Illinois General Assembly - Full Text of HB3146
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Full Text of HB3146  102nd General Assembly

HB3146 102ND GENERAL ASSEMBLY

  
  

 


 
102ND GENERAL ASSEMBLY
State of Illinois
2021 and 2022
HB3146

 

Introduced 2/19/2021, by Rep. Kathleen Willis

 

SYNOPSIS AS INTRODUCED:
 
New Act
30 ILCS 105/5.935 new

    Creates the Vapor Products Regulatory Act. Provides that on and after January 1, 2022 no person may engage in business as a retailer of vapor products in this State without first having obtained a vapor products retail license from the Department of Revenue. Provides that applications shall be made to the Department and submitted electronically with the name and address of the applicant, the address of the proposed retailer of vapor products in this State, and any other information the Department may lawfully require. Provides that the annual license fee shall be $150. Provides that specified felons, corporations, and persons are ineligible to receive a retailer's license under the Act. Provides that acting as a retailer without a license is a punishable offense. Requires retailers to keep records for at least 3 years. Prohibits the distribution of vapor products to, and possession by, persons under minimum legal age. Defines "person under minimum legal age". Provides penalties for distribution of vapor products to, and possession by, persons under minimum legal age. Amends the State Finance Act. Creates the Vapor Products Compliance Fund. Effective January 1, 2022.


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FISCAL NOTE ACT MAY APPLY

 

 

A BILL FOR

 

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1    AN ACT concerning regulation.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 1. Short title. This Act may be cited as the Vapor
5Products Regulatory Act.
 
6    Section 5. Definitions. In 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 minimum legal age is present. A
13facility or restricted area need not be permanently restricted
14to persons under minimum legal age to constitute an adult-only
15facility, provided that the operator ensures or has a
16reasonable basis to believe that no person under minimum legal
17age is present during the event or time period in question.
18    "Age restricted area" means a signed designated area in a
19retail establishment to which persons under minimum legal age
20are not permitted access unless accompanied by a parent or
21legal guardian.
22    "Department" means the Department of Revenue.
23    "Electronic nicotine delivery system" means a powered

 

 

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1vaporizer, and any component parts of a powered vaporizer
2intended to be used in the powered vaporizer, that converts
3e-liquid into vapor which is intended for inhalation.
4    "E-liquid" means a substance that contains nicotine and
5flavoring, substances, or other additives and is intended for
6use in a vapor product.
7    "Person" means any natural individual, firm, partnership,
8association, joint stock company, joint adventure, or public
9or private corporation, however formed, limited liability
10company, or a receiver, executor, administrator, trustee,
11conservator, or other representative appointed by order of any
12court.
13    "Person under minimum legal age" means a person who is not
14at least 21 years of age.
15    "Records" means all data maintained by the retailer of
16vapor products, including data on paper, microfilm,
17microfiche, or any type of machine-sensible data compilation.
18    "Retailer of vapor products" means any person engaged in
19the business of selling e-liquids or vapor products to
20consumers in this State for use or consumption and not for
21resale in any form, for valuable consideration, regardless of
22amount, quantity, or number of sales. "Retailer of vapor
23products" does not include any person or business subject to
24the Cigarette Tax Act, the Tobacco Products Tax Act of 1995,
25the Prevention of Tobacco Use By Persons under 21 Years of Age
26and Sale and Distribution of Tobacco Products Act, the Display

 

 

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1of Tobacco Products Act, or the Use of Medical Cannabis
2Program Act.
3    "Sale" means any transfer, exchange, or barter in any
4manner or by any means whatsoever for consideration and
5includes all sales made by persons.
6    "Vapor product" means an e-liquid or electronic nicotine
7delivery system as defined in this Act.
 
8    Section 10. Retailer's license; fee.
9    (a) On and after January 1, 2022 no person may engage in
10business as a retailer of vapor products in this State without
11first having obtained a vapor products retail license from the
12Department. Applications for a license shall be made to the
13Department, by electronic means, in a form prescribed by the
14Department. Each applicant for a license under this Section
15shall furnish to the Department, in an electronic format
16established by the Department, the following information:
17        (1) the name and address of the applicant;
18        (2) the address of the location at which the applicant
19    proposes to engage in business as a retailer of vapor
20    products in this State;
21        (3) a statement of compliance with applicable federal
22    requirements under 15 U.S.C. 376a for common carriers or
23    other delivery services regarding purchasers accepting a
24    delivery sale order from a person without: obtaining the
25    full name, birth date, and residential address of that

 

 

