SB2765 EnrolledLRB100 17580 RJF 32750 b

1    AN ACT concerning government.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Alcoholism and Other Drug Abuse and
5Dependency Act is amended by adding Section 55-35 as follows:
 
6    (20 ILCS 301/55-35 new)
7    Sec. 55-35. Tobacco enforcement.
8    (a) The Department of Human Services may contract with the
9Food and Drug Administration of the U.S. Department of Health
10and Human Services to conduct unannounced investigations of
11Illinois tobacco vendors to determine compliance with federal
12laws relating to the illegal sale of cigarettes and smokeless
13tobacco products to persons under the age of 18.
14    (b) Grant funds received from the Food and Drug
15Administration of the U.S. Department of Health and Human
16Services for conducting unannounced investigations of Illinois
17tobacco vendors shall be deposited into the Tobacco Settlement
18Recovery Fund starting July 1, 2018.
 
19    Section 10. The Liquor Control Act of 1934 is amended by
20changing Sections 3-12 and 5-6 as follows:
 
21    (235 ILCS 5/3-12)

 

 

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1    Sec. 3-12. Powers and duties of State Commission.
2    (a) The State commission shall have the following powers,
3functions, and duties:
4        (1) To receive applications and to issue licenses to
5    manufacturers, foreign importers, importing distributors,
6    distributors, non-resident dealers, on premise consumption
7    retailers, off premise sale retailers, special event
8    retailer licensees, special use permit licenses, auction
9    liquor licenses, brew pubs, caterer retailers,
10    non-beverage users, railroads, including owners and
11    lessees of sleeping, dining and cafe cars, airplanes,
12    boats, brokers, and wine maker's premises licensees in
13    accordance with the provisions of this Act, and to suspend
14    or revoke such licenses upon the State commission's
15    determination, upon notice after hearing, that a licensee
16    has violated any provision of this Act or any rule or
17    regulation issued pursuant thereto and in effect for 30
18    days prior to such violation. Except in the case of an
19    action taken pursuant to a violation of Section 6-3, 6-5,
20    or 6-9, any action by the State Commission to suspend or
21    revoke a licensee's license may be limited to the license
22    for the specific premises where the violation occurred. An
23    action for a violation of this Act shall be commenced by
24    the State Commission within 2 years after the date the
25    State Commission becomes aware of the violation.
26        In lieu of suspending or revoking a license, the

 

 

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1    commission may impose a fine, upon the State commission's
2    determination and notice after hearing, that a licensee has
3    violated any provision of this Act or any rule or
4    regulation issued pursuant thereto and in effect for 30
5    days prior to such violation.
6        For the purpose of this paragraph (1), when determining
7    multiple violations for the sale of alcohol to a person
8    under the age of 21, a second or subsequent violation for
9    the sale of alcohol to a person under the age of 21 shall
10    only be considered if it was committed within 5 years after
11    the date when a prior violation for the sale of alcohol to
12    a person under the age of 21 was committed.
13        The fine imposed under this paragraph may not exceed
14    $500 for each violation. Each day that the activity, which
15    gave rise to the original fine, continues is a separate
16    violation. The maximum fine that may be levied against any
17    licensee, for the period of the license, shall not exceed
18    $20,000. The maximum penalty that may be imposed on a
19    licensee for selling a bottle of alcoholic liquor with a
20    foreign object in it or serving from a bottle of alcoholic
21    liquor with a foreign object in it shall be the destruction
22    of that bottle of alcoholic liquor for the first 10 bottles
23    so sold or served from by the licensee. For the eleventh
24    bottle of alcoholic liquor and for each third bottle
25    thereafter sold or served from by the licensee with a
26    foreign object in it, the maximum penalty that may be

 

 

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1    imposed on the licensee is the destruction of the bottle of
2    alcoholic liquor and a fine of up to $50.
3        Any notice issued by the State Commission to a licensee
4    for a violation of this Act or any notice with respect to
5    settlement or offer in compromise shall include the field
6    report, photographs, and any other supporting
7    documentation necessary to reasonably inform the licensee
8    of the nature and extent of the violation or the conduct
9    alleged to have occurred.
10        (2) To adopt such rules and regulations consistent with
11    the provisions of this Act which shall be necessary to
12    carry on its functions and duties to the end that the
13    health, safety and welfare of the People of the State of
14    Illinois shall be protected and temperance in the
15    consumption of alcoholic liquors shall be fostered and
16    promoted and to distribute copies of such rules and
17    regulations to all licensees affected thereby.
18        (3) To call upon other administrative departments of
19    the State, county and municipal governments, county and
20    city police departments and upon prosecuting officers for
21    such information and assistance as it deems necessary in
22    the performance of its duties.
23        (4) To recommend to local commissioners rules and
24    regulations, not inconsistent with the law, for the
25    distribution and sale of alcoholic liquors throughout the
26    State.

