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Full Text of HB3877  100th General Assembly

HB3877ham001 100TH GENERAL ASSEMBLY

Rep. Kathleen Willis

Filed: 3/24/2017

 

 


 

 


 
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1
AMENDMENT TO HOUSE BILL 3877

2    AMENDMENT NO. ______. Amend House Bill 3877 by replacing
3everything after the enacting clause with the following:
 
4    "Section 1. Short title. This Act may be cited as the Vapor
5Products Regulatory Act.
 
6    Section 5. Definitions. For purposes of this Act:
7    "Adult-only facility" means a facility or restricted area
8(whether open-air or enclosed) where the operator ensures or
9has a reasonable basis to believe (such as by checking
10identification as required under State law, or by checking the
11identification of any person appearing to be under the age of
1227) that no person under legal age is present. A facility or
13restricted area need not be permanently restricted to persons
14under legal age to constitute an adult-only facility, provided
15that the operator ensures or has a reasonable basis to believe
16that no person under legal age is present during the event or

 

 

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1time period in question.
2    "Age restricted area" means a signed designated area in a
3retail establishment to which minors under 18 years of age are
4not permitted access unless accompanied by a parent or legal
5guardian.
6    "Department" means the Department of Revenue.
7    "E-liquid" means a substance that contains nicotine and
8flavoring, substances, or other additives and is intended for
9use in a vapor product.
10    "Person" means any natural individual, firm, partnership,
11association, joint stock company, joint adventure, or public or
12private corporation, however formed, limited liability
13company, or a receiver, executor, administrator, trustee,
14conservator, or other representative appointed by order of any
15court.
16    "Records" means all data maintained by the retailer of
17vapor products, including data on paper, microfilm,
18microfiche, or any type of machine sensible data compilation.
19    "Retailer of vapor products" means any person in this State
20engaged in the business of selling e-liquids or vapor products
21to consumers in this State for use or consumption and not for
22resale in any form, for valuable consideration, regardless of
23amount, quantity, or number of sales. "Retailer of vapor
24products" does not include any person or business subject to
25the Cigarette Tax Act, the Tobacco Products Tax Act of 1995,
26the Prevention of Tobacco Use By Minors and Sale and

 

 

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1Distribution of Tobacco Products Act, the Display of Tobacco
2Products Act, or the Compassionate Use of Medical Cannabis
3Pilot Program Act.
4    "Sale" means any transfer, exchange, or barter in any
5manner or by any means whatsoever for a consideration and
6includes all sales made by persons.
7    "Vapor pen" means a powered vaporizer, and any component
8parts thereof intended to be used in the powered vaporizer,
9that converts e-liquid into vapor which is intended for
10inhalation.
11    "Vapor product" means an e-liquid or vapor pen as defined
12under this Act.
 
13    Section 10. Retailer's license; fee.
14    (a) On or after January 1, 2018, no person may engage in
15business as a retailer of vapor products in this State without
16first having obtained a vapor products retail license from the
17Department. Applications for a license shall be made to the
18Department, by electronic means, in a form prescribed by the
19Department. Each applicant for a license under this Section
20shall furnish to the Department, in an electronic format
21established by the Department, the following information:
22        (1) the name and address of the applicant;
23        (2) the address of the location at which the applicant
24    proposes to engage in business as a retailer of vapor
25    products in this State;

 

 

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1        (3) whether the applicant will engage in the sale of
2    e-liquids, vapor pens, or both; and
3        (4) such other additional information as the
4    Department may lawfully require by its rules.
5    (b) The annual license fee payable to the Department for
6each retailer's license shall be $75. The fee shall be
7deposited into the Tax Compliance and Administration Fund and
8shall be used for the cost of enforcement of this Act.
9    An applicant for a license shall pay such fee to the
10Department at the time of submitting its application for
11license to the Department. The Department shall require an
12applicant for a license under this Section to electronically
13file and pay the fee.
14    (c) The following are ineligible to receive a retailer's
15license under this Act:
16        (1) a person who has been convicted of a felony related
17    to the illegal transportation, sale, or distribution of any
18    age-restricted product or item, under any federal or State
19    law, if the Department, after investigation and a hearing
20    if requested by the applicant, determines that the person
21    has not been sufficiently rehabilitated to warrant the
22    public trust; or
23        (2) a corporation, if any officer, manager, or director
24    thereof, or any stockholder or stockholders owning in the
25    aggregate more than 5% of the stock of such corporation,
26    would not be eligible to receive a license under this Act

 

 

