98TH GENERAL ASSEMBLY
State of Illinois
2013 and 2014
SB1855

 

Introduced 2/15/2013, by Sen. Antonio Muņoz - Terry Link - Kirk W. Dillard - Ira I. Silverstein - Dale A. Righter

 

SYNOPSIS AS INTRODUCED:
 
235 ILCS 5/1-3.39 new
235 ILCS 5/6-2  from Ch. 43, par. 120
235 ILCS 5/6-4.5 new

    Amends the Liquor Control Act of 1934. Provides that no person licensed as a manufacturer of beer by any licensing authority, or any partnership, corporation, subsidiary, limited liability company, trust, agent, affiliate, or other form of business enterprise thereof, shall have any interest, directly or indirectly, in a holder of a distributor's license or importing distributor's license. Provides that the Illinois Liquor Control Commission shall notify all persons licensed by the State Commission as a manufacturer of beer, brewer, or non-resident dealer of the required written disclosures prescribed by the Commission. Provides a process for revocation of licenses for violation of these provisions. Defines "Person" for the purposes of the Act. Effective immediately.


LRB098 07888 MGM 37973 b

 

 

A BILL FOR

 

SB1855LRB098 07888 MGM 37973 b

1    AN ACT concerning liquor.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Liquor Control Act of 1934 is amended by
5changing Section 6-2 and by adding Sections 1-3.39 and 6-4.5 as
6follows:
 
7    (235 ILCS 5/1-3.39 new)
8    Sec. 1-3.39. "Person" defined. For the purposes of this
9Act, "person" means a natural person, partnership,
10corporation, subsidiary, limited liability company, trust,
11agent, affiliate, or other form of business enterprise.
12"Person" also includes heirs, assigns, personal
13representatives, and guardians.
 
14    (235 ILCS 5/6-2)  (from Ch. 43, par. 120)
15    Sec. 6-2. Issuance of licenses to certain persons
16prohibited.
17    (a) Except as otherwise provided in subsection (b) of this
18Section and in paragraph (1) of subsection (a) of Section 3-12,
19no license of any kind issued by the State Commission or any
20local commission shall be issued to:
21        (1) A person who is not a resident of any city, village
22    or county in which the premises covered by the license are

 

 

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1    located; except in case of railroad or boat licenses.
2        (2) A person who is not of good character and
3    reputation in the community in which he resides.
4        (3) A person who is not a citizen of the United States.
5        (4) A person who has been convicted of a felony under
6    any Federal or State law, unless the Commission determines
7    that such person has been sufficiently rehabilitated to
8    warrant the public trust after considering matters set
9    forth in such person's application and the Commission's
10    investigation. The burden of proof of sufficient
11    rehabilitation shall be on the applicant.
12        (5) A person who has been convicted of keeping a place
13    of prostitution or keeping a place of juvenile
14    prostitution, promoting prostitution that involves keeping
15    a place of prostitution, or promoting juvenile
16    prostitution that involves keeping a place of juvenile
17    prostitution.
18        (6) A person who has been convicted of pandering or
19    other crime or misdemeanor opposed to decency and morality.
20        (7) A person whose license issued under this Act has
21    been revoked for cause.
22        (8) A person who at the time of application for renewal
23    of any license issued hereunder would not be eligible for
24    such license upon a first application.
25        (9) A copartnership, if any general partnership
26    thereof, or any limited partnership thereof, owning more

 

 

