Public Act 100-0134
 
HB2878 EnrolledLRB100 09902 RPS 20073 b


  
    AN ACT concerning liquor.
  
 
    Be it enacted by the People of the State of Illinois,
 
represented in the General Assembly:
  
 
 
    Section 5. The Liquor Control Act of 1934 is amended  by 
changing Section 3-12 as follows:
 
 

    (235 ILCS 5/3-12)

 
  
    Sec. 3-12. Powers and duties of State Commission.

    (a) The State commission shall have the following powers, 
functions, and
duties:


        (1) To receive applications and to issue licenses to 
    manufacturers,
foreign importers, importing distributors, 
    distributors, non-resident dealers,
on premise consumption 
    retailers, off premise sale retailers, special event

    retailer licensees, special use permit licenses, auction 
    liquor licenses, brew
pubs, caterer retailers, 
    non-beverage users, railroads, including owners and

    lessees of sleeping, dining and cafe cars, airplanes, 
    boats, brokers, and wine
maker's premises licensees in 
    accordance with the provisions of this Act, and
to suspend 
    or revoke such licenses upon the State commission's 
    determination,
upon notice after hearing, that a licensee 
    has violated any provision of this
Act or any rule or 
    regulation issued pursuant thereto and in effect for 30 
    days
prior to such violation.  Except in the case of an 
    action taken pursuant to a
violation of Section 6-3, 6-5, 
    or 6-9, any action by the State Commission to
suspend or 
    revoke a licensee's license may be limited to the license 
    for the
specific premises where the violation occurred.
An 
    action for a violation of this Act shall be commenced by 
    the State Commission within 2 years after the date the 
    State Commission becomes aware of the violation. 

        In lieu of suspending or revoking a license, the 
    commission may impose
a fine, upon the State commission's 
    determination and notice after hearing,
that a licensee has 
    violated any provision of this Act or any rule or

    regulation issued pursuant thereto and in effect for 30 
    days prior to such
violation.
        For the purpose of this paragraph (1), when determining 
    multiple violations for the sale of alcohol to a person 
    under the age of 21, a second or subsequent violation for 
    the sale of alcohol to a person under the age of 21 shall 
    only be considered if it was committed within 5 years after 
    the date when a prior violation for the sale of alcohol to 
    a person under the age of 21 was committed.  
        The fine imposed under this paragraph may not exceed 
    $500 for each
violation.  Each day that the activity, which 
    gave rise to the original fine,
continues is a separate 
    violation.  The maximum fine that may be levied against
any 
    licensee, for the period of the license, shall not exceed 
    $20,000.
The maximum penalty that may be imposed on a 
    licensee for selling a bottle of
alcoholic liquor with a 
    foreign object in it or serving from a bottle of
alcoholic 
    liquor with a foreign object in it shall be the destruction 
    of that
bottle of alcoholic liquor for the first 10 bottles 
    so sold or served from by
the licensee.  For the eleventh 
    bottle of alcoholic liquor and for each third
bottle 
    thereafter sold or served from by the licensee with a 
    foreign object in
it, the maximum penalty that may be 
    imposed on the licensee is the destruction
of the bottle of 
    alcoholic liquor and a fine of up to $50.


        Any notice issued by the State Commission to a licensee 
    for a violation of this Act or any notice with respect to 
    settlement or offer in compromise shall include the field 
    report, photographs, and any other supporting 
    documentation necessary to reasonably inform the licensee 
    of the nature and extent of the violation or the conduct 
    alleged to have occurred. 
        (2) To adopt such rules and regulations consistent with 
    the
provisions of this Act which shall be necessary to 
    carry on its
functions and duties to the end that the 
    health, safety and welfare of
the People of the State of 
    Illinois shall be protected and temperance in
the 
    consumption of alcoholic liquors shall be fostered and 
    promoted and
to distribute copies of such rules and 
    regulations to all licensees
affected thereby.


        (3) To call upon other administrative departments of 
    the State,
county and municipal governments, county and 
    city police departments and
upon prosecuting officers for 
    such information and assistance as it
deems necessary in 
    the performance of its duties.


        (4) To recommend to local commissioners rules and 
    regulations, not
inconsistent with the law, for the 
    distribution and sale of alcoholic
liquors throughout the 
    State.