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1    for any reason.
2    (d) The Department, upon receipt of an application and
3license fee, in proper form, from a person who is eligible to
4receive a retailer's license under this Act, shall issue to the
5applicant a license in form as prescribed by the Department,
6which license shall permit the applicant to which it is issued
7to engage in business as a retailer of vapor products under
8this Act at the place shown in his application. All licenses
9issued by the Department under this Section shall be valid for
10a period not to exceed one year after issuance unless sooner
11revoked, canceled, or suspended as provided in this Act. No
12license issued under this Section is transferable or
13assignable. The license shall be conspicuously displayed in the
14place of business conducted by the licensee in Illinois under
15the license. A person who obtains a license as a retailer of
16vapor products who ceases to do business as specified in the
17license, or who never commenced business, or whose license is
18suspended or revoked, shall immediately surrender the license
19to the Department. The Department shall not issue a license to
20a retailer of vapor products unless the retailer of vapor
21products is also validly registered under the Retailers'
22Occupation Tax Act. A person who obtains a license as a
23retailer of vapor products who ceases to do business as
24specified in the license, or who never commenced business, or
25whose license is suspended or revoked, shall immediately
26surrender the license to the Department.

 

 

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1    (e) Any person aggrieved by any decision of the Department
2under this Section may, within 30 days after notice of the
3decision, protest and request a hearing. Upon receiving a
4request for hearing, the Department shall give written notice
5to the person requesting the hearing of the time and place
6fixed for the hearing and shall hold a hearing in conformity
7with the provisions of this Act and then issue its final
8administrative decision in the matter to that person. In
9absence of protest and request for a hearing within 30 days,
10the Department's decision shall become final without any
11further determination being made or notice given.
 
12    Section 20. Acting as a retailer of vapor products without
13a license; penalty. A person who knowingly acts as a retailer
14of vapor products in this State without first having obtained a
15license to do so in compliance with this Act is guilty of a
16Class A misdemeanor for the first offense and a Class 4 felony
17for a second or subsequent offense. Each day such person
18operates as a retailer of vapor products without a license
19constitutes a separate offense. The Department may, by
20application to any circuit court, obtain an injunction
21restraining any person who engages in business as a retailer of
22vapor products without a license (either because his or her
23license has been revoked, canceled, or suspended or because of
24a failure to obtain a license in the first instance) from
25engaging in that business until that person, as if that person

 

 

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1were a new applicant for a license, complies with all of the
2conditions, restrictions, and requirements of this Act and
3qualifies for and obtains a license.
 
4    Section 25. Revocation, cancellation, or suspension of a
5retail license.
6    (a) The Department may, after notice and hearing, revoke,
7cancel, or suspend the license of any retailer of vapor
8products for the violation of any provision of this Act, or for
9noncompliance with any provision herein contained, or for any
10noncompliance with any lawful rule adopted by the Department
11pursuant to this Act, or because the licensee is determined to
12be ineligible for a license for any one or more of the reasons
13provided in this Section.
14    (b) A person aggrieved by any decision of the Department
15under this Section may, within 30 days after notice of the
16decision, protest and request a hearing. Upon receiving a
17request for a hearing, the Department shall give notice to the
18person requesting the hearing of the time and place fixed for
19the hearing and shall hold a hearing in conformity with the
20provisions of this Act and then issue its final administrative
21decision in the matter to that person. In the absence of a
22protest and request for a hearing within 30 days, the
23Department's decision shall become final without any further
24determination being made or notice given. The final decisions
25of the Department shall be subject to judicial review according

 

 

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1to the provisions of the Administrative Review Law.
2    (c) If the retailer of vapor products has a training
3program that facilitates compliance with minimum-age vapor
4products laws, the Department shall suspend for 3 days the
5license of that retailer of vapor products for a fourth or
6subsequent violation of subsection (a) or (b) of Section 50.
7For the purposes of this Section, any violation of Section 50
8occurring at the licensed location for the retailer of vapor
9products during a 24-month period shall be counted as a
10violation against the retailer of vapor products.
11    If the retailer of vapor products does not have a training
12program that facilitates compliance with minimum-age vapor
13products laws, the Department shall suspend for 3 days the
14license of that retailer of vapor products for a second
15violation subsection (a) or (b) of Section 50.
16    If the retailer of vapor products does not have a training
17program that facilitates compliance with minimum-age vapor
18products laws, the Department shall suspend for 7 days the
19license of that retailer of vapor products for a third
20violation of subsection (a) or (b) of Section 50.
21    If the retailer of vapor products does not have a training
22program that facilitates compliance with minimum-age vapor
23products laws, the Department shall suspend for 30 days the
24license of a retailer of vapor products for a fourth or
25subsequent violation of subsection (a) or (b) of Section 50.
 

