Sen. Terry Link

Filed: 4/8/2014

 

 


 

 


 
09800SB0728sam002LRB098 04934 RPS 58348 a

1
AMENDMENT TO SENATE BILL 728

2    AMENDMENT NO. ______. Amend Senate Bill 728 by replacing
3everything after the enacting clause with the following:
 
4    "Section 5. The Liquor Control Act of 1934 is amended by
5changing Sections 3-12 and 6-28 and by adding Section 6-22.5 as
6follows:
 
7    (235 ILCS 5/3-12)
8    Sec. 3-12. Powers and duties of State Commission.
9    (a) The State commission shall have the following powers,
10functions, and duties:
11        (1) To receive applications and to issue licenses to
12    manufacturers, foreign importers, importing distributors,
13    distributors, non-resident dealers, on premise consumption
14    retailers, off premise sale retailers, special event
15    retailer licensees, special use permit licenses, auction
16    liquor licenses, brew pubs, caterer retailers,

 

 

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

 

 

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1    from a bottle of alcoholic liquor with a foreign object in
2    it shall be the destruction of that bottle of alcoholic
3    liquor for the first 10 bottles so sold or served from by
4    the licensee. For the eleventh bottle of alcoholic liquor
5    and for each third bottle thereafter sold or served from by
6    the licensee with a foreign object in it, the maximum
7    penalty that may be imposed on the licensee is the
8    destruction of the bottle of alcoholic liquor and a fine of
9    up to $50.
10        For the purpose of this paragraph (1), the date when
11    any violation is committed shall be used in determining the
12    period between violations, and when determining multiple
13    violations, a second or subsequent violation shall only be
14    considered if the violation was committed within 4 years
15    after the date when a prior violation was committed.
16        (2) To adopt such rules and regulations consistent with
17    the provisions of this Act which shall be necessary to
18    carry on its functions and duties to the end that the
19    health, safety and welfare of the People of the State of
20    Illinois shall be protected and temperance in the
21    consumption of alcoholic liquors shall be fostered and
22    promoted and to distribute copies of such rules and
23    regulations to all licensees affected thereby.
24        (3) To call upon other administrative departments of
25    the State, county and municipal governments, county and
26    city police departments and upon prosecuting officers for

 

 

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1    such information and assistance as it deems necessary in
2    the performance of its duties.
3        (4) To recommend to local commissioners rules and
4    regulations, not inconsistent with the law, for the
5    distribution and sale of alcoholic liquors throughout the
6    State.
7        (5) To inspect, or cause to be inspected, any premises
8    in this State where alcoholic liquors are manufactured,
9    distributed, warehoused, or sold. Nothing in this Act
10    authorizes an agent of the Commission to inspect private
11    areas within the premises without reasonable suspicion or a
12    warrant during an inspection. "Private areas" include, but
13    are not limited to, safes, personal property, and closed
14    desks.
15        (5.1) Upon receipt of a complaint or upon having
16    knowledge that any person is engaged in business as a
17    manufacturer, importing distributor, distributor, or
18    retailer without a license or valid license, to notify the
19    local liquor authority, file a complaint with the State's
20    Attorney's Office of the county where the incident
21    occurred, or initiate an investigation with the
22    appropriate law enforcement officials.
23        (5.2) To issue a cease and desist notice to persons
24    shipping alcoholic liquor into this State from a point
25    outside of this State if the shipment is in violation of
26    this Act.

 

 

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1        (5.3) To receive complaints from licensees, local
2    officials, law enforcement agencies, organizations, and
3    persons stating that any licensee has been or is violating
4    any provision of this Act or the rules and regulations
5    issued pursuant to this Act. Such complaints shall be in
6    writing, signed and sworn to by the person making the
7    complaint, and shall state with specificity the facts in
8    relation to the alleged violation. If the Commission has
9    reasonable grounds to believe that the complaint
10    substantially alleges a violation of this Act or rules and
11    regulations adopted pursuant to this Act, it shall conduct
12    an investigation. If, after conducting an investigation,
13    the Commission is satisfied that the alleged violation did
14    occur, it shall proceed with disciplinary action against
15    the licensee as provided in this Act.
16        (6) To hear and determine appeals from orders of a
17    local commission in accordance with the provisions of this
18    Act, as hereinafter set forth. Hearings under this
19    subsection shall be held in Springfield or Chicago, at
20    whichever location is the more convenient for the majority
21    of persons who are parties to the hearing.
22        (7) The commission shall establish uniform systems of
23    accounts to be kept by all retail licensees having more
24    than 4 employees, and for this purpose the commission may
25    classify all retail licensees having more than 4 employees
26    and establish a uniform system of accounts for each class

