SB0207 104TH GENERAL ASSEMBLY

LRB104 03204 RPS 13225 b

104TH GENERAL ASSEMBLY
State of Illinois
2025 and 2026
SB0207

Introduced 1/22/2025, by Sen. Sally J. Turner

SYNOPSIS AS INTRODUCED:

235 ILCS 5/6-4	from Ch. 43, par. 121
235 ILCS 5/6-5	from Ch. 43, par. 122

Amends the Liquor Control Act of 1934. Provides that an immediate family member of a retail licensee may be issued a wine manufacturer's license if the family member is not named on the retail license and does not have any ownership or other interest in that family member's licensed business. Provides that an individual shall not be deemed to have an ownership or other interest in the licensed business of a spouse if each spouse's ownership is independent and each spouse does not exercise control over or have a financial interest in the other's operations in a manner inconsistent with this Act. Provides that a holder of a wine manufacturer license and a holder of a retail license who are married shall not be deemed to be accepting, receiving, borrowing, or exchanging anything of value solely based on their marital status so long as (i) each spouse independently operates his or her licensed business separately in compliance with the 3-tier regulatory system, (ii) each spouse's ownership is independent, and (iii) neither spouse exercises control or has a financial interest over the other's operations in a manner inconsistent with the Act or the 3-tier regulatory system. Effective immediately.

A BILL FOR

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 Sections 6-4 and 6-5 as follows:

(235 ILCS 5/6-4) (from Ch. 43, par. 121)

Sec. 6-4. (a) No person licensed by any licensing authority as a distiller, or a wine manufacturer, or any subsidiary or affiliate thereof, or any officer, associate, member, partner, representative, employee, agent or shareholder owning more than 5% of the outstanding shares of such person shall be issued an importing distributor's or distributor's license, nor shall any person licensed by any licensing authority as an importing distributor, distributor or retailer, or any subsidiary or affiliate thereof, or any officer or associate, member, partner, representative, employee, agent or shareholder owning more than 5% of the outstanding shares of such person be issued a distiller's license, a craft distiller's license, or a wine manufacturer's license; and no person or persons licensed as a distiller, craft distiller, class 1 craft distiller, or class 2 craft distiller by any licensing authority shall have any interest, directly or indirectly, with such distributor or importing distributor. However, an immediate family member of a retail licensee may be issued a wine manufacturer's license if the family member is not named on the retail license and does not have any ownership or other interest in that other family member's business for which the wine manufacturer license was issued. An individual shall not be deemed to have an ownership or other interest in the licensed business of a spouse if each spouse's ownership is independent and each spouse does not exercise control over or have a financial interest in the other's operations in a manner inconsistent with this Act.

However, an importing distributor or distributor, which on January 1, 1985 is owned by a brewer, or any subsidiary or affiliate thereof or any officer, associate, member, partner, representative, employee, agent or shareholder owning more than 5% of the outstanding shares of the importing distributor or distributor referred to in this paragraph, may own or acquire an ownership interest of more than 5% of the outstanding shares of a wine manufacturer and be issued a wine manufacturer's license by any licensing authority.

(b) The foregoing provisions shall not apply to any person licensed by any licensing authority as a distiller or wine manufacturer, or to any subsidiary or affiliate of any distiller or wine manufacturer who shall have been heretofore licensed by the State Commission as either an importing distributor or distributor during the annual licensing period expiring June 30, 1947, and shall actually have made sales regularly to retailers.

(c) Provided, however, that in such instances where a distributor's or importing distributor's license has been issued to any distiller or wine manufacturer or to any subsidiary or affiliate of any distiller or wine manufacturer who has, during the licensing period ending June 30, 1947, sold or distributed as such licensed distributor or importing distributor alcoholic liquors and wines to retailers, such distiller or wine manufacturer or any subsidiary or affiliate of any distiller or wine manufacturer holding such distributor's or importing distributor's license may continue to sell or distribute to retailers such alcoholic liquors and wines which are manufactured, distilled, processed or marketed by distillers and wine manufacturers whose products it sold or distributed to retailers during the whole or any part of its licensing periods; and such additional brands and additional products may be added to the line of such distributor or importing distributor, provided, that such brands and such products were not sold or distributed by any distributor or importing distributor licensed by the State Commission during the licensing period ending June 30, 1947, but can not sell or distribute to retailers any other alcoholic liquors or wines.