 

 

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1    Section 30. Arrest; search and seizure without warrant.
2    (a) Any duly authorized employee of the Department may:
3        (1) arrest without warrant any person committing in his
4    or her presence a violation of any of the provisions of
5    this Act; and
6        (2) may seize any vapor products in accordance with the
7    provisions of this Act.
8    The vapor products so seized are subject to confiscation
9and forfeiture.
10    (b) After seizing any vapor products or vending devices,
11the Department must hold a hearing and determine whether the
12retailer of vapor products was properly licensed to sell the
13vapor products at the time of their seizure by the Department.
14The Department shall give not less than 20 days' notice of the
15time and place of the hearing to the owner of the property, if
16the owner is known, and also to the person in whose possession
17the property was found, if that person is known and if the
18person in possession is not the owner of the property. If
19neither the owner nor the person in possession of the property
20is known, the Department must cause publication of the time and
21place of the hearing to be made at least once in each week for 3
22weeks successively in a newspaper of general circulation in the
23county where the hearing is to be held.
24    If, as the result of the hearing, the Department determines
25that the retailer of vapor products was not properly licensed
26at the time the vapor products were seized, the Department must

 

 

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1enter an order declaring the vapor products or vending devices
2confiscated and forfeited to the State, to be held by the
3Department for disposal by it as provided in Section 40. The
4Department must give notice of the order to the owner of the
5property, if the owner is known, and also to the person in
6whose possession the property was found, if that person is
7known and if the person in possession is not the owner of the
8property. If neither the owner nor the person in possession of
9the property is known, the Department must cause publication of
10the order to be made at least once in each week for 3 weeks
11successively in a newspaper of general circulation in the
12county where the hearing was held.
 
13    Section 35. Peace officer investigation.
14    (a) Whenever any peace officer of the State or any duly
15authorized officer or employee of the Department shall have
16reason to believe that any violation of this Act has occurred
17and that the person so violating the Act has in his, hers, or
18its possession any vapor product, or any vending device
19containing such vapor products, he may file or cause to be
20filed his complaint in writing, verified by affidavit, with any
21court within whose jurisdiction the premises to be searched are
22situated, stating the facts upon which such belief is founded,
23the premises to be searched, and the property to be seized, and
24procure a search warrant and execute the same.
25    (b) Upon the execution of such search warrant, the peace

 

 

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

 

 

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

 

 

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1    (b) Records shall be preserved for a period of at least 3
2years after the later of the date of the records or the date of
3the entries appearing in the records, unless the Department, in
4writing, authorizes their destruction or disposal at an earlier
5date. At all times during the usual business hours of the day,
6any duly authorized agent or employee of the Department may
7enter any place of business of the retailer of vapor products
8without a search warrant and may inspect the premises to
9determine whether any of the provisions of this Act are being
10violated. If such agent or employee is denied free access or is
11hindered or interfered with in making such examination as
12herein provided, the license of the retailer of vapor products
13shall be subject to suspension or revocation by the Department.
 
14    Section 50. Distribution of vapor products to, and
15possession by, persons under 18 years of age prohibited.
16    (a) A person, either directly or indirectly by an agent or
17employee, or by a vending machine owned by the person or
18located in the person's establishment, may not sell, offer for
19sale, give, or furnish any vapor product to a person under 18
20years of age.
21    (b) Before selling, offering for sale, giving, or
22furnishing an vapor product to another person, the person
23selling, offering for sale, giving, or furnishing the vapor
24product shall verify that the person is at least 18 years of
25age by:

 

 

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1        (1) examining from any person that appears to be under
2    27 years of age a government-issued photographic
3    identification that establishes the person is at least 18
4    years of age; or
5        (2) for sales made though the Internet or other remote
6    sales methods, performing an age verification through an
7    independent, third-party age verification service that
8    compares information available from public records to the
9    personal information entered by the person during the
10    ordering process that establishes the person is 18 years of
11    age or older.
12    (c) A person under 18 years of age shall not possess a
13vapor product.
 
