Illinois General Assembly - Full Text of HB1573
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Full Text of HB1573  98th General Assembly


Sen. Antonio Muñoz

Filed: 5/3/2013





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2    AMENDMENT NO. ______. Amend House Bill 1573 by replacing
3everything after the enacting clause with the following:
4    "Section 5. The Liquor Control Act of 1934 is amended by
5changing Section 3-12 as follows:
6    (235 ILCS 5/3-12)
7    Sec. 3-12. Powers and duties of State Commission.
8    (a) The State commission shall have the following powers,
9functions and duties:
10        (1) To receive applications and to issue licenses to
11    manufacturers, foreign importers, importing distributors,
12    distributors, non-resident dealers, on premise consumption
13    retailers, off premise sale retailers, special event
14    retailer licensees, special use permit licenses, auction
15    liquor licenses, brew pubs, caterer retailers,
16    non-beverage users, railroads, including owners and



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1    lessees of sleeping, dining and cafe cars, airplanes,
2    boats, brokers, and wine maker's premises licensees in
3    accordance with the provisions of this Act, and to suspend
4    or revoke such licenses upon the State commission's
5    determination, upon notice after hearing, that a licensee
6    has violated any provision of this Act or any rule or
7    regulation issued pursuant thereto and in effect for 30
8    days prior to such violation. Except in the case of an
9    action taken pursuant to a violation of Section 6-3, 6-5,
10    or 6-9, any action by the State Commission to suspend or
11    revoke a licensee's license may be limited to the license
12    for the specific premises where the violation occurred.
13        In lieu of suspending or revoking a license, the
14    commission may impose a fine, upon the State commission's
15    determination and notice after hearing, that a licensee has
16    violated any provision of this Act or any rule or
17    regulation issued pursuant thereto and in effect for 30
18    days prior to such violation. The fine imposed under this
19    paragraph may not exceed $500 for each violation. Each day
20    that the activity, which gave rise to the original fine,
21    continues is a separate violation. The maximum fine that
22    may be levied against any licensee, for the period of the
23    license, shall not exceed $20,000. The maximum penalty that
24    may be imposed on a licensee for selling a bottle of
25    alcoholic liquor with a foreign object in it or serving
26    from a bottle of alcoholic liquor with a foreign object in



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1    it shall be the destruction of that bottle of alcoholic
2    liquor for the first 10 bottles so sold or served from by
3    the licensee. For the eleventh bottle of alcoholic liquor
4    and for each third bottle thereafter sold or served from by
5    the licensee with a foreign object in it, the maximum
6    penalty that may be imposed on the licensee is the
7    destruction of the bottle of alcoholic liquor and a fine of
8    up to $50.
9        (2) To adopt such rules and regulations consistent with
10    the provisions of this Act which shall be necessary to
11    carry on its functions and duties to the end that the
12    health, safety and welfare of the People of the State of
13    Illinois shall be protected and temperance in the
14    consumption of alcoholic liquors shall be fostered and
15    promoted and to distribute copies of such rules and
16    regulations to all licensees affected thereby.
17        (3) To call upon other administrative departments of
18    the State, county and municipal governments, county and
19    city police departments and upon prosecuting officers for
20    such information and assistance as it deems necessary in
21    the performance of its duties.
22        (4) To recommend to local commissioners rules and
23    regulations, not inconsistent with the law, for the
24    distribution and sale of alcoholic liquors throughout the
25    State.
26        (5) To inspect, or cause to be inspected, any premises



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1    in this State where alcoholic liquors are manufactured,
2    distributed, warehoused, or sold.
3        (5.1) Upon receipt of a complaint or upon having
4    knowledge that any person is engaged in business as a
5    manufacturer, importing distributor, distributor, or
6    retailer without a license or valid license, to notify the
7    local liquor authority, file a complaint with the State's
8    Attorney's Office of the county where the incident
9    occurred, or initiate an investigation with the
10    appropriate law enforcement officials.
11        (5.2) To issue a cease and desist notice to persons
12    shipping alcoholic liquor into this State from a point
13    outside of this State if the shipment is in violation of
14    this Act.
15        (5.3) To receive complaints from licensees, local
16    officials, law enforcement agencies, organizations, and
17    persons stating that any licensee has been or is violating
18    any provision of this Act or the rules and regulations
19    issued pursuant to this Act. Such complaints shall be in
20    writing, signed and sworn to by the person making the
21    complaint, and shall state with specificity the facts in
22    relation to the alleged violation. If the Commission has
23    reasonable grounds to believe that the complaint
24    substantially alleges a violation of this Act or rules and
25    regulations adopted pursuant to this Act, it shall conduct
26    an investigation. If, after conducting an investigation,