(d) It shall be unlawful for any distiller licensed anywhere to have any stock ownership or interest in any distributor's or importing distributor's license wherein any other person has an interest therein who is not a distiller and does not own more than 5% of any stock in any distillery. Nothing herein contained shall apply to such distillers or their subsidiaries or affiliates, who had a distributor's or importing distributor's license during the licensing period ending June 30, 1947, which license was owned in whole by such distiller, or subsidiaries or affiliates of such distiller.

(e) Any person licensed as a brewer, class 1 brewer, or class 2 brewer shall be permitted to sell on the licensed premises to non-licensees for on or off-premises consumption for the premises in which he or she actually conducts such business: (i) beer manufactured by the brewer, class 1 brewer, class 2 brewer, or class 3 brewer; (ii) beer manufactured by any other brewer, class 1 brewer, class 2 brewer, or class 3 brewer; and (iii) cider or mead. Any person licensed as a class 3 brewer shall be permitted to sell on the licensed premises to non-licensees for on or off premises consumption for the premises in which he or she actually conducts such business: (i) beer manufactured by the class 3 brewer on the premises; (ii) beer manufactured by any other brewer, class 1 brewer, class 2 brewer, or class 3 brewer; and (iii) cider, wine, and spirits. All products sold under this subsection that are not manufactured on premises must be purchased through a licensed distributor, importing distributor, or manufacturer with self-distribution privileges. Such sales shall be limited to on-premises, in-person sales only, for lawful consumption on or off premises. Such authorization shall be considered a privilege granted by the brewer license and, other than a manufacturer of beer as stated above, no manufacturer or distributor or importing distributor, excluding airplane licensees exercising powers provided in paragraph (i) of Section 5-1 of this Act, or any subsidiary or affiliate thereof, or any officer, associate, member, partner, representative, employee or agent, or shareholder shall be issued a retailer's license, nor shall any person having a retailer's license, excluding airplane licensees exercising powers provided in paragraph (i) of Section 5-1 of this Act, or any subsidiary or affiliate thereof, or any officer, associate, member, partner, representative or agent, or shareholder be issued a manufacturer's license or importing distributor's license.

A manufacturer of beer that imports or transfers beer into this State must comply with Sections 6-8 and 8-1 of this Act.

A person who holds a class 2 brewer license and is authorized by this Section to sell beer to non-licensees shall not sell beer to non-licensees from more than 3 total brewer or commonly owned brew pub licensed locations in this State. The class 2 brewer shall designate to the State Commission the brewer or brew pub locations from which it will sell beer to non-licensees.

A person licensed as a class 1 craft distiller or a class 2 craft distiller, including a person who holds more than one class 1 craft distiller or class 2 craft distiller license, not affiliated with any other person manufacturing spirits may be authorized by the State Commission to sell (1) up to 5,000 gallons of spirits produced by the person to non-licensees for on or off-premises consumption for the premises in which he or she actually conducts business permitting only the retail sale of spirits manufactured at such premises and (2) vermouth purchased through a licensed distributor for on-premises consumption. Such sales shall be limited to on-premises, in-person sales only, for lawful consumption on or off premises, and such authorization shall be considered a privilege granted by the class 1 craft distiller or class 2 craft distiller license. A class 1 craft distiller or class 2 craft distiller licensed for retail sale shall secure liquor liability insurance coverage in an amount at least equal to the maximum liability amounts set forth in subsection (a) of Section 6-21 of this Act.

