Michigan Senate Bill SB0731

Michigan 2023-2024 Regular Session

• Introduced: 2/28/24
• Refer: 2/28/24
• Report Pass: 6/12/24
• Refer: 6/12/24
• Report Pass: 6/25/24
• Engrossed: 6/26/24
• Refer: 6/26/24
• Report Pass: 12/10/24

Caption

Liquor: other; payment of administrative fee to wholesaler for a payment dishonored by a financial institution; require. Amends sec. 903b of 1998 PA 58 (MCL 436.1903b).

Impact

The proposed changes are intended to strengthen the financial relationship between wholesalers and retailers in the liquor trade by discouraging the issuance of bad checks. The escalatory fee structure serves not only as a financial deterrent to prevent late or non-payment but also as a clear guideline for standard practice among wholesalers. This measure is expected to improve compliance within the industry, thereby enhancing overall operational efficiency and accountability.

Summary

Senate Bill 0731 amends the Michigan Liquor Control Code by introducing a structured fee system for wholesalers that encounter dishonored payments from retailers. According to the bill, if a retailer's payment to a wholesaler is not honored by a bank due to insufficient funds, the wholesaler is entitled to charge the retailer an administrative fee that escalates with repeated offenses. The fees start at $50 for the first dishonored payment and can increase up to $250 for subsequent violations within a 12-month period.

Sentiment

The sentiment surrounding SB 0731 appears to be generally positive, especially among wholesalers who see it as a necessary step towards financial security in transactions with retailers. The structured fee approach has been framed as a reasonable response to a problem that can financially harm wholesalers. However, concerns may arise among smaller liquor retailers who fear that such fees could disproportionately affect their financial viability in times of economic strain.

Contention

While the bill aims to provide clarity and protection for wholesalers against non-payment, there is a potential for contention regarding the fairness and burden of the increasing fees. Smaller retailers may argue that the fees can escalate too quickly, leading to financial difficulties if they encounter multiple payment issues. The balance between enforcing responsible payment practices and maintaining fair treatment of retailers will be a point of debate as discussions around SB 0731 progress.