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1    the Commission is satisfied that the alleged violation did
2    occur, it shall proceed with disciplinary action against
3    the licensee as provided in this Act.
4        (6) To hear and determine appeals from orders of a
5    local commission in accordance with the provisions of this
6    Act, as hereinafter set forth. Hearings under this
7    subsection shall be held in Springfield or Chicago, at
8    whichever location is the more convenient for the majority
9    of persons who are parties to the hearing.
10        (7) The commission shall establish uniform systems of
11    accounts to be kept by all retail licensees having more
12    than 4 employees, and for this purpose the commission may
13    classify all retail licensees having more than 4 employees
14    and establish a uniform system of accounts for each class
15    and prescribe the manner in which such accounts shall be
16    kept. The commission may also prescribe the forms of
17    accounts to be kept by all retail licensees having more
18    than 4 employees, including but not limited to accounts of
19    earnings and expenses and any distribution, payment, or
20    other distribution of earnings or assets, and any other
21    forms, records and memoranda which in the judgment of the
22    commission may be necessary or appropriate to carry out any
23    of the provisions of this Act, including but not limited to
24    such forms, records and memoranda as will readily and
25    accurately disclose at all times the beneficial ownership
26    of such retail licensed business. The accounts, forms,



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1    records and memoranda shall be available at all reasonable
2    times for inspection by authorized representatives of the
3    State commission or by any local liquor control
4    commissioner or his or her authorized representative. The
5    commission, may, from time to time, alter, amend or repeal,
6    in whole or in part, any uniform system of accounts, or the
7    form and manner of keeping accounts.
8        (8) In the conduct of any hearing authorized to be held
9    by the commission, to appoint, at the commission's
10    discretion, hearing officers to conduct hearings involving
11    complex issues or issues that will require a protracted
12    period of time to resolve, to examine, or cause to be
13    examined, under oath, any licensee, and to examine or cause
14    to be examined the books and records of such licensee; to
15    hear testimony and take proof material for its information
16    in the discharge of its duties hereunder; to administer or
17    cause to be administered oaths; for any such purpose to
18    issue subpoena or subpoenas to require the attendance of
19    witnesses and the production of books, which shall be
20    effective in any part of this State, and to adopt rules to
21    implement its powers under this paragraph (8). When
22    multiple complaints alleging violations of Sections 6-2,
23    6-4, 6-5, 6-6 or 6-9 of this Act result in a hearing, the
24    Commission shall designate a hearing officer to conduct the
25    hearing. The hearing officer shall be an attorney licensed
26    to practice law in this State and shall be an employee of



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1    the Illinois Liquor Control Commission, unless, by a
2    majority vote of the Commission, the Commission selects a
3    hearing officer who has not received compensation for a
4    period of one year from the date of the hearing from a
5    licensed business or entity subject to the provisions of
6    this Act. These hearings shall commence no later than 30
7    days after the hearing officer determines that the
8    complaint or result of an investigation substantially
9    alleges a violation of the Act or rules adopted under this
10    Act, and the hearing officer alleges a violation in a
11    notice of hearing. At the time of the hearing, the hearing
12    officer shall proceed to hear the complaint or result of an
13    investigation, and all parties shall be afforded an
14    opportunity to present, in person or by counsel, any
15    relevant statements, testimony, evidence, and arguments.
16    The hearing officer may continue the hearing by agreement
17    of the parties or upon finding of good cause, but in no
18    event shall the hearing be rescheduled or continued more
19    that 60 days after the initial hearing date.
20        Upon any hearing, the hearing officer may administer
21    oaths to witnesses and issue subpoenas for the attendance
22    of witnesses or other persons and the production of
23    relevant documents, records, and other evidence and may
24    require examination of the evidence. For purposes of
25    discovery, the hearing officer may, if deemed appropriate
26    and proper under the circumstances, authorize the parties



