Rep. Kathleen Willis

Filed: 4/13/2018

 

 


 

 


 
10000HB3877ham002LRB100 06224 HLH 37922 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 Financial and
7Professional Regulation.
8    "Electronic nicotine delivery system" means a powered
9vaporizer, and any component parts of a powered vaporizer
10intended to be used in the powered vaporizer, that converts
11e-liquid into vapor which is intended for inhalation.
12    "E-liquid" means a substance that contains nicotine and
13flavoring, substances, or other additives and is intended for
14use in a vapor product.
15    "Minor" means a person under 18 years of age.
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;
3        (3) whether the applicant will engage in the sale of
4    e-liquids, electronic nicotine delivery systems, or both;
5    and
6        (4) any other additional information as the Department
7    may lawfully require by its rules.
8    (b) The annual license fee payable to the Department for
9each retailer's license shall be $75. The fee shall be
10deposited into the Vapor Products Compliance Fund and shall be
11used for the cost of enforcement of 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 premises to
7determine whether any of the provisions of this Act are being
8violated. If the agent or employee is denied free access or is
9hindered or interfered with in making the examination as
10provided in this Section, the license of the retailer of vapor
11products shall be subject to suspension or revocation by the
12Department.
 
13    Section 50. Distribution of vapor products to, and
14possession by, minors prohibited.
15    (a) A person, either directly or indirectly by an agent or
16employee, or by a vending machine owned by the person or
17located in the person's establishment, may not sell, offer for
18sale, give, or furnish any vapor product to a minor.
19    (b) Before selling, offering for sale, giving, or
20furnishing a vapor product to another person, the person
21selling, offering for sale, giving, or furnishing the vapor
22product shall verify that the person is at least 18 years of
23age by:
24        (1) examining from any person that appears to be under
25    27 years of age a government-issued photographic

 

 

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1    identification that establishes the person is at least 18
2    years of age; or
3        (2) for sales made through the Internet or other remote
4    sales methods, performing an age verification through an
5    independent, third-party age verification service that
6    compares information available from public records to the
7    personal information entered by the person during the
8    ordering process that establishes the person is 18 years of
9    age or older.
10    (c) A minor shall not possess a vapor product.
 
11    Section 55. Penalties for distribution of vapor products
12to, and possession by, minors.
13    (a) Any person who violates subsection (a) or (b) of
14Section 50 is guilty of a petty offense. For the first offense
15in a 24-month period, the person shall be fined $200 if his or
16her employer has a training program that facilitates compliance
17with minimum-age vapor product laws. For the second offense in
18a 24-month period, the person shall be fined $400 if his or her
19employer has a training program that facilitates compliance
20with minimum-age vapor products laws. For the third offense in
21a 24-month period, the person shall be fined $600 if his or her
22employer has a training program that facilitates compliance
23with minimum-age vapor product laws. For the fourth or
24subsequent offense in a 24-month period, the person shall be
25fined $800 if his or her employer has a training program that

 

 

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1facilitates compliance with minimum-age vapor products laws.
2For the purposes of this subsection, the 24-month period shall
3begin with the person's first violation of the Act. The
4penalties in this subsection are in addition to any other
5penalties provided by law.
6    (a-5) Any retailer of vapor products who violates
7subsection (a) or (b) of Section 50 is guilty of a petty
8offense. For the first offense in a 24-month period, the
9retailer of vapor products shall be fined $200 it does not have
10a training program that facilitates compliance with
11minimum-age vapor product laws. For the second offense in a
1224-month period, the retailer of vapor products shall be fined
13$400 if it does not have a training program that facilitates
14compliance with minimum-age vapor products laws. For the third
15offense in a 24-month period, the retailer of vapor products
16shall be fined $600 if it does not have a training program that
17facilitates compliance with minimum-age vapor product laws.
18For the fourth or subsequent offense in a 24-month period, the
19retailer of vapor products shall be fined $800 if it does not
20have a training program that facilitates compliance with
21minimum-wage vapor products laws. For the purposes of this
22subsection, the 24-month period shall begin with the person's
23first violation of the Act. The penalties in this subsection
24are in addition to any other penalties provided by law.
25    (a-10) A training program that facilitates compliance with
26minimum-age vapor products laws must include at least the

 

 

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1following elements: (i) it must explain that only individuals
2displaying valid identification demonstrating that they are 18
3years of age or older shall be eligible to purchase vapor
4products; and (ii) it must explain where a clerk can check
5identification for a date of birth. The training may be
6conducted electronically. Each retailer of vapor products that
7has a training program shall require each employee who
8completes the training program to sign a form attesting that
9the employee has received and completed the vapor products
10training. The form shall be kept in the employee's file and may
11be used to provide proof of training.
12    (b) If a minor violates subsection (c) of Section 50, he or
13she is guilty of a petty offense and the court may impose a
14sentence of 25 hours of community service and a fine of $50 for
15a first violation.
16    (c) A second violation by a minor of subsection (c) of
17Section 50 that occurs within 12 months after the first
18violation is punishable by a fine of $75 and 50 hours of
19community service.
20    (d) A third or subsequent violation by a minor of
21subsection (c) of Section 50 that occurs within 12 months after
22the first violation is punishable by a $200 fine and 50 hours
23of community service.
24    (e) Any second or subsequent violation not within the
2512-month time period after the first violation is punishable as
26provided for a first violation.

