101ST GENERAL ASSEMBLY
State of Illinois
2019 and 2020
SB3290

 

Introduced 2/11/2020, by Sen. Bill Cunningham

 

SYNOPSIS AS INTRODUCED:
 
230 ILCS 40/5
230 ILCS 40/25
230 ILCS 40/30
230 ILCS 40/45

    Amends the Video Gaming Act. Creates a sales agent and broker license to solicit or receive business from current or potential establishments licensed under the Act. Provides that a person may not solicit the signing of a use agreement on behalf of a terminal operator or enter into a use agreement as agent of a terminal operator unless that person either has a valid sales agent and broker license or owns, manages, or significantly influences or controls the terminal operator. Provides the fee for the issuance and renewal for the sales agent and broker license. Effective immediately.


LRB101 16585 SMS 65969 b

FISCAL NOTE ACT MAY APPLY

 

 

A BILL FOR

 

SB3290LRB101 16585 SMS 65969 b

1    AN ACT concerning gaming.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 20. The Video Gaming Act is amended by changing
5Sections 5, 25, 30, and 45 as follows:
 
6    (230 ILCS 40/5)
7    Sec. 5. Definitions. As used in this Act:
8    "Board" means the Illinois Gaming Board.
9    "Credit" means one, 5, 10, or 25 cents either won or
10purchased by a player.
11    "Distributor" means an individual, partnership,
12corporation, or limited liability company licensed under this
13Act to buy, sell, lease, or distribute video gaming terminals
14or major components or parts of video gaming terminals to or
15from terminal operators.
16    "Electronic card" means a card purchased from a licensed
17establishment, licensed fraternal establishment, licensed
18veterans establishment, licensed truck stop establishment, or
19licensed large truck stop establishment for use in that
20establishment as a substitute for cash in the conduct of gaming
21on a video gaming terminal.
22    "Electronic voucher" means a voucher printed by an
23electronic video game machine that is redeemable in the

 

 

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1licensed establishment for which it was issued.
2    "In-location bonus jackpot" means one or more video gaming
3terminals at a single licensed establishment that allows for
4wagers placed on such video gaming terminals to contribute to a
5cumulative maximum jackpot of up to $10,000.
6    "Terminal operator" means an individual, partnership,
7corporation, or limited liability company that is licensed
8under this Act and that owns, services, and maintains video
9gaming terminals for placement in licensed establishments,
10licensed truck stop establishments, licensed large truck stop
11establishments, licensed fraternal establishments, or licensed
12veterans establishments.
13    "Licensed technician" means an individual who is licensed
14under this Act to repair, service, and maintain video gaming
15terminals.
16    "Licensed terminal handler" means a person, including but
17not limited to an employee or independent contractor working
18for a manufacturer, distributor, supplier, technician, or
19terminal operator, who is licensed under this Act to possess or
20control a video gaming terminal or to have access to the inner
21workings of a video gaming terminal. A licensed terminal
22handler does not include an individual, partnership,
23corporation, or limited liability company defined as a
24manufacturer, distributor, supplier, technician, or terminal
25operator under this Act.
26    "Manufacturer" means an individual, partnership,

 

 

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1corporation, or limited liability company that is licensed
2under this Act and that manufactures or assembles video gaming
3terminals.
4    "Supplier" means an individual, partnership, corporation,
5or limited liability company that is licensed under this Act to
6supply major components or parts to video gaming terminals to
7licensed terminal operators.
8    "Net terminal income" means money put into a video gaming
9terminal minus credits paid out to players.
10    "Video gaming terminal" means any electronic video game
11machine that, upon insertion of cash, electronic cards or
12vouchers, or any combination thereof, is available to play or
13simulate the play of a video game, including but not limited to
14video poker, line up, and blackjack, as authorized by the Board
15utilizing a video display and microprocessors in which the
16player may receive free games or credits that can be redeemed
17for cash. The term does not include a machine that directly
18dispenses coins, cash, or tokens or is for amusement purposes
19only.
20    "Licensed establishment" means any licensed retail
21establishment where alcoholic liquor is drawn, poured, mixed,
22or otherwise served for consumption on the premises, whether
23the establishment operates on a nonprofit or for-profit basis.
24"Licensed establishment" includes any such establishment that
25has a contractual relationship with an inter-track wagering
26location licensee licensed under the Illinois Horse Racing Act

