(1) The commission shall deny a new application for a license to sell alcoholic beverages at retail or a request to transfer location of an existing license if the contemplated location is within 500 feet of a church or a school building. The distance between the church or school building and the contemplated location must be measured along the center line of the street or streets of address between 2 fixed points on the center line determined by projecting straight lines, at right angles to the center line, from the part of the church or school building nearest to the contemplated location and from the part of the contemplated location nearest to the church or school building.

  (2) This section does not apply to specially designated merchants not in conjunction with on the premises licenses.

  (3) This section does not apply to an outstanding license issued before March 1, 2017, for a location within the distance described in subsection (1) or to the renewal or transfer of the outstanding license at the location. A license issued, renewed, or transferred as described in this subsection is conclusively presumed to be valid for purposes of this section only.

  (4) The commission may waive this section for all classes of licenses. If an objection is not filed by the church or school, the commission may issue the license under this act. If an objection is filed, the commission shall hold a hearing under rules established by the commission before making a decision on issuing the license.

  (5) This section does not prevent the transfer of a license to a location farther from a church or school, if the license to be transferred is within the 500-foot radius described in subsection (1).