101ST GENERAL ASSEMBLY
State of Illinois
2019 and 2020
SB1240

 

Introduced 2/6/2019, by Sen. Terry Link

 

SYNOPSIS AS INTRODUCED:
 
New Act
30 ILCS 105/5.891 new
55 ILCS 5/5-1184 new
65 ILCS 5/11-42-17 new

    Creates the Checkout Bag Tax Act. Imposes a tax of $0.07 on each checkout bag used by a customer at a retail establishment in the State. Provides that the term "checkout bag" means a single use plastic, paper, or compostable bag provided by a retail establishment at the checkout, cash register, point of sale, or other point of departure to a customer for the purpose of transporting goods out of the retail establishment. Sets forth certain exceptions. Provides that the proceeds from the tax shall be distributed as follows: (1) the retailer shall retain $0.02 per bag; (2) the wholesaler shall retain $0.02 per bag; and (3) $0.03 per bag shall be deposited into the Checkout Bag Tax Fund. Amends the State Finance Act to create the Checkout Bag Tax Fund. Provides that moneys in the Fund shall be remitted to counties and municipal joint action agencies. Amends the Counties Code and the Illinois Municipal Code to preempt certain actions by counties and municipalities concerning auxiliary containers or checkout bags.


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FISCAL NOTE ACT MAY APPLY
HOME RULE NOTE ACT MAY APPLY

 

 

A BILL FOR

 

SB1240LRB101 08782 HLH 53869 b

1    AN ACT concerning revenue.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 1. Short title. This Act may be cited as the
5Checkout Bag Tax Act.
 
6    Section 5. Definitions. As used in this Act:
7    "Agency" means the Illinois Environmental Protection
8Agency.
9    "Auxiliary container" means, but is not limited to, a bag,
10cup, bottle, lid, or other packaging that is:
11        (1) designed to be reusable or for single use;
12        (2) made of cloth, paper, plastic, cardboard,
13    corrugated material, aluminum, glass, extruded
14    polystyrene, postconsumer recycled material, or similar
15    material or substrates, including coated, laminated, or
16    multi-layer substrates;
17        (3) designed for transporting, containing, or
18    protecting merchandise, food, or beverages from a retail
19    establishment or restaurant;
20        (4) used to package bulk items such as fruit,
21    vegetables, nuts, grains, or candy;
22        (5) used for greeting cards or small hardware items
23    such as nails and bolts;

 

 

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1        (6) used to contain or wrap frozen foods, meat, or fish
2    whether prepackaged or not;
3        (7) used to contain or wrap flowers or potted plants or
4    other items where dampness may be a problem;
5        (8) used to contain unwrapped prepared foods or bakery
6    goods;
7        (9) used to contain prescription drugs;
8        (10) used to safeguard public health and safety during
9    the transportation of prepared take-out foods and prepared
10    liquids intended for consumption away from a retail
11    establishment or restaurant; or
12        (11) a newspaper bag, door-hanger bag, laundry
13    cleaning bag, garment bag, or a bag of any type that
14    customers bring to a retail establishment for their own use
15    or to carry away from the retail establishment goods that
16    are not placed in a bag provided by the retail
17    establishment.
18    "Checkout bag" means a single use plastic, paper, or
19compostable bag that is provided by a retail establishment at
20the checkout, cash register, point of sale, or other point of
21departure to a customer for the purpose of transporting goods
22out of the retail establishment. The term "checkout bag" does
23not include auxiliary containers.
24    "Department" means the Department of Revenue.
25    "Restaurant" means any business having sales of
26ready-to-eat food for immediate consumption comprising at

 

 

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1least 51% of total sales excluding the sale of liquor.
2    "Retail establishment" means any person, corporation,
3partnership, business venture, public sports or entertainment
4facility, government agency, or organization that sells or
5provides merchandise, goods, or materials, including, but not
6limited to, clothing, food, beverages, household goods, or
7personal items of any kind directly to a customer. "Retail
8establishment" includes, but is not limited to, department
9stores, clothing stores, jewelry stores, grocery stores,
10pharmacies, home improvement stores, liquor stores,
11convenience stores, gas stations, restaurants, mobile food
12delivery, and farmers markets. The term "retail establishment"
13does not include food banks or other food assistance programs.
14    "Wholesaler" means any person who engages in the business
15of selling or supplying checkout bags to any retail
16establishment for use in the State and includes any such person
17who makes or fabricates checkout bags or packs and sells
18checkout bags in packages.
 
19    Section 10. Checkout Bag Tax Fund.
20    (a) The Checkout Bag Tax Fund is created as a special fund
21in the State treasury. Moneys in the Fund shall be used as
22provided in this Act.
23    (b) Notwithstanding any other provision of law, the
24Checkout Bag Tax Fund is not subject to sweeps, administrative
25charges or chargebacks, or any other fiscal or budgetary

 

 

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1maneuver that would in any way transfer any funds from the
2Checkout Bag Tax Fund into any other fund of the State.
 
