Rep. Kathleen Willis

Filed: 5/16/2018

 

 


 

 


 
10000HB3877ham003LRB100 06224 HLH 40219 a

1
AMENDMENT TO HOUSE BILL 3877

2    AMENDMENT NO. ______. Amend House Bill 3877, AS AMENDED, by
3replacing everything after the enacting clause with the
4following:
 
5    "Section 1. Short title. This Act may be cited as the Vapor
6Products Regulatory Act.
 
7    Section 5. Definitions. As used in this Act:
8    "Adult-only facility" means a facility or restricted area
9(whether open-air or enclosed) where the operator ensures or
10has a reasonable basis to believe (such as by checking
11identification as required under State law, or by checking the
12identification of any person appearing to be under the age of
1327) that no person under legal age is present. A facility or
14restricted area need not be permanently restricted to persons
15under legal age to constitute an adult-only facility, provided
16that the operator ensures or has a reasonable basis to believe

 

 

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1that no person under legal age is present during the event or
2time period in question.
3    "Age restricted area" means a signed designated area in a
4retail establishment to which minors are not permitted access
5unless accompanied by a parent or legal guardian.
6    "Department" means the Department of Revenue.
7    "Electronic nicotine delivery system" means a powered
8vaporizer, and any component parts of a powered vaporizer
9intended to be used in the powered vaporizer, that converts
10e-liquid into vapor which is intended for inhalation.
11    "E-liquid" means a substance that contains nicotine and
12flavoring, substances, or other additives and is intended for
13use in a vapor product.
14    "Minor" means a person who has not reached the minimum
15legal age for the purchase of alternative nicotine products.
16    "Person" means any natural individual, firm, partnership,
17association, joint stock company, joint adventure, or public or
18private corporation, however formed, limited liability
19company, or a receiver, executor, administrator, trustee,
20conservator, or other representative appointed by order of any
21court.
22    "Records" means all data maintained by the retailer of
23vapor products, including data on paper, microfilm,
24microfiche, or any type of machine sensible data compilation.
25    "Retailer of vapor products" means any person engaged in
26the business of selling e-liquids or vapor products to

 

 

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1consumers in this State for use or consumption and not for
2resale in any form, for valuable consideration, regardless of
3amount, quantity, or number of sales. "Retailer of vapor
4products" does not include any person or business subject to
5the Cigarette Tax Act, the Tobacco Products Tax Act of 1995,
6the Prevention of Tobacco Use By Minors and Sale and
7Distribution of Tobacco Products Act, the Display of Tobacco
8Products Act, or the Compassionate Use of Medical Cannabis
9Pilot Program Act.
10    "Sale" means any transfer, exchange, or barter in any
11manner or by any means whatsoever for a consideration and
12includes all sales made by persons.
13    "Vapor product" means an e-liquid or electronic nicotine
14delivery system as defined under this Act.
 
15    Section 10. Retailer's license; fee.
16    (a) On or after January 1, 2019, no person may engage in
17business as a retailer of vapor products in this State without
18first having obtained a vapor products retail license from the
19Department. Applications for a license shall be made to the
20Department, by electronic means, in a form prescribed by the
21Department. Each applicant for a license under this Section
22shall furnish to the Department, in an electronic format
23established by the Department, the following information:
24        (1) the name and address of the applicant;
25        (2) the address of the location at which the applicant

 

 

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1    proposes to engage in business as a retailer of vapor
2    products in this State; and
3        (3) any other additional information as the Department
4    may lawfully require by its rules.
5    (b) The annual license fee payable to the Department for
6each retailer's license shall be $150. Seventy-five dollars of
7the fee shall be deposited into the Vapor Products Compliance
8Fund and shall be used for the cost of enforcement of this Act.
9Seventy-five dollars of the fee shall be used by the Department
10of Human Services for unannounced investigations of retailers
11licensed under this Act.
12    An applicant for a license shall pay the fee to the
13Department at the time of submitting its application for
14license to the Department. The Department shall require an
15applicant for a license under this Section to electronically
16file and pay the fee.
17    (c) The following are ineligible to receive a retailer's
18license under this Act:
19        (1) a person who has been convicted of a felony related
20    to the illegal transportation, sale, or distribution of any
21    age-restricted product or item, under any federal or State
22    law, if the Department, after investigation and a hearing
23    if requested by the applicant, determines that the person
24    has not been sufficiently rehabilitated to warrant the
25    public trust;
26        (2) a corporation, if any officer, manager, or director

 

 