 

 

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1        (5) To inspect, or cause to be inspected, any premises
2    in this State where alcoholic liquors are manufactured,
3    distributed, warehoused, or sold. Nothing in this Act
4    authorizes an agent of the Commission to inspect private
5    areas within the premises without reasonable suspicion or a
6    warrant during an inspection. "Private areas" include, but
7    are not limited to, safes, personal property, and closed
8    desks.
9        (5.1) Upon receipt of a complaint or upon having
10    knowledge that any person is engaged in business as a
11    manufacturer, importing distributor, distributor, or
12    retailer without a license or valid license, to notify the
13    local liquor authority, file a complaint with the State's
14    Attorney's Office of the county where the incident
15    occurred, or initiate an investigation with the
16    appropriate law enforcement officials.
17        (5.2) To issue a cease and desist notice to persons
18    shipping alcoholic liquor into this State from a point
19    outside of this State if the shipment is in violation of
20    this Act.
21        (5.3) To receive complaints from licensees, local
22    officials, law enforcement agencies, organizations, and
23    persons stating that any licensee has been or is violating
24    any provision of this Act or the rules and regulations
25    issued pursuant to this Act. Such complaints shall be in
26    writing, signed and sworn to by the person making the

 

 

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1    complaint, and shall state with specificity the facts in
2    relation to the alleged violation. If the Commission has
3    reasonable grounds to believe that the complaint
4    substantially alleges a violation of this Act or rules and
5    regulations adopted pursuant to this Act, it shall conduct
6    an investigation. If, after conducting an investigation,
7    the Commission is satisfied that the alleged violation did
8    occur, it shall proceed with disciplinary action against
9    the licensee as provided in this Act.
10        (6) To hear and determine appeals from orders of a
11    local commission in accordance with the provisions of this
12    Act, as hereinafter set forth. Hearings under this
13    subsection shall be held in Springfield or Chicago, at
14    whichever location is the more convenient for the majority
15    of persons who are parties to the hearing.
16        (7) The commission shall establish uniform systems of
17    accounts to be kept by all retail licensees having more
18    than 4 employees, and for this purpose the commission may
19    classify all retail licensees having more than 4 employees
20    and establish a uniform system of accounts for each class
21    and prescribe the manner in which such accounts shall be
22    kept. The commission may also prescribe the forms of
23    accounts to be kept by all retail licensees having more
24    than 4 employees, including but not limited to accounts of
25    earnings and expenses and any distribution, payment, or
26    other distribution of earnings or assets, and any other

 

 

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1    forms, records and memoranda which in the judgment of the
2    commission may be necessary or appropriate to carry out any
3    of the provisions of this Act, including but not limited to
4    such forms, records and memoranda as will readily and
5    accurately disclose at all times the beneficial ownership
6    of such retail licensed business. The accounts, forms,
7    records and memoranda shall be available at all reasonable
8    times for inspection by authorized representatives of the
9    State commission or by any local liquor control
10    commissioner or his or her authorized representative. The
11    commission, may, from time to time, alter, amend or repeal,
12    in whole or in part, any uniform system of accounts, or the
13    form and manner of keeping accounts.
14        (8) In the conduct of any hearing authorized to be held
15    by the commission, to appoint, at the commission's
16    discretion, hearing officers to conduct hearings involving
17    complex issues or issues that will require a protracted
18    period of time to resolve, to examine, or cause to be
19    examined, under oath, any licensee, and to examine or cause
20    to be examined the books and records of such licensee; to
21    hear testimony and take proof material for its information
22    in the discharge of its duties hereunder; to administer or
23    cause to be administered oaths; for any such purpose to
24    issue subpoena or subpoenas to require the attendance of
25    witnesses and the production of books, which shall be
26    effective in any part of this State, and to adopt rules to

 

 

