96TH GENERAL ASSEMBLY
State of Illinois
2009 and 2010
SB3136

 

Introduced 2/9/2010, by Sen. Michael W. Frerichs

 

SYNOPSIS AS INTRODUCED:
 
235 ILCS 5/3-12
235 ILCS 5/5-3   from Ch. 43, par. 118

    Amends the Liquor Control Act of 1934. Beginning on July 1, 2010, provides that of the funds received for a retailer's license, $270 shall be paid into the Dram Shop Fund and $230 shall be paid into the General Revenue Fund. Provides that the increase in amount of funds that is deposited into the Dram Shop Fund as a result of the amendatory Act shall only be used for the continuing education and professional training of examination employees of the State Commission and shall be in addition to the regular expenditures being made from the Dram Shop Fund for such purposes. Also makes technical changes. Effective July 1, 2010.


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FISCAL NOTE ACT MAY APPLY

 

 

A BILL FOR

 

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1     AN ACT concerning liquor.
 
2     Be it enacted by the People of the State of Illinois,
3 represented in the General Assembly:
 
4     Section 10. The Liquor Control Act of 1934 is amended by
5 changing Sections 3-12 and 5-3 as follows:
 
6     (235 ILCS 5/3-12)
7     Sec. 3-12. Powers and duties of State Commission.
8     (a) The State Commission commission shall have the
9 following powers, functions, and duties:
10         (1) To receive applications and to issue licenses to
11     manufacturers, foreign importers, importing distributors,
12     distributors, non-resident dealers, on premise consumption
13     retailers, off premise sale retailers, special event
14     retailer licensees, special use permit licenses, auction
15     liquor licenses, brew pubs, caterer retailers,
16     non-beverage users, railroads, including owners and
17     lessees of sleeping, dining and cafe cars, airplanes,
18     boats, brokers, and wine maker's premises licensees in
19     accordance with the provisions of this Act, and to suspend
20     or revoke such licenses upon the State Commission's
21     commission's determination, upon notice after hearing,
22     that a licensee has violated any provision of this Act or
23     any rule or regulation issued pursuant thereto and in

 

 

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1     effect for 30 days prior to such violation. Except in the
2     case of an action taken pursuant to a violation of Section
3     6-3, 6-5, or 6-9, any action by the State Commission to
4     suspend or revoke a licensee's license may be limited to
5     the license for the specific premises where the violation
6     occurred.
7         In lieu of suspending or revoking a license, the State
8     Commission commission may impose a fine, upon the State
9     Commission's commission's determination and notice after
10     hearing, that a licensee has violated any provision of this
11     Act or any rule or regulation issued pursuant thereto and
12     in effect for 30 days prior to such violation. The fine
13     imposed under this paragraph may not exceed $500 for each
14     violation. Each day that the activity, which gave rise to
15     the original fine, continues is a separate violation. The
16     maximum fine that may be levied against any licensee, for
17     the period of the license, shall not exceed $20,000. The
18     maximum penalty that may be imposed on a licensee for
19     selling a bottle of alcoholic liquor with a foreign object
20     in it or serving from a bottle of alcoholic liquor with a
21     foreign object in it shall be the destruction of that
22     bottle of alcoholic liquor for the first 10 bottles so sold
23     or served from by the licensee. For the eleventh bottle of
24     alcoholic liquor and for each third bottle thereafter sold
25     or served from by the licensee with a foreign object in it,
26     the maximum penalty that may be imposed on the licensee is

 

 

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1     the destruction of the bottle of alcoholic liquor and a
2     fine of up to $50.
3         (2) To adopt such rules and regulations consistent with
4     the provisions of this Act which shall be necessary to
5     carry on its functions and duties to the end that the
6     health, safety and welfare of the People of the State of
7     Illinois shall be protected and temperance in the
8     consumption of alcoholic liquors shall be fostered and
9     promoted and to distribute copies of such rules and
10     regulations to all licensees affected thereby.
11         (3) To call upon other administrative departments of
12     the State, county and municipal governments, county and
13     city police departments and upon prosecuting officers for
14     such information and assistance as it deems necessary in
15     the performance of its duties.
16         (4) To recommend to local commissioners rules and
17     regulations, not inconsistent with the law, for the
18     distribution and sale of alcoholic liquors throughout the
19     State.
20         (5) To inspect, or cause to be inspected, any premises
21     in this State where alcoholic liquors are manufactured,
22     distributed, warehoused, or sold.
23         (5.1) Upon receipt of a complaint or upon having
24     knowledge that any person is engaged in business as a
25     manufacturer, importing distributor, distributor, or
26     retailer without a license or valid license, to notify the

