STATE OF MICHIGAN

FRANK J. KELLEY, ATTORNEY GENERAL

Opinion No. 6673

February 14, 1991

LIQUOR CONTROL:

Authority of a home rule city to restrict tavern licenses to establishments generating at least 50% of revenues from sale of food

LIQUOR CONTROL:

Authority of a home rule city to restrict tavern licenses to establishments that only serve beer and wine with the purchase of food

A home rule city may limit its approval of tavern licenses to establishments which generate at least 50% of their gross revenues from the sale of food.

A home rule city may not require, as a condition for granting tavern licenses, that licensed establishments only serve beer and wine with the purchase of food prepared for consumption on the premises.

Honorable David M. Gubow

House of Representatives

The Capitol

Lansing, Michigan 48909-7514

You have requested my opinion on two questions regarding the issuance of tavern licenses. The first question is whether the City of Oak Park may limit its approval of applications for tavern licenses to restaurants which generate at least 50% of their gross revenues from the sale of food. The second question is whether the City may require, as a condition for granting tavern licenses, that licensed establishments only serve beer and wine with the purchase of food prepared for consumption on the premises.

The Legislature has provided for the statewide regulation of alcoholic beverages through the Michigan Liquor Control Act, MCL 436.1 et seq; MSA 18.971 et seq. Except as may be otherwise provided by that Act, the Michigan Liquor Control Commission is vested with "the sole right, power, and duty to control the alcoholic beverage traffic"' in this state. MCL 436.1(2); MSA 18.971(2). However, pursuant to section 17(3) of the Act, MCL 436.17(3); MSA 18.988(3), the Legislature has also required the approval of the local legislative body before the Liquor Control Commission may issue a license for on-premises consumption of alcohol:

The term "alcoholic liquor,"' as used in this section includes both beer and wine, as well as spirits. MCL 436.2; MSA 18.972.

The voters of the City of Oak Park have, by referendum, twice voted to prohibit the sale of spirits for consumption on the premises in the City. These referenda affect only the sale of spirits and do not prohibit the licensing of establishments to serve beer and wine. OAG, 1981-1982, No 5889, p 148 (April 29, 1981). You inform us that, nevertheless, the Oak Park City Council, by resolution, determined not to approve any applications for licenses for on-premises consumption of beer and wine and has consistently maintained that policy to date. In determining whether to change its current policy, the city wants to know whether it can limit its approval of tavern licenses to restaurants which generate at least 50% of their gross revenues from the sale of food, and which serve beer and wine only in connection with the purchase of food prepared for consumption on the premises.

In Stafford's Restaurant, Inc. v City of Oak Park, 129 MichApp 84; 341 NW2d 235 (1983), the Court of Appeals reviewed the Oak Park City Council's present practice of refusing to consider any applications for on-premises beer and wine sales. The Court held that, in light of section 17(3) of the Michigan Liquor Control Act, supra, expressly requiring local approval of tavern licenses, the State had not preempted the field of regulation of liquor sales, and the City could, therefore, exercise discretion to limit the number of licensees below the maximum number allowed by the State, or even to prohibit on-premises beer and wine sales altogether. The question you raise, however, is whether the City may regulate the type of establishment which may be licensed, as well as the number of licenses.

The home rule cities act, section 4-i, MCL 117.4i(4); MSA 5.2082(4), states that each city may, in its charter, provide:

In Tally v Detroit, 54 MichApp 328; 220 NW2d 778 (1974), the Court of Appeals held that, pursuant to this provision, a home rule city has the power to regulate traffic in the liquor business within its boundaries, subject to the authority of the Liquor Control Commission only when a conflict arises. Tally involved a challenge to a Detroit ordinance regulating topless dancing in establishments licensed to sell liquor. In finding the challenged ordinance valid and within the City's authority, the Court stated:

Id. at 334. Thus, pursuant to Talley, a city may act to regulate the type of establishments licensed to sell beer and wine as well as the number of such establishments, so long as the regulation is related to the health, morals or welfare of the inhabitants, and so long as it does not conflict with state statutes or rules promulgated by the Liquor Control Commission.

Research discloses no statute nor any rule promulgated by the Liquor Control Commission that would conflict with a home rule city's decision to limit its approval of applications for tavern licenses to restaurants which generate at least 50% of their gross revenues from the sale of food. Moreover, such a limitation is similar to MCL 436.19e(2); MSA 18.990(5)(2), which allows for Sunday liquor sales, by approval of the local legislative body, only after 12 noon in establishments in which the gross receipts derived from the sale of food and other goods and services exceed 50% of the total gross receipts.

It is my opinion, therefore, in response to your first question, that a home rule city may limit its approval of tavern licenses to establishments which generate at least 50% of their gross revenues from the sale of food.

Your second question is whether the City may require, as a condition for granting tavern licenses, that licensed establishments only serve beer and wine with the purchase of food prepared for consumption on the premises.

Section 27 of the Michigan Liquor Control Act, MCL 436.27; MSA 18.998, provides:

This provision clearly prohibits the City from limiting the service of beer and wine to patrons ordering food.

It is my opinion, therefore, in response to your second question, that a home rule city may not require, as a condition for granting tavern licenses, that licensed establishments only serve beer and wine with the purchase of food prepared for consumption on the premises.

Frank J. Kelley

Attorney General