A class 1 craft distiller or class 2 craft distiller license holder shall not deliver any alcoholic liquor to any non-licensee off the licensed premises. A class 1 craft distiller or class 2 craft distiller shall affirm in its annual license application that it does not produce more than 50,000 or 100,000 gallons of distilled spirits annually, whichever is applicable, and that the craft distiller does not sell more than 5,000 gallons of spirits to non-licensees for on or off-premises consumption. In the application, which shall be sworn under penalty of perjury, the class 1 craft distiller or class 2 craft distiller shall state the volume of production and sales for each year since the class 1 craft distiller's or class 2 craft distiller's establishment.

A person who holds a class 1 craft distiller or class 2 craft distiller license and is authorized by this Section to sell spirits to non-licensees shall not sell spirits to non-licensees from more than 3 total distillery or commonly owned distilling pub licensed locations in this State. The class 1 craft distiller or class 2 craft distiller shall designate to the State Commission the distillery or distilling pub locations from which it will sell spirits to non-licensees.

(f) (Blank).

(g) Notwithstanding any of the foregoing prohibitions, a limited wine manufacturer may sell at retail at its manufacturing site for on or off premises consumption and may sell to distributors. A limited wine manufacturer licensee shall secure liquor liability insurance coverage in an amount at least equal to the maximum liability amounts set forth in subsection (a) of Section 6-21 of this Act.

(h) The changes made to this Section by Public Act 99-47 shall not diminish or impair the rights of any person, whether a distiller, wine manufacturer, agent, or affiliate thereof, who requested in writing and submitted documentation to the State Commission on or before February 18, 2015 to be approved for a retail license pursuant to what has heretofore been subsection (f); provided that, on or before that date, the State Commission considered the intent of that person to apply for the retail license under that subsection and, by recorded vote, the State Commission approved a resolution indicating that such a license application could be lawfully approved upon that person duly filing a formal application for a retail license and if that person, within 90 days of the State Commission appearance and recorded vote, first filed an application with the appropriate local commission, which application was subsequently approved by the appropriate local commission prior to consideration by the State Commission of that person's application for a retail license. It is further provided that the State Commission may approve the person's application for a retail license or renewals of such license if such person continues to diligently adhere to all representations made in writing to the State Commission on or before February 18, 2015, or thereafter, or in the affidavit filed by that person with the State Commission to support the issuance of a retail license and to abide by all applicable laws and duly adopted rules.

(i) Notwithstanding any other provision of this Act, the common ownership of a brewery, winery, or a distillery shall not authorize the grant of and aggregation of retail privileges granted to any person or licensees in subsection (e). Any person or licensee with common ownership in a brewery, winery, or a distillery shall be limited to the retail privileges granted to only one of the commonly owned brewery, winery, or distillery. The State Commission is hereby authorized to restrict the locations of any commonly owned brewery, winery, or distillery to prevent the expansion of retail privileges, including, without limitation, restricting a commonly owned brewery, winery, or distillery from operating in adjacent licensed premises or restricting self-distribution privileges.

(Source: P.A. 101-81, eff. 7-12-19; 101-482, eff. 8-23-19; 101-615, eff. 12-20-19; 102-442, eff. 8-20-21.)

(235 ILCS 5/6-5) (from Ch. 43, par. 122)