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1    of the corporation, or any stockholder or stockholders
2    owning in the aggregate more than 5% of the stock of the
3    corporation, would not be eligible to receive a license
4    under this Act for any reason; or
5        (3) a person who has been convicted of a violation of
6    the federal Trademark Act of 1946 related to the sale of
7    vapor products in the United States.
8    (d) The Department, upon receipt of an application and
9license fee, in proper form, from a person who is eligible to
10receive a retailer's license under this Act, shall issue to the
11applicant a license in form as prescribed by the Department,
12which license shall permit the applicant to which it is issued
13to engage in business as a retailer of vapor products under
14this Act at the place shown in his or her application. All
15licenses issued by the Department under this Section shall be
16valid for a period not to exceed one year after issuance unless
17sooner revoked, canceled, or suspended as provided in this Act.
18No license issued under this Section is transferable or
19assignable. The license shall be conspicuously displayed in the
20place of business conducted by the licensee in this State under
21the license. A person who obtains a license as a retailer of
22vapor products who ceases to do business as specified in the
23license, or who never commenced business, or whose license is
24suspended or revoked, shall immediately surrender the license
25to the Department. The Department shall not issue a license to
26a retailer of vapor products unless the retailer of vapor

 

 

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1products is also validly registered under the Retailers'
2Occupation Tax Act. A person who obtains a license as a
3retailer of vapor products who ceases to do business as
4specified in the license, or who never commenced business, or
5whose license is suspended or revoked, shall immediately
6surrender the license to the Department.
7    (e) Any person aggrieved by any decision of the Department
8under this Section may, within 30 days after notice of the
9decision, protest and request a hearing. Upon receiving a
10request for hearing, the Department shall give written notice
11to the person requesting the hearing of the time and place
12fixed for the hearing and shall hold a hearing in conformity
13with the provisions of this Act and then issue its final
14administrative decision in the matter to that person. In
15absence of protest and request for a hearing within 30 days,
16the Department's decision shall become final without any
17further determination being made or notice given.
 
18    Section 20. Acting as a retailer of vapor products without
19a license; penalty. A person who knowingly acts as a retailer
20of vapor products in this State without first having obtained a
21license to do so in compliance with this Act is guilty of a
22Class A misdemeanor for the first offense and a Class 4 felony
23for a second or subsequent offense. Each day the person
24operates as a retailer of vapor products without a license
25constitutes a separate offense. The Department may, by

 

 

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1application to any circuit court, obtain an injunction
2restraining any person who engages in business as a retailer of
3vapor products without a license (either because his or her
4license has been revoked, canceled, or suspended or because of
5a failure to obtain a license in the first instance) from
6engaging in that business until that person, as if that person
7were a new applicant for a license, complies with all of the
8conditions, restrictions, and requirements of this Act and
9qualifies for and obtains a license.
 
10    Section 25. Revocation, cancellation, or suspension of a
11retail license.
12    (a) The Department may, after notice and hearing, revoke,
13cancel, or suspend the license of any retailer of vapor
14products for the violation of any provision of this Act, or for
15noncompliance with any provision of this Act, or for any
16noncompliance with any lawful rule adopted by the Department
17under this Act, or because the licensee is determined to be
18ineligible for a license for any one or more of the reasons
19provided in this Section.
20    (b) A person aggrieved by any decision of the Department
21under this Section may, within 30 days after notice of the
22decision, protest and request a hearing. Upon receiving a
23request for a hearing, the Department shall give notice to the
24person requesting the hearing of the time and place fixed for
25the hearing and shall hold a hearing in conformity with the

 

 

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1provisions of this Act and then issue its final administrative
2decision in the matter to that person. In the absence of a
3protest and request for a hearing within 30 days, the
4Department's decision shall become final without any further
5determination being made or notice given. The final decisions
6of the Department shall be subject to judicial review according
7to the provisions of the Administrative Review Law.
8    (c) If the retailer of vapor products has a training
9program that facilitates compliance with minimum-age vapor
10products laws, the Department shall suspend for 3 days the
11license of that retailer of vapor products for a fourth or
12subsequent violation of subsection (a) or (b) of Section 50.
13For the purposes of this Section, any violation of Section 50
14occurring at the licensed location for the retailer of vapor
15products during a 24-month period shall be counted as a
16violation against the retailer of vapor products.
17    If the retailer of vapor products does not have a training
18program that facilitates compliance with minimum-age vapor
19products laws, the Department shall suspend for 3 days the
20license of that retailer of vapor products for a second
21violation of subsection (a) or (b) of Section 50.
22    If the retailer of vapor products does not have a training
23program that facilitates compliance with minimum-age vapor
24products laws, the Department shall suspend for 7 days the
25license of that retailer of vapor products for a third
26violation of subsection (a) or (b) of Section 50.