        (5) To inspect, or cause to be inspected, any
premises 
    in this State
where alcoholic liquors are manufactured, 
    distributed, warehoused, or
sold. Nothing in this Act

    authorizes an agent of the Commission to inspect private

    areas within the premises without reasonable suspicion or a 
    warrant
during an inspection. "Private areas" include, but 
    are not limited to, safes, personal property, and closed 
    desks.


        (5.1) Upon receipt of a complaint or upon having 
    knowledge that any person
is engaged in business as a 
    manufacturer, importing distributor, distributor,
or 
    retailer without a license or valid license, to notify the 
    local liquor
authority, file a complaint with the State's 
    Attorney's Office of the county
where the incident 
    occurred, or initiate an investigation with the 
    appropriate
law enforcement officials.


        (5.2) To issue a cease and desist notice to persons 
    shipping alcoholic
liquor
into this State from a point 
    outside of this State if the shipment is in
violation of 
    this Act.


        (5.3) To receive complaints from licensees, local 
    officials, law
enforcement agencies, organizations, and 
    persons stating that any licensee has
been or is violating 
    any provision of this Act or the rules and regulations

    issued pursuant to this Act.  Such complaints shall be in 
    writing, signed and
sworn to by the person making the 
    complaint, and shall state with specificity
the facts in 
    relation to the alleged violation.  If the Commission has

    reasonable grounds to believe that the complaint 
    substantially alleges a
violation of this Act or rules and 
    regulations adopted pursuant to this Act, it
shall conduct 
    an investigation.  If, after conducting an investigation, 
    the
Commission is satisfied that the alleged violation did 
    occur, it shall proceed
with disciplinary action against 
    the licensee as provided in this Act.


        (6) To hear and determine appeals from orders of a 
    local commission
in accordance with the provisions of this 
    Act, as hereinafter set forth.
Hearings under this 
    subsection shall be held in Springfield or Chicago,
at 
    whichever location is the more convenient for the majority 
    of persons
who are parties to the hearing.


        (7) The commission shall establish uniform systems of 
    accounts to be
kept by all retail licensees having more 
    than 4 employees, and for this
purpose the commission may 
    classify all retail licensees having more
than 4 employees 
    and establish a uniform system of accounts for each
class 
    and prescribe the manner in which such accounts shall be 
    kept.
The commission may also prescribe the forms of 
    accounts to be kept by
all retail licensees having more 
    than 4 employees, including but not
limited to accounts of 
    earnings and expenses and any distribution,
payment, or 
    other distribution of earnings or assets, and any other

    forms, records and memoranda which in the judgment of the 
    commission may
be necessary or appropriate to carry out any 
    of the provisions of this
Act, including but not limited to 
    such forms, records and memoranda as
will readily and 
    accurately disclose at all times the beneficial
ownership 
    of such retail licensed business.  The accounts, forms,

    records and memoranda shall be available at all reasonable 
    times for
inspection by authorized representatives of the 
    State commission or by
any local liquor control 
    commissioner or his or her authorized representative.
The 
    commission, may, from time to time, alter, amend or repeal, 
    in whole
or in part, any uniform system of accounts, or the 
    form and manner of
keeping accounts.


        (8) In the conduct of any hearing authorized to be held 
    by the
commission, to appoint, at the commission's 
    discretion, hearing officers
to conduct hearings involving 
    complex issues or issues that will require a
protracted 
    period of time to resolve, to examine, or cause to be 
    examined,
under oath, any licensee, and to examine or cause 
    to be examined the books and
records
of such licensee; to 
    hear testimony and take proof material for its
information 
    in the discharge of its duties hereunder; to administer or

    cause to be administered oaths; for any such purpose to 
    issue
subpoena or subpoenas to require the attendance of 
    witnesses and the
production of books, which shall be 
    effective in any part of this State, and
to adopt rules to 
    implement its powers under this paragraph (8).


        Any Circuit Court may by order duly entered,
require 
    the attendance of witnesses and the production of relevant 
    books
subpoenaed by the State commission and the court may 
    compel
obedience to its order by proceedings for contempt.