Sec. 6-5. Except as otherwise provided in this Section, it is unlawful for any person having a retailer's license or any officer, associate, member, representative or agent of such licensee to accept, receive or borrow money, or anything else of value, or accept or receive credit (other than merchandising credit in the ordinary course of business for a period not to exceed 30 days) directly or indirectly from any manufacturer, importing distributor or distributor of alcoholic liquor, or from any person connected with or in any way representing, or from any member of the family of, such manufacturer, importing distributor, distributor or wholesaler, or from any stockholders in any corporation engaged in manufacturing, distributing or wholesaling of such liquor, or from any officer, manager, agent or representative of said manufacturer. Except as provided below, it is unlawful for any manufacturer or distributor or importing distributor to give or lend money or anything of value, or otherwise loan or extend credit (except such merchandising credit) directly or indirectly to any retail licensee or to the manager, representative, agent, officer or director of such licensee. A manufacturer, distributor or importing distributor may furnish free advertising, posters, signs, brochures, hand-outs, or other promotional devices or materials to any unit of government owning or operating any auditorium, exhibition hall, recreation facility or other similar facility holding a retailer's license, provided that the primary purpose of such promotional devices or materials is to promote public events being held at such facility. For the purposes of this Section, a holder of a wine manufacturer license and a holder of a retail license who are married shall not be deemed to be accepting, receiving, borrowing, or exchanging anything of value solely based on his or her marital status so long as (i) each spouse independently operates his or her licensed business separately in compliance with the 3-tier regulatory system, (ii) each spouse's ownership is independent, and (iii) neither spouse exercises control over or has a financial interest in the other's operations in a manner inconsistent with this Act or the 3-tier regulatory system. A unit of government owning or operating such a facility holding a retailer's license may accept such promotional devices or materials designed primarily to promote public events held at the facility. No retail licensee delinquent beyond the 30 day period specified in this Section shall solicit, accept or receive credit, purchase or acquire alcoholic liquors, directly or indirectly from any other licensee, and no manufacturer, distributor or importing distributor shall knowingly grant or extend credit, sell, furnish or supply alcoholic liquors to any such delinquent retail licensee; provided that the purchase price of all beer sold to a retail licensee shall be paid by the retail licensee in cash on or before delivery of the beer, and unless the purchase price payable by a retail licensee for beer sold to him in returnable bottles shall expressly include a charge for the bottles and cases, the retail licensee shall, on or before delivery of such beer, pay the seller in cash a deposit in an amount not less than the deposit required to be paid by the distributor to the brewer; but where the brewer sells direct to the retailer, the deposit shall be an amount no less than that required by the brewer from his own distributors; and provided further, that in no instance shall this deposit be less than 50 cents for each case of beer in pint or smaller bottles and 60 cents for each case of beer in quart or half-gallon bottles; and provided further, that the purchase price of all beer sold to an importing distributor or distributor shall be paid by such importing distributor or distributor in cash on or before the 15th day (Sundays and holidays excepted) after delivery of such beer to such purchaser; and unless the purchase price payable by such importing distributor or distributor for beer sold in returnable bottles and cases shall expressly include a charge for the bottles and cases, such importing distributor or distributor shall, on or before the 15th day (Sundays and holidays excepted) after delivery of such beer to such purchaser, pay the seller in cash a required amount as a deposit to assure the return of such bottles and cases. Nothing herein contained shall prohibit any licensee from crediting or refunding to a purchaser the actual amount of money paid for bottles, cases, kegs or barrels returned by the purchaser to the seller or paid by the purchaser as a deposit on bottles, cases, kegs or barrels, when such containers or packages are returned to the seller. Nothing herein contained shall prohibit any manufacturer, importing distributor or distributor from extending usual and customary credit for alcoholic liquor sold to customers or purchasers who live in or maintain places of business outside of this State when such alcoholic liquor is actually transported and delivered to such points outside of this State.

A manufacturer, distributor, or importing distributor may furnish free social media advertising to a retail licensee if the social media advertisement does not contain the retail price of any alcoholic liquor and the social media advertisement complies with any applicable rules or regulations issued by the Alcohol and Tobacco Tax and Trade Bureau of the United States Department of the Treasury. A manufacturer, distributor, or importing distributor may list the names of one or more unaffiliated retailers in the advertisement of alcoholic liquor through social media. Nothing in this Section shall prohibit a retailer from communicating with a manufacturer, distributor, or importing distributor on social media or sharing media on the social media of a manufacturer, distributor, or importing distributor. A retailer may request free social media advertising from a manufacturer, distributor, or importing distributor. Nothing in this Section shall prohibit a manufacturer, distributor, or importing distributor from sharing, reposting, or otherwise forwarding a social media post by a retail licensee, so long as the sharing, reposting, or forwarding of the social media post does not contain the retail price of any alcoholic liquor. No manufacturer, distributor, or importing distributor shall pay or reimburse a retailer, directly or indirectly, for any social media advertising services, except as specifically permitted in this Act. No retailer shall accept any payment or reimbursement, directly or indirectly, for any social media advertising services offered by a manufacturer, distributor, or importing distributor, except as specifically permitted in this Act. For the purposes of this Section, "social media" means a service, platform, or site where users communicate with one another and share media, such as pictures, videos, music, and blogs, with other users free of charge.