 

 

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1    If the retailer of vapor products does not have a training
2program that facilitates compliance with minimum-age vapor
3products laws, the Department shall suspend for 30 days the
4license of a retailer of vapor products for a fourth or
5subsequent violation of subsection (a) or (b) of Section 50.
 
6    Section 30. Vapor product labeling and safety. Any e-liquid
7container sold by a retailer in this State shall:
8        (1) use childproof caps that have the child-resistant
9    effectiveness set forth in the federal prevention
10    packaging standards at 16 C.F.R. 1700.15(b)(1); and
11        (2) contain a label that meets the requirements set
12    forth in 21 C.F.R. 1143.3.
 
13    Section 35. Peace officer investigation.
14    (a) Whenever any peace officer of the State shall have
15reason to believe that any violation of this Act has occurred
16and that the person so violating the Act has in his, hers, or
17its possession any vapor product, or any vending device
18containing the vapor products, he or she may file or cause to
19be filed his or her complaint in writing, verified by
20affidavit, with any court within whose jurisdiction the
21premises to be searched are situated, stating the facts upon
22which the belief is founded, the premises to be searched, and
23the property to be seized, and procure a search warrant and
24execute the warrant.

 

 

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1    (b) Upon the execution of the search warrant, the peace
2officer executing the search warrant shall make due return of
3the warrant to the court issuing the warrant, together with an
4inventory of the property taken under the warrant. The court
5shall then issue process against the owner of the property if
6he is known; otherwise, the process shall be issued against the
7person in whose possession the property so taken is found, if
8the person is known. In case of inability to serve the process
9upon the owner or the person in possession of the property at
10the time of its seizure, notice of the proceedings before the
11court shall be given as required by the statutes of the State
12governing cases of attachment. Upon the return of the process
13duly served or upon the posting or publishing of notice made,
14the court or jury, if a jury shall be demanded, shall proceed
15to determine whether or not the property so seized was held or
16possessed in violation of this Act, or whether, if a vending
17device has been so seized, it contained at the time of its
18seizure any vapor products held or possessed in violation of
19this Act.
 
20    Section 40. Destruction or use of forfeited property. When
21any vapor product or any vending device shall have been
22declared forfeited to the State and all proceedings for
23judicial review have terminated, the Department shall destroy
24or maintain and allow the use of the property in an undercover
25capacity.
 

 

 

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1    Section 45. Retailers; records.
2    (a) A retailer of vapor products who is required to procure
3a license under this Act shall keep within this State complete
4and accurate records of vapor products purchased, sold, or
5otherwise disposed of and shall preserve and keep all invoices,
6bills of lading, sales records, and copies of bills of sale,
7returns, and other pertinent papers and documents relating to
8the purchase, sale, or disposition of vapor products. The
9records need not be maintained on the licensed premises, but
10must be maintained in this State; however, if access is
11available electronically, the records may be maintained
12out-of-State. However, all original invoices or copies of
13invoices covering purchases of vapor products must be retained
14on the licensed premises for a period of 90 days after the
15purchase, unless the Department has granted a waiver in
16response to a written request in cases where records are kept
17at a central business location within this State or in cases
18where records that are available electronically are maintained
19out-of-State. The Department shall adopt rules regarding the
20eligibility for a waiver, revocation of a waiver, and
21requirements and standards for maintenance and accessibility
22of records located at a central location out-of-State under a
23waiver provided under this Section.
24    (b) Records shall be preserved for a period of at least 3
25years after the later of the date of the records or the date of

 

 

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1the entries appearing in the records, unless the Department, in
2writing, authorizes their destruction or disposal at an earlier
3date. At all times during the usual business hours of the day,
4any duly authorized agent or employee of the Department may
5enter any place of business of the retailer of vapor products
6without a search warrant and may inspect the records required
7to be maintained under this Section. If the agent or employee
8is denied free access or is hindered or interfered with in
9making the examination as provided in this Section, the license
10of the retailer of vapor products shall be subject to
11suspension or revocation by the Department.
 