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1    than 5% of the aggregate limited partner interest in such
2    copartnership would not be eligible to receive a license
3    hereunder for any reason other than residence within the
4    political subdivision, unless residency is required by
5    local ordinance.
6        (10) A corporation or limited liability company, if any
7    member, officer, manager or director thereof, or any
8    stockholder or stockholders owning in the aggregate more
9    than 5% of the stock of such corporation, would not be
10    eligible to receive a license hereunder for any reason
11    other than citizenship and residence within the political
12    subdivision.
13        (10a) A corporation or limited liability company
14    unless it is incorporated or organized in Illinois, or
15    unless it is a foreign corporation or foreign limited
16    liability company which is qualified under the Business
17    Corporation Act of 1983 or the Limited Liability Company
18    Act to transact business in Illinois. The Commission shall
19    permit and accept from an applicant for a license under
20    this Act proof prepared from the Secretary of State's
21    website that the corporation or limited liability company
22    is in good standing and is qualified under the Business
23    Corporation Act of 1983 or the Limited Liability Company
24    Act to transact business in Illinois.
25        (11) A person whose place of business is conducted by a
26    manager or agent unless the manager or agent possesses the

 

 

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1    same qualifications required by the licensee.
2        (12) A person who has been convicted of a violation of
3    any Federal or State law concerning the manufacture,
4    possession or sale of alcoholic liquor, subsequent to the
5    passage of this Act or has forfeited his bond to appear in
6    court to answer charges for any such violation.
7        (13) A person who does not beneficially own the
8    premises for which a license is sought, or does not have a
9    lease thereon for the full period for which the license is
10    to be issued.
11        (14) Any law enforcing public official, including
12    members of local liquor control commissions, any mayor,
13    alderman, or member of the city council or commission, any
14    president of the village board of trustees, any member of a
15    village board of trustees, or any president or member of a
16    county board; and no such official shall have a direct
17    interest in the manufacture, sale, or distribution of
18    alcoholic liquor, except that a license may be granted to
19    such official in relation to premises that are not located
20    within the territory subject to the jurisdiction of that
21    official if the issuance of such license is approved by the
22    State Liquor Control Commission and except that a license
23    may be granted, in a city or village with a population of
24    50,000 or less, to any alderman, member of a city council,
25    or member of a village board of trustees in relation to
26    premises that are located within the territory subject to

 

 

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1    the jurisdiction of that official if (i) the sale of
2    alcoholic liquor pursuant to the license is incidental to
3    the selling of food, (ii) the issuance of the license is
4    approved by the State Commission, (iii) the issuance of the
5    license is in accordance with all applicable local
6    ordinances in effect where the premises are located, and
7    (iv) the official granted a license does not vote on
8    alcoholic liquor issues pending before the board or council
9    to which the license holder is elected. Notwithstanding any
10    provision of this paragraph (14) to the contrary, an
11    alderman or member of a city council or commission, a
12    member of a village board of trustees other than the
13    president of the village board of trustees, or a member of
14    a county board other than the president of a county board
15    may have a direct interest in the manufacture, sale, or
16    distribution of alcoholic liquor as long as he or she is
17    not a law enforcing public official, a mayor, a village
18    board president, or president of a county board. To prevent
19    any conflict of interest, the elected official with the
20    direct interest in the manufacture, sale, or distribution
21    of alcoholic liquor shall not participate in any meetings,
22    hearings, or decisions on matters impacting the
23    manufacture, sale, or distribution of alcoholic liquor.
24    Furthermore, the mayor of a city with a population of
25    50,000 or less or the president of a village with a
26    population of 50,000 or less may have an interest in the

 

 

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1    manufacture, sale, or distribution of alcoholic liquor as
2    long as the council or board over which he or she presides
3    has made a local liquor control commissioner appointment
4    that complies with the requirements of Section 4-2 of this
5    Act.
6        (15) A person who is not a beneficial owner of the
7    business to be operated by the licensee.
8        (16) A person who has been convicted of a gambling
9    offense as proscribed by any of subsections (a) (3) through
10    (a) (11) of Section 28-1 of, or as proscribed by Section
11    28-1.1 or 28-3 of, the Criminal Code of 1961, or as
12    proscribed by a statute replaced by any of the aforesaid
13    statutory provisions.
14        (17) A person or entity to whom a federal wagering
15    stamp has been issued by the federal government, unless the
16    person or entity is eligible to be issued a license under
17    the Raffles Act or the Illinois Pull Tabs and Jar Games
18    Act.
19        (18) A person who intends to sell alcoholic liquors for
20    use or consumption on his or her licensed retail premises
21    who does not have liquor liability insurance coverage for
22    that premises in an amount that is at least equal to the
23    maximum liability amounts set out in subsection (a) of
24    Section 6-21.
25        (19) A person who is licensed by any licensing
26    authority as a manufacturer of beer, or any partnership,