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1    person; and verifying that information using a
2    commercially available database or aggregate of databases
3    regularly used by government and businesses for age and
4    identity verification and authentication; and
5        (4) any other additional information as the Department
6    may lawfully require by its rules.
7    (b) The annual license fee payable to the Department for
8each retailer's license shall be $150. $75 of the fee shall be
9deposited into the Tax Compliance and Administration Fund and
10shall be used by the Department for the cost of administration
11and enforcement of this Act. $75 of the fee shall be deposited
12into the Vapor Products Compliance Fund and shall be used by
13the Department of Human Services for unannounced
14investigations of retailers licensed under this Act.
15    An applicant for a license shall pay the fee to the
16Department at the time of submitting its application for
17license to the Department. The Department shall require an
18applicant for a license under this Section to electronically
19file and pay the fee.
20    (c) The following are ineligible to receive a retailer's
21license under this Act:
22        (1) a person who has been convicted of a felony
23    related to the illegal transportation, sale, or
24    distribution of any age-restricted product or item under
25    any federal or State law, if the Department, after
26    investigation and a hearing if requested by the applicant,

 

 

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

 

 

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1commenced business, or whose license is suspended or revoked,
2shall immediately surrender the license to the Department. The
3Department shall not issue a license to a retailer of vapor
4products unless the retailer of vapor products is also validly
5registered under the Retailers' Occupation Tax Act. A person
6who obtains a license as a retailer of vapor products who
7ceases to do business as specified in the license, or who never
8commenced business, or whose license is suspended or revoked,
9shall immediately surrender the license to the Department.
10    (e) Any person aggrieved by any decision of the Department
11under this Section may, within 30 days after notice of the
12decision, protest and request a hearing. Upon receiving a
13request for hearing, the Department shall give written notice
14to the person requesting the hearing of the time and place
15fixed for the hearing and shall hold a hearing in conformity
16with the provisions of this Act and then issue its final
17administrative decision in the matter to that person. In
18absence of protest and request for a hearing within 30 days,
19the Department's decision shall become final without any
20further determination being made or notice given.
 
21    Section 20. Acting as a retailer of vapor products without
22a license; penalty. A person who knowingly acts as a retailer
23of vapor products in this State without first having obtained
24a license to do so in compliance with this Act is guilty of a
25Class A misdemeanor for the first offense and a Class 4 felony

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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1is not a person under minimum legal age:
2        (1) if the person appears to be under 27 years of age,
3    examining a government-issued photographic identification
4    that establishes that the person is not a person under
5    minimum legal age; or
6        (2) for sales made through the Internet or other
7    remote sales methods, performing an age verification
8    through an independent, third-party age verification
9    service that compares information available from public
10    records to the personal information entered by the person
11    during the ordering process that establishes that the
12    person is not a person under minimum legal age.
13    (c) A person under minimum legal age shall not possess a
14vapor product.
15    (d) The Department of Human Services shall administer a
16program to conduct unannounced investigations of Illinois
17retailers licensed under this Act to determine compliance with
18State and federal laws relating to the illegal sale of vapor
19products to persons under minimum legal age. The results of
20the unannounced investigations shall be reported to the
21Department of Human Services and the Department of Revenue.
 
22    Section 55. Penalties for distribution of vapor products
23to, and possession by, persons under minimum legal age.
24    (a) Any person who violates subsection (a) or (b) of
25Section 50 is guilty of a petty offense. For the first offense

 

 

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1in a 24-month period, the person shall be fined $200 if his or
2her employer has a training program that facilitates
3compliance with minimum-age vapor product laws. For the second
4offense in a 24-month period, the person shall be fined $400 if
5his or her employer has a training program that facilitates
6compliance with minimum-age vapor products laws. For the third
7offense in a 24-month period, the person shall be fined $600 if
8his or her employer has a training program that facilitates
9compliance with minimum-age vapor product laws. For the fourth
10or subsequent offense in a 24-month period, the person shall
11be fined $800 if his or her employer has a training program
12that facilitates compliance with minimum-age vapor products
13laws. For the purposes of this subsection, the 24-month period
14shall begin with the person's first violation of the Act. The
15penalties in this subsection are in addition to any other
16penalties provided by law.
17    (b) Any retailer of vapor products who violates subsection
18(a) or (b) of Section 50 is guilty of a petty offense. For the
19first offense in a 24-month period, the retailer of vapor
20products shall be fined $200 if it does not have a training
21program that facilitates compliance with minimum-age vapor
22product laws. For the second offense in a 24-month period, the
23retailer of vapor products shall be fined $400 if it does not
24have a training program that facilitates compliance with
25minimum-age vapor products laws. For the third offense in a
2624-month period, the retailer of vapor products shall be fined