12    Section 50. Distribution of vapor products to, and
13possession by, minors prohibited.
14    (a) A person, either directly or indirectly by an agent or
15employee, or by a vending machine owned by the person or
16located in the person's establishment, may not sell, offer for
17sale, give, or furnish any vapor product to a minor.
18    (b) Before selling, offering for sale, giving, or
19furnishing a vapor product to another person, the person
20selling, offering for sale, giving, or furnishing the vapor
21product shall, by doing the following, verify that the person
22is not a minor:
23        (1) if the person appears to be under 27 years of age,
24    examining a government-issued photographic identification
25    that establishes that the person is not a minor; or

 

 

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1        (2) for sales made through the Internet or other remote
2    sales methods, performing an age verification through an
3    independent, third-party age verification service that
4    compares information available from public records to the
5    personal information entered by the person during the
6    ordering process that establishes that the person is not a
7    minor.
8    (c) A minor shall not possess a vapor product.
9    (d) The Department of Human Services shall administer a
10program to conduct unannounced investigations of Illinois
11retailers licensed under this Act to determine compliance with
12State and federal laws relating to the illegal sale of vapor
13products to persons who are not of legal age. The results of
14the unannounced investigations shall be reported to the
15Department of Human Services and the Department of Revenue.
 
16    Section 55. Penalties for distribution of vapor products
17to, and possession by, minors.
18    (a) Any person who violates subsection (a) or (b) of
19Section 50 is guilty of a petty offense. For the first offense
20in a 24-month period, the person shall be fined $200 if his or
21her employer has a training program that facilitates compliance
22with minimum-age vapor product laws. For the second offense in
23a 24-month period, the person shall be fined $400 if his or her
24employer has a training program that facilitates compliance
25with minimum-age vapor products laws. For the third offense in

 

 

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1a 24-month period, the person shall be fined $600 if his or her
2employer has a training program that facilitates compliance
3with minimum-age vapor product laws. For the fourth or
4subsequent offense in a 24-month period, the person shall be
5fined $800 if his or her employer has a training program that
6facilitates compliance with minimum-age vapor products laws.
7For the purposes of this subsection, the 24-month period shall
8begin with the person's first violation of the Act. The
9penalties in this subsection are in addition to any other
10penalties provided by law.
11    (a-5) Any retailer of vapor products who violates
12subsection (a) or (b) of Section 50 is guilty of a petty
13offense. For the first offense in a 24-month period, the
14retailer of vapor products shall be fined $200 it does not have
15a training program that facilitates compliance with
16minimum-age vapor product laws. For the second offense in a
1724-month period, the retailer of vapor products shall be fined
18$400 if it does not have a training program that facilitates
19compliance with minimum-age vapor products laws. For the third
20offense in a 24-month period, the retailer of vapor products
21shall be fined $600 if it does not have a training program that
22facilitates compliance with minimum-age vapor product laws.
23For the fourth or subsequent offense in a 24-month period, the
24retailer of vapor products shall be fined $800 if it does not
25have a training program that facilitates compliance with
26minimum-wage vapor products laws. For the purposes of this

 

 

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1subsection, the 24-month period shall begin with the person's
2first violation of the Act. The penalties in this subsection
3are in addition to any other penalties provided by law.
4    (a-10) A training program that facilitates compliance with
5minimum-age vapor products laws must include at least the
6following elements: (i) it must explain that only individuals
7displaying valid identification demonstrating that they are of
8legal age shall be eligible to purchase vapor products; and
9(ii) it must explain where a clerk can check identification for
10a date of birth. The training may be conducted electronically.
11Each retailer of vapor products that has a training program
12shall require each employee who completes the training program
13to sign a form attesting that the employee has received and
14completed the vapor products training. The form shall be kept
15in the employee's file and may be used to provide proof of
16training.
17    (b) If a minor violates subsection (c) of Section 50, he or
18she is guilty of a petty offense and the court may impose a
19sentence of 25 hours of community service and a fine of $50 for
20a first violation.
21    (c) A second violation by a minor of subsection (c) of
22Section 50 that occurs within 12 months after the first
23violation is punishable by a fine of $75 and 50 hours of
24community service.
25    (d) A third or subsequent violation by a minor of
26subsection (c) of Section 50 that occurs within 12 months after

 

 