 

 

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1    corporation, subsidiary, limited liability company, trust,
2    agent or affiliate, or any other form of business
3    enterprise thereof, having any interest, directly or
4    indirectly, in a person licensed in this State as a
5    distributor or importing distributor.
6        (20) A person who is licensed in this State as a
7    distributor or importing distributor having any interest,
8    directly or indirectly, in a person licensed as a
9    manufacturer of beer by any licensing authority, or any
10    partnership, corporation, subsidiary, limited liability
11    company, trust, agent or affiliate, or any other form of
12    business enterprise thereof, except for persons who own no
13    more than 5% of the outstanding shares of a manufacturer of
14    beer whose shares are publicly traded on an exchange within
15    the meaning of the Securities Exchange Act of 1934.
16    (b) A criminal conviction of a corporation is not grounds
17for the denial, suspension, or revocation of a license applied
18for or held by the corporation if the criminal conviction was
19not the result of a violation of any federal or State law
20concerning the manufacture, possession or sale of alcoholic
21liquor, the offense that led to the conviction did not result
22in any financial gain to the corporation and the corporation
23has terminated its relationship with each director, officer,
24employee, or controlling shareholder whose actions directly
25contributed to the conviction of the corporation. The
26Commission shall determine if all provisions of this subsection

 

 

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1(b) have been met before any action on the corporation's
2license is initiated.
3(Source: P.A. 96-1551, eff. 7-1-11; 97-1059, eff. 8-24-12.)
 
4    (235 ILCS 5/6-4.5 new)
5    Sec. 6-4.5. Manufacturers with an interest in a distributor
6or importing distributor.
7    (a) The General Assembly hereby restates its commitment to
8the primary purpose of the Liquor Control Act of 1934, which is
9to protect the health, safety, and welfare of the People of
10Illinois through the sound and careful control and regulation
11of the manufacture, distribution, and sale of alcoholic liquor
12through independent licensees in a 3-tier regulatory system.
13The State's 3-tier regulatory system is designed to prevent a
14manufacturer or non-resident dealer, if the non-resident
15dealer is also the manufacturer of alcoholic liquors, including
16a partnership, corporation, subsidiary, limited liability
17company, trust, agent, affiliate, or other form of business
18enterprise thereof, from exercising vertical integration
19between a manufacturer or non-resident dealer, if the
20non-resident dealer is also the manufacturer of alcoholic
21liquors, and a distributor, importing distributor, or retailer
22through any ownership interest or through control.
23    (b) Notwithstanding any provision of this Act, no person
24licensed as a manufacturer of beer by any licensing authority,
25or any partnership, corporation, subsidiary, limited liability

 

 

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1company, trust, agent, affiliate, or other form of business
2enterprise thereof, shall have any interest, directly or
3indirectly, in a holder of a distributor's license or importing
4distributor's license. Any such person who holds an interest in
5a holder of a distributor's license or importing distributor's
6license prior to this amendatory Act of the 98th General
7Assembly shall, in accordance with paragraph (19) of subsection
8(a) of Section 6-2, be ineligible to receive or hold a license
9issued by the State Commission.
10    (c) The State Commission shall, within 30 days after the
11effective date of this amendatory Act of the 98th General
12Assembly, notify all persons licensed by the State Commission
13as a manufacturer of beer, brewer, or non-resident dealer of
14the provisions of subsection (b) of this Section. Such
15manufacturer of beer, brewer, or non-resident dealer shall,
16within 30 days after receiving the notice, file a written
17disclosure with the Commission of all such interests in the
18manner and form prescribed by the Commission. Any manufacturer
19of beer, brewer, or non-resident dealer, who is also the
20manufacturer of beer, who has disclosed any interest in a
21distributor or importing distributor may request in its written
22disclosure an additional period of time to divest such
23interest. If such interest is not divested by the agreed time
24by such manufacturer of beer, brewer, or non-resident dealer,
25who is also the manufacturer of beer, the State Commission
26shall, after notice and hearing, revoke the license upon the