        (9) To investigate the administration of laws in 
    relation to
alcoholic liquors in this and other states and 
    any foreign countries,
and to recommend from time to time 
    to the Governor and through him or
her to the legislature 
    of this State, such amendments to this Act, if any, as
it 
    may think desirable and as will serve to further the 
    general broad
purposes contained in Section 1-2 hereof.


        (10) To adopt such rules and regulations consistent 
    with the
provisions of this Act which shall be necessary 
    for the control, sale or
disposition of alcoholic liquor 
    damaged as a result of an accident, wreck,
flood, fire or 
    other similar occurrence.


        (11) To develop industry educational programs related 
    to responsible
serving and selling, particularly in the 
    areas of overserving consumers and
illegal underage 
    purchasing and consumption of alcoholic beverages.


        (11.1) To license persons providing education and 
    training to alcohol
beverage sellers and servers for 
    mandatory and non-mandatory training under the
Beverage 
    Alcohol Sellers and Servers
Education and Training 
    (BASSET) programs and to develop and administer a public

    awareness program in Illinois to reduce or eliminate the 
    illegal purchase and
consumption of alcoholic beverage 
    products by persons under the age of 21.
Application for a 
    license shall be made on forms provided by the State

    Commission.


        (12) To develop and maintain a repository of license 
    and regulatory
information.


        (13) On or before January 15, 1994, the Commission 
    shall issue
a written report to the Governor and General 
    Assembly that is to be based on a
comprehensive study of 
    the impact on and implications for the State of Illinois
of 
    Section 1926 of the federal Federal ADAMHA Reorganization 
    Act of 1992 (Public Law
102-321).  This study shall address 
    the extent to which Illinois currently
complies with the 
    provisions of P.L. 102-321 and the rules promulgated 
    pursuant
thereto.


        As part of its report, the Commission shall provide the 
    following essential
information:


            (i) the number of retail distributors of tobacco 
        products, by type and
geographic area, in the State;


            (ii) the number of reported citations and 
        successful convictions,
categorized by type and 
        location of retail distributor, for violation of the

        Prevention of Tobacco Use by Minors and Sale and 
        Distribution of Tobacco  Products Act and the Smokeless

        Tobacco Limitation Act;


            (iii) the extent and nature of organized 
        educational and governmental
activities that are 
        intended to promote, encourage or otherwise secure

        compliance with any Illinois laws that prohibit the 
        sale or distribution of
tobacco products to minors; and


            (iv) the level of access and availability of 
        tobacco products to
individuals under the age of 18.


        To obtain the data necessary to comply with the 
    provisions of P.L. 102-321
and the requirements of this 
    report, the Commission shall conduct random,
unannounced 
    inspections of a geographically and scientifically 
    representative
sample of the State's retail tobacco 
    distributors.


        The Commission shall consult with the Department of 
    Public Health, the
Department of Human Services, the

    Illinois State Police and any
other executive branch 
    agency, and private organizations that may have

    information relevant to this report.


        The Commission may contract with the Food and Drug 
    Administration of the
U.S. Department of Health and Human 
    Services to conduct unannounced
investigations of Illinois 
    tobacco vendors to determine compliance with federal
laws 
    relating to the illegal sale of cigarettes and smokeless 
    tobacco products
to persons under the age of 18.


        (14) On or before April 30, 2008 and every 2 years
    
    thereafter, the Commission shall present a written
    report 
    to the Governor and the General Assembly that shall
    be 
    based on a study of the impact of Public Act 95-634 this 
    amendatory Act of
    the 95th General Assembly on the business 
    of soliciting,
    selling, and shipping wine from inside and 
    outside of this
    State directly to residents of this State. 
    As part of its
    report, the Commission shall provide all of 
    the
    following information:
            (A) The amount of State excise and sales tax
        
        revenues generated.
            (B) The amount of licensing fees received.
            (C) The number of cases of wine shipped from inside
        
        and outside of this State directly to residents of this
        
        State.
            (D) The number of alcohol compliance operations
        
        conducted.
            (E) The number of winery shipper's licenses
        
        issued.
            (F) The number of each of the following: reported
        
        violations; cease and desist notices issued by the
        
        Commission; notices of violations issued by
        the 
        Commission and to the Department of Revenue;
        and 
        notices and complaints of violations to law
        
        enforcement officials, including, without limitation,
        
        the Illinois Attorney General and the U.S. Department
        
        of Treasury's Alcohol and Tobacco Tax and Trade Bureau.
        (15) As a means to reduce the underage consumption of
    
