Public Act 100-1012
 
SB2765 EnrolledLRB100 17580 RJF 32750 b

    AN ACT concerning government.
 
    Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
 
    Section 5. The Alcoholism and Other Drug Abuse and
Dependency Act is amended by adding Section 55-35 as follows:
 
    (20 ILCS 301/55-35 new)
    Sec. 55-35. Tobacco enforcement.
    (a) The Department of Human Services may contract with the
Food and Drug Administration of the U.S. Department of Health
and Human Services to conduct unannounced investigations of
Illinois tobacco vendors to determine compliance with federal
laws relating to the illegal sale of cigarettes and smokeless
tobacco products to persons under the age of 18.
    (b) Grant funds received from the Food and Drug
Administration of the U.S. Department of Health and Human
Services for conducting unannounced investigations of Illinois
tobacco vendors shall be deposited into the Tobacco Settlement
Recovery Fund starting July 1, 2018.
 
    Section 10. The Liquor Control Act of 1934 is amended by
changing Sections 3-12 and 5-6 as follows:
 
    (235 ILCS 5/3-12)
    Sec. 3-12. Powers and duties of State Commission.
    (a) The State commission shall have the following powers,
functions, and duties:
        (1) To receive applications and to issue licenses to
    manufacturers, foreign importers, importing distributors,
    distributors, non-resident dealers, on premise consumption
    retailers, off premise sale retailers, special event
    retailer licensees, special use permit licenses, auction
    liquor licenses, brew pubs, caterer retailers,
    non-beverage users, railroads, including owners and
    lessees of sleeping, dining and cafe cars, airplanes,
    boats, brokers, and wine maker's premises licensees in
    accordance with the provisions of this Act, and to suspend
    or revoke such licenses upon the State commission's
    determination, upon notice after hearing, that a licensee
    has violated any provision of this Act or any rule or
    regulation issued pursuant thereto and in effect for 30
    days prior to such violation. Except in the case of an
    action taken pursuant to a violation of Section 6-3, 6-5,
    or 6-9, any action by the State Commission to suspend or
    revoke a licensee's license may be limited to the license
    for the specific premises where the violation occurred. An
    action for a violation of this Act shall be commenced by
    the State Commission within 2 years after the date the
    State Commission becomes aware of the violation.
        In lieu of suspending or revoking a license, the
    commission may impose a fine, upon the State commission's
    determination and notice after hearing, that a licensee has
    violated any provision of this Act or any rule or
    regulation issued pursuant thereto and in effect for 30
    days prior to such violation.
        For the purpose of this paragraph (1), when determining
    multiple violations for the sale of alcohol to a person
    under the age of 21, a second or subsequent violation for
    the sale of alcohol to a person under the age of 21 shall
    only be considered if it was committed within 5 years after
    the date when a prior violation for the sale of alcohol to
    a person under the age of 21 was committed.
        The fine imposed under this paragraph may not exceed
    $500 for each violation. Each day that the activity, which
    gave rise to the original fine, continues is a separate
    violation. The maximum fine that may be levied against any
    licensee, for the period of the license, shall not exceed
    $20,000. The maximum penalty that may be imposed on a
    licensee for selling a bottle of alcoholic liquor with a
    foreign object in it or serving from a bottle of alcoholic
    liquor with a foreign object in it shall be the destruction
    of that bottle of alcoholic liquor for the first 10 bottles
    so sold or served from by the licensee. For the eleventh
    bottle of alcoholic liquor and for each third bottle
    thereafter sold or served from by the licensee with a
    foreign object in it, the maximum penalty that may be
    imposed on the licensee is the destruction of the bottle of
    alcoholic liquor and a fine of up to $50.
        Any notice issued by the State Commission to a licensee
    for a violation of this Act or any notice with respect to
    settlement or offer in compromise shall include the field
    report, photographs, and any other supporting
    documentation necessary to reasonably inform the licensee
    of the nature and extent of the violation or the conduct
    alleged to have occurred.
        (2) To adopt such rules and regulations consistent with
    the provisions of this Act which shall be necessary to
    carry on its functions and duties to the end that the
    health, safety and welfare of the People of the State of
    Illinois shall be protected and temperance in the
    consumption of alcoholic liquors shall be fostered and
    promoted and to distribute copies of such rules and
    regulations to all licensees affected thereby.
