House committee hears bills to raise retailer margins and limit licensing lookback to two years

The Michigan House Regulatory Reform Committee on an unspecified May meeting date heard testimony on a package of liquor-industry bills that supporters said would help small, neighborhood liquor retailers competing with large chains.

Representative Goon, sponsor of House Bill 4,114, told the committee the bill "allows the Liquor Control Commission to focus on recent and relevant violations — those occurring within the past two years when making licensing decisions. Violations older than two years would no longer be considered unless they resulted in a license revocation." He said the change would give "licensees a clear path forward after two years of compliance while still allowing the Commission to hold serious offenders accountable." Representative Goon said the change is intended to reduce administrative burden for the Commission, which oversees nearly 20,000 licensees statewide.

Martin Manna, identified himself as president and CEO of the Chaldean American Chamber of Commerce, testified in support of the package that includes House Bill 4,113. Manna said many independent, often minority-owned, retailers operate on thin margins. "They're currently at about a 17% spread," he said, and noted operating costs such as wages, utilities and credit card fees have risen. "It costs them about 24% just to really open their doors and operate," he said, arguing that adjusting retailer margins would help neighborhood stores remain viable against big-box competitors.

Joe Shabal, counsel for the Chaldean Chamber, said similar control states allow retailers between 20% and 35% margins and that rising credit-card processing fees and other costs are squeezing independent operators. Bill Concha, who identified himself as a Freeland Market owner with roughly four decades in grocery and liquor retail, described long hours, theft, delivery and inventory costs and said a 17% margin no longer covers the cost to run a small store.

Committee members asked how the two-year lookback would apply to specific violations. Representative Carter noted major retailers could also benefit from any change in margins; Manna acknowledged that fact. On what counts as a disqualifying offense, Representative Goon said the bill draws the line at revocations: "If it's been a revocation, that can be considered beyond two years. Otherwise, every other infraction has a two year limit," he said. When asked whether a sale to a minor would be subject to the two-year lookback, Representative Goon said yes; "anything can be looked at within two years."

The committee adopted a technical substitute to H.B. 4,114 and then voted to report H.B. 4,114 with recommendation as substitute H-1. The clerk recorded the substitute adoption roll as 12 yeas, 0 nays, 2 pass. The bill H.B. 4,114 was reported with a recorded roll of 11 yeas, 0 nays, 3 pass. Representative Holy moved to report H.B. 4,113 with a recommendation that it be referred to the Committee on Rules; the clerk recorded that motion as reported to Rules with a roll of 11 yeas, 0 nays, 3 pass.

No final legislative text changes beyond the substitute were detailed on the record during the committee hearing. Support cards on file, read by the clerk, included multiple retail and industry groups and individual store owners supportive of the bill package.

The committee discussion included questions about whether limiting lookback to two years would allow the Liquor Control Commission to identify patterns of repeat violations. Supporters argued bad actors typically show repeated, more recent violations and could be identified under a two-year standard; opponents or neutral parties did not speak on the record during the hearing portion.

Votes at a glance: - Adopt substitute on House Bill 4,114: 12 yeas, 0 nays, 2 pass (substitute adopted) - Report House Bill 4,114 with recommendation as substitute H-1: 11 yeas, 0 nays, 3 pass (reported out) - Report House Bill 4,113 to Committee on Rules with recommendation: 11 yeas, 0 nays, 3 pass (referred)

The committee adjourned after other business; no further action on the liquor bills was recorded in the transcript excerpt provided.