Illinois General Assembly - Full Text of SB2130
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Full Text of SB2130  102nd General Assembly

SB2130 102ND GENERAL ASSEMBLY

  
  

 


 
102ND GENERAL ASSEMBLY
State of Illinois
2021 and 2022
SB2130

 

Introduced 2/26/2021, by Sen. Rachelle Crowe

 

SYNOPSIS AS INTRODUCED:
 
235 ILCS 5/6-5  from Ch. 43, par. 122
235 ILCS 5/6-9.5 new
235 ILCS 5/6-9.10 new
235 ILCS 5/6-9.15 new
235 ILCS 5/6-9.20 new
235 ILCS 5/6-9.25 new

    Amends the Liquor Control Act of 1934. Provides that a verified written list of delinquent retail licensees shall be developed, administered, and maintained only by the Illinois Liquor Control Commission. Provides that determinations of delinquency or nondelinquency shall be made only by the State Commission and shall be made only after determining there is not a bona fide dispute between such retail licensee and the manufacturer, importing distributor, or distributor with respect to the amount of the indebtedness existing because of such alleged sale. Adds provisions concerning cooperative purchasing agreements, quantity discount programs, credit or rebate programs, and combination sales offers. Effective immediately.


LRB102 10761 RPS 16090 b

 

 

A BILL FOR

 

SB2130LRB102 10761 RPS 16090 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 6-5 and by adding Sections 6-9.5, 6-9.10,
66-9.15, 6-9.20, and 6-9.25 as follows:
 
7    (235 ILCS 5/6-5)  (from Ch. 43, par. 122)
8    Sec. 6-5. Except as otherwise provided in this Section, it
9is unlawful for any person having a retailer's license or any
10officer, associate, member, representative or agent of such
11licensee to accept, receive or borrow money, or anything else
12of value, or accept or receive credit (other than
13merchandising credit in the ordinary course of business for a
14period not to exceed 30 days) directly or indirectly from any
15manufacturer, importing distributor or distributor of
16alcoholic liquor, or from any person connected with or in any
17way representing, or from any member of the family of, such
18manufacturer, importing distributor, distributor or
19wholesaler, or from any stockholders in any corporation
20engaged in manufacturing, distributing or wholesaling of such
21liquor, or from any officer, manager, agent or representative
22of said manufacturer. Except as provided below, it is unlawful
23for any manufacturer or distributor or importing distributor

 

 

SB2130- 2 -LRB102 10761 RPS 16090 b

1to give or lend money or anything of value, or otherwise loan
2or extend credit (except such merchandising credit) directly
3or indirectly to any retail licensee or to the manager,
4representative, agent, officer or director of such licensee. A
5manufacturer, distributor or importing distributor may furnish
6free advertising, posters, signs, brochures, hand-outs, or
7other promotional devices or materials to any unit of
8government owning or operating any auditorium, exhibition
9hall, recreation facility or other similar facility holding a
10retailer's license, provided that the primary purpose of such
11promotional devices or materials is to promote public events
12being held at such facility. A unit of government owning or
13operating such a facility holding a retailer's license may
14accept such promotional devices or materials designed
15primarily to promote public events held at the facility. No
16retail licensee delinquent beyond the 30 day period specified
17in this Section shall solicit, accept or receive credit,
18purchase or acquire alcoholic liquors, directly or indirectly
19from any other licensee, and no manufacturer, distributor or
20importing distributor shall knowingly grant or extend credit,
21sell, furnish or supply alcoholic liquors to any such
22delinquent retail licensee; provided that the purchase price
23of all beer sold to a retail licensee shall be paid by the
24retail licensee in cash on or before delivery of the beer, and
25unless the purchase price payable by a retail licensee for
26beer sold to him in returnable bottles shall expressly include

 

 

