HB2502ham001 103RD GENERAL ASSEMBLY

Rep. Curtis J. Tarver, II

Filed: 3/21/2023

10300HB2502ham001 LRB103 28642 RPS 59665 a

AMENDMENT TO HOUSE BILL 2502

AMENDMENT NO. ______. Amend House Bill 2502 by replacing everything after the enacting clause with the following:

"Section 5. The Liquor Control Act of 1934 is amended by changing Sections 6-6.3 and 6-35 as follows:

(235 ILCS 5/6-6.3)

Sec. 6-6.3. Non-alcoholic merchandise.

(a) Nothing in this Act shall authorize the Illinois Liquor Control Commission to regulate or exercise jurisdiction over any action, transaction, and business of manufacturers, distributors, or retailers, or any parent or subsidiary thereof, engaged in any transaction involving the furnishing, selling, or offering for sale of non-alcoholic merchandise by manufacturers, distributors, or retailers, or any parent or subsidiary thereof, unless the transaction involves expressed or implied agreements or understandings prohibited by this Act.

(b) Non-alcoholic merchandise may be sold by a manufacturer class license holder, non-resident dealer, foreign importer, importing distributor, or distributor, or any parent or subsidiary thereof, to a retail licensee if:

(1) the manufacturer class license holder, non-resident dealer, foreign importer, importing distributor, or distributor, or any parent or subsidiary thereof, is also in business as a bona fide producer or vendor of other merchandise;

(2) the merchandise is sold at its fair market value;

(3) the non-alcoholic merchandise is not sold in combination with alcoholic liquor or conditioned on the sale of alcoholic liquor;

(4) the manufacturer class license holder's, non-resident dealer's, foreign importer's, importing distributor's, or distributor's, or their parent's or subsidiary's, acquisition or production costs of the non-alcoholic merchandise appear on the manufacturer class license holder's, non-resident dealer's, foreign importer's, importing distributor's, or distributor's purchase invoices or other records;

(5) the individual selling prices of the non-alcoholic merchandise and alcoholic liquor sold in a single transaction can be determined from commercial documents covering the sales transaction if non-alcoholic merchandise is sold in the same transaction as alcoholic liquor; and

(6) the price is collected by the manufacturer class license holder, non-resident dealer, foreign importer, or distributor, or any parent or subsidiary thereof, within 30 days of the date of the sale, unless other terms are established in writing between the parties.

(c) The State Commission may not prohibit the sale of non-alcoholic merchandise if it is sold in the manner in which the non-alcoholic merchandise is sold by a manufacturer or distributor that is not licensed by the State Commission; provided, however, that all invoices for non-alcoholic merchandise sold by a manufacturer class license holder, non-resident dealer, foreign importer, importing distributor, or distributor, or any parent or subsidiary thereof, that is also in business as a bona fide producer or vendor of other merchandise must be in compliance with the books and records requirements of 11 Ill. Adm. Code 100.130. If the non-alcoholic merchandise is sold on the same invoice as an alcoholic liquor product, the 30-day merchandising credit provisions of Section 6-5 of this Act shall apply to the entire transaction, including the non-alcoholic merchandise.

(d) Except as provided in subsection (f), a manufacturer class license holder, non-resident dealer, foreign importer, importing distributor, or distributor, or any parent or subsidiary thereof, that is also in business as a bona fide producer or vendor of non-alcoholic merchandise shall not condition the sale of its alcoholic liquor on the sale of its non-alcoholic merchandise and shall not combine the sale of its alcoholic liquor with the sale of its non-alcoholic merchandise. A manufacturer class license holder, non-resident dealer, foreign importer, importing distributor, or distributor, or any parent or subsidiary thereof, that is also in business as a bona fide producer or vendor of non-alcoholic merchandise may sell, market, and promote non-alcoholic merchandise in the same manner in which the non-alcoholic merchandise is sold, marketed, or promoted by a manufacturer or distributor not licensed by the State Commission. Notwithstanding any provision of this Section to the contrary, the bona fide producer or vendor of non-alcoholic merchandise shall not provide something of value to a retailer for sale of non-alcoholic merchandise if the of-value item or items are a subterfuge for providing something of value for the sale of alcoholic liquor. The State Commission shall have the authority to examine records of a manufacturer class license holder, non-resident dealer, foreign importer, importing distributor, or distributor, or any parent or subsidiary thereof, for the purpose of examining all of-value transactions between such entity and a retailer.