 

 

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1    and prescribe the manner in which such accounts shall be
2    kept. The commission may also prescribe the forms of
3    accounts to be kept by all retail licensees having more
4    than 4 employees, including but not limited to accounts of
5    earnings and expenses and any distribution, payment, or
6    other distribution of earnings or assets, and any other
7    forms, records and memoranda which in the judgment of the
8    commission may be necessary or appropriate to carry out any
9    of the provisions of this Act, including but not limited to
10    such forms, records and memoranda as will readily and
11    accurately disclose at all times the beneficial ownership
12    of such retail licensed business. The accounts, forms,
13    records and memoranda shall be available at all reasonable
14    times for inspection by authorized representatives of the
15    State commission or by any local liquor control
16    commissioner or his or her authorized representative. The
17    commission, may, from time to time, alter, amend or repeal,
18    in whole or in part, any uniform system of accounts, or the
19    form and manner of keeping accounts.
20        (8) In the conduct of any hearing authorized to be held
21    by the commission, to appoint, at the commission's
22    discretion, hearing officers to conduct hearings involving
23    complex issues or issues that will require a protracted
24    period of time to resolve, to examine, or cause to be
25    examined, under oath, any licensee, and to examine or cause
26    to be examined the books and records of such licensee; to

 

 

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1    hear testimony and take proof material for its information
2    in the discharge of its duties hereunder; to administer or
3    cause to be administered oaths; for any such purpose to
4    issue subpoena or subpoenas to require the attendance of
5    witnesses and the production of books, which shall be
6    effective in any part of this State, and to adopt rules to
7    implement its powers under this paragraph (8).
8        Any Circuit Court may by order duly entered, require
9    the attendance of witnesses and the production of relevant
10    books subpoenaed by the State commission and the court may
11    compel obedience to its order by proceedings for contempt.
12        (9) To investigate the administration of laws in
13    relation to alcoholic liquors in this and other states and
14    any foreign countries, and to recommend from time to time
15    to the Governor and through him or her to the legislature
16    of this State, such amendments to this Act, if any, as it
17    may think desirable and as will serve to further the
18    general broad purposes contained in Section 1-2 hereof.
19        (10) To adopt such rules and regulations consistent
20    with the provisions of this Act which shall be necessary
21    for the control, sale or disposition of alcoholic liquor
22    damaged as a result of an accident, wreck, flood, fire or
23    other similar occurrence.
24        (11) To develop industry educational programs related
25    to responsible serving and selling, particularly in the
26    areas of overserving consumers and illegal underage

 

 

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1    purchasing and consumption of alcoholic beverages.
2        (11.1) To license persons providing education and
3    training to alcohol beverage sellers and servers under the
4    Beverage Alcohol Sellers and Servers Education and
5    Training (BASSET) programs and to develop and administer a
6    public awareness program in Illinois to reduce or eliminate
7    the illegal purchase and consumption of alcoholic beverage
8    products by persons under the age of 21. Application for a
9    license shall be made on forms provided by the State
10    Commission.
11        (12) To develop and maintain a repository of license
12    and regulatory information.
13        (13) On or before January 15, 1994, the Commission
14    shall issue a written report to the Governor and General
15    Assembly that is to be based on a comprehensive study of
16    the impact on and implications for the State of Illinois of
17    Section 1926 of the Federal ADAMHA Reorganization Act of
18    1992 (Public Law 102-321). This study shall address the
19    extent to which Illinois currently complies with the
20    provisions of P.L. 102-321 and the rules promulgated
21    pursuant thereto.
22        As part of its report, the Commission shall provide the
23    following essential information:
24            (i) the number of retail distributors of tobacco
25        products, by type and geographic area, in the State;
26            (ii) the number of reported citations and