SB2130- 3 -LRB102 10761 RPS 16090 b

1a charge for the bottles and cases, the retail licensee shall,
2on or before delivery of such beer, pay the seller in cash a
3deposit in an amount not less than the deposit required to be
4paid by the distributor to the brewer; but where the brewer
5sells direct to the retailer, the deposit shall be an amount no
6less than that required by the brewer from his own
7distributors; and provided further, that in no instance shall
8this deposit be less than 50 cents for each case of beer in
9pint or smaller bottles and 60 cents for each case of beer in
10quart or half-gallon bottles; and provided further, that the
11purchase price of all beer sold to an importing distributor or
12distributor shall be paid by such importing distributor or
13distributor in cash on or before the 15th day (Sundays and
14holidays excepted) after delivery of such beer to such
15purchaser; and unless the purchase price payable by such
16importing distributor or distributor for beer sold in
17returnable bottles and cases shall expressly include a charge
18for the bottles and cases, such importing distributor or
19distributor shall, on or before the 15th day (Sundays and
20holidays excepted) after delivery of such beer to such
21purchaser, pay the seller in cash a required amount as a
22deposit to assure the return of such bottles and cases.
23Nothing herein contained shall prohibit any licensee from
24crediting or refunding to a purchaser the actual amount of
25money paid for bottles, cases, kegs or barrels returned by the
26purchaser to the seller or paid by the purchaser as a deposit

 

 

SB2130- 4 -LRB102 10761 RPS 16090 b

1on bottles, cases, kegs or barrels, when such containers or
2packages are returned to the seller. Nothing herein contained
3shall prohibit any manufacturer, importing distributor or
4distributor from extending usual and customary credit for
5alcoholic liquor sold to customers or purchasers who live in
6or maintain places of business outside of this State when such
7alcoholic liquor is actually transported and delivered to such
8points outside of this State.
9    A manufacturer, distributor, or importing distributor may
10furnish free social media advertising to a retail licensee if
11the social media advertisement does not contain the retail
12price of any alcoholic liquor and the social media
13advertisement complies with any applicable rules or
14regulations issued by the Alcohol and Tobacco Tax and Trade
15Bureau of the United States Department of the Treasury. A
16manufacturer, distributor, or importing distributor may list
17the names of one or more unaffiliated retailers in the
18advertisement of alcoholic liquor through social media.
19Nothing in this Section shall prohibit a retailer from
20communicating with a manufacturer, distributor, or importing
21distributor on social media or sharing media on the social
22media of a manufacturer, distributor, or importing
23distributor. A retailer may request free social media
24advertising from a manufacturer, distributor, or importing
25distributor. Nothing in this Section shall prohibit a
26manufacturer, distributor, or importing distributor from

 

 

SB2130- 5 -LRB102 10761 RPS 16090 b

1sharing, reposting, or otherwise forwarding a social media
2post by a retail licensee, so long as the sharing, reposting,
3or forwarding of the social media post does not contain the
4retail price of any alcoholic liquor. No manufacturer,
5distributor, or importing distributor shall pay or reimburse a
6retailer, directly or indirectly, for any social media
7advertising services, except as specifically permitted in this
8Act. No retailer shall accept any payment or reimbursement,
9directly or indirectly, for any social media advertising
10services offered by a manufacturer, distributor, or importing
11distributor, except as specifically permitted in this Act. For
12the purposes of this Section, "social media" means a service,
13platform, or site where users communicate with one another and
14share media, such as pictures, videos, music, and blogs, with
15other users free of charge.
16    No right of action shall exist for the collection of any
17claim based upon credit extended to a distributor, importing
18distributor or retail licensee contrary to the provisions of
19this Section.
20    Every manufacturer, importing distributor and distributor
21shall submit or cause to be submitted, to the State
22Commission, in triplicate, not later than Thursday of each
23calendar week, a verified written list of the names and
24respective addresses of each retail licensee purchasing
25spirits or wine from such manufacturer, importing distributor
26or distributor who, on the first business day of that calendar

 

 