14    Section 55. Penalties for distribution of vapor products
15to, and possession by, persons under 18 years of age.
16    (a) Any person who violates subsection (a) or (b) of
17Section 50 is guilty of a petty offense. For the first offense
18in a 24-month period, the person shall be fined $200 if his or
19her employer has a training program that facilitates compliance
20with minimum-age vapor product laws. For the second offense in
21a 24-month period, the person shall be fined $400 if his or her
22employer has a training program that facilitates compliance
23with minimum-age vapor products laws. For the third offense in
24a 24-month period, the person shall be fined $600 dollars if
25his or her employer has a training program that facilitates

 

 

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1compliance with minimum-age vapor product laws. For the fourth
2or subsequent offense in a 24-month period, the person shall be
3fined $800 if his or her employer has a training program that
4facilitates compliance with minimum-age vapor products laws.
5For the purposes of this subsection, the 24-month period shall
6begin with the person's first violation of the Act. The
7penalties in this subsection are in addition to any other
8penalties provided by law.
9    (a-5) Any retailer of vapor products who violates
10subsection (a) or (b) of Section 50 is guilty of a petty
11offense. For the first offense in a 24-month period, the
12retailer of vapor products shall be fined $200 it does not have
13a training program that facilitates compliance with
14minimum-age vapor product laws. For the second offense in a
1524-month period, the retailer of vapor products shall be fined
16$400 if it does not have a training program that facilitates
17compliance with minimum-age vapor products laws. For the third
18offense in a 24-month period, the retailer of vapor products
19shall be fined $600 dollars if it does not have a training
20program that facilitates compliance with minimum-age vapor
21product laws. For the fourth or subsequent offense in a
2224-month period, the retailer of vapor products shall be fined
23$800 if it does not have a training program that facilitates
24compliance with minimum-wage vapor products laws. For the
25purposes of this subsection, the 24-month period shall begin
26with the person's first violation of the Act. The penalties in

 

 

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1this subsection are in addition to any other penalties provided
2by law.
3    (a-10) A training program that facilitates compliance with
4minimum-age vapor products laws must include at least the
5following elements: (i) it must explain that only individuals
6displaying valid identification demonstrating that they are 18
7years of age or older shall be eligible to purchase vapor
8products; and (ii) it must explain where a clerk can check
9identification for a date of birth. The training may be
10conducted electronically. Each retailer of vapor products that
11has a training program shall require each employee who
12completes the training program to sign a form attesting that
13the employee has received and completed the vapor products
14training. The form shall be kept in the employee's file and may
15be used to provide proof of training.
16    (b) If a minor violates subsection (c) of Section 50, he or
17she is guilty of a petty offense and the court may impose a
18sentence of 25 hours of community service and a fine of $50 for
19a first violation.
20    (c) A second violation by a minor of subsection (c) of
21Section 50 that occurs within 12 months after the first
22violation is punishable by a fine of $75 and 50 hours of
23community service.
24    (d) A third or subsequent violation by a minor of
25subsection (c) of Section 50 that occurs within 12 months after
26the first violation is punishable by a $200 fine and 50 hours

 

 

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1of community service.
2    (e) Any second or subsequent violation not within the
312-month time period after the first violation is punishable as
4provided for a first violation.
5    (f) If a minor is convicted of or placed on supervision for
6a violation of subsection (c) of Section 50, the court may, in
7its discretion, and upon recommendation by the State's Attorney
8order that minor and his or her parents or legal guardian to
9attend a youth diversion program if that program is available
10in the jurisdiction where the offender resides. Attendance at a
11youth diversion program shall be time-credited against any
12community service time imposed for any first violation of
13subsection (c) of Section 50. In addition to any other penalty
14that the court may impose for a violation of subsection (c) of
15Section 50, the court, upon request by the State's Attorney,
16may in its discretion require the offender to remit a fee for
17his or her attendance at a youth diversion program.
18    For the purposes of this Section, a "youth diversion
19program" includes, but is not limited to, a seminar designed to
20educate a person on the physical and psychological effects of
21using nicotine products and the health consequences of using
22nicotine products that can be conducted with a locality's youth
23diversion program.
24    (g) All moneys collected as fines for violations of Section
25(a), (b), or (c) of Section 50 of this Act shall be distributed
26in the following manner:

 

 

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1        (1) one-half of each fine shall be distributed to the
2    unit of local government or other entity that successfully
3    prosecuted the offender; and
4        (2) one-half shall be remitted to the State to be used
5    for enforcement of this Act.
6    Any violation of subsection (a) or (b) of Section 50 shall
7be reported to the Department of Revenue within 7 business
8days.
 
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 65. 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 though the Internet or other
17    remote sales methods, performing an age verification
18    through an independent, third-party age verification
19    service that compares information available from public
20    records to the personal information entered by the person
21    during the ordering process that establishes the person is
22    18 years of age or older.
23    (d) A person under 18 years of age shall not possess an
24alternative nicotine product.
25(Source: P.A. 98-350, eff. 1-1-14; 99-496, eff. 6-1-16; revised
2610-25-16.)
 

 

 

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1    Section 99. Effective date. This Act takes effect January
21, 2018.".