    alcoholic liquors, the Commission shall conduct
    alcohol 
    compliance operations to investigate whether
    businesses 
    that are soliciting, selling, and shipping wine
    from inside 
    or outside of this State directly to residents
    of this 
    State are licensed by this State or are selling or
    
    attempting to sell wine to persons under 21 years of age in
    
    violation of this Act.
        (16) The Commission shall, in addition to
    notifying any 
    appropriate law enforcement agency, submit
    notices of 
    complaints or violations of Sections 6-29 and
    6-29.1 by 
    persons who do not hold a winery shipper's
    license under 
    this amendatory Act to the Illinois Attorney General and
    to 
    the U.S. Department of Treasury's Alcohol and Tobacco Tax 
    and Trade Bureau.
        (17) (A) A person licensed to make wine under the laws 
    of another state who has a winery shipper's license under 
    this amendatory Act and annually produces less than 25,000 
    gallons of wine or a person who has a first-class or 
    second-class wine manufacturer's license, a first-class or 
    second-class wine-maker's license, or a limited wine 
    manufacturer's license under this Act and annually 
    produces less than 25,000 gallons of wine may make 
    application to the Commission for a self-distribution 
    exemption to allow the sale of not more than 5,000 gallons 
    of the exemption holder's wine to retail licensees per 
    year.
            (B)  In the application, which shall be sworn under 
        penalty of perjury, such person shall state (1) the 
        date it was established; (2) its volume of production 
        and sales for each year since its establishment; (3) 
        its efforts to establish distributor relationships; 
        (4) that a self-distribution exemption is necessary to 
        facilitate the marketing of its wine; and (5) that it 
        will comply with the liquor and revenue laws of the 
        United States,  this State, and any other state where it 
        is licensed.
            (C)  The Commission shall approve the application 
        for a self-distribution exemption if such person:  (1) 
        is in compliance with State revenue and liquor laws; 
        (2) is not a member of any affiliated group that 
        produces more than 25,000 gallons of wine per annum or 
        produces any other alcoholic liquor; (3) will not 
        annually produce for sale more than 25,000 gallons of 
        wine; and (4) will not annually sell more than 5,000 
        gallons of its wine to retail licensees.
            (D)  A self-distribution exemption holder shall 
        annually certify to the Commission its production of 
        wine in the previous 12 months and its anticipated 
        production and sales for the next 12 months.  The 
        Commission may fine, suspend, or revoke a 
        self-distribution exemption after a hearing if it 
        finds that the exemption holder has made a material 
        misrepresentation in its application, violated a 
        revenue or liquor law of Illinois, exceeded production 
        of 25,000 gallons of wine in any calendar year, or 
        become part of an affiliated group producing more than 
        25,000 gallons of wine or any other alcoholic liquor.
            (E)  Except in hearings for violations of this Act 
        or Public Act 95-634 amendatory Act or a bona fide 
        investigation by duly sworn law enforcement officials, 
        the Commission, or its agents, the Commission shall 
        maintain the production and sales information of a 
        self-distribution exemption holder as confidential and 
        shall not release such information to any person.
            (F)  The Commission shall issue regulations 
        governing self-distribution exemptions consistent with 
        this Section and this Act.
            (G) Nothing in this subsection (17) shall prohibit 
        a self-distribution exemption holder from entering 
        into or simultaneously having a distribution agreement 
        with a licensed Illinois distributor.
            (H) It is the intent of this subsection (17) to 
        promote and continue orderly markets.  The General 
        Assembly finds that in order to preserve Illinois' 
        regulatory distribution system it is necessary to 
        create an exception for smaller makers of wine as their 
        wines are frequently adjusted in varietals, mixes, 
        vintages, and taste to find and create market niches 
        sometimes too small for distributor or importing 
        distributor business strategies.  Limited 
        self-distribution rights will afford and allow smaller 
        makers of wine access to the marketplace in order to 
        develop a customer base without impairing the 
        integrity of the 3-tier system.