        (3) To call upon other administrative departments of
    the State, county and municipal governments, county and
    city police departments and upon prosecuting officers for
    such information and assistance as it deems necessary in
    the performance of its duties.
        (4) To recommend to local commissioners rules and
    regulations, not inconsistent with the law, for the
    distribution and sale of alcoholic liquors throughout the
    State.
        (5) To inspect, or cause to be inspected, any premises
    in this State where alcoholic liquors are manufactured,
    distributed, warehoused, or sold. Nothing in this Act
    authorizes an agent of the Commission to inspect private
    areas within the premises without reasonable suspicion or a
    warrant during an inspection. "Private areas" include, but
    are not limited to, safes, personal property, and closed
    desks.
        (5.1) Upon receipt of a complaint or upon having
    knowledge that any person is engaged in business as a
    manufacturer, importing distributor, distributor, or
    retailer without a license or valid license, to notify the
    local liquor authority, file a complaint with the State's
    Attorney's Office of the county where the incident
    occurred, or initiate an investigation with the
    appropriate law enforcement officials.
        (5.2) To issue a cease and desist notice to persons
    shipping alcoholic liquor into this State from a point
    outside of this State if the shipment is in violation of
    this Act.
        (5.3) To receive complaints from licensees, local
    officials, law enforcement agencies, organizations, and
    persons stating that any licensee has been or is violating
    any provision of this Act or the rules and regulations
    issued pursuant to this Act. Such complaints shall be in
    writing, signed and sworn to by the person making the
    complaint, and shall state with specificity the facts in
    relation to the alleged violation. If the Commission has
    reasonable grounds to believe that the complaint
    substantially alleges a violation of this Act or rules and
    regulations adopted pursuant to this Act, it shall conduct
    an investigation. If, after conducting an investigation,
    the Commission is satisfied that the alleged violation did
    occur, it shall proceed with disciplinary action against
    the licensee as provided in this Act.
        (6) To hear and determine appeals from orders of a
    local commission in accordance with the provisions of this
    Act, as hereinafter set forth. Hearings under this
    subsection shall be held in Springfield or Chicago, at
    whichever location is the more convenient for the majority
    of persons who are parties to the hearing.
        (7) The commission shall establish uniform systems of
    accounts to be kept by all retail licensees having more
    than 4 employees, and for this purpose the commission may
    classify all retail licensees having more than 4 employees
    and establish a uniform system of accounts for each class
    and prescribe the manner in which such accounts shall be
    kept. The commission may also prescribe the forms of
    accounts to be kept by all retail licensees having more
    than 4 employees, including but not limited to accounts of
    earnings and expenses and any distribution, payment, or
    other distribution of earnings or assets, and any other
    forms, records and memoranda which in the judgment of the
    commission may be necessary or appropriate to carry out any
    of the provisions of this Act, including but not limited to
    such forms, records and memoranda as will readily and
    accurately disclose at all times the beneficial ownership
    of such retail licensed business. The accounts, forms,
    records and memoranda shall be available at all reasonable
    times for inspection by authorized representatives of the
    State commission or by any local liquor control
    commissioner or his or her authorized representative. The
    commission, may, from time to time, alter, amend or repeal,
    in whole or in part, any uniform system of accounts, or the
    form and manner of keeping accounts.
        (8) In the conduct of any hearing authorized to be held
    by the commission, to appoint, at the commission's
    discretion, hearing officers to conduct hearings involving
    complex issues or issues that will require a protracted
    period of time to resolve, to examine, or cause to be
    examined, under oath, any licensee, and to examine or cause
    to be examined the books and records of such licensee; to
    hear testimony and take proof material for its information
    in the discharge of its duties hereunder; to administer or
    cause to be administered oaths; for any such purpose to
    issue subpoena or subpoenas to require the attendance of
    witnesses and the production of books, which shall be
    effective in any part of this State, and to adopt rules to
    implement its powers under this paragraph (8).