 

 

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1of 1975, provided any contractual relationship shall not
2include any transfer or offer of revenue from the operation of
3video gaming under this Act to any licensee licensed under the
4Illinois Horse Racing Act of 1975. Provided, however, that the
5licensed establishment that has such a contractual
6relationship with an inter-track wagering location licensee
7may not, itself, be (i) an inter-track wagering location
8licensee, (ii) the corporate parent or subsidiary of any
9licensee licensed under the Illinois Horse Racing Act of 1975,
10or (iii) the corporate subsidiary of a corporation that is also
11the corporate parent or subsidiary of any licensee licensed
12under the Illinois Horse Racing Act of 1975. "Licensed
13establishment" does not include a facility operated by an
14organization licensee, an inter-track wagering licensee, or an
15inter-track wagering location licensee licensed under the
16Illinois Horse Racing Act of 1975 or a riverboat licensed under
17the Illinois Gambling Act, except as provided in this
18paragraph. The changes made to this definition by Public Act
1998-587 are declarative of existing law.
20    "Licensed fraternal establishment" means the location
21where a qualified fraternal organization that derives its
22charter from a national fraternal organization regularly
23meets.
24    "Licensed veterans establishment" means the location where
25a qualified veterans organization that derives its charter from
26a national veterans organization regularly meets.

 

 

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1    "Licensed truck stop establishment" means a facility (i)
2that is at least a 3-acre facility with a convenience store,
3(ii) with separate diesel islands for fueling commercial motor
4vehicles, (iii) that sells at retail more than 10,000 gallons
5of diesel or biodiesel fuel per month, and (iv) with parking
6spaces for commercial motor vehicles. "Commercial motor
7vehicles" has the same meaning as defined in Section 18b-101 of
8the Illinois Vehicle Code. The requirement of item (iii) of
9this paragraph may be met by showing that estimated future
10sales or past sales average at least 10,000 gallons per month.
11    "Licensed large truck stop establishment" means a facility
12located within 3 road miles from a freeway interchange, as
13measured in accordance with the Department of Transportation's
14rules regarding the criteria for the installation of business
15signs: (i) that is at least a 3-acre facility with a
16convenience store, (ii) with separate diesel islands for
17fueling commercial motor vehicles, (iii) that sells at retail
18more than 50,000 gallons of diesel or biodiesel fuel per month,
19and (iv) with parking spaces for commercial motor vehicles.
20"Commercial motor vehicles" has the same meaning as defined in
21Section 18b-101 of the Illinois Vehicle Code. The requirement
22of item (iii) of this paragraph may be met by showing that
23estimated future sales or past sales average at least 50,000
24gallons per month.
25    "Sales agent and broker" means an individual, partnership,
26corporation, limited liability company, or other business

 

 

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1entity engaged in the solicitation or receipt of business from
2current or potential licensed establishments, licensed
3fraternal establishments, licensed veterans establishments,
4licensed truck stop establishments, or licensed large truck
5stop establishments either on an employment or contractual
6basis.
7(Source: P.A. 101-31, eff. 6-28-19.)
 
8    (230 ILCS 40/25)
9    Sec. 25. Restriction of licensees.
10    (a) Manufacturer. A person may not be licensed as a
11manufacturer of a video gaming terminal in Illinois unless the
12person has a valid manufacturer's license issued under this
13Act. A manufacturer may only sell video gaming terminals for
14use in Illinois to persons having a valid distributor's
15license.
16    (b) Distributor. A person may not sell, distribute, or
17lease or market a video gaming terminal in Illinois unless the
18person has a valid distributor's license issued under this Act.
19A distributor may only sell video gaming terminals for use in
20Illinois to persons having a valid distributor's or terminal
21operator's license.
22    (c) Terminal operator. A person may not own, maintain, or
23place a video gaming terminal unless he has a valid terminal
24operator's license issued under this Act. A terminal operator
25may only place video gaming terminals for use in Illinois in

 

 