3    Section 15. Payment of checkout bag tax required. A
4checkout bag tax of $0.07 is imposed on each checkout bag used
5by a customer at retail establishments located in the State,
6except for a retail establishment located in a municipality
7that passed a bag fee or bag tax ordinance on or before
8February 1, 2018. The fee shall be paid by the customer. The
9ultimate incidence and liability for payment of the tax is to
10be borne by the customer. The tax shall be separately stated on
11the receipt provided to the customer at the time of sale and
12shall be identified as the Checkout Bag Tax. It is a violation
13of this Section for the retail establishment to fail to
14separately itemize the tax on a customer's purchase of such a
15bag or to otherwise absorb the tax on such sale. The tax shall
16be collected by each wholesaler who sells checkout bags to a
17retail establishment in Illinois. Any wholesaler required to
18pay the tax shall collect the tax from each retail
19establishment in the State to whom the sales of checkout bags
20are made. The retail establishment shall retain $0.02 of the
21tax. The retail establishment shall remit the remaining $0.05
22of the tax to the wholesaler. The wholesaler receiving such
23remittance or payment from a retail establishment shall be
24required to remit to the Department, on form ST-1 or any
25successor form, the net amount of $0.05 per checkout bag sold

 

 

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1or used. If a wholesaler sells checkout bags to a purchaser
2other than a retail establishment for use or consumption by
3such person in the State, then the wholesaler shall collect the
4tax from such purchaser and remit it to the Department in the
5same manner as applies to its sales to retail establishments.
6The wholesaler shall be eligible to retain $0.02 per checkout
7bag sold to such purchaser. The Department shall deposit $0.03
8per bag into the Checkout Bag Tax Fund and $0.02 per bag into
9the General Revenue Fund. The Department shall monthly remit
10the $0.03 per bag of the tax from the Checkout Bag Tax Fund to
11the county where the retail establishment is located, except
12that, if a municipal joint action agency is located within the
13county where the retail establishment is located, then the
14Department shall monthly remit to the municipal joint action
15agency a portion of the tax to the municipal joint action
16agency based on the location of retail establishments within
17the municipal joint action agency.
18    The Department shall publish an annual report detailing the
19amount of taxes remitted to each individual county or municipal
20joint action agency from the Checkout Bag Tax Fund. The report
21may be published electronically.
 
22    Section 20. Use of tax proceeds by counties and municipal
23joint action agencies. A county or municipal joint action
24agency shall use the revenue received from the checkout bag tax
25in the following manner:

 

 

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1        (1) At least 50% of the funds shall be used to collect
2    items that include auxiliary containers, checkout bags,
3    oil-based paints, latex paints, paint thinners,
4    herbicides, insecticides, pesticides, gasoline, pool
5    chemicals, packaging, plastic film, prescription drugs,
6    non-prescription drugs, cleaning products, mercury,
7    household batteries, used motor oil, oil filters, drain
8    cleaners, lawn chemicals, solvents, antifreeze, carpet,
9    mattresses, sharps, needles, fluorescent lamps, aerosol
10    products, adhesives, glues, acids, caustics, flammable
11    liquids, and any other products collected at residential
12    household hazardous waste events funded by the Agency. A
13    county or municipal joint action agency or county may
14    contract with a governmental entity whose primary function
15    is environmental protection and operates permanent and
16    temporary household waste facilities or a private vendor
17    whose primary function is to collect and process permanent
18    and temporary household hazardous waste to collect
19    materials in this Section that are considered hazardous.
20        (2) The remainder of the funds shall be used for:
21            (A) education programs to reduce contamination and
22        increase participation in recycling and composting
23        programs;
24            (B) programs to increase the collection and
25        recycling or composting of auxiliary containers;
26            (C) programs or grants to encourage infrastructure

 

 

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1        development for and market development or recycling
2        and composting; or
3            (D) the implementation of solid waste management
4        plans developed pursuant to the Solid Waste Planning
5        and Recycling Act.
 
6    Section 25. Recordkeeping. Each county or municipal joint
7action agency that receives revenue from the Checkout Bag Tax
8Fund shall provide an annual report to the Agency detailing how
9the revenues received from the Checkout Bag Tax Fund were spent
10or distributed pursuant to Section 20 by no later than March 15
11of each year. The report shall include but not be limited to
12itemized amounts for each individual program, grant, plan,
13event or any other disbursement made pursuant to Section 20;
14the percentage of the revenue distributed to item (1) of
15Section 20 and the enumerated categories in item (2) of Section
1620; the category of products collected, the aggregate weight of
17each product collected, and the amount of fund spent on
18collecting each product.
19    The Agency shall publish an annual report that includes
20each municipal joint action agency and county report.
 
21    Section 30. Exemption. The tax imposed under this Act does
22not apply to the retail sale or use of checkout bags that are
23used to carry items purchased pursuant to the Supplemental
24Nutrition Assistance Program or a similar governmental food

 

 

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1assistance program.
 