 

 

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1$600 if it does not have a training program that facilitates
2compliance with minimum-age vapor product laws. For the fourth
3or subsequent offense in a 24-month period, the retailer of
4vapor products shall be fined $800 if it does not have a
5training program that facilitates compliance with minimum-wage
6vapor products laws. For the purposes of this subsection, the
724-month period shall begin with the person's first violation
8of the Act. The penalties in this subsection are in addition to
9any other penalties provided by law.
10    (c) A training program that facilitates compliance with
11minimum-age vapor products laws must include at least the
12following elements: (i) it must explain that only individuals
13displaying valid identification demonstrating that they are of
14legal age shall be eligible to purchase vapor products; and
15(ii) it must explain where a clerk can check identification
16for a date of birth. The training may be conducted
17electronically. Each retailer of vapor products that has a
18training program shall require each employee who completes the
19training program to sign a form attesting that the employee
20has received and completed the vapor products training. The
21form shall be kept in the employee's file and may be used to
22provide proof of training.
23    (d) If a person under minimum legal age violates
24subsection (c) of Section 50, he or she is guilty of a petty
25offense and the court may impose a sentence of 25 hours of
26community service and a fine of $50 for a first violation.

 

 

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1    A second violation of subsection (c) of Section 50 by a
2person under minimum legal age that occurs within 12 months
3after the first violation is punishable by a fine of $75 and 50
4hours of community service.
5    A third or subsequent violation by a person under minimum
6legal age of subsection (c) of Section 50 that occurs within 12
7months after the first violation is punishable by a $200 fine
8and 50 hours of community service.
9    Any second or subsequent violation not within the 12-month
10time period after the first violation is punishable as
11provided for a first violation.
12    (e) If a person under minimum legal age is convicted of or
13placed on supervision for a violation of subsection (c) of
14Section 50, the court may, in its discretion, and upon
15recommendation by the State's Attorney, order that person
16under minimum legal age and his or her parents or legal
17guardian to attend a youth diversion program if that program
18is available in the jurisdiction where the offender resides.
19Attendance at a youth diversion program shall be time-credited
20against any community service time imposed for any first
21violation of subsection (c) of Section 50. In addition to any
22other penalty that the court may impose for a violation of
23subsection (c) of Section 50, the court, upon request by the
24State's Attorney, may in its discretion require the offender
25to remit a fee for his or her attendance at a youth diversion
26program.

 

 

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1    For the purposes of this Section, a "youth diversion
2program" includes, but is not limited to, a seminar designed
3to educate a person on the physical and psychological effects
4of using nicotine products and the health consequences of
5using nicotine products that can be conducted with a
6locality's youth diversion program.
7    (g) All moneys collected as fines for violations of
8Section (a), (b), or (c) of Section 50 of this Act shall be
9distributed in the following manner:
10        (1) one-half of each fine shall be distributed to the
11    unit of local government or other entity that successfully
12    prosecuted the offender; and
13        (2) one-half shall be remitted to the State to be used
14    for enforcement of this Act.
15    Any violation of subsection (a) or (b) of Section 50 shall
16be reported to the Department within 7 business days.
 
17    Section 60. Display of vapor products.
18    (a) All vapor products must be sold from behind the
19counter or displayed in an age restricted area or sealed
20display case.
21    (b) The restrictions in this Section do not apply to an
22adult-only facility.
23    (c) The restrictions in this Section do not apply to a
24retail store that (i) derives at least 90% of its revenue from
25tobacco, tobacco related products, or vapor products; (ii)

 

 

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1does not permit persons under minimum legal age to enter the
2premises unless accompanied by a parent or legal guardian;
3(iii) posts a sign on the main entranceway stating that
4persons under minimum legal age are prohibited from entering
5unless accompanied by a parent or legal guardian; and (iv) is
6subject to the Cigarette Tax Act, the Tobacco Products Tax Act
7of 1995, the Prevention of Tobacco Use By Persons under 21
8Years of Age and Sale and Distribution of Tobacco Products
9Act, or the Display of Tobacco Products Act.
10    (d) A violation of this Section is a petty offense for
11which a court shall impose a fine of not less than $100 nor
12more than $1,000.
 
13    Section 900. The State Finance Act is amended by adding
14Section 5.935 as follows:
 
15    (30 ILCS 105/5.935 new)
16    Sec. 5.935. The Vapor Products Compliance Fund.
 
17    Section 999. Effective date. This Act takes effect January
181, 2022.