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1licensed establishments, licensed truck stop establishments,
2licensed large truck stop establishments, licensed fraternal
3establishments, and licensed veterans establishments. No
4terminal operator may give anything of value, including but not
5limited to a loan or financing arrangement, to a licensed
6establishment, licensed truck stop establishment, licensed
7large truck stop establishment, licensed fraternal
8establishment, or licensed veterans establishment as any
9incentive or inducement to locate video terminals in that
10establishment. Of the after-tax profits from a video gaming
11terminal, 50% shall be paid to the terminal operator and 50%
12shall be paid to the licensed establishment, licensed truck
13stop establishment, licensed large truck stop establishment,
14licensed fraternal establishment, or licensed veterans
15establishment, notwithstanding any agreement to the contrary.
16A video terminal operator that violates one or more
17requirements of this subsection is guilty of a Class 4 felony
18and is subject to termination of his or her license by the
19Board.
20    (d) Licensed technician. A person may not service,
21maintain, or repair a video gaming terminal in this State
22unless he or she (1) has a valid technician's license issued
23under this Act, (2) is a terminal operator, or (3) is employed
24by a terminal operator, distributor, or manufacturer.
25    (d-5) Licensed terminal handler. No person, including, but
26not limited to, an employee or independent contractor working

 

 

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1for a manufacturer, distributor, supplier, technician, or
2terminal operator licensed pursuant to this Act, shall have
3possession or control of a video gaming terminal, or access to
4the inner workings of a video gaming terminal, unless that
5person possesses a valid terminal handler's license issued
6under this Act.
7    (d-10) Solicitation of use agreements. A person may not
8solicit the signing of a use agreement on behalf of a terminal
9operator or enter into a use agreement as agent of a terminal
10operator unless that person either has a valid sales agent and
11broker license issued under this Act or owns, manages, or
12significantly influences or controls the terminal operator.
13    (e) Licensed establishment. No video gaming terminal may be
14placed in any licensed establishment, licensed veterans
15establishment, licensed truck stop establishment, licensed
16large truck stop establishment, or licensed fraternal
17establishment unless the owner or agent of the owner of the
18licensed establishment, licensed veterans establishment,
19licensed truck stop establishment, licensed large truck stop
20establishment, or licensed fraternal establishment has entered
21into a written use agreement with the terminal operator for
22placement of the terminals. A copy of the use agreement shall
23be on file in the terminal operator's place of business and
24available for inspection by individuals authorized by the
25Board. A licensed establishment, licensed truck stop
26establishment, licensed veterans establishment, or licensed

 

 

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1fraternal establishment may operate up to 6 video gaming
2terminals on its premises at any time. A licensed large truck
3stop establishment may operate up to 10 video gaming terminals
4on its premises at any time.
5    (f) (Blank).
6    (g) Financial interest restrictions. As used in this Act,
7"substantial interest" in a partnership, a corporation, an
8organization, an association, a business, or a limited
9liability company means:
10        (A) When, with respect to a sole proprietorship, an
11    individual or his or her spouse owns, operates, manages, or
12    conducts, directly or indirectly, the organization,
13    association, or business, or any part thereof; or
14        (B) When, with respect to a partnership, the individual
15    or his or her spouse shares in any of the profits, or
16    potential profits, of the partnership activities; or
17        (C) When, with respect to a corporation, an individual
18    or his or her spouse is an officer or director, or the
19    individual or his or her spouse is a holder, directly or
20    beneficially, of 5% or more of any class of stock of the
21    corporation; or
22        (D) When, with respect to an organization not covered
23    in (A), (B) or (C) above, an individual or his or her
24    spouse is an officer or manages the business affairs, or
25    the individual or his or her spouse is the owner of or
26    otherwise controls 10% or more of the assets of the

 

 

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1    organization; or
2        (E) When an individual or his or her spouse furnishes
3    5% or more of the capital, whether in cash, goods, or
4    services, for the operation of any business, association,
5    or organization during any calendar year; or
6        (F) When, with respect to a limited liability company,
7    an individual or his or her spouse is a member, or the
8    individual or his or her spouse is a holder, directly or
9    beneficially, of 5% or more of the membership interest of
10    the limited liability company.
11    For purposes of this subsection (g), "individual" includes
12all individuals or their spouses whose combined interest would
13qualify as a substantial interest under this subsection (g) and
14whose activities with respect to an organization, association,
15or business are so closely aligned or coordinated as to
16constitute the activities of a single entity.
17    (h) Location restriction. A licensed establishment,
18licensed truck stop establishment, licensed large truck stop
19establishment, licensed fraternal establishment, or licensed
20veterans establishment that is (i) located within 1,000 feet of
21a facility operated by an organization licensee licensed under
22the Illinois Horse Racing Act of 1975 or the home dock of a
23riverboat licensed under the Illinois Gambling Act or (ii)
24located within 100 feet of a school or a place of worship under
25the Religious Corporation Act, is ineligible to operate a video
26gaming terminal. The location restrictions in this subsection