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1    to engage in the discovery procedures as provided in
2    Section 2-1003 of the Code of Civil Procedure. Discovery
3    shall be completed no later than 15 days prior to
4    commencement of the proceeding or hearing. Enforcement of
5    discovery procedures shall be provided in the rules.
6    Subpoenas issued shall be served in the same manner as
7    subpoenas issued by the circuit courts.
8        A party may conduct cross-examination required for a
9    full and fair disclosure of the facts. Within 60 days after
10    the date of the hearing, the hearing officer shall issue
11    his or her proposed decision to the Commission and shall,
12    by certified mail, return receipt requested, serve the
13    proposed decision upon the parties, with an opportunity
14    afforded to each party to file exceptions and present a
15    brief to the Commission within 10 days after their receipt
16    of the proposed decisions. The proposed decision shall
17    contain a statement of the reasons for the decision and
18    each issue of fact or law necessary to the proposed
19    decision. The Commission shall then issue its final order
20    within 30 days after receipt of the hearing officer's
21    proposed decision.
22        The Commission shall record the testimony and preserve
23    a record of all proceedings at the hearing by proper means
24    of recordation. The citation issued, the notice of hearing,
25    and all other documents in the nature of pleadings,
26    motions, and rulings, all evidence, offers of proof,



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1    objections, and rulings thereon, the transcript of
2    testimony, the report of findings or proposed decision of
3    the hearing officer, and the orders of the Commission shall
4    constitute the record of the proceedings. The Commission
5    shall furnish a transcript of the record to any person
6    interested in the hearing upon payment of the actual cost
7    of the transcript.
8        Any Circuit Court may by order duly entered, require
9    the attendance of witnesses and the production of relevant
10    books subpoenaed by the State commission and the court may
11    compel obedience to its order by proceedings for contempt.
12        (9) To investigate the administration of laws in
13    relation to alcoholic liquors in this and other states and
14    any foreign countries, and to recommend from time to time
15    to the Governor and through him or her to the legislature
16    of this State, such amendments to this Act, if any, as it
17    may think desirable and as will serve to further the
18    general broad purposes contained in Section 1-2 hereof.
19        (10) To adopt such rules and regulations consistent
20    with the provisions of this Act which shall be necessary
21    for the control, sale or disposition of alcoholic liquor
22    damaged as a result of an accident, wreck, flood, fire or
23    other similar occurrence.
24        (11) To develop industry educational programs related
25    to responsible serving and selling, particularly in the
26    areas of overserving consumers and illegal underage



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1    purchasing and consumption of alcoholic beverages.
2        (11.1) To license persons providing education and
3    training to alcohol beverage sellers and servers under the
4    Beverage Alcohol Sellers and Servers Education and
5    Training (BASSET) programs and to develop and administer a
6    public awareness program in Illinois to reduce or eliminate
7    the illegal purchase and consumption of alcoholic beverage
8    products by persons under the age of 21. Application for a
9    license shall be made on forms provided by the State
10    Commission.
11        (12) To develop and maintain a repository of license
12    and regulatory information.
13        (13) On or before January 15, 1994, the Commission
14    shall issue a written report to the Governor and General
15    Assembly that is to be based on a comprehensive study of
16    the impact on and implications for the State of Illinois of
17    Section 1926 of the Federal ADAMHA Reorganization Act of
18    1992 (Public Law 102-321). This study shall address the
19    extent to which Illinois currently complies with the
20    provisions of P.L. 102-321 and the rules promulgated
21    pursuant thereto.
22        As part of its report, the Commission shall provide the
23    following essential information:
24            (i) the number of retail distributors of tobacco
25        products, by type and geographic area, in the State;
26            (ii) the number of reported citations and



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1        successful convictions, categorized by type and
2        location of retail distributor, for violation of the
3        Prevention of Tobacco Use by Minors and Sale and
4        Distribution of Tobacco Products Act and the Smokeless
5        Tobacco Limitation Act;
6            (iii) the extent and nature of organized
7        educational and governmental activities that are
8        intended to promote, encourage or otherwise secure
9        compliance with any Illinois laws that prohibit the
10        sale or distribution of tobacco products to minors; and
11            (iv) the level of access and availability of
12        tobacco products to individuals under the age of 18.
13        To obtain the data necessary to comply with the
14    provisions of P.L. 102-321 and the requirements of this
15    report, the Commission shall conduct random, unannounced
16    inspections of a geographically and scientifically
17    representative sample of the State's retail tobacco
18    distributors.
19        The Commission shall consult with the Department of
20    Public Health, the Department of Human Services, the
21    Illinois State Police and any other executive branch
22    agency, and private organizations that may have
23    information relevant to this report.
24        The Commission may contract with the Food and Drug
25    Administration of the U.S. Department of Health and Human
26    Services to conduct unannounced investigations of Illinois