 

 

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1        successful convictions, categorized by type and
2        location of retail distributor, for violation of the
3        Prevention of Tobacco Use by Minors and Sale and
4        Distribution of Tobacco Products Act and the Smokeless
5        Tobacco Limitation Act;
6            (iii) the extent and nature of organized
7        educational and governmental activities that are
8        intended to promote, encourage or otherwise secure
9        compliance with any Illinois laws that prohibit the
10        sale or distribution of tobacco products to minors; and
11            (iv) the level of access and availability of
12        tobacco products to individuals under the age of 18.
13        To obtain the data necessary to comply with the
14    provisions of P.L. 102-321 and the requirements of this
15    report, the Commission shall conduct random, unannounced
16    inspections of a geographically and scientifically
17    representative sample of the State's retail tobacco
18    distributors.
19        The Commission shall consult with the Department of
20    Public Health, the Department of Human Services, the
21    Illinois State Police and any other executive branch
22    agency, and private organizations that may have
23    information relevant to this report.
24        The Commission may contract with the Food and Drug
25    Administration of the U.S. Department of Health and Human
26    Services to conduct unannounced investigations of Illinois

 

 

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1    tobacco vendors to determine compliance with federal laws
2    relating to the illegal sale of cigarettes and smokeless
3    tobacco products to persons under the age of 18.
4        (14) On or before April 30, 2008 and every 2 years
5    thereafter, the Commission shall present a written report
6    to the Governor and the General Assembly that shall be
7    based on a study of the impact of this amendatory Act of
8    the 95th General Assembly on the business of soliciting,
9    selling, and shipping wine from inside and outside of this
10    State directly to residents of this State. As part of its
11    report, the Commission shall provide all of the following
12    information:
13            (A) The amount of State excise and sales tax
14        revenues generated.
15            (B) The amount of licensing fees received.
16            (C) The number of cases of wine shipped from inside
17        and outside of this State directly to residents of this
18        State.
19            (D) The number of alcohol compliance operations
20        conducted.
21            (E) The number of winery shipper's licenses
22        issued.
23            (F) The number of each of the following: reported
24        violations; cease and desist notices issued by the
25        Commission; notices of violations issued by the
26        Commission and to the Department of Revenue; and

 

 

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1        notices and complaints of violations to law
2        enforcement officials, including, without limitation,
3        the Illinois Attorney General and the U.S. Department
4        of Treasury's Alcohol and Tobacco Tax and Trade Bureau.
5        (15) As a means to reduce the underage consumption of
6    alcoholic liquors, the Commission shall conduct alcohol
7    compliance operations to investigate whether businesses
8    that are soliciting, selling, and shipping wine from inside
9    or outside of this State directly to residents of this
10    State are licensed by this State or are selling or
11    attempting to sell wine to persons under 21 years of age in
12    violation of this Act.
13        (16) The Commission shall, in addition to notifying any
14    appropriate law enforcement agency, submit notices of
15    complaints or violations of Sections 6-29 and 6-29.1 by
16    persons who do not hold a winery shipper's license under
17    this amendatory Act to the Illinois Attorney General and to
18    the U.S. Department of Treasury's Alcohol and Tobacco Tax
19    and Trade Bureau.
20        (17) (A) A person licensed to make wine under the laws
21    of another state who has a winery shipper's license under
22    this amendatory Act and annually produces less than 25,000
23    gallons of wine or a person who has a first-class or
24    second-class wine manufacturer's license, a first-class or
25    second-class wine-maker's license, or a limited wine
26    manufacturer's license under this Act and annually

 

 

