query.
3. Application Submission Requirements
Resolution of approval "above all others" from the city, village, or township where the establishment to be licensed is located for a Class B-Hotel license which is available under the on premises consumption quota for that city, village, or township OR a Purchase Agreement, completely executed by both the Buyer and the Seller, for an existing Tavern license, business, fixtures, and equipment.
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
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 Class B-Hotel license only the inspection
fees would be $70.00. Please make your check or money order payable to the
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
Class B-Hotel 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 and a resolution form to the local
governing body. 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 and the local governing body to
ensure compliance with all local requirements. The recommendations of the local
law enforcement agency and the local legislative body are forwarded 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. The MLCC Enforcement investigator also determines if the proposed licensed establishment is located within 500 feet of a church or school building.
If the MLCC Enforcement investigator determines that the proposed licensed location of an applicant is within 500 feet of a church or school building, a memorandum is prepared by the investigator and forwarded to the MLCC Licensing Division. The MLCC Enforcement investigator continues with the investigation.
Upon receipt of the
memorandum from the MLCC Enforcement investigator, the MLCC Licensing Division
notifies the clergyman of the church or the superintendent of the school, via
certified mail, of the pending application of the new license to sell alcoholic
liquor for consumption on the premises or the transfer of location of an
existing license to sell alcoholic liquor for consumption on the premises to
the new proposed location. If the church or school objects to the issuance or
transfer of location of the license, then the governing body of the church or
school, by resolution, shall file the specific written objections with the
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, the Police Investigation Report and fingerprint cards, if required, from the local law enforcement agency, and the Resolution from the local legislative body, if required, 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. If the local legislative body did not recommend approval of the application or an objection to the application is received from a church or school located within 500 feet of the proposed licensed location, the application must be denied by the MLCC Administrative Commissioners. 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 Class B-Hotel 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, objection to renewal by the city, village, or township where the licensed premises is located, 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, except January 1, 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 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 post in a conspicuous place, a sign stating the total capacity of each public room of the licensed premises based upon the capacity established by the state or local authority having jurisdiction.
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 licensee shall not contract for the services of another person to operate the food portion of the licensed business 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
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.
A licensee shall not allow contests in which the licensee or any person gives away anything of value over $250 per day, except upon written order 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 sell, offer for sale, expose for sale, or possess alcoholic beverages that have been adulterated, misbranded, or in bottles that have been refilled. A bottle is adulterated if it contains any liquid or other ingredient that was not placed there by the original manufacturer or bottler. A bottle is misbranded if it is not plainly labeled, marked, or otherwise designated. A bottle has been refilled when it contains any liquid or other ingredient not placed in the bottles by the original manufacturer or bottler.
A licensee shall not sell, offer for sale, or advertise the sale of an unlimited quantity of alcoholic beverages at a specific price.
A licensee shall not sell, offer for sale, or advertise the sale of 2 or more identical drinks containing alcoholic liquor to a person for consumption for 1 price.
A licensee shall not give away any alcoholic beverages at any time in connection with the licensed business.
$70 nonrefundable Inspection Fee.
$600 License Fee which includes 1 bar and 20 bedrooms. The License Fee also includes $3.00 for each bedroom in excess of 20 and if a Class B-Hotel licensee sells beer, wine, mixed spirit drink and/or spirits in more than 1 bar, $350 shall be paid for each additional bar and an Additional Bar Permit must be obtained.
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 public has an opportunity for input at the local level when the application is considered by the city, village or township board.
The MLCC also considers the opinions of the local residents at the time of review and consideration of the completed application.
October 8, 2010
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