 

 

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1    (f) If a minor is convicted of or placed on supervision for
2a violation of subsection (c) of Section 50, the court may, in
3its discretion, and upon recommendation by the State's Attorney
4order that minor and his or her parents or legal guardian to
5attend a youth diversion program if that program is available
6in the jurisdiction where the offender resides. Attendance at a
7youth diversion program shall be time-credited against any
8community service time imposed for any first violation of
9subsection (c) of Section 50. In addition to any other penalty
10that the court may impose for a violation of subsection (c) of
11Section 50, the court, upon request by the State's Attorney,
12may in its discretion require the offender to remit a fee for
13his or her attendance at a youth diversion program.
14    For the purposes of this Section, a "youth diversion
15program" includes, but is not limited to, a seminar designed to
16educate a person on the physical and psychological effects of
17using nicotine products and the health consequences of using
18nicotine products that can be conducted with a locality's youth
19diversion program.
20    (g) All moneys collected as fines for violations of Section
21(a), (b), or (c) of Section 50 of this Act shall be distributed
22in the following manner:
23        (1) one-half of each fine shall be distributed to the
24    unit of local government or other entity that successfully
25    prosecuted the offender; and
26        (2) one-half shall be remitted to the State to be used

 

 

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1    for enforcement of this Act.
2    Any violation of subsection (a) or (b) of Section 50 shall
3be reported to the Department within 7 business days.
 
4    Section 60. Display of vapor products.
5    (a) Vapor product displays. All vapor products must be sold
6from behind the counter or in an age restricted area or in a
7sealed display case.
8    (b) The restrictions in this Section do not apply to an
9adult-only facility.
10    (c) The restrictions in this Section do not apply to a
11retail store that (i) derives at least 90% of its revenue from
12tobacco, tobacco related products, or vapor products; (ii) does
13not permit persons under the age of 18 to enter the premises
14unless accompanied by a parent or legal guardian; (iii) posts a
15sign on the main entrance way stating that persons under the
16age of 18 are prohibited from entering unless accompanied by a
17parent or legal guardian; or (iv) is subject to the Cigarette
18Tax Act, the Tobacco Products Tax Act of 1995, the Prevention
19of Tobacco Use By Minors and Sale and Distribution of Tobacco
20Products Act, or the Display of Tobacco Products Act.
21    (d) A violation of this Section is a petty offense for
22which the court shall impose a fine of not less than $100 nor
23more than $1,000.
 
24    Section 900. The Prevention of Tobacco Use by Minors and

 

 

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1Sale and Distribution of Tobacco Products Act is amended by
2changing Section 1.5 as follows:
 
3    (720 ILCS 675/1.5)
4    Sec. 1.5. Distribution of alternative nicotine products to
5persons under 18 years of age prohibited.
6    (a) For the purposes of this Section, "alternative nicotine
7product" means a product or device not consisting of or
8containing tobacco that provides for the ingestion into the
9body of nicotine, whether by chewing, smoking, absorbing,
10dissolving, inhaling, snorting, sniffing, or by any other
11means. "Alternative nicotine product" excludes cigarettes,
12smokeless tobacco, or other tobacco products as these terms are
13defined in Section 1 of this Act, vapor products as defined
14under Section 5 of the Vapor Products Regulatory Act, and any
15product approved by the United States Food and Drug
16Administration as a non-tobacco product for sale as a tobacco
17cessation product, as a tobacco dependence product, or for
18other medical purposes, and is being marketed and sold solely
19for that approved purpose.
20    (b) A person, either directly or indirectly by an agent or
21employee, or by a vending machine owned by the person or
22located in the person's establishment, may not sell, offer for
23sale, give, or furnish any alternative nicotine product, or any
24cartridge or component of an alternative nicotine product, to a
25person under 18 years of age.

 

 

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1    (c) Before selling, offering for sale, giving, or
2furnishing an alternative nicotine product, or any cartridge or
3component of an alternative nicotine product, to another
4person, the person selling, offering for sale, giving, or
5furnishing the alternative nicotine product shall verify that
6the person is at least 18 years of age by:
7        (1) examining from any person that appears to be under
8    27 years of age a government-issued photographic
9    identification that establishes the person is at least 18
10    years of age or
11        (2) for sales made through the Internet or other remote
12    sales methods, performing an age verification through an
13    independent, third-party age verification service that
14    compares information available from public records to the
15    personal information entered by the person during the
16    ordering process that establishes the person is 18 years of
17    age or older.
18    (d) A person under 18 years of age shall not possess an
19alternative nicotine product.
20(Source: P.A. 99-496, eff. 6-1-16; 100-201, eff. 8-18-17.)
 
21    Section 905. The State Finance Act is amended by adding
22Section 5.886 as follows:
 
23    (30 ILCS 105/5.886 new)
24    Sec. 5.886. The Vapor Products Compliance Fund.
 

 

 

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1    Section 999. Effective date. This Act takes effect January
21, 2019.".