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1    implement its powers under this paragraph (8).
2        Any Circuit Court may by order duly entered, require
3    the attendance of witnesses and the production of relevant
4    books subpoenaed by the State commission and the court may
5    compel obedience to its order by proceedings for contempt.
6        (9) To investigate the administration of laws in
7    relation to alcoholic liquors in this and other states and
8    any foreign countries, and to recommend from time to time
9    to the Governor and through him or her to the legislature
10    of this State, such amendments to this Act, if any, as it
11    may think desirable and as will serve to further the
12    general broad purposes contained in Section 1-2 hereof.
13        (10) To adopt such rules and regulations consistent
14    with the provisions of this Act which shall be necessary
15    for the control, sale or disposition of alcoholic liquor
16    damaged as a result of an accident, wreck, flood, fire or
17    other similar occurrence.
18        (11) To develop industry educational programs related
19    to responsible serving and selling, particularly in the
20    areas of overserving consumers and illegal underage
21    purchasing and consumption of alcoholic beverages.
22        (11.1) To license persons providing education and
23    training to alcohol beverage sellers and servers for
24    mandatory and non-mandatory training under the Beverage
25    Alcohol Sellers and Servers Education and Training
26    (BASSET) programs and to develop and administer a public

 

 

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1    awareness program in Illinois to reduce or eliminate the
2    illegal purchase and consumption of alcoholic beverage
3    products by persons under the age of 21. Application for a
4    license shall be made on forms provided by the State
5    Commission.
6        (12) To develop and maintain a repository of license
7    and regulatory information.
8        (13) (Blank). On or before January 15, 1994, the
9    Commission shall issue a written report to the Governor and
10    General Assembly that is to be based on a comprehensive
11    study of the impact on and implications for the State of
12    Illinois of Section 1926 of the federal ADAMHA
13    Reorganization Act of 1992 (Public Law 102-321). This study
14    shall address the extent to which Illinois currently
15    complies with the provisions of P.L. 102-321 and the rules
16    promulgated pursuant thereto.
17        As part of its report, the Commission shall provide the
18    following essential information:
19            (i) the number of retail distributors of tobacco
20        products, by type and geographic area, in the State;
21            (ii) the number of reported citations and
22        successful convictions, categorized by type and
23        location of retail distributor, for violation of the
24        Prevention of Tobacco Use by Minors and Sale and
25        Distribution of Tobacco Products Act and the Smokeless
26        Tobacco Limitation Act;

 

 

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1            (iii) the extent and nature of organized
2        educational and governmental activities that are
3        intended to promote, encourage or otherwise secure
4        compliance with any Illinois laws that prohibit the
5        sale or distribution of tobacco products to minors; and
6            (iv) the level of access and availability of
7        tobacco products to individuals under the age of 18.
8        To obtain the data necessary to comply with the
9    provisions of P.L. 102-321 and the requirements of this
10    report, the Commission shall conduct random, unannounced
11    inspections of a geographically and scientifically
12    representative sample of the State's retail tobacco
13    distributors.
14        The Commission shall consult with the Department of
15    Public Health, the Department of Human Services, the
16    Illinois State Police and any other executive branch
17    agency, and private organizations that may have
18    information relevant to this report.
19        The Commission may contract with the Food and Drug
20    Administration of the U.S. Department of Health and Human
21    Services to conduct unannounced investigations of Illinois
22    tobacco vendors to determine compliance with federal laws
23    relating to the illegal sale of cigarettes and smokeless
24    tobacco products to persons under the age of 18.
25        (14) On or before April 30, 2008 and every 2 years
26    thereafter, the Commission shall present a written report

 

 

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1    to the Governor and the General Assembly that shall be
2    based on a study of the impact of Public Act 95-634 on the
3    business of soliciting, selling, and shipping wine from
4    inside and outside of this State directly to residents of
5    this State. As part of its report, the Commission shall
6    provide all of the following information:
7            (A) The amount of State excise and sales tax
8        revenues generated.
9            (B) The amount of licensing fees received.
10            (C) The number of cases of wine shipped from inside
11        and outside of this State directly to residents of this
12        State.
13            (D) The number of alcohol compliance operations
14        conducted.
15            (E) The number of winery shipper's licenses
16        issued.
17            (F) The number of each of the following: reported
18        violations; cease and desist notices issued by the
19        Commission; notices of violations issued by the
20        Commission and to the Department of Revenue; and
21        notices and complaints of violations to law
22        enforcement officials, including, without limitation,
23        the Illinois Attorney General and the U.S. Department
24        of Treasury's Alcohol and Tobacco Tax and Trade Bureau.
25        (15) As a means to reduce the underage consumption of
26    alcoholic liquors, the Commission shall conduct alcohol

