(1) Except as otherwise provided in this act, the commission shall not issue a license to sell alcoholic liquor, either on or off the premises, if the property or establishment to be covered by the license is situated in or on state owned land.

  (2) Subsection (1) does not apply to a special license that has been approved by the governing authority of that state owned land.

  (3) Subsection (1) does not apply to any of the following:

  (a) The Michigan state fairgrounds.

  (b) The Upper Peninsula state fairgrounds.

  (c) Armories, air bases, and naval installations owned or leased by this state or provided by the federal government by either lease, license, or use permit and used by outside parties of a nonmilitary or nonstate governmental nature.

  (d) Land that was under lease to a person licensed in the calendar year 1954 and on which a licensed establishment is presently located.

  (e) Land located in the Upper Peninsula that was owned or leased by the federal government, used as a military installation, and transferred to this state before December 31, 2000 under 1978 PA 151, MCL 3.551 to 3.561, or 1993 PA 159, MCL 3.571 to 3.580. The commission may issue 2 additional licenses under this subdivision for establishments located on this state land without regard to or without an effect on the quota provisions of section 531 in the local governmental unit in which the license will be issued subject to the recommendation of the authority established under 1978 PA 151, MCL 3.551 to 3.561, or 1993 PA 159, MCL 3.571 to 3.580. A person issued a license under this subdivision may renew the license and transfer ownership of the license, without regard to or without an effect on the quota provisions of section 531, if title to the property covered by the license is transferred from this state to another person or to another governmental unit. The commission shall not transfer a license issued under this subdivision to another location. Before the issuance of a license, and annually thereafter before the issuance of a license for a new licensing period, the applicant for a license shall submit to the commission a certificate from the department or agency charged with control of the land setting forth that the issuance of a license is not incompatible with the objects and purposes entrusted to that department or agency under the law establishing control of the land in the department or agency. This subsection does not prohibit the issuance of a license under section 513.

  (f) Property owned by the Michigan state waterways commission and leased to persons under part 791 of the natural resources and environmental protection act, 1994 PA 451, MCL 324.79101 to 324.79118. The commission may issue a license under this subdivision to a lessee without regard to the quota provisions of section 531. However, the commission shall not issue a license under this subdivision without the written approval of the Michigan state waterways commission or its designee. A license issued under this subdivision is not transferable as to ownership or location, and, if the licensee goes out of business, the license must be surrendered to the commission.

  (g) Property owned by the state treasurer of this state when acting in the capacity of custodian of the assets of the state retirement systems created by the public school employees retirement act of 1979, 1980 PA 300, MCL 38.1301 to 38.1437; the state employees’ retirement act, 1943 PA 240, MCL 38.1 to 38.69; the state police retirement act of 1986, 1986 PA 182, MCL 38.1601 to 38.1675; and the judges retirement act of 1992, 1992 PA 234, MCL 38.2101 to 38.2670.

  (h) A building to which all of the following apply:

  (i) The building is owned by this state.

  (ii) The land on which the building is located is owned by this state.

  (iii) The building is more than 1,000,000 square feet.

  (iv) Space within the building is leased to a private entity to which both of the following apply:

  (A) In the building, the private entity provides services to the general public.

  (B) The private entity holds a license to sell alcoholic liquor as provided by this act.