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1    produces less than 25,000 gallons of wine may make
2    application to the Commission for a self-distribution
3    exemption to allow the sale of not more than 5,000 gallons
4    of the exemption holder's wine to retail licensees per
5    year.
6            (B) In the application, which shall be sworn under
7        penalty of perjury, such person shall state (1) the
8        date it was established; (2) its volume of production
9        and sales for each year since its establishment; (3)
10        its efforts to establish distributor relationships;
11        (4) that a self-distribution exemption is necessary to
12        facilitate the marketing of its wine; and (5) that it
13        will comply with the liquor and revenue laws of the
14        United States, this State, and any other state where it
15        is licensed.
16            (C) The Commission shall approve the application
17        for a self-distribution exemption if such person: (1)
18        is in compliance with State revenue and liquor laws;
19        (2) is not a member of any affiliated group that
20        produces more than 25,000 gallons of wine per annum or
21        produces any other alcoholic liquor; (3) will not
22        annually produce for sale more than 25,000 gallons of
23        wine; and (4) will not annually sell more than 5,000
24        gallons of its wine to retail licensees.
25            (D) A self-distribution exemption holder shall
26        annually certify to the Commission its production of

 

 

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1        wine in the previous 12 months and its anticipated
2        production and sales for the next 12 months. The
3        Commission may fine, suspend, or revoke a
4        self-distribution exemption after a hearing if it
5        finds that the exemption holder has made a material
6        misrepresentation in its application, violated a
7        revenue or liquor law of Illinois, exceeded production
8        of 25,000 gallons of wine in any calendar year, or
9        become part of an affiliated group producing more than
10        25,000 gallons of wine or any other alcoholic liquor.
11            (E) Except in hearings for violations of this Act
12        or amendatory Act or a bona fide investigation by duly
13        sworn law enforcement officials, the Commission, or
14        its agents, the Commission shall maintain the
15        production and sales information of a
16        self-distribution exemption holder as confidential and
17        shall not release such information to any person.
18            (F) The Commission shall issue regulations
19        governing self-distribution exemptions consistent with
20        this Section and this Act.
21            (G) Nothing in this subsection (17) shall prohibit
22        a self-distribution exemption holder from entering
23        into or simultaneously having a distribution agreement
24        with a licensed Illinois distributor.
25            (H) It is the intent of this subsection (17) to
26        promote and continue orderly markets. The General

 

 

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1        Assembly finds that in order to preserve Illinois'
2        regulatory distribution system it is necessary to
3        create an exception for smaller makers of wine as their
4        wines are frequently adjusted in varietals, mixes,
5        vintages, and taste to find and create market niches
6        sometimes too small for distributor or importing
7        distributor business strategies. Limited
8        self-distribution rights will afford and allow smaller
9        makers of wine access to the marketplace in order to
10        develop a customer base without impairing the
11        integrity of the 3-tier system.
12        (18) (A) A craft brewer licensee, who must also be
13    either a licensed brewer or licensed non-resident dealer
14    and annually manufacture less than 930,000 gallons of beer,
15    may make application to the Commission for a
16    self-distribution exemption to allow the sale of not more
17    than 232,500 gallons of the exemption holder's beer to
18    retail licensees per year.
19            (B) In the application, which shall be sworn under
20        penalty of perjury, the craft brewer licensee shall
21        state (1) the date it was established; (2) its volume
22        of beer manufactured and sold for each year since its
23        establishment; (3) its efforts to establish
24        distributor relationships; (4) that a
25        self-distribution exemption is necessary to facilitate
26        the marketing of its beer; and (5) that it will comply

 

 

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1        with the alcoholic beverage and revenue laws of the
2        United States, this State, and any other state where it
3        is licensed.
4            (C) Any application submitted shall be posted on
5        the Commission's website at least 45 days prior to
6        action by the Commission. The Commission shall approve
7        the application for a self-distribution exemption if
8        the craft brewer licensee: (1) is in compliance with
9        the State, revenue, and alcoholic beverage laws; (2) is
10        not a member of any affiliated group that manufacturers
11        more than 930,000 gallons of beer per annum or produces
12        any other alcoholic beverages; (3) shall not annually
13        manufacture for sale more than 930,000 gallons of beer;
14        and (4) shall not annually sell more than 232,500
15        gallons of its beer to retail licensees.
16            (D) A self-distribution exemption holder shall
17        annually certify to the Commission its manufacture of
18        beer during the previous 12 months and its anticipated
19        manufacture and sales of beer for the next 12 months.
20        The Commission may fine, suspend, or revoke a
21        self-distribution exemption after a hearing if it
22        finds that the exemption holder has made a material
23        misrepresentation in its application, violated a
24        revenue or alcoholic beverage law of Illinois,
25        exceeded the manufacture of 930,000 gallons of beer in
26        any calendar year or became part of an affiliated group