 

 

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1(h) do not apply if (A) a facility operated by an organization
2licensee, a school, or a place of worship moves to or is
3established within the restricted area after a licensed
4establishment, licensed truck stop establishment, licensed
5large truck stop establishment, licensed fraternal
6establishment, or licensed veterans establishment becomes
7licensed under this Act or (B) a school or place of worship
8moves to or is established within the restricted area after a
9licensed establishment, licensed truck stop establishment,
10licensed large truck stop establishment, licensed fraternal
11establishment, or licensed veterans establishment obtains its
12original liquor license. For the purpose of this subsection,
13"school" means an elementary or secondary public school, or an
14elementary or secondary private school registered with or
15recognized by the State Board of Education.
16    Notwithstanding the provisions of this subsection (h), the
17Board may waive the requirement that a licensed establishment,
18licensed truck stop establishment, licensed large truck stop
19establishment, licensed fraternal establishment, or licensed
20veterans establishment not be located within 1,000 feet from a
21facility operated by an organization licensee licensed under
22the Illinois Horse Racing Act of 1975 or the home dock of a
23riverboat licensed under the Illinois Gambling Act. The Board
24shall not grant such waiver if there is any common ownership or
25control, shared business activity, or contractual arrangement
26of any type between the establishment and the organization

 

 

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1licensee or owners licensee of a riverboat. The Board shall
2adopt rules to implement the provisions of this paragraph.
3    (h-5) Restrictions on licenses in malls. The Board shall
4not grant an application to become a licensed video gaming
5location if the Board determines that granting the application
6would more likely than not cause a terminal operator,
7individually or in combination with other terminal operators,
8licensed video gaming location, or other person or entity, to
9operate the video gaming terminals in 2 or more licensed video
10gaming locations as a single video gaming operation.
11        (1) In making determinations under this subsection
12    (h-5), factors to be considered by the Board shall include,
13    but not be limited to, the following:
14            (A) the physical aspects of the location;
15            (B) the ownership, control, or management of the
16        location;
17            (C) any arrangements, understandings, or
18        agreements, written or otherwise, among or involving
19        any persons or entities that involve the conducting of
20        any video gaming business or the sharing of costs or
21        revenues; and
22            (D) the manner in which any terminal operator or
23        other related entity markets, advertises, or otherwise
24        describes any location or locations to any other person
25        or entity or to the public.
26        (2) The Board shall presume, subject to rebuttal, that

 

 

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1    the granting of an application to become a licensed video
2    gaming location within a mall will cause a terminal
3    operator, individually or in combination with other
4    persons or entities, to operate the video gaming terminals
5    in 2 or more licensed video gaming locations as a single
6    video gaming operation if the Board determines that
7    granting the license would create a local concentration of
8    licensed video gaming locations.
9    For the purposes of this subsection (h-5):
10    "Mall" means a building, or adjoining or connected
11buildings, containing 4 or more separate locations.
12    "Video gaming operation" means the conducting of video
13gaming and all related activities.
14    "Location" means a space within a mall containing a
15separate business, a place for a separate business, or a place
16subject to a separate leasing arrangement by the mall owner.
17    "Licensed video gaming location" means a licensed
18establishment, licensed fraternal establishment, licensed
19veterans establishment, licensed truck stop establishment, or
20licensed large truck stop.
21    "Local concentration of licensed video gaming locations"
22means that the combined number of licensed video gaming
23locations within a mall exceed half of the separate locations
24within the mall.
25    (i) Undue economic concentration. In addition to
26considering all other requirements under this Act, in deciding

 

 