        Any Circuit Court may by order duly entered, require
    the attendance of witnesses and the production of relevant
    books subpoenaed by the State commission and the court may
    compel obedience to its order by proceedings for contempt.
        (9) To investigate the administration of laws in
    relation to alcoholic liquors in this and other states and
    any foreign countries, and to recommend from time to time
    to the Governor and through him or her to the legislature
    of this State, such amendments to this Act, if any, as it
    may think desirable and as will serve to further the
    general broad purposes contained in Section 1-2 hereof.
        (10) To adopt such rules and regulations consistent
    with the provisions of this Act which shall be necessary
    for the control, sale or disposition of alcoholic liquor
    damaged as a result of an accident, wreck, flood, fire or
    other similar occurrence.
        (11) To develop industry educational programs related
    to responsible serving and selling, particularly in the
    areas of overserving consumers and illegal underage
    purchasing and consumption of alcoholic beverages.
        (11.1) To license persons providing education and
    training to alcohol beverage sellers and servers for
    mandatory and non-mandatory training under the Beverage
    Alcohol Sellers and Servers Education and Training
    (BASSET) programs and to develop and administer a public
    awareness program in Illinois to reduce or eliminate the
    illegal purchase and consumption of alcoholic beverage
    products by persons under the age of 21. Application for a
    license shall be made on forms provided by the State
    Commission.
        (12) To develop and maintain a repository of license
    and regulatory information.
        (13) (Blank). On or before January 15, 1994, the
    Commission shall issue a written report to the Governor and
    General Assembly that is to be based on a comprehensive
    study of the impact on and implications for the State of
    Illinois of Section 1926 of the federal ADAMHA
    Reorganization Act of 1992 (Public Law 102-321). This study
    shall address the extent to which Illinois currently
    complies with the provisions of P.L. 102-321 and the rules
    promulgated pursuant thereto.
        As part of its report, the Commission shall provide the
    following essential information:
            (i) the number of retail distributors of tobacco
        products, by type and geographic area, in the State;
            (ii) the number of reported citations and
        successful convictions, categorized by type and
        location of retail distributor, for violation of the
        Prevention of Tobacco Use by Minors and Sale and
        Distribution of Tobacco Products Act and the Smokeless
        Tobacco Limitation Act;
            (iii) the extent and nature of organized
        educational and governmental activities that are
        intended to promote, encourage or otherwise secure
        compliance with any Illinois laws that prohibit the
        sale or distribution of tobacco products to minors; and
            (iv) the level of access and availability of
        tobacco products to individuals under the age of 18.
        To obtain the data necessary to comply with the
    provisions of P.L. 102-321 and the requirements of this
    report, the Commission shall conduct random, unannounced
    inspections of a geographically and scientifically
    representative sample of the State's retail tobacco
    distributors.
        The Commission shall consult with the Department of
    Public Health, the Department of Human Services, the
    Illinois State Police and any other executive branch
    agency, and private organizations that may have
    information relevant to this report.
        The Commission may contract with the Food and Drug
    Administration of the U.S. Department of Health and Human
    Services to conduct unannounced investigations of Illinois
    tobacco vendors to determine compliance with federal laws
    relating to the illegal sale of cigarettes and smokeless
    tobacco products to persons under the age of 18.
        (14) On or before April 30, 2008 and every 2 years
    thereafter, the Commission shall present a written report
    to the Governor and the General Assembly that shall be
    based on a study of the impact of Public Act 95-634 on the
    business of soliciting, selling, and shipping wine from
    inside and outside of this State directly to residents of
    this State. As part of its report, the Commission shall
    provide all of the following information:
            (A) The amount of State excise and sales tax
        revenues generated.
            (B) The amount of licensing fees received.
            (C) The number of cases of wine shipped from inside
        and outside of this State directly to residents of this
        State.
            (D) The number of alcohol compliance operations
        conducted.
            (E) The number of winery shipper's licenses