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1    tobacco vendors to determine compliance with federal laws
2    relating to the illegal sale of cigarettes and smokeless
3    tobacco products to persons under the age of 18.
4        (14) On or before April 30, 2008 and every 2 years
5    thereafter, the Commission shall present a written report
6    to the Governor and the General Assembly that shall be
7    based on a study of the impact of this amendatory Act of
8    the 95th General Assembly on the business of soliciting,
9    selling, and shipping wine from inside and outside of this
10    State directly to residents of this State. As part of its
11    report, the Commission shall provide all of the following
12    information:
13            (A) The amount of State excise and sales tax
14        revenues generated.
15            (B) The amount of licensing fees received.
16            (C) The number of cases of wine shipped from inside
17        and outside of this State directly to residents of this
18        State.
19            (D) The number of alcohol compliance operations
20        conducted.
21            (E) The number of winery shipper's licenses
22        issued.
23            (F) The number of each of the following: reported
24        violations; cease and desist notices issued by the
25        Commission; notices of violations issued by the
26        Commission and to the Department of Revenue; and



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1        notices and complaints of violations to law
2        enforcement officials, including, without limitation,
3        the Illinois Attorney General and the U.S. Department
4        of Treasury's Alcohol and Tobacco Tax and Trade Bureau.
5        (15) As a means to reduce the underage consumption of
6    alcoholic liquors, the Commission shall conduct alcohol
7    compliance operations to investigate whether businesses
8    that are soliciting, selling, and shipping wine from inside
9    or outside of this State directly to residents of this
10    State are licensed by this State or are selling or
11    attempting to sell wine to persons under 21 years of age in
12    violation of this Act.
13        (16) The Commission shall, in addition to notifying any
14    appropriate law enforcement agency, submit notices of
15    complaints or violations of Sections 6-29 and 6-29.1 by
16    persons who do not hold a winery shipper's license under
17    this amendatory Act to the Illinois Attorney General and to
18    the U.S. Department of Treasury's Alcohol and Tobacco Tax
19    and Trade Bureau.
20        (17) (A) A person licensed to make wine under the laws
21    of another state who has a winery shipper's license under
22    this amendatory Act and annually produces less than 25,000
23    gallons of wine or a person who has a first-class or
24    second-class wine manufacturer's license, a first-class or
25    second-class wine-maker's license, or a limited wine
26    manufacturer's license under this Act and annually



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1    produces less than 25,000 gallons of wine may make
2    application to the Commission for a self-distribution
3    exemption to allow the sale of not more than 5,000 gallons
4    of the exemption holder's wine to retail licensees per
5    year.
6            (B) In the application, which shall be sworn under
7        penalty of perjury, such person shall state (1) the
8        date it was established; (2) its volume of production
9        and sales for each year since its establishment; (3)
10        its efforts to establish distributor relationships;
11        (4) that a self-distribution exemption is necessary to
12        facilitate the marketing of its wine; and (5) that it
13        will comply with the liquor and revenue laws of the
14        United States, this State, and any other state where it
15        is licensed.
16            (C) The Commission shall approve the application
17        for a self-distribution exemption if such person: (1)
18        is in compliance with State revenue and liquor laws;
19        (2) is not a member of any affiliated group that
20        produces more than 25,000 gallons of wine per annum or
21        produces any other alcoholic liquor; (3) will not
22        annually produce for sale more than 25,000 gallons of
23        wine; and (4) will not annually sell more than 5,000
24        gallons of its wine to retail licensees.
25            (D) A self-distribution exemption holder shall
26        annually certify to the Commission its production of



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1        wine in the previous 12 months and its anticipated
2        production and sales for the next 12 months. The
3        Commission may fine, suspend, or revoke a
4        self-distribution exemption after a hearing if it
5        finds that the exemption holder has made a material
6        misrepresentation in its application, violated a
7        revenue or liquor law of Illinois, exceeded production
8        of 25,000 gallons of wine in any calendar year, or
9        become part of an affiliated group producing more than
10        25,000 gallons of wine or any other alcoholic liquor.
11            (E) Except in hearings for violations of this Act
12        or amendatory Act or a bona fide investigation by duly
13        sworn law enforcement officials, the Commission, or
14        its agents, the Commission shall maintain the
15        production and sales information of a
16        self-distribution exemption holder as confidential and
17        shall not release such information to any person.
18            (F) The Commission shall issue regulations
19        governing self-distribution exemptions consistent with
20        this Section and this Act.
21            (G) Nothing in this subsection (17) shall prohibit
22        a self-distribution exemption holder from entering
23        into or simultaneously having a distribution agreement
24        with a licensed Illinois distributor.
25            (H) It is the intent of this subsection (17) to
26        promote and continue orderly markets. The General



