The bipartisan package that amends many state liquor laws would change the definition of a microbrewery, doubling production limits from 30,000 barrels to 60,000 barrels a year. It also would accelerate liquor licensing by creating a conditional license for use during applicants' license review process. Startup craft brewers would be allowed limited self-distribution.
The legislation passed the House and Senate on Wednesday and is expected to reach Gov. Rick Snyder's desk soon.
Brewers and trade associations say the new regulations would help the industry grow and create jobs.
"These reforms will open the door of opportunity for businesses and further support Michigan's thriving craft beer sector," Michigan Beer and Wine Wholesalers Association President Mike Lashbrook said in a statement. "After more than two years of working with diverse stakeholders and making concessions to find common ground, distributors look forward to doing our part to keep Michigan beer hopping."
Michigan's $2 billion beer industry accounted for more than 5,000 brewing and distribution jobs and more than 30,000 retail jobs in 2012, according to the Beer Institute, a Washington, D.C.-based trade association. Lashbrook's association represents 53 distributors across the state.
Bill sponsor Rep. Kevin Cotter, R-Mt. Pleasant, said the production cap increase is a victory for breweries that were fighting what he called an "arbitrary" limit set in the 1990s. He would like the cap to be "even higher," he said, and the bills leave the Legislature room to reevaluate the limit.
"Frankly, 60,000 is another arbitrary cap. We arrived at it by multiplying the current cap by two," Cotter said in an interview. "I have a lot of confidence that we're going to butt up against that threshold in the coming years."
One bill in the package intends to shorten wait times for businesses applying to sell alcohol. While the state Liquor Control Commission is required to issue a license within 90 days of receiving an application, procedural rules have caused some businesses to wait for several months or years. The new legislation creates a $300 temporary license that a business can use while the commission reviews its application.
Another bill that regulates branded barware items became a sticking point for the package last fall, when Gov. Rick Snyder's administration began canceling the regulations but lawmakers voted to maintain some of the advertising rules.
The version that passed Wednesday would allow a business to use certain promotional merchandise, including coasters, napkins and trays. A business could only use "brand logoed glassware" if it purchased it from a glassware retailer, but not from an alcohol manufacturer or distributor.
Rep. Thomas Hooker, R-Byron Center, was among only a handful of House members who voted against certain bills in the package. He said he opposes increased beer and liquor distribution because of "the damage alcohol does to our society and the uncounted costs to families."
"My mom grew up in an orphanage because of alcohol," Hooker said in an interview. "I have vowed that every vote that's ever taken that expands or makes more liquor available, I'm going to vote against."
SB 505: http://1.usa.gov/1lXRpua
HB 4277: http://1.usa.gov/1lBsx8B
Beer Institute report: http://bit.ly/1glr8Cf