2    Section 35. Illinois False Claims Act. No acts or omissions
3by the employee or retailer regarding the charging of taxes
4under this Act shall be the basis for filing an action by a
5private person under the Illinois False Claims Act.
6    The Department of Revenue shall have the sole authority to
7bring an administrative action resulting from information
8provided by any person alleging a false claim, statement or
9record, as defined in Section 3 of the Illinois False Claims
10Act pertaining to any tax administered by the Department of
11Revenue under this Act.
 
12    Section 40. Incorporation by reference. All of the
13provisions of Sections 4, 5, 5a, 5b, 5c, 5d, 5e, 5f, 5g, 5j, 6,
146a, 6b, 6c, 7, 8, 9, 10, 11, 11, 12, and 13 of the Retailers'
15Occupation Tax Act that are not inconsistent with this Act, and
16all provisions of the Uniform Penalty and Interest Act shall
17apply, as far as practicable, to the subject matter of this Act
18to the same extent as if such provisions were included in this
19Act.
 
20    Section 45. Repealer. This Act is repealed on January 1,
212030.
 
22    Section 900. The State Finance Act is amended by adding

 

 

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1Section 5.891 as follows:
 
2    (30 ILCS 105/5.891 new)
3    Sec. 5.891. The Checkout Bag Tax Fund.
 
4    Section 905. The Counties Code is amended by adding Section
55-1184 as follows:
 
6    (55 ILCS 5/5-1184 new)
7    Sec. 5-1184. Auxiliary containers and checkout bags.
8    (a) As used in this Section:
9    "Auxiliary container" has the meaning given to that term in
10Section 5 of the Checkout Bag Tax Act.
11    "Checkout bag" has the meaning given to that term in
12Section 5 of the Checkout Bag Tax Act.
13    (b) Except as otherwise provided in this Section, a county
14may not ban, place a fee or tax on, or regulate in any other
15manner the use, disposition, content, taxation, or sale of
16auxiliary containers or checkout bags.
17    (c) Except for the prohibition on taxing or placing a fee
18on auxiliary containers and checkout bags, Subsection (b) may
19not be construed to prohibit or restrict any of the following:
20        (1) a curbside recycling program;
21        (2) a designated residential or commercial recycling
22    location;
23        (3) a commercial recycling program; or

 

 

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1        (4) the use or sale of auxiliary containers on property
2    owned or operated by a unit of local government.
3    (d) A home rule county may not ban, place a fee or tax on,
4or regulate in any other manner the use, disposition, content,
5taxation, or sale of auxiliary containers or checkout bags,
6except as provided for in this Section. This Section is a
7denial and limitation of home rule powers and functions under
8subsection (g) of Section 6 of Article VII of the Illinois
9Constitution.
 
10    Section 910. The Illinois Municipal Code is amended by
11adding Section 11-42-17 as follows:
 
12    (65 ILCS 5/11-42-17 new)
13    Sec. 11-42-17. Auxiliary containers and checkout bags.
14    (a) As used in this Section:
15    "Auxiliary container" has the meaning given to that term in
16Section 5 of the Checkout Bag Tax Act.
17    "Checkout bag" has the meaning given to that term in
18Section 5 of the Checkout Bag Tax Act.
19    (b) Except as otherwise provided in this Section, a
20municipality may not ban, place a fee or tax on, or regulate in
21any other manner the use, disposition, content, taxation, or
22sale of auxiliary containers or checkout bags.
23    (c) Except for the prohibition on taxing or placing a fee
24on auxiliary containers and checkout bags, Subsection (b) may

 

 

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1not be construed to prohibit or restrict any of the following:
2        (1) a curbside recycling program;
3        (2) a designated residential or commercial recycling
4    location;
5        (3) a commercial recycling program; or
6        (4) the use or sale of auxiliary containers on property
7    owned or operated by a unit of local government.
8    (d) A municipality that charged a fee or tax on checkout
9bags as defined by the municipality's ordinance on or before
10February 1, 2018 may continue to charge the fee or tax as
11existed on that date. The municipality is prohibited from
12further regulating auxiliary containers or checkout bags and
13from making further changes to the bag fee or bag tax ordinance
14in effect on or before February 1, 2018. However, the
15municipality may change its regulations to be consistent with
16this Section, the Checkout Bag Tax Act, or eliminate the tax or
17fee altogether.
18    (e) Except in municipalities with a population greater than
192,500,000, that charged a fee or tax on checkout bags as
20defined by the municipality's ordinance on February 1, 2018, a
21home rule municipality may not ban, place a fee or tax on, or
22regulate in any other manner the use, disposition, content,
23taxation, or sale of auxiliary containers and Checkout bags,
24except as provided for in this Section. This Section is a
25denial and limitation of home rule powers and functions under
26subsection (g) of Section 6 of Article VII of the Illinois

 

 

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1Constitution.