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1        Assembly finds that in order to preserve Illinois'
2        regulatory distribution system it is necessary to
3        create an exception for smaller makers of wine as their
4        wines are frequently adjusted in varietals, mixes,
5        vintages, and taste to find and create market niches
6        sometimes too small for distributor or importing
7        distributor business strategies. Limited
8        self-distribution rights will afford and allow smaller
9        makers of wine access to the marketplace in order to
10        develop a customer base without impairing the
11        integrity of the 3-tier system.
12        (18) (A) A craft brewer licensee, who must also be
13    either a licensed brewer or licensed non-resident dealer
14    and annually manufacture less than 465,000 gallons of beer,
15    may make application to the Commission for a
16    self-distribution exemption to allow the sale of not more
17    than 232,500 gallons of the exemption holder's beer to
18    retail licensees per year.
19            (B) In the application, which shall be sworn under
20        penalty of perjury, the craft brewer licensee shall
21        state (1) the date it was established; (2) its volume
22        of beer manufactured and sold for each year since its
23        establishment; (3) its efforts to establish
24        distributor relationships; (4) that a
25        self-distribution exemption is necessary to facilitate
26        the marketing of its beer; and (5) that it will comply



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1        with the alcoholic beverage and revenue laws of the
2        United States, this State, and any other state where it
3        is licensed.
4            (C) Any application submitted shall be posted on
5        the Commission's website at least 45 days prior to
6        action by the Commission. The Commission shall approve
7        the application for a self-distribution exemption if
8        the craft brewer licensee: (1) is in compliance with
9        the State, revenue, and alcoholic beverage laws; (2) is
10        not a member of any affiliated group that manufacturers
11        more than 465,000 gallons of beer per annum or produces
12        any other alcoholic beverages; (3) shall not annually
13        manufacture for sale more than 465,000 gallons of beer;
14        and (4) shall not annually sell more than 232,500
15        gallons of its beer to retail licensees.
16            (D) A self-distribution exemption holder shall
17        annually certify to the Commission its manufacture of
18        beer during the previous 12 months and its anticipated
19        manufacture and sales of beer for the next 12 months.
20        The Commission may fine, suspend, or revoke a
21        self-distribution exemption after a hearing if it
22        finds that the exemption holder has made a material
23        misrepresentation in its application, violated a
24        revenue or alcoholic beverage law of Illinois,
25        exceeded the manufacture of 465,000 gallons of beer in
26        any calendar year or became part of an affiliated group



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1        manufacturing more than 465,000 gallons of beer or any
2        other alcoholic beverage.
3            (E) The Commission shall issue rules and
4        regulations governing self-distribution exemptions
5        consistent with this Act.
6            (F) Nothing in this paragraph (18) shall prohibit a
7        self-distribution exemption holder from entering into
8        or simultaneously having a distribution agreement with
9        a licensed Illinois importing distributor or a
10        distributor. If a self-distribution exemption holder
11        enters into a distribution agreement and has assigned
12        distribution rights to an importing distributor or
13        distributor, then the self-distribution exemption
14        holder's distribution rights in the assigned
15        territories shall cease in a reasonable time not to
16        exceed 60 days.
17            (G) It is the intent of this paragraph (18) to
18        promote and continue orderly markets. The General
19        Assembly finds that in order to preserve Illinois'
20        regulatory distribution system, it is necessary to
21        create an exception for smaller manufacturers in order
22        to afford and allow such smaller manufacturers of beer
23        access to the marketplace in order to develop a
24        customer base without impairing the integrity of the
25        3-tier system.
26    (b) On or before April 30, 1999, the Commission shall



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1present a written report to the Governor and the General
2Assembly that shall be based on a study of the impact of this
3amendatory Act of 1998 on the business of soliciting, selling,
4and shipping alcoholic liquor from outside of this State
5directly to residents of this State.
6    As part of its report, the Commission shall provide the
7following information:
8        (i) the amount of State excise and sales tax revenues
9    generated as a result of this amendatory Act of 1998;
10        (ii) the amount of licensing fees received as a result
11    of this amendatory Act of 1998;
12        (iii) the number of reported violations, the number of
13    cease and desist notices issued by the Commission, the
14    number of notices of violations issued to the Department of
15    Revenue, and the number of notices and complaints of
16    violations to law enforcement officials.
17(Source: P.A. 96-179, eff. 8-10-09; 96-446, eff. 1-1-10;
1896-1000, eff. 7-2-10; 97-5, eff. 6-1-11.)
19    Section 99. Effective date. This Act takes effect upon
20becoming law.".