 

 

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1     local liquor authority, file a complaint with the State's
2     Attorney's Office of the county where the incident
3     occurred, or initiate an investigation with the
4     appropriate law enforcement officials.
5         (5.2) To issue a cease and desist notice to persons
6     shipping alcoholic liquor into this State from a point
7     outside of this State if the shipment is in violation of
8     this Act.
9         (5.3) To receive complaints from licensees, local
10     officials, law enforcement agencies, organizations, and
11     persons stating that any licensee has been or is violating
12     any provision of this Act or the rules and regulations
13     issued pursuant to this Act. Such complaints shall be in
14     writing, signed and sworn to by the person making the
15     complaint, and shall state with specificity the facts in
16     relation to the alleged violation. If the State Commission
17     has reasonable grounds to believe that the complaint
18     substantially alleges a violation of this Act or rules and
19     regulations adopted pursuant to this Act, it shall conduct
20     an investigation. If, after conducting an investigation,
21     the State Commission is satisfied that the alleged
22     violation did occur, it shall proceed with disciplinary
23     action against the licensee as provided in this Act.
24         (6) To hear and determine appeals from orders of a
25     local commission in accordance with the provisions of this
26     Act, as hereinafter set forth. Hearings under this

 

 

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1     subsection shall be held in Springfield or Chicago, at
2     whichever location is the more convenient for the majority
3     of persons who are parties to the hearing.
4         (7) The State Commission commission shall establish
5     uniform systems of accounts to be kept by all retail
6     licensees having more than 4 employees, and for this
7     purpose the State Commission commission may classify all
8     retail licensees having more than 4 employees and establish
9     a uniform system of accounts for each class and prescribe
10     the manner in which such accounts shall be kept. The State
11     Commission commission may also prescribe the forms of
12     accounts to be kept by all retail licensees having more
13     than 4 employees, including, but not limited to, accounts
14     of earnings and expenses and any distribution, payment, or
15     other distribution of earnings or assets, and any other
16     forms, records and memoranda which in the judgment of the
17     State Commission commission may be necessary or
18     appropriate to carry out any of the provisions of this Act,
19     including, but not limited to, such forms, records, and
20     memoranda as will readily and accurately disclose at all
21     times the beneficial ownership of such retail licensed
22     business. The accounts, forms, records, and memoranda
23     shall be available at all reasonable times for inspection
24     by authorized representatives of the State Commission
25     commission or by any local liquor control commissioner or
26     his or her authorized representative. The State Commission

 

 

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1     commission, may, from time to time, alter, amend or repeal,
2     in whole or in part, any uniform system of accounts, or the
3     form and manner of keeping accounts.
4         (8) In the conduct of any hearing authorized to be held
5     by the State Commission commission, to appoint, at the
6     State Commission's commission's discretion, hearing
7     officers to conduct hearings involving complex issues or
8     issues that will require a protracted period of time to
9     resolve, to examine, or cause to be examined, under oath,
10     any licensee, and to examine or cause to be examined the
11     books and records of such licensee; to hear testimony and
12     take proof material for its information in the discharge of
13     its duties hereunder; to administer or cause to be
14     administered oaths; for any such purpose to issue subpoena
15     or subpoenas to require the attendance of witnesses and the
16     production of books, which shall be effective in any part
17     of this State, and to adopt rules to implement its powers
18     under this paragraph (8).
19         Any Circuit Court may by order duly entered, require
20     the attendance of witnesses and the production of relevant
21     books subpoenaed by the State Commission commission and the
22     court may compel obedience to its order by proceedings for
23     contempt.
24         (9) To investigate the administration of laws in
25     relation to alcoholic liquors in this and other states and
26     any foreign countries, and to recommend from time to time