SB2130- 6 -LRB102 10761 RPS 16090 b

1week, was delinquent beyond the above mentioned permissible
2merchandising credit period of 30 days; or, if such is the
3fact, a verified written statement that no retail licensee
4purchasing spirits or wine was then delinquent beyond such
5permissible merchandising credit period of 30 days.
6    Every manufacturer, importing distributor and distributor
7shall submit or cause to be submitted, to the State
8Commission, in triplicate, a verified written list of the
9names and respective addresses of each previously reported
10delinquent retail licensee who has cured such delinquency by
11payment, which list shall be submitted not later than the
12close of the second full business day following the day such
13delinquency was so cured.
14    The verified written list of delinquent retail licensees
15shall be developed, administered, and maintained only by the
16State Commission. Determinations of delinquency or
17nondelinquency shall be made only by the State Commission and
18shall be made only after determining there is not a bona fide
19dispute between such retail licensee and manufacturer,
20importing distributor, or distributor with respect to the
21amount of indebtedness existing because of such alleged sale.
22    Such written verified reports required to be submitted by
23this Section shall be posted by the State Commission in each of
24its offices in places available for public inspection not
25later than the day following receipt thereof by the State
26Commission. The reports so posted shall constitute notice to

 

 

SB2130- 7 -LRB102 10761 RPS 16090 b

1every manufacturer, importing distributor and distributor of
2the information contained therein. Actual notice to
3manufacturers, importing distributors and distributors of the
4information contained in any such posted reports, however
5received, shall also constitute notice of such information.
6    The 30 day merchandising credit period allowed by this
7Section shall commence with the day immediately following the
8date of invoice and shall include all successive days
9including Sundays and holidays to and including the 30th
10successive day.
11    In addition to other methods allowed by law, payment by
12check during the period for which merchandising credit may be
13extended under the provisions of this Section shall be
14considered payment. All checks received in payment for
15alcoholic liquor shall be promptly deposited for collection. A
16post dated check or a check dishonored on presentation for
17payment shall not be deemed payment.
18    A retail licensee shall not be deemed to be delinquent in
19payment for any alleged sale to him of alcoholic liquor when
20there exists a bona fide dispute between such retailer and a
21manufacturer, importing distributor or distributor with
22respect to the amount of indebtedness existing because of such
23alleged sale. A retail licensee shall not be deemed to be
24delinquent under this provision and 11 Ill. Adm. Code 100.90
25until 30 days after the date on which the region in which the
26retail licensee is located enters Phase 4 of the Governor's

 

 

SB2130- 8 -LRB102 10761 RPS 16090 b

1Restore Illinois Plan as issued on May 5, 2020. A retail
2licensee shall not be deemed to be delinquent in payment for
3any alleged sale to the retail licensee of alcoholic liquor
4unless such manufacturer, importing distributor, or
5distributor has provided notice in writing to the retailer of
6the amount of indebtedness existing because of such alleged
7sale not less than 7 days prior to reporting the retailer as
8delinquent.
9    A delinquent retail licensee who engages in the retail
10liquor business at 2 or more locations shall be deemed to be
11delinquent with respect to each such location.
12    The license of any person who violates any provision of
13this Section shall be subject to suspension or revocation in
14the manner provided by this Act.
15    If any part or provision of this Article or the
16application thereof to any person or circumstances shall be
17adjudged invalid by a court of competent jurisdiction, such
18judgment shall be confined by its operation to the controversy
19in which it was mentioned and shall not affect or invalidate
20the remainder of this Article or the application thereof to
21any other person or circumstance and to this and the
22provisions of this Article are declared severable.
23(Source: P.A. 101-631, eff. 6-2-20.)
 