 

 

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1State Commission's determination of a violation of subsection
2(b) of this Section. The State Commission shall enter its order
3within 90 days after the date of issuance of the notice of
4revocation of the license. The State Commission may, upon good
5cause, grant an extension to divest such interest for a
6reasonable period of time not to exceed 24 months from the
7effective date of this amendatory Act of the 98th General
8Assembly.
9    In the event a timely request for a hearing is not received
10and the manufacturer of beer, brewer, or non-resident dealer,
11who is also the manufacturer of beer, is found in violation of
12subsection (b) of this Section, such license issued to the
13manufacturer of beer, brewer, or non-resident dealer, who is
14also the manufacturer of beer, shall expire without further
15action.
16    (d) Notwithstanding any provision of this Act, no person
17licensed as a distributor or importing distributor shall have
18any interest, directly or indirectly, in a person licensed as a
19manufacturer of beer by any licensing authority, or any
20partnership, corporation, subsidiary, limited liability
21company, trust, agent or affiliate, or any other form of
22business enterprise thereof, except for ownership of no more
23than 5% of the outstanding shares of a manufacturer of beer
24whose shares are publicly traded on an exchange within the
25meaning of the Securities Exchange Act of 1934. Any person who
26holds such an interest in a person licensed as a manufacturer

 

 

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1of beer by any licensing authority or any partnership,
2corporation, subsidiary, limited liability company, trust,
3agent or affiliate, or any other form of business enterprise
4thereof, except for ownership of no more than 5% of the
5outstanding shares of a manufacturer of beer whose shares are
6publicly traded on an exchange within the meaning of the
7Securities Exchange Act of 1934 prior to this amendatory Act of
8the 98th General Assembly, shall, in accordance with paragraph
9(20) of subsection (a) of Section 6-2, be ineligible to receive
10or hold a license issued by the State Commission.
11    (e) The State Commission shall, within 30 days after the
12effective date of this amendatory Act of the 98th General
13Assembly, notify all persons licensed by the State Commission
14as a distributor or importing distributor of the provisions of
15subsection (d) of this Section. Such distributors or importing
16distributors shall, within 30 days after receiving the notice,
17file a written disclosure with the Commission of all such
18interests greater than permitted by the provisions of
19subsection (d) of this Section in the manner and form
20prescribed by the Commission. Any distributor or importing
21distributor who has disclosed any interest greater than
22permitted by the provisions of subsection (d) may indicate in
23its written disclosure a request for an additional period of
24time to divest such interest. If such interest is not divested
25by the agreed time by such distributor or importing
26distributor, the State Commission, after notice and hearing,

 

 

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1shall revoke the license upon the State Commission's
2determination of a violation of subsection (d) of this Section.
3The State Commission shall enter its order within 90 days of
4the date of issuance of the notice of revocation of the
5license. The State Commission may, upon good cause, grant an
6extension to divest such interest for a reasonable period of
7time not to exceed 24 months from the effective date of this
8amendatory Act of the 98th General Assembly.
9    In the event that a timely request for a hearing is not
10received and the distributor or importing distributor is found
11in violation of subsection (d) of this Section, such license
12issued to the distributor or importing distributor shall expire
13without further action.
 
14    Section 99. Effective date. This Act takes effect upon
15becoming law.