No right of action shall exist for the collection of any claim based upon credit extended to a distributor, importing distributor or retail licensee contrary to the provisions of this Section.

Every manufacturer, importing distributor and distributor shall submit or cause to be submitted, to the State Commission, not later than Thursday of each calendar week, a verified written list of the names and respective addresses of each retail licensee purchasing spirits or wine from such manufacturer, importing distributor or distributor who, on the first business day of that calendar week, was delinquent beyond the above mentioned permissible merchandising credit period of 30 days; or, if such is the fact, a verified written statement that no retail licensee purchasing spirits or wine was then delinquent beyond such permissible merchandising credit period of 30 days.

Every manufacturer, importing distributor and distributor shall submit or cause to be submitted, to the State Commission, a verified written list of the names and respective addresses of each previously reported delinquent retail licensee who has cured such delinquency by payment, which list shall be submitted not later than the close of the second full business day following the day such delinquency was so cured.

The written list of delinquent retail licensees shall be developed, administered, and maintained only by the State Commission. The State Commission shall notify each retail licensee that it has been placed on the delinquency list. Determinations of delinquency or nondelinquency shall be made only by the State Commission.

Such written verified reports required to be submitted by this Section shall be posted by the State Commission in each of its offices in places available for public inspection not later than the day following receipt thereof by the State Commission. The reports so posted shall constitute notice to every manufacturer, importing distributor and distributor of the information contained therein. Actual notice to manufacturers, importing distributors and distributors of the information contained in any such posted reports, however received, shall also constitute notice of such information.

The 30-day merchandising credit period allowed by this Section shall commence with the day immediately following the date of invoice and shall include all successive days including Sundays and holidays to and including the 30th successive day.

In addition to other methods allowed by law, payment by check or credit card during the period for which merchandising credit may be extended under the provisions of this Section shall be considered payment. All checks received in payment for alcoholic liquor shall be promptly deposited for collection. A post dated check or a check dishonored on presentation for payment shall not be deemed payment.

A credit card payment in dispute by a retailer shall not be deemed payment, and the debt uncured for merchandising credit shall be reported as delinquent. Nothing in this Section shall prevent a distributor, self-distributing manufacturer, or importing distributor from assessing a usual and customary transaction fee representative of the actual finance charges incurred for processing a credit card payment. This transaction fee shall be disclosed on the invoice. It shall be considered unlawful for a distributor, importing distributor, or self-distributing manufacturer to waive finance charges for retailers.

A retail licensee shall not be deemed to be delinquent in payment for any alleged sale to him of alcoholic liquor when there exists a bona fide dispute between such retailer and a manufacturer, importing distributor or distributor with respect to the amount of indebtedness existing because of such alleged sale. A retail licensee shall not be deemed to be delinquent under this provision and 11 Ill. Adm. Code 100.90 until 30 days after the date on which the region in which the retail licensee is located enters Phase 4 of the Governor's Restore Illinois Plan as issued on May 5, 2020.

A delinquent retail licensee who engages in the retail liquor business at 2 or more locations shall be deemed to be delinquent with respect to each such location.

The license of any person who violates any provision of this Section shall be subject to suspension or revocation in the manner provided by this Act.

If any part or provision of this Article or the application thereof to any person or circumstances shall be adjudged invalid by a court of competent jurisdiction, such judgment shall be confined by its operation to the controversy in which it was mentioned and shall not affect or invalidate the remainder of this Article or the application thereof to any other person or circumstance and to this and the provisions of this Article are declared severable.

(Source: P.A. 102-8, eff. 6-2-21; 102-442, eff. 1-1-22; 102-813, eff. 5-13-22; 103-363, eff. 7-28-23.)

Section 99. Effective date. This Act takes effect upon becoming law.