 

 

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1     to the Governor and through him or her to the legislature
2     of this State, such amendments to this Act, if any, as it
3     may think desirable and as will serve to further the
4     general broad purposes contained in Section 1-2 hereof.
5         (10) To adopt such rules and regulations consistent
6     with the provisions of this Act which shall be necessary
7     for the control, sale or disposition of alcoholic liquor
8     damaged as a result of an accident, wreck, flood, fire, or
9     other similar occurrence.
10         (11) To develop industry educational programs related
11     to responsible serving and selling, particularly in the
12     areas of overserving consumers and illegal underage
13     purchasing and consumption of alcoholic beverages.
14         (11.1) To license persons providing education and
15     training to alcohol beverage sellers and servers under the
16     Beverage Alcohol Sellers and Servers Education and
17     Training (BASSET) programs and to develop and administer a
18     public awareness program in Illinois to reduce or eliminate
19     the illegal purchase and consumption of alcoholic beverage
20     products by persons under the age of 21. Application for a
21     license shall be made on forms provided by the State
22     Commission.
23         (12) To develop and maintain a repository of license
24     and regulatory information.
25         (13) On or before January 15, 1994, the State
26     Commission shall issue a written report to the Governor and

 

 

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1     General Assembly that is to be based on a comprehensive
2     study of the impact on and implications for the State of
3     Illinois of Section 1926 of the Federal ADAMHA
4     Reorganization Act of 1992 (Public Law 102-321). This study
5     shall address the extent to which Illinois currently
6     complies with the provisions of P.L. 102-321 and the rules
7     promulgated pursuant thereto.
8         As part of its report, the State Commission shall
9     provide the following essential information:
10             (i) the number of retail distributors of tobacco
11         products, by type and geographic area, in the State;
12             (ii) the number of reported citations and
13         successful convictions, categorized by type and
14         location of retail distributor, for violation of the
15         Prevention of Tobacco Use by Minors and Sale and
16         Distribution of Tobacco Products Act and the Smokeless
17         Tobacco Limitation Act;
18             (iii) the extent and nature of organized
19         educational and governmental activities that are
20         intended to promote, encourage or otherwise secure
21         compliance with any Illinois laws that prohibit the
22         sale or distribution of tobacco products to minors; and
23             (iv) the level of access and availability of
24         tobacco products to individuals under the age of 18.
25         To obtain the data necessary to comply with the
26     provisions of P.L. 102-321 and the requirements of this

 

 

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1     report, the State Commission shall conduct random,
2     unannounced inspections of a geographically and
3     scientifically representative sample of the State's retail
4     tobacco distributors.
5         The State Commission shall consult with the Department
6     of Public Health, the Department of Human Services, the
7     Illinois State Police and any other executive branch
8     agency, and private organizations that may have
9     information relevant to this report.
10         The State Commission may contract with the Food and
11     Drug Administration of the U.S. Department of Health and
12     Human Services to conduct unannounced investigations of
13     Illinois tobacco vendors to determine compliance with
14     federal laws relating to the illegal sale of cigarettes and
15     smokeless tobacco products to persons under the age of 18.
16         (14) On or before April 30, 2008 and every 2 years
17     thereafter, the State Commission shall present a written
18     report to the Governor and the General Assembly that shall
19     be based on a study of the impact of this amendatory Act of
20     the 95th General Assembly on the business of soliciting,
21     selling, and shipping wine from inside and outside of this
22     State directly to residents of this State. As part of its
23     report, the State Commission shall provide all of the
24     following information:
25             (A) The amount of State excise and sales tax
26         revenues generated.