        issued.
            (F) The number of each of the following: reported
        violations; cease and desist notices issued by the
        Commission; notices of violations issued by the
        Commission and to the Department of Revenue; and
        notices and complaints of violations to law
        enforcement officials, including, without limitation,
        the Illinois Attorney General and the U.S. Department
        of Treasury's Alcohol and Tobacco Tax and Trade Bureau.
        (15) As a means to reduce the underage consumption of
    alcoholic liquors, the Commission shall conduct alcohol
    compliance operations to investigate whether businesses
    that are soliciting, selling, and shipping wine from inside
    or outside of this State directly to residents of this
    State are licensed by this State or are selling or
    attempting to sell wine to persons under 21 years of age in
    violation of this Act.
        (16) The Commission shall, in addition to notifying any
    appropriate law enforcement agency, submit notices of
    complaints or violations of Sections 6-29 and 6-29.1 by
    persons who do not hold a winery shipper's license under
    this Act to the Illinois Attorney General and to the U.S.
    Department of Treasury's Alcohol and Tobacco Tax and Trade
    Bureau.
        (17)(A) A person licensed to make wine under the laws
    of another state who has a winery shipper's license under
    this Act and annually produces less than 25,000 gallons of
    wine or a person who has a first-class or second-class wine
    manufacturer's license, a first-class or second-class
    wine-maker's license, or a limited wine manufacturer's
    license under this Act and annually produces less than
    25,000 gallons of wine may make application to the
    Commission for a self-distribution exemption to allow the
    sale of not more than 5,000 gallons of the exemption
    holder's wine to retail licensees per year.
        (B) In the application, which shall be sworn under
    penalty of perjury, such person shall state (1) the date it
    was established; (2) its volume of production and sales for
    each year since its establishment; (3) its efforts to
    establish distributor relationships; (4) that a
    self-distribution exemption is necessary to facilitate the
    marketing of its wine; and (5) that it will comply with the
    liquor and revenue laws of the United States, this State,
    and any other state where it is licensed.
        (C) The Commission shall approve the application for a
    self-distribution exemption if such person: (1) is in
    compliance with State revenue and liquor laws; (2) is not a
    member of any affiliated group that produces more than
    25,000 gallons of wine per annum or produces any other
    alcoholic liquor; (3) will not annually produce for sale
    more than 25,000 gallons of wine; and (4) will not annually
    sell more than 5,000 gallons of its wine to retail
    licensees.
        (D) A self-distribution exemption holder shall
    annually certify to the Commission its production of wine
    in the previous 12 months and its anticipated production
    and sales for the next 12 months. The Commission may fine,
    suspend, or revoke a self-distribution exemption after a
    hearing if it finds that the exemption holder has made a
    material misrepresentation in its application, violated a
    revenue or liquor law of Illinois, exceeded production of
    25,000 gallons of wine in any calendar year, or become part
    of an affiliated group producing more than 25,000 gallons
    of wine or any other alcoholic liquor.
        (E) Except in hearings for violations of this Act or
    Public Act 95-634 or a bona fide investigation by duly
    sworn law enforcement officials, the Commission, or its
    agents, the Commission shall maintain the production and
    sales information of a self-distribution exemption holder
    as confidential and shall not release such information to
    any person.
        (F) The Commission shall issue regulations governing
    self-distribution exemptions consistent with this Section
    and this Act.
        (G) Nothing in this subsection (17) shall prohibit a
    self-distribution exemption holder from entering into or
    simultaneously having a distribution agreement with a
    licensed Illinois distributor.
        (H) It is the intent of this subsection (17) to promote
    and continue orderly markets. The General Assembly finds
    that in order to preserve Illinois' regulatory
    distribution system it is necessary to create an exception
    for smaller makers of wine as their wines are frequently
    adjusted in varietals, mixes, vintages, and taste to find
    and create market niches sometimes too small for
    distributor or importing distributor business strategies.
    Limited self-distribution rights will afford and allow
    smaller makers of wine access to the marketplace in order
    to develop a customer base without impairing the integrity
    of the 3-tier system.