(e) Notwithstanding the prohibited furnishing or providing of fixtures, equipment, and furnishings to retailers as contained in Section 6-6 of this Act, the act of a manufacturer class license holder, non-resident dealer, foreign importer, importing distributor, or distributor furnishing or providing retailers with fixtures, equipment, or furnishings for the limited purpose of storing, servicing, displaying, advertising, furnishing, selling, or aiding in the sale of non-alcoholic merchandise is permitted, only to the extent allowed by this Section, and such fixtures, equipment, and furnishings shall not be used by the retail licensee to store, service, display, advertise, furnish, sell, or aid in the sale of alcoholic liquors. All such fixtures, equipment, or furnishings shall be identified by the retail licensee as being furnished by a manufacturer class license holder, non-resident dealer, foreign importer, importing distributor, or distributor licensed by the State Commission and, if purchased by the retail licensee and sold on the same invoice as alcoholic liquor products, the price must be collected by the manufacturer class license holder, non-resident dealer, foreign importer, importing distributor, or distributor selling the same within 30 days of the date of sale.

(f) Notwithstanding any provision of this Act to the contrary, a manufacturer class license holder, non-resident dealer, foreign importer, importing distributor, or distributor may package and distribute alcoholic liquor in combination with other non-alcoholic merchandise products if the alcoholic liquor and non-alcoholic merchandise was originally packaged together for ultimate sale to consumers by the manufacturer or agent of the manufacturer as originally packaged by the manufacturer or agent of the manufacturer for ultimate sale to consumers.

(Source: P.A. 99-282, eff. 8-5-15.)

(235 ILCS 5/6-35)

Sec. 6-35. Alcopops.

(a) For purposes of this Section: ,

"Alcopop alcopop" means a flavored alcoholic beverage or flavored malt beverage that includes (i) a malt beverage containing a malt base or beer and added natural or artificial blending material, such as fruit juices, flavors, flavorings, colorings, or preservatives where the beverage constitutes 0.5% or more of alcohol by volume such blending material constitutes .5% or more of the alcohol by volume contained in the finished beverage; (ii) a beverage containing wine and more than 15% added natural or artificial blending material, such as fruit juices, flavors, flavorings, or adjuncts, water (plain, carbonated, or sparkling), colorings, or preservatives; (iii) a beverage containing distilled alcohol and added natural or artificial blending material, such as fruit juices, flavors, flavorings, colorings, or preservatives; or (iv) an alcohol malt beverage containing caffeine, guarana, tauri ne, or ginseng, where the beverage constitutes 0.5% or more of alcohol by volume.

"Immediately adjacent" means directly touching or immediately bordering one another from above, below, or the side. "Immediately adjacent" does not include a separate aisle.

"Retail sales floor" means the part of a retailer's premises that contains goods on display that are freely accessible to the consumer

(b) No entity may advertise, promote, or market any alcopop beverages toward children. Advertise, promote, or market includes, but is not limited to the following:

(1) the use of cartoons and youth-orientated photos in advertising, promotion, packaging, or labeling of alcohol products;

(2) sponsorships of athletic events where the intended audience is primarily children;

(3) billboards advertising alcopops, as defined in items (i), (ii), and (iii) of subsection (a) of this Section, placed within 500 feet of schools, public parks, amusement parks, and places of worship; and

(4) the display of any alcopop beverage in any videogame, theater production, or other live performances where the intended audience is primarily children.

(b-5) No retail establishment with a retail sales floor that exceeds 2,500 square feet shall display alcopops immediately adjacent to soft drinks, fruit juices, bottled water, candy, or snack foods portraying cartoons or youth-oriented photos.

(b-10) Any retail establishment with a retail sales floor that is equal to or less than 2,500 square feet shall either:

(1) not display alcopops immediately adjacent to soft drinks, fruit juices, bottled water, candy, or snack foods portraying cartoons or youth-oriented photos; or

(2) equip any such display that contains alcopops and is immediately adjacent to soft drinks, fruit juices, bottled water, candy, or snack foods portraying cartoons or youth-oriented photos with signage that is clearly visible to consumers, is not less than 8.5 x 11 inches, and states the following: "This product is an alcoholic beverage available only to persons who are 21 years of age or older.". Such sign may be provided by the State Commission or by the licensee.

(b-15) Subsections (b-5) and (b-10) do not apply to a shelf, aisle, display, or display area in which the primary items for sale are alcoholic liquors or in an area in which persons under the age of 21 are prohibited from entering without a parent or legal guardian.

(c) No entity shall sell for consumption an alcohol malt beverage containing caffeine, guarana, taurine, or ginseng, where the beverage constitutes 0.5% or more of alcohol by volume, unless individual containers of the beverage have imprinted on each individual container the following:

(1) the words "contains alcohol"; and

(2) the alcohol content of the beverage.

(d) Any person who violates this Section is guilty of a business offense and shall be fined $500 for a first offense and $1,000 for a second or subsequent offense.

(e) Nothing in this Section shall be construed to be inconsistent with any other provision of this Section or any other State or federal laws, rules, or regulations regarding the labeling of alcoholic beverages.

(Source: P.A. 95-618, eff. 6-1-08; 95-860, eff. 1-1-09.)".