 

 

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1             (B) The amount of licensing fees received.
2             (C) The number of cases of wine shipped from inside
3         and outside of this State directly to residents of this
4         State.
5             (D) The number of alcohol compliance operations
6         conducted.
7             (E) The number of winery shipper's licenses
8         issued.
9             (F) The number of each of the following: reported
10         violations; cease and desist notices issued by the
11         State Commission; notices of violations issued by the
12         State Commission and to the Department of Revenue; and
13         notices and complaints of violations to law
14         enforcement officials, including, without limitation,
15         the Illinois Attorney General and the U.S. Department
16         of Treasury's Alcohol and Tobacco Tax and Trade Bureau.
17         (15) As a means to reduce the underage consumption of
18     alcoholic liquors, the State Commission shall conduct
19     alcohol compliance operations to investigate whether
20     businesses that are soliciting, selling, and shipping wine
21     from inside or outside of this State directly to residents
22     of this State are licensed by this State or are selling or
23     attempting to sell wine to persons under 21 years of age in
24     violation of this Act.
25         (16) The State Commission shall, in addition to
26     notifying any appropriate law enforcement agency, submit

 

 

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1     notices of complaints or violations of Sections 6-29 and
2     6-29.1 by persons who do not hold a winery shipper's
3     license under this amendatory Act to the Illinois Attorney
4     General and to the U.S. Department of Treasury's Alcohol
5     and Tobacco Tax and Trade Bureau.
6         (17) (A) A person licensed to make wine under the laws
7     of another state who has a winery shipper's license under
8     this amendatory Act and annually produces less than 25,000
9     gallons of wine or a person who has a first-class or
10     second-class wine manufacturer's license, a first-class or
11     second-class wine-maker's license, or a limited wine
12     manufacturer's license under this Act and annually
13     produces less than 25,000 gallons of wine may make
14     application to the State Commission for a
15     self-distribution exemption to allow the sale of not more
16     than 5,000 gallons of the exemption holder's wine to retail
17     licensees per year.
18             (B) In the application, which shall be sworn under
19         penalty of perjury, such person shall state (1) the
20         date it was established; (2) its volume of production
21         and sales for each year since its establishment; (3)
22         its efforts to establish distributor relationships;
23         (4) that a self-distribution exemption is necessary to
24         facilitate the marketing of its wine; and (5) that it
25         will comply with the liquor and revenue laws of the
26         United States, this State, and any other state where it

 

 

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1         is licensed.
2             (C) The State Commission shall approve the
3         application for a self-distribution exemption if such
4         person: (1) is in compliance with State revenue and
5         liquor laws; (2) is not a member of any affiliated
6         group that produces more than 25,000 gallons of wine
7         per annum or produces any other alcoholic liquor; (3)
8         will not annually produce for sale more than 25,000
9         gallons of wine; and (4) will not annually sell more
10         than 5,000 gallons of its wine to retail licensees.
11             (D) A self-distribution exemption holder shall
12         annually certify to the State Commission its
13         production of wine in the previous 12 months and its
14         anticipated production and sales for the next 12
15         months. The State Commission may fine, suspend, or
16         revoke a self-distribution exemption after a hearing
17         if it finds that the exemption holder has made a
18         material misrepresentation in its application,
19         violated a revenue or liquor law of Illinois, exceeded
20         production of 25,000 gallons of wine in any calendar
21         year, or become part of an affiliated group producing
22         more than 25,000 gallons of wine or any other alcoholic
23         liquor.
24             (E) Except in hearings for violations of this Act
25         or amendatory Act or a bona fide investigation by duly
26         sworn law enforcement officials, the State Commission,

 

 

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

 

 

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1 amount of funds deposited into the Dram Shop Fund as a result
2 of this amendatory Act of the 96th General Assembly shall only
3 be used for this purpose and shall be in addition to the
4 regular expenditures being made from the Dram Shop Fund for
5 this purpose.
6     (b) On or before April 30, 1999, the State Commission shall
7 present a written report to the Governor and the General
8 Assembly that shall be based on a study of the impact of this
9 amendatory Act of 1998 on the business of soliciting, selling,
10 and shipping alcoholic liquor from outside of this State
11 directly to residents of this State.
12     As part of its report, the State Commission shall provide
13 the following information:
14         (i) the amount of State excise and sales tax revenues
15     generated as a result of this amendatory Act of 1998;
16         (ii) the amount of licensing fees received as a result
17     of this amendatory Act of 1998;
18         (iii) the number of reported violations, the number of
19     cease and desist notices issued by the State Commission,
20     the number of notices of violations issued to the
21     Department of Revenue, and the number of notices and
22     complaints of violations to law enforcement officials.
23 (Source: P.A. 95-634, eff. 6-1-08; 96-179, eff. 8-10-09;
24 96-446, eff. 1-1-10; revised 10-19-09.)
 
