102ND GENERAL ASSEMBLY
State of Illinois
2021 and 2022
HB2656

 

Introduced 2/19/2021, by Rep. Robert Rita

 

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.


LRB102 02833 SMS 12841 b

FISCAL NOTE ACT MAY APPLY

 

 

A BILL FOR

 

HB2656LRB102 02833 SMS 12841 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
21gaming on 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
5a cumulative 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
20or control a video gaming terminal or to have access to the
21inner workings 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
6to supply major components or parts to video gaming terminals
7to licensed 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
15Board utilizing a video display and microprocessors in which
16the player may receive free games or credits that can be
17redeemed for cash. The term does not include a machine that
18directly dispenses coins, cash, or tokens or is for amusement
19purposes only.
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
11also the corporate parent or subsidiary of any licensee
12licensed under the Illinois Horse Racing Act of 1975.
13"Licensed establishment" does not include a facility operated
14by an organization licensee, an inter-track wagering licensee,
15or an inter-track wagering location licensee licensed under
16the Illinois Horse Racing Act of 1975 or a riverboat licensed
17under the 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
26from a 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
8of the 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
19month, and (iv) with parking spaces for commercial motor
20vehicles. "Commercial motor vehicles" has the same meaning as
21defined in Section 18b-101 of the Illinois Vehicle Code. The
22requirement of item (iii) of this paragraph may be met by
23showing that estimated future sales or past sales average at
24least 50,000 gallons 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
19Act. A distributor may only sell video gaming terminals for
20use in Illinois to persons having a valid distributor's or
21terminal operator'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
5not limited 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
14be placed 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,
12    or conducts, directly or indirectly, the organization,
13    association, or business, or any part thereof; or
14        (B) When, with respect to a partnership, the
15    individual or his or her spouse shares in any of the
16    profits, or potential profits, of the partnership
17    activities; or
18        (C) When, with respect to a corporation, an individual
19    or his or her spouse is an officer or director, or the
20    individual or his or her spouse is a holder, directly or
21    beneficially, of 5% or more of any class of stock of the
22    corporation; or
23        (D) When, with respect to an organization not covered
24    in (A), (B) or (C) above, an individual or his or her
25    spouse is an officer or manages the business affairs, or
26    the individual or his or her spouse is the owner of or

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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1        (5) Technician..............................$100
2        (6) Terminal Handler........................$100
3        (7) Licensed establishment, licensed truck stop
4    establishment, licensed large truck stop establishment,
5    licensed fraternal establishment, or licensed
6    veterans establishment..........................$100
7        (8) Sales agent and broker.......................$100
8    (g) The Board shall establish an annual fee for each
9license not to exceed the following:
10        (1) Manufacturer.........................$10,000
11        (2) Distributor..........................$10,000
12        (3) Terminal operator.....................$5,000
13        (4) Supplier..............................$2,000
14        (5) Technician..............................$100
15        (6) Licensed establishment, licensed truck stop
16    establishment, licensed large truck stop establishment,
17    licensed fraternal establishment, or licensed
18    veterans establishment..........................$100
19        (7) Video gaming terminal...................$100
20        (8) Terminal Handler........................$100
21        (9) Sales agent and broker......................$100 
22    (h) A terminal operator and a licensed establishment,
23licensed truck stop establishment, licensed large truck stop
24establishment, licensed fraternal establishment, or licensed
25veterans establishment shall equally split the fees specified
26in item (7) of subsection (g).

 

 

HB2656- 21 -LRB102 02833 SMS 12841 b

1(Source: P.A. 100-1152, eff. 12-14-18; 101-31, eff. 6-28-19.)
 
2    Section 99. Effective date. This Act takes effect upon
3becoming law.