        (18) (A)  A class 1 brewer licensee, who must also be 
    either a licensed brewer or licensed non-resident dealer 
    and annually manufacture less than 930,000 gallons of beer, 
    may make application to the State Commission for a 
    self-distribution exemption to allow the sale of not more 
    than 232,500 gallons of the exemption holder's beer to 
    retail licensees per year.
            (B)  In the application, which shall be sworn under 
        penalty of perjury, the class 1 brewer licensee shall 
        state (1) the date it was established; (2) its volume 
        of beer manufactured and sold for each year since its 
        establishment; (3) its efforts to establish 
        distributor relationships; (4) that a 
        self-distribution exemption is necessary to facilitate 
        the marketing of its beer; and (5) that it will comply 
        with the alcoholic beverage and revenue laws of the 
        United States, this State, and any other state where it 
        is licensed.
            (C)  Any application submitted shall be posted on 
        the State Commission's website at least 45 days prior 
        to action by the State Commission.  The State Commission 
        shall approve the application for a self-distribution 
        exemption if the class 1 brewer licensee: (1) is in 
        compliance with the State, revenue, and alcoholic 
        beverage laws; (2) is not a member of any affiliated 
        group that manufactures manufacturers more than 
        930,000 gallons of beer per annum or produces any other 
        alcoholic beverages; (3) shall not annually 
        manufacture for sale more than 930,000 gallons of beer; 
        (4) shall not annually sell more than 232,500 gallons 
        of its beer to retail licensees; and (5) has 
        relinquished any brew pub license held by the licensee, 
        including  any ownership interest it held in the 
        licensed brew pub.
            (D)  A self-distribution exemption holder shall 
        annually certify to the State Commission its 
        manufacture of beer during the previous 12 months and 
        its anticipated manufacture and sales of beer for the 
        next 12 months. The State Commission may fine, suspend, 
        or revoke a self-distribution exemption after a 
        hearing if it finds that the exemption holder has made 
        a material misrepresentation in its application, 
        violated a revenue or alcoholic beverage law of 
        Illinois, exceeded the manufacture of 930,000 gallons 
        of beer in any calendar year or became part of an 
        affiliated group manufacturing more than 930,000 
        gallons of beer or any other alcoholic beverage.
            (E)  The State Commission shall issue rules and 
        regulations governing self-distribution exemptions 
        consistent with this Act.
            (F) Nothing in this paragraph (18) shall prohibit a 
        self-distribution exemption holder from entering into 
        or simultaneously having a distribution agreement with 
        a licensed Illinois importing distributor or a 
        distributor. If a self-distribution exemption holder 
        enters into a distribution agreement and has assigned 
        distribution rights to an importing distributor or 
        distributor, then the self-distribution exemption 
        holder's distribution rights in the assigned 
        territories shall cease in a reasonable time not to 
        exceed 60 days.
            (G)  It is the intent of this paragraph (18) to 
        promote and continue orderly markets. The General 
        Assembly finds that in order to preserve Illinois' 
        regulatory distribution system, it is necessary to 
        create an exception for smaller manufacturers in order 
        to afford and allow such smaller manufacturers of beer 
        access to the marketplace in order to develop a 
        customer base without impairing the integrity of the 
        3-tier system. 
    (b) On or before April 30, 1999, the Commission shall 
present a written
report to the Governor and the General 
Assembly that shall be based on a study
of the impact of Public 
Act 90-739 this amendatory Act of 1998 on the business of 
soliciting,
selling, and shipping
alcoholic liquor from 
outside of this State directly to residents of this
State.


    As part of its report, the Commission shall provide the 
following
information:


        (i) the amount of State excise and sales tax revenues 
    generated as a
result of Public Act 90-739 this amendatory 
    Act of 1998;


        (ii) the amount of licensing fees received as a result 
    of Public Act 90-739 this amendatory
Act of 1998;


        (iii) the number of reported violations, the number of 
    cease and desist
notices issued by the Commission, the 
    number of notices of violations issued
to the Department of 
    Revenue, and the number of notices and complaints of

    violations to law enforcement officials.


(Source: P.A. 98-401, eff. 8-16-13; 98-939, eff. 7-1-15; 
98-941, eff. 1-1-15; 99-78, eff. 7-20-15; 99-448, eff. 8-24-15; 
revised 9-13-16.)
 
 
    Section 99. Effective date. This Act takes effect upon 
becoming law. 
  


Effective Date:  8/18/2017