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1whether to approve the operation of video gaming terminals by a
2terminal operator in a location, the Board shall consider the
3impact of any economic concentration of such operation of video
4gaming terminals. The Board shall not allow a terminal operator
5to operate video gaming terminals if the Board determines such
6operation will result in undue economic concentration. For
7purposes of this Section, "undue economic concentration" means
8that a terminal operator would have such actual or potential
9influence over video gaming terminals in Illinois as to:
10        (1) substantially impede or suppress competition among
11    terminal operators;
12        (2) adversely impact the economic stability of the
13    video gaming industry in Illinois; or
14        (3) negatively impact the purposes of the Video Gaming
15    Act.
16    The Board shall adopt rules concerning undue economic
17concentration with respect to the operation of video gaming
18terminals in Illinois. The rules shall include, but not be
19limited to, (i) limitations on the number of video gaming
20terminals operated by any terminal operator within a defined
21geographic radius and (ii) guidelines on the discontinuation of
22operation of any such video gaming terminals the Board
23determines will cause undue economic concentration.
24    (j) The provisions of the Illinois Antitrust Act are fully
25and equally applicable to the activities of any licensee under
26this Act.

 

 

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1(Source: P.A. 101-31, eff. 6-28-19.)
 
2    (230 ILCS 40/30)
3    Sec. 30. Multiple types of licenses prohibited. A video
4gaming terminal manufacturer may not be licensed as a video
5gaming terminal operator or own, manage, or control a licensed
6establishment, licensed truck stop establishment, licensed
7large truck stop establishment, licensed fraternal
8establishment, or licensed veterans establishment, and shall
9be licensed to sell only to persons having a valid
10distributor's license or, if the manufacturer also holds a
11valid distributor's license, to sell, distribute, lease, or
12market to persons having a valid terminal operator's license. A
13video gaming terminal distributor may not be licensed as a
14video gaming terminal operator or own, manage, or control a
15licensed establishment, licensed truck stop establishment,
16licensed large truck stop establishment, licensed fraternal
17establishment, or licensed veterans establishment, and shall
18only contract with a licensed terminal operator. A video gaming
19terminal operator may not be licensed as a video gaming
20terminal manufacturer or distributor or own, manage, or control
21a licensed establishment, licensed truck stop establishment,
22licensed large truck stop establishment, licensed fraternal
23establishment, or licensed veterans establishment, and shall
24be licensed only to contract with licensed distributors and
25licensed establishments, licensed truck stop establishments,

 

 

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1licensed large truck stop establishments, licensed fraternal
2establishments, and licensed veterans establishments. An owner
3or manager of a licensed establishment, licensed truck stop
4establishment, licensed large truck stop establishment,
5licensed fraternal establishment, or licensed veterans
6establishment may not be licensed as a video gaming terminal
7manufacturer, distributor, or operator, and shall only
8contract with a licensed operator to place and service this
9equipment. A sales agent and broker may not be licensed as a
10manufacturer, distributor, supplier, licensed establishment,
11licensed fraternal establishment, licensed veterans
12establishment, licensed truck stop establishment, or licensed
13large truck stop establishment.
14(Source: P.A. 101-31, eff. 6-28-19.)
 
15    (230 ILCS 40/45)
16    Sec. 45. Issuance of license.
17    (a) The burden is upon each applicant to demonstrate his
18suitability for licensure. Each video gaming terminal
19manufacturer, distributor, supplier, operator, handler,
20licensed establishment, licensed truck stop establishment,
21licensed large truck stop establishment, licensed fraternal
22establishment, and licensed veterans establishment shall be
23licensed by the Board. The Board may issue or deny a license
24under this Act to any person pursuant to the same criteria set
25forth in Section 9 of the Illinois Gambling Act.

 

 

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1    (a-5) The Board shall not grant a license to a person who
2has facilitated, enabled, or participated in the use of
3coin-operated devices for gambling purposes or who is under the
4significant influence or control of such a person. For the
5purposes of this Act, "facilitated, enabled, or participated in
6the use of coin-operated amusement devices for gambling
7purposes" means that the person has been convicted of any
8violation of Article 28 of the Criminal Code of 1961 or the
9Criminal Code of 2012. If there is pending legal action against
10a person for any such violation, then the Board shall delay the
11licensure of that person until the legal action is resolved.
12    (b) Each person seeking and possessing a license as a video
13gaming terminal manufacturer, distributor, supplier, operator,
14handler, licensed establishment, licensed truck stop
15establishment, licensed large truck stop establishment,
16licensed fraternal establishment, or licensed veterans
17establishment shall submit to a background investigation
18conducted by the Board with the assistance of the State Police
19or other law enforcement. To the extent that the corporate
20structure of the applicant allows, the background
21investigation shall include any or all of the following as the
22Board deems appropriate or as provided by rule for each
23category of licensure: (i) each beneficiary of a trust, (ii)
24each partner of a partnership, (iii) each member of a limited
25liability company, (iv) each director and officer of a publicly
26or non-publicly held corporation, (v) each stockholder of a