24    (235 ILCS 5/6-9.5 new)
25    Sec. 6-9.5. Definitions. In this Section through Section

 

 

SB2130- 9 -LRB102 10761 RPS 16090 b

16-9.25:
2    "Common ownership" means any ownership interest of more
3than 5% of the total ownership interests of 2 or more retail
4licensees.
5    "Cooperative purchasing agreement" means an agreement
6entered into between 2 or more individually owned, commonly
7owned, or not commonly owned retail licensees or other
8licensees with retail privileges for the purpose of purchasing
9alcoholic beverages from licensees with distribution
10privileges.
11    "Quantity discounting" means a sales program between a
12licensee with distribution privileges and a retail licensee or
13retail licensees in which the primary purpose of the program
14is to increase product sales and merchandising to retail
15licensees and is not a subterfuge to provide prohibited things
16of value as inducements to retail licensees. "Quantity
17discounting" includes circumstances in which a licensee with
18distribution privileges offers a retail licensee or retail
19licensees a discount based upon an agreement by which the
20retail licensee may purchase a predetermined number of
21products in return for receiving a discount on the goods
22purchased, which may be applied either as a price reduction at
23the time of sale or as a rebate or credit following the sale,
24subject to the conditions found in Section 6-9.15.
 
25    (235 ILCS 5/6-9.10 new)

 

 

SB2130- 10 -LRB102 10761 RPS 16090 b

1    Sec. 6-9.10. Cooperative purchasing agreements.
2    (a) A cooperative purchasing agreement shall only be valid
3if the following conditions are met:
4        (1) the agreement is in writing and signed by all
5    parties to the agreement;
6        (2) the agreement contains the complete license
7    information for all parties to the agreement, including
8    State and local license numbers and expiration dates;
9        (3) a retail licensee that is a party to the agreement
10    must not be a party to any other liquor-related
11    cooperative purchasing agreement;
12        (4) the agreement designates an agent or select group
13    of agents who will place orders on behalf of the
14    participating members of the group;
15        (5) a copy of the executed agreement, including any
16    amendments, deletions, or additions, is kept on the
17    premises of each party to the agreement for a period of 3
18    years; and
19        (6) a copy of the executed agreement, including any
20    amendments, deletions, or additions, is delivered to the
21    relevant licensee with distribution privileges and to the
22    State Commission prior to making any purchases under the
23    agreement; any amendments, deletions, or additions must be
24    submitted to the State Commission within 7 business days
25    after the amendment, deletion, or addition is executed.
26    (b) A retail licensee may only be a member of one

 

 

SB2130- 11 -LRB102 10761 RPS 16090 b

1cooperative purchasing agreement group at a time. A retail
2licensee may make purchases as a party to a cooperative
3purchasing agreement or independently of any such agreement.
4Nothing in this or any other Section of this Act shall be
5construed to prohibit commonly or not commonly owned retail
6licensees from making purchases separate and apart from any
7executed cooperative purchasing agreements.
8    (c) A retail licensee may change to a different
9cooperative purchasing agreement group no more than twice in a
1012-month period. However, if an existing cooperative
11purchasing agreement group member purchases a retail location
12from a member of another cooperative purchasing agreement, the
13new owner of the retail location may move the membership of the
14retail licensee to a different cooperative purchasing
15agreement.
16    (d) When a retail licensee joins an existing cooperative
17purchasing agreement group, the members of a group must be
18members for a period of 7 days prior to being able to
19participate in any quantity discount programs.
20    (e) Cooperative purchasing agreement group members must be
21either all on-premises retail licensees or off-premises retail
22licensees.
23    (f) Any individual retail licensee that fails to comply
24with the terms and conditions of this Section may be deemed to
25be in violation of Section 6-5. Any licensee with distribution
26privileges that fails to comply with this Section may be

 

 

SB2130- 12 -LRB102 10761 RPS 16090 b

1deemed to be in violation of Section 6-5.
 