        (18)(A) A class 1 brewer licensee, who must also be
    either a licensed brewer or licensed non-resident dealer
    and annually manufacture less than 930,000 gallons of beer,
    may make application to the State Commission for a
    self-distribution exemption to allow the sale of not more
    than 232,500 gallons of the exemption holder's beer to
    retail licensees per year.
        (B) In the application, which shall be sworn under
    penalty of perjury, the class 1 brewer licensee shall state
    (1) the date it was established; (2) its volume of beer
    manufactured and sold for each year since its
    establishment; (3) its efforts to establish distributor
    relationships; (4) that a self-distribution exemption is
    necessary to facilitate the marketing of its beer; and (5)
    that it will comply with the alcoholic beverage and revenue
    laws of the United States, this State, and any other state
    where it is licensed.
        (C) Any application submitted shall be posted on the
    State Commission's website at least 45 days prior to action
    by the State Commission. The State Commission shall approve
    the application for a self-distribution exemption if the
    class 1 brewer licensee: (1) is in compliance with the
    State, revenue, and alcoholic beverage laws; (2) is not a
    member of any affiliated group that manufactures more than
    930,000 gallons of beer per annum or produces any other
    alcoholic beverages; (3) shall not annually manufacture
    for sale more than 930,000 gallons of beer; (4) shall not
    annually sell more than 232,500 gallons of its beer to
    retail licensees; and (5) has relinquished any brew pub
    license held by the licensee, including any ownership
    interest it held in the licensed brew pub.
        (D) A self-distribution exemption holder shall
    annually certify to the State Commission its manufacture of
    beer during the previous 12 months and its anticipated
    manufacture and sales of beer for the next 12 months. The
    State Commission may fine, suspend, or revoke a
    self-distribution exemption after a hearing if it finds
    that the exemption holder has made a material
    misrepresentation in its application, violated a revenue
    or alcoholic beverage law of Illinois, exceeded the
    manufacture of 930,000 gallons of beer in any calendar year
    or became part of an affiliated group manufacturing more
    than 930,000 gallons of beer or any other alcoholic
    beverage.
        (E) The State Commission shall issue rules and
    regulations governing self-distribution exemptions
    consistent with this Act.
        (F) Nothing in this paragraph (18) shall prohibit a
    self-distribution exemption holder from entering into or
    simultaneously having a distribution agreement with a
    licensed Illinois importing distributor or a distributor.
    If a self-distribution exemption holder enters into a
    distribution agreement and has assigned distribution
    rights to an importing distributor or distributor, then the
    self-distribution exemption holder's distribution rights
    in the assigned territories shall cease in a reasonable
    time not to exceed 60 days.
        (G) It is the intent of this paragraph (18) to promote
    and continue orderly markets. The General Assembly finds
    that in order to preserve Illinois' regulatory
    distribution system, it is necessary to create an exception
    for smaller manufacturers in order to afford and allow such
    smaller manufacturers of beer access to the marketplace in
    order to develop a customer base without impairing the
    integrity of the 3-tier system.
    (b) On or before April 30, 1999, the Commission shall
present a written report to the Governor and the General
Assembly that shall be based on a study of the impact of Public
Act 90-739 on the business of soliciting, selling, and shipping
alcoholic liquor from outside of this State directly to
residents of this State.
    As part of its report, the Commission shall provide the
following information:
        (i) the amount of State excise and sales tax revenues
    generated as a result of Public Act 90-739;
        (ii) the amount of licensing fees received as a result
    of Public Act 90-739;
        (iii) the number of reported violations, the number of
    cease and desist notices issued by the Commission, the
    number of notices of violations issued to the Department of
    Revenue, and the number of notices and complaints of
    violations to law enforcement officials.
(Source: P.A. 99-78, eff. 7-20-15; 99-448, eff. 8-24-15;
100-134, eff. 8-18-17; 100-201, eff. 8-18-17.)
 
    (235 ILCS 5/5-6)
    Sec. 5-6. FDA grant funds. Grant funds received from the
Food and Drug Administration of the U.S. Department of Health
and Human Services for conducting unannounced investigations
of Illinois tobacco vendors shall be deposited into the Dram
Shop Fund until June 30, 2018.
(Source: P.A. 90-9, eff. 7-1-97.)
 
    Section 99. Effective date. This Act takes effect upon
becoming law.