 

 

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1        manufacturing more than 930,000 gallons of beer or any
2        other alcoholic beverage.
3            (E) The Commission shall issue rules and
4        regulations governing self-distribution exemptions
5        consistent with this Act.
6            (F) Nothing in this paragraph (18) shall prohibit a
7        self-distribution exemption holder from entering into
8        or simultaneously having a distribution agreement with
9        a licensed Illinois importing distributor or a
10        distributor. If a self-distribution exemption holder
11        enters into a distribution agreement and has assigned
12        distribution rights to an importing distributor or
13        distributor, then the self-distribution exemption
14        holder's distribution rights in the assigned
15        territories shall cease in a reasonable time not to
16        exceed 60 days.
17            (G) It is the intent of this paragraph (18) to
18        promote and continue orderly markets. The General
19        Assembly finds that in order to preserve Illinois'
20        regulatory distribution system, it is necessary to
21        create an exception for smaller manufacturers in order
22        to afford and allow such smaller manufacturers of beer
23        access to the marketplace in order to develop a
24        customer base without impairing the integrity of the
25        3-tier system.
26    (b) On or before April 30, 1999, the Commission shall

 

 

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1present a written report to the Governor and the General
2Assembly that shall be based on a study of the impact of this
3amendatory Act of 1998 on the business of soliciting, selling,
4and shipping alcoholic liquor from outside of this State
5directly to residents of this State.
6    As part of its report, the Commission shall provide the
7following information:
8        (i) the amount of State excise and sales tax revenues
9    generated as a result of this amendatory Act of 1998;
10        (ii) the amount of licensing fees received as a result
11    of this amendatory Act of 1998;
12        (iii) the number of reported violations, the number of
13    cease and desist notices issued by the Commission, the
14    number of notices of violations issued to the Department of
15    Revenue, and the number of notices and complaints of
16    violations to law enforcement officials.
17(Source: P.A. 97-5, eff. 6-1-11; 98-401, eff. 8-16-13.)
 
18    (235 ILCS 5/6-22.5 new)
19    Sec. 6-22.5. Infusions.
20    (a) For purposes of this Section, "infusion" means a spirit
21where ingredients, including, but not limited to, fruits,
22spices, or nuts, are added to naturally infuse flavor into the
23spirit.
24    (b) A licensee that is preparing an infusion for
25consumption on the premises shall comply with the following

 

 

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1requirements:
2        (1) the infusion shall be mixed and stored on the
3    premises of the licensee;
4        (2) the container that the infusion is stored in must
5    have a lid and be in sanitary condition;
6        (3) the infusion shall not be aged for more than 14
7    days;
8        (4) the infusion must be used or destroyed within 21
9    days after the end of the aging process;
10        (5) cleaning records for the container that the
11    infusion is stored in must be available for inspection by
12    agents of the State Commission; and
13        (6) the container that the infusion is stored in must
14    have a label affixed to the container that provides the
15    production date of the infusion, the base spirit of the
16    infusion, the date the infusion will finish the aging
17    process, and the date by which the infusion must be
18    destroyed.
 