2    (235 ILCS 5/6-9.15 new)
3    Sec. 6-9.15. Quantity discounting terms.
4    (a) Any and all quantity discount programs shall offer the
5same quantity price discount to all retail licensees,
6cooperative purchasing agreement groups, and their agents.
7Quantity discount programs shall:
8        (1) be open and available for acceptance for 7
9    business days;
10        (2) be designed and implemented to produce product
11    volume growth with retail licensees;
12        (3) be based on the volume of product purchased;
13    discounts may include price reductions, cash, credits, and
14    rebates; no-charge alcoholic liquor products may be given
15    in lieu of a discount;
16        (4) be documented on related sales invoices or credit
17    memoranda;
18        (5) not require a retail licensee to take and dispose
19    of any quota of alcoholic liquors; bona fide quantity
20    discounts shall not be deemed to be quota sales;
21        (6) not require a retail licensee to purchase one
22    product in order to purchase another; this includes
23    combination sales if one or more products may be purchased
24    only in combination with other products and not
25    individually; and

 

 

SB2130- 13 -LRB102 10761 RPS 16090 b

1        (7) require a minimum quantity of 250 cases.
2    (b) A licensee who has distribution privileges and makes
3quantity discount sales to participating members of a
4cooperative purchasing agreement group shall issue customary
5invoices to each participating retail licensee itemizing the
6alcoholic liquor sold and delivered as part of a quantity
7discount program to each participating retail licensee.
8    (c) A licensee who has distribution privileges may require
9any participating member of a cooperative purchase group to
10make the following minimum purchases:
11        (1) 2% of cases of any quantity discount program of
12    500 or fewer cases.
13        (2) 1.5% of cases of any quantity discount program of
14    at least 501 and not more than 2,000 cases.
15        (3) 1% of cases of any quantity discount program of
16    2,001 or more cases.
 
17    (235 ILCS 5/6-9.20 new)
18    Sec. 6-9.20. Credit or rebate programs.
19    (a) A licensee with distribution privileges may issue to a
20retail licensee product credits and rebates as an adjustment
21on the purchase price based on volume purchasing, such as end
22of month, end of year, end of period, or other such temporary
23cumulative discounts, credits, and rebates to a retail
24licensee. These cumulative discounts are considered to be a
25form of pricing arrangement or quantity discount program and

 

 

SB2130- 14 -LRB102 10761 RPS 16090 b

1must be offered to all retail licensees.
2    (b) A licensee with distribution privileges utilizing
3credits or rebates shall conform the credit or rebate program
4to the following conditions:
5        (1) the credit or rebate program is made pursuant to a
6    written agreement established at or prior to the sale; the
7    licensee and the retail licensee shall maintain a record
8    of the written agreement per recordkeeping requirements;
9        (2) the agreement is entered into at the time of sale;
10        (3) the credit or rebate is extended for a specific
11    period of time;
12        (4) the credit or rebate is calculated based solely
13    upon the purchases made by the retail licensee receiving
14    the cumulative discount; and
15        (5) the credit or rebate is documented on a related
16    sales invoice or credit memoranda.
17    (c) If the retail licensee is part of a group of retail
18licensees with common ownership or a member of a cooperative
19purchasing agreement in compliance with Section 6-9.10,
20cumulative discounts, credits, or rebates may be aggregated
21into a single payment to each participating retail licensee.
22If an aggregated payment is issued, the cumulative discount,
23credit, or rebate must be calculated based upon the volume
24purchases of each individual participating retail licensee and
25must include supporting documentation that denotes the portion
26of the discount, credit, or rebate attributable to each

 

 

SB2130- 15 -LRB102 10761 RPS 16090 b

1individual retail licensee.
 
2    (235 ILCS 5/6-9.25 new)
3    Sec. 6-9.25. Combination sales offers. A licensee with
4distribution privileges is not prohibited from selling, at a
5special combination price, 2 or more kinds or brands of
6products to a retail licensee if the retail licensee has the
7option of purchasing either product at the usual price and the
8retail licensee is not required to purchase any product it
9does not want.
 
10    Section 99. Effective date. This Act takes effect upon
11becoming law.