25     (235 ILCS 5/5-3)  (from Ch. 43, par. 118)

 

 

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1     Sec. 5-3. License fees. Except as otherwise provided
2 herein, at the time application is made to the State Commission
3 for a license of any class, the applicant shall pay to the
4 State Commission the fee hereinafter provided for the kind of
5 license applied for.
6     The fee for licenses issued by the State Commission shall
7 be as follows:
8     For a manufacturer's license:
9    Class 1. Distiller .............................$3,600
10    Class 2. Rectifier .............................3,600
11    Class 3. Brewer ................................900
12    Class 4. First-class Wine Manufacturer .........600
13    Class 5. Second-class
14        Wine Manufacturer ..........................1,200
15    Class 6. First-class wine-maker ................600
16    Class 7. Second-class wine-maker ...............1200
17    Class 8. Limited Wine Manufacturer..............120
18    For a Brew Pub License .........................1,050
19    For a caterer retailer's license................200
20    For a foreign importer's license ...............25
21    For an importing distributor's license .........25
22    For a distributor's license ....................270
23    For a non-resident dealer's license
24        (500,000 gallons or over) ..................270
25    For a non-resident dealer's license
26        (under 500,000 gallons) ....................90

 

 

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1    For a wine-maker's premises license ............100
2    For a winery shipper's license
3        (under 250,000 gallons).....................150
4    For a winery shipper's license
5        (250,000 or over, but under 500,000 gallons).500
6    For a winery shipper's license
7        (500,000 gallons or over)...................1,000
8    For a wine-maker's premises license,
9        second location ............................350
10    For a wine-maker's premises license,
11        third location .............................350
12    For a retailer's license .......................500
13    For a special event retailer's license,
14        (not-for-profit) ...........................25
15    For a special use permit license,
16        one day only ...............................50
17        2 days or more .............................100
18    For a railroad license .........................60
19    For a boat license .............................180
20    For an airplane license, times the
21        licensee's maximum number of aircraft
22        in flight, serving liquor over the
23        State at any given time, which either
24        originate, terminate, or make
25        an intermediate stop in the State ..........60
26    For a non-beverage user's license:

 

 

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1        Class 1 ....................................24
2        Class 2 ....................................60
3        Class 3 ....................................120
4        Class 4 ....................................240
5        Class 5 ....................................600
6    For a broker's license .........................600
7    For an auction liquor license ..................50
8     Fees collected under this Section shall be paid into the
9 Dram Shop Fund. On and after July 1, 2010 2003, of the funds
10 received for a retailer's license, $270 in addition to the
11 first $175, an additional $75 shall be paid into the Dram Shop
12 Fund, and $230 $250 shall be paid into the General Revenue
13 Fund. Beginning June 30, 1990 and on June 30 of each subsequent
14 year through June 29, 2003, any balance over $5,000,000
15 remaining in the Dram Shop Fund shall be credited to State
16 liquor licensees and applied against their fees for State
17 liquor licenses for the following year. The amount credited to
18 each licensee shall be a proportion of the balance in the Dram
19 Fund that is the same as the proportion of the license fee paid
20 by the licensee under this Section for the period in which the
21 balance was accumulated to the aggregate fees paid by all
22 licensees during that period.
23     No fee shall be paid for licenses issued by the State
24 Commission to the following non-beverage users:
25         (a) Hospitals, sanitariums, or clinics when their use
26     of alcoholic liquor is exclusively medicinal, mechanical

 

 

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1     or scientific.
2         (b) Universities, colleges of learning or schools when
3     their use of alcoholic liquor is exclusively medicinal,
4     mechanical or scientific.
5         (c) Laboratories when their use is exclusively for the
6     purpose of scientific research.
7 (Source: P.A. 95-634, eff. 6-1-08.)
 
8     Section 99. Effective date. This Act takes effect July 1,
9 2010.