19    (235 ILCS 5/6-28)  (from Ch. 43, par. 144d)
20    Sec. 6-28. Happy hours prohibited.
21    (a) All retail licensees shall maintain a schedule of the
22prices charged for all drinks of alcoholic liquor to be served
23and consumed on the licensed premises or in any room or part
24thereof. Whenever a hotel or multi-use establishment which
25holds a valid retailer's license operates on its premises more

 

 

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1than one establishment at which drinks of alcoholic liquor are
2sold at retail, the hotel or multi-use establishment shall
3maintain at each such establishment a separate schedule of the
4prices charged for such drinks at that establishment.
5    (b) No retail licensee or employee or agent of such
6licensee shall:
7        (1) serve more than 2 or more drinks of alcoholic
8    liquor at one time to one person for consumption by that
9    one person, except conducting product sampling pursuant to
10    Section 6-31 or selling or delivering wine by the bottle or
11    1/2 carafe;
12        (2) sell, offer to sell or serve to any person an
13    unlimited number of drinks of alcoholic liquor during any
14    set period of time for a fixed price, except at private
15    functions not open to the general public; this item (2)
16    does not prohibit a licensee from selling private event
17    tickets in advance to the general public if the event
18    includes a food service package;
19        (3) sell, offer to sell or serve any drink of alcoholic
20    liquor to any person on any one date at a reduced price
21    other than that charged other purchasers of drinks on that
22    day where such reduced price is a promotion to encourage
23    consumption of alcoholic liquor, except as authorized in
24    paragraph (7) of subsection (c); this item (3) does not
25    prohibit a licensee from having a different schedule of
26    prices for a private function on the same day, as long as a

 

 

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1    valid contract for services exists;
2        (4) increase the volume of alcoholic liquor contained
3    in a drink, or the size of a drink of alcoholic liquor,
4    without increasing proportionately the price regularly
5    charged for the drink on that day;
6        (4.5) serve drinks that are traditionally served
7    individually in carafes, pitchers, or other drink vessels
8    containing more than one liter of beer or 3 ounces of
9    spirits;
10        (5) encourage or knowingly permit, on the licensed
11    premises, any game or contest which involves drinking
12    alcoholic liquor or the awarding of drinks of alcoholic
13    liquor as prizes for such game or contest on the licensed
14    premises; this item (5) does not prohibit incentives for
15    servers or bartenders based on sales volume, unless those
16    sales are to intoxicated persons; or
17        (6) advertise or promote in any way, whether on or off
18    the licensed premises, any of the practices prohibited
19    under paragraphs (1) through (5).
20    (c) Nothing in subsection (b) shall be construed to
21prohibit a licensee from:
22        (1) offering free food or entertainment at any time;
23        (2) including drinks of alcoholic liquor as part of a
24    meal package;
25        (3) including drinks of alcoholic liquor as part of a
26    hotel package;

 

 

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1        (4) negotiating drinks of alcoholic liquor as part of a
2    contract between a licensee hotel or multi-use
3    establishment and another group for the holding of any
4    function, meeting, convention or trade show;
5        (5) providing room service to persons renting rooms at
6    a hotel;
7        (6) selling pitchers (or the equivalent, including but
8    not limited to buckets), carafes, or bottles of alcoholic
9    liquor which are customarily sold in such manner, or
10    selling bottles of spirits, and delivered to 2 or more
11    persons at one time;
12        (7) increasing prices of drinks of alcoholic liquor in
13    lieu of, in whole or in part, a cover charge to offset the
14    cost of special entertainment not regularly scheduled
15    within a scheduled day part; or
16        (8) including drinks of alcoholic liquor as part of an
17    entertainment package where the licensee is separately
18    licensed by a municipal ordinance that (A) restricts dates
19    of operation to dates during which there is an event at an
20    adjacent stadium, (B) restricts hours of serving alcoholic
21    liquor to 2 hours before the event and one hour after the
22    event, (C) restricts alcoholic liquor sales to beer and
23    wine, (D) requires tickets for admission to the
24    establishment, and (E) prohibits sale of admission tickets
25    on the day of an event and permits the sale of admission
26    tickets for single events only; or .

 

 

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1        (9) charging a cover charge at any time.
2    (d) A violation of this Act shall be grounds for suspension
3or revocation of the retailer's license as provided by this
4Act.
5(Source: P.A. 98-571, eff. 8-27-13.)
 
6    Section 99. Effective date. This Act takes effect upon
7becoming law.".