 

 

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1    compliance operations to investigate whether businesses
2    that are soliciting, selling, and shipping wine from inside
3    or outside of this State directly to residents of this
4    State are licensed by this State or are selling or
5    attempting to sell wine to persons under 21 years of age in
6    violation of this Act.
7        (16) The Commission shall, in addition to notifying any
8    appropriate law enforcement agency, submit notices of
9    complaints or violations of Sections 6-29 and 6-29.1 by
10    persons who do not hold a winery shipper's license under
11    this Act to the Illinois Attorney General and to the U.S.
12    Department of Treasury's Alcohol and Tobacco Tax and Trade
13    Bureau.
14        (17)(A) A person licensed to make wine under the laws
15    of another state who has a winery shipper's license under
16    this Act and annually produces less than 25,000 gallons of
17    wine or a person who has a first-class or second-class wine
18    manufacturer's license, a first-class or second-class
19    wine-maker's license, or a limited wine manufacturer's
20    license under this Act and annually produces less than
21    25,000 gallons of wine may make application to the
22    Commission for a self-distribution exemption to allow the
23    sale of not more than 5,000 gallons of the exemption
24    holder's wine to retail licensees per year.
25        (B) In the application, which shall be sworn under
26    penalty of perjury, such person shall state (1) the date it

 

 

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1    was established; (2) its volume of production and sales for
2    each year since its establishment; (3) its efforts to
3    establish distributor relationships; (4) that a
4    self-distribution exemption is necessary to facilitate the
5    marketing of its wine; and (5) that it will comply with the
6    liquor and revenue laws of the United States, this State,
7    and any other state where it is licensed.
8        (C) The Commission shall approve the application for a
9    self-distribution exemption if such person: (1) is in
10    compliance with State revenue and liquor laws; (2) is not a
11    member of any affiliated group that produces more than
12    25,000 gallons of wine per annum or produces any other
13    alcoholic liquor; (3) will not annually produce for sale
14    more than 25,000 gallons of wine; and (4) will not annually
15    sell more than 5,000 gallons of its wine to retail
16    licensees.
17        (D) A self-distribution exemption holder shall
18    annually certify to the Commission its production of wine
19    in the previous 12 months and its anticipated production
20    and sales for the next 12 months. The Commission may fine,
21    suspend, or revoke a self-distribution exemption after a
22    hearing if it finds that the exemption holder has made a
23    material misrepresentation in its application, violated a
24    revenue or liquor law of Illinois, exceeded production of
25    25,000 gallons of wine in any calendar year, or become part
26    of an affiliated group producing more than 25,000 gallons

 

 

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1    of wine or any other alcoholic liquor.
2        (E) Except in hearings for violations of this Act or
3    Public Act 95-634 or a bona fide investigation by duly
4    sworn law enforcement officials, the Commission, or its
5    agents, the Commission shall maintain the production and
6    sales information of a self-distribution exemption holder
7    as confidential and shall not release such information to
8    any person.
9        (F) The Commission shall issue regulations governing
10    self-distribution exemptions consistent with this Section
11    and this Act.
12        (G) Nothing in this subsection (17) shall prohibit a
13    self-distribution exemption holder from entering into or
14    simultaneously having a distribution agreement with a
15    licensed Illinois distributor.
16        (H) It is the intent of this subsection (17) to promote
17    and continue orderly markets. The General Assembly finds
18    that in order to preserve Illinois' regulatory
19    distribution system it is necessary to create an exception
20    for smaller makers of wine as their wines are frequently
21    adjusted in varietals, mixes, vintages, and taste to find
22    and create market niches sometimes too small for
23    distributor or importing distributor business strategies.
24    Limited self-distribution rights will afford and allow
25    smaller makers of wine access to the marketplace in order
26    to develop a customer base without impairing the integrity

 

 