 

 

SB3290- 18 -LRB101 16585 SMS 65969 b

1non-publicly held corporation, (vi) each stockholder of 5% or
2more of a publicly held corporation, or (vii) each stockholder
3of 5% or more in a parent or subsidiary corporation.
4    (c) Each person seeking and possessing a license as a video
5gaming terminal manufacturer, distributor, supplier, operator,
6handler, licensed establishment, licensed truck stop
7establishment, licensed large truck stop establishment,
8licensed fraternal establishment, or licensed veterans
9establishment shall disclose the identity of every person,
10association, trust, corporation, or limited liability company
11having a greater than 1% direct or indirect pecuniary interest
12in the video gaming terminal operation for which the license is
13sought. If the disclosed entity is a trust, the application
14shall disclose the names and addresses of the beneficiaries; if
15a corporation, the names and addresses of all stockholders and
16directors; if a limited liability company, the names and
17addresses of all members; or if a partnership, the names and
18addresses of all partners, both general and limited.
19    (d) No person may be licensed as a video gaming terminal
20manufacturer, distributor, supplier, operator, handler,
21licensed establishment, licensed truck stop establishment,
22licensed large truck stop establishment, licensed fraternal
23establishment, or licensed veterans establishment if that
24person has been found by the Board to:
25        (1) have a background, including a criminal record,
26    reputation, habits, social or business associations, or

 

 

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1    prior activities that pose a threat to the public interests
2    of the State or to the security and integrity of video
3    gaming;
4        (2) create or enhance the dangers of unsuitable,
5    unfair, or illegal practices, methods, and activities in
6    the conduct of video gaming; or
7        (3) present questionable business practices and
8    financial arrangements incidental to the conduct of video
9    gaming activities.
10    (e) Any applicant for any license under this Act has the
11burden of proving his or her qualifications to the satisfaction
12of the Board. The Board may adopt rules to establish additional
13qualifications and requirements to preserve the integrity and
14security of video gaming in this State.
15    (f) A non-refundable application fee shall be paid at the
16time an application for a license is filed with the Board in
17the following amounts:
18        (1) Manufacturer..........................$5,000
19        (2) Distributor...........................$5,000
20        (3) Terminal operator.....................$5,000
21        (4) Supplier..............................$2,500
22        (5) Technician..............................$100
23        (6) Terminal Handler........................$100
24        (7) Licensed establishment, licensed truck stop
25    establishment, licensed large truck stop establishment,
26    licensed fraternal establishment, or licensed

 

 

SB3290- 20 -LRB101 16585 SMS 65969 b

1    veterans establishment..........................$100
2        (8) Sales agent and broker.......................$100
3    (g) The Board shall establish an annual fee for each
4license not to exceed the following:
5        (1) Manufacturer.........................$10,000
6        (2) Distributor..........................$10,000
7        (3) Terminal operator.....................$5,000
8        (4) Supplier..............................$2,000
9        (5) Technician..............................$100
10        (6) Licensed establishment, licensed truck stop
11    establishment, licensed large truck stop establishment,
12    licensed fraternal establishment, or licensed
13    veterans establishment..........................$100
14        (7) Video gaming terminal...................$100
15        (8) Terminal Handler........................$100
16        (9) Sales agent and broker......................$100 
17    (h) A terminal operator and a licensed establishment,
18licensed truck stop establishment, licensed large truck stop
19establishment, licensed fraternal establishment, or licensed
20veterans establishment shall equally split the fees specified
21in item (7) of subsection (g).
22(Source: P.A. 100-1152, eff. 12-14-18; 101-31, eff. 6-28-19.)
 
23    Section 99. Effective date. This Act takes effect upon
24becoming law.