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1the first violation is punishable by a $200 fine and 50 hours
2of community service.
3    (e) Any second or subsequent violation not within the
412-month time period after the first violation is punishable as
5provided for a first violation.
6    (f) If a minor is convicted of or placed on supervision for
7a violation of subsection (c) of Section 50, the court may, in
8its discretion, and upon recommendation by the State's Attorney
9order that minor and his or her parents or legal guardian to
10attend a youth diversion program if that program is available
11in the jurisdiction where the offender resides. Attendance at a
12youth diversion program shall be time-credited against any
13community service time imposed for any first violation of
14subsection (c) of Section 50. In addition to any other penalty
15that the court may impose for a violation of subsection (c) of
16Section 50, the court, upon request by the State's Attorney,
17may in its discretion require the offender to remit a fee for
18his or her attendance at a youth diversion program.
19    For the purposes of this Section, a "youth diversion
20program" includes, but is not limited to, a seminar designed to
21educate a person on the physical and psychological effects of
22using nicotine products and the health consequences of using
23nicotine products that can be conducted with a locality's youth
24diversion program.
25    (g) All moneys collected as fines for violations of Section
26(a), (b), or (c) of Section 50 of this Act shall be distributed

 

 

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1in the following manner:
2        (1) one-half of each fine shall be distributed to the
3    unit of local government or other entity that successfully
4    prosecuted the offender; and
5        (2) one-half shall be remitted to the State to be used
6    for enforcement of this Act.
7    Any violation of subsection (a) or (b) of Section 50 shall
8be reported to the Department within 7 business days.
 
9    Section 60. Display of vapor products.
10    (a) Vapor product displays. All vapor products must be sold
11from behind the counter or in an age restricted area or in a
12sealed display case.
13    (b) The restrictions in this Section do not apply to an
14adult-only facility.
15    (c) The restrictions in this Section do not apply to a
16retail store that (i) derives at least 90% of its revenue from
17tobacco, tobacco related products, or vapor products; (ii) does
18not permit persons under the age of 18 to enter the premises
19unless accompanied by a parent or legal guardian; (iii) posts a
20sign on the main entrance way stating that persons under the
21age of 18 are prohibited from entering unless accompanied by a
22parent or legal guardian; or (iv) is subject to the Cigarette
23Tax Act, the Tobacco Products Tax Act of 1995, the Prevention
24of Tobacco Use By Minors and Sale and Distribution of Tobacco
25Products Act, or the Display of Tobacco Products Act.

 

 

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1    (d) A violation of this Section is a petty offense for
2which the court shall impose a fine of not less than $100 nor
3more than $1,000.
 
4    Section 900. The Prevention of Tobacco Use by Minors and
5Sale and Distribution of Tobacco Products Act is amended by
6changing Section 1.5 as follows:
 
7    (720 ILCS 675/1.5)
8    Sec. 1.5. Distribution of alternative nicotine products to
9persons under 18 years of age prohibited.
10    (a) For the purposes of this Section, "alternative nicotine
11product" means a product or device not consisting of or
12containing tobacco that provides for the ingestion into the
13body of nicotine, whether by chewing, smoking, absorbing,
14dissolving, inhaling, snorting, sniffing, or by any other
15means. "Alternative nicotine product" excludes cigarettes,
16smokeless tobacco, or other tobacco products as these terms are
17defined in Section 1 of this Act, vapor products as defined
18under Section 5 of the Vapor Products Regulatory Act, and any
19product approved by the United States Food and Drug
20Administration as a non-tobacco product for sale as a tobacco
21cessation product, as a tobacco dependence product, or for
22other medical purposes, and is being marketed and sold solely
23for that approved purpose.
24    (b) A person, either directly or indirectly by an agent or

 

 

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1employee, or by a vending machine owned by the person or
2located in the person's establishment, may not sell, offer for
3sale, give, or furnish any alternative nicotine product, or any
4cartridge or component of an alternative nicotine product, to a
5person under 18 years of age.
6    (c) Before selling, offering for sale, giving, or
7furnishing an alternative nicotine product, or any cartridge or
8component of an alternative nicotine product, to another
9person, the person selling, offering for sale, giving, or
10furnishing the alternative nicotine product shall verify that
11the person is at least 18 years of age by:
12        (1) examining from any person that appears to be under
13    27 years of age a government-issued photographic
14    identification that establishes the person is at least 18
15    years of age or
16        (2) for sales made through the Internet or other remote
17    sales methods, performing an age verification through an
18    independent, third-party age verification service that
19    compares information available from public records to the
20    personal information entered by the person during the
21    ordering process that establishes the person is 18 years of
22    age or older.
23    (d) A person under 18 years of age shall not possess an
24alternative nicotine product.
25(Source: P.A. 99-496, eff. 6-1-16; 100-201, eff. 8-18-17.)
 

 

 

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1    Section 905. The State Finance Act is amended by adding
2Section 5.886 as follows:
 
3    (30 ILCS 105/5.886 new)
4    Sec. 5.886. The Vapor Products Compliance Fund.
 
5    Section 999. Effective date. This Act takes effect July 1,
62019.".