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1    of the 3-tier system.
2        (18)(A) A class 1 brewer licensee, who must also be
3    either a licensed brewer or licensed non-resident dealer
4    and annually manufacture less than 930,000 gallons of beer,
5    may make application to the State Commission for a
6    self-distribution exemption to allow the sale of not more
7    than 232,500 gallons of the exemption holder's beer to
8    retail licensees per year.
9        (B) In the application, which shall be sworn under
10    penalty of perjury, the class 1 brewer licensee shall state
11    (1) the date it was established; (2) its volume of beer
12    manufactured and sold for each year since its
13    establishment; (3) its efforts to establish distributor
14    relationships; (4) that a self-distribution exemption is
15    necessary to facilitate the marketing of its beer; and (5)
16    that it will comply with the alcoholic beverage and revenue
17    laws of the United States, this State, and any other state
18    where it is licensed.
19        (C) Any application submitted shall be posted on the
20    State Commission's website at least 45 days prior to action
21    by the State Commission. The State Commission shall approve
22    the application for a self-distribution exemption if the
23    class 1 brewer licensee: (1) is in compliance with the
24    State, revenue, and alcoholic beverage laws; (2) is not a
25    member of any affiliated group that manufactures more than
26    930,000 gallons of beer per annum or produces any other

 

 

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1    alcoholic beverages; (3) shall not annually manufacture
2    for sale more than 930,000 gallons of beer; (4) shall not
3    annually sell more than 232,500 gallons of its beer to
4    retail licensees; and (5) has relinquished any brew pub
5    license held by the licensee, including any ownership
6    interest it held in the licensed brew pub.
7        (D) A self-distribution exemption holder shall
8    annually certify to the State Commission its manufacture of
9    beer during the previous 12 months and its anticipated
10    manufacture and sales of beer for the next 12 months. The
11    State Commission may fine, suspend, or revoke a
12    self-distribution exemption after a hearing if it finds
13    that the exemption holder has made a material
14    misrepresentation in its application, violated a revenue
15    or alcoholic beverage law of Illinois, exceeded the
16    manufacture of 930,000 gallons of beer in any calendar year
17    or became part of an affiliated group manufacturing more
18    than 930,000 gallons of beer or any other alcoholic
19    beverage.
20        (E) The State Commission shall issue rules and
21    regulations governing self-distribution exemptions
22    consistent with this Act.
23        (F) Nothing in this paragraph (18) shall prohibit a
24    self-distribution exemption holder from entering into or
25    simultaneously having a distribution agreement with a
26    licensed Illinois importing distributor or a distributor.

 

 

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1    If a self-distribution exemption holder enters into a
2    distribution agreement and has assigned distribution
3    rights to an importing distributor or distributor, then the
4    self-distribution exemption holder's distribution rights
5    in the assigned territories shall cease in a reasonable
6    time not to exceed 60 days.
7        (G) It is the intent of this paragraph (18) to promote
8    and continue orderly markets. The General Assembly finds
9    that in order to preserve Illinois' regulatory
10    distribution system, it is necessary to create an exception
11    for smaller manufacturers in order to afford and allow such
12    smaller manufacturers of beer access to the marketplace in
13    order to develop a customer base without impairing the
14    integrity of the 3-tier system.
15    (b) On or before April 30, 1999, the Commission shall
16present a written report to the Governor and the General
17Assembly that shall be based on a study of the impact of Public
18Act 90-739 on the business of soliciting, selling, and shipping
19alcoholic liquor from outside of this State directly to
20residents of this State.
21    As part of its report, the Commission shall provide the
22following information:
23        (i) the amount of State excise and sales tax revenues
24    generated as a result of Public Act 90-739;
25        (ii) the amount of licensing fees received as a result
26    of Public Act 90-739;

 

 

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1        (iii) the number of reported violations, the number of
2    cease and desist notices issued by the Commission, the
3    number of notices of violations issued to the Department of
4    Revenue, and the number of notices and complaints of
5    violations to law enforcement officials.
6(Source: P.A. 99-78, eff. 7-20-15; 99-448, eff. 8-24-15;
7100-134, eff. 8-18-17; 100-201, eff. 8-18-17.)
 
8    (235 ILCS 5/5-6)
9    Sec. 5-6. FDA grant funds. Grant funds received from the
10Food and Drug Administration of the U.S. Department of Health
11and Human Services for conducting unannounced investigations
12of Illinois tobacco vendors shall be deposited into the Dram
13Shop Fund until June 30, 2018.
14(Source: P.A. 90-9, eff. 7-1-97.)
 
15    Section 99. Effective date. This Act takes effect upon
16becoming law.