235 ILCS 5/ Liquor Control Act of 1934.

(235 ILCS 5/Art. II heading) ARTICLE II. SCOPE OF ACT

(235 ILCS 5/2-1) (from Ch. 43, par. 96)

Sec. 2-1. No person shall manufacture, bottle, blend, sell, barter, transport, transfer into this State from a point outside this State, deliver, furnish or possess any alcoholic liquor for beverage purposes, unless such person has been issued a license by the Commission or except as permitted by Section 6-29 of this Act or except as otherwise specifically provided in this Act; provided, however, nothing herein contained shall prevent the possession and transportation of alcoholic liquor by the possessor for the personal use of the possessor, his family and guests, nor prevent the making of wine, cider or other alcoholic liquor by a person from fruits, vegetables or grains, or the products thereof, by simple fermentation and without distillation, if it is made solely for the use of the maker, his family and his guests; and provided further that nothing herein contained shall prevent any duly licensed practicing physician or dentist from possessing or using alcoholic liquor in the strict practice of his profession, or any hospital or other institution caring for sick and diseased persons, from possessing and using alcoholic liquor for the treatment of bona fide patients of such hospital or other institution; and provided further that any drug store employing a licensed pharmacist may possess and use alcoholic liquors in the concoction of prescriptions of duly licensed physicians; and provided further, that the possession and dispensation of wine by an authorized representative of any church for the purpose of conducting any bona fide rite or religious ceremony conducted by such church shall not be prohibited by this Act.

(Source: P.A. 90-739, eff. 8-13-98.)

(235 ILCS 5/Art. III heading) ARTICLE III. STATE CONTROL COMMISSION

(235 ILCS 5/3-1) (from Ch. 43, par. 97)

Sec. 3-1. There is hereby created an Illinois Liquor Control Commission consisting of 7 members to be appointed by the Governor with the advice and consent of the Senate, no more than 4 of whom shall be members of the same political party. The Executive Director of the Illinois Liquor Control Commission shall be appointed by the Governor with the advice and consent of the Senate.

(Source: P.A. 100-1050, eff. 7-1-19.)

(235 ILCS 5/3-2) (from Ch. 43, par. 98)

Sec. 3-2. Immediately, or soon as may be after the effective date of this Act, the Governor shall appoint 3 members of the commission, one of whom shall be designated as "Chairman", one to hold office for a period of 2 years, one to hold office for a period of 4 years and one to hold office for a period of 6 years. Immediately, or as soon as may be after the effective date of this amendatory Act of 1983, the Governor shall appoint 2 members to the commission to the offices created by this amendatory Act of 1983, one for an initial term expiring the third Monday in January of 1986 and one for an initial term expiring the third Monday in January of 1988. At the expiration of the term of any such commissioner the Governor shall reappoint said commissioner or appoint a successor of said commissioner for a period of 6 years. The Governor shall have power to fill vacancies in the office of any commissioner.

Notwithstanding any provision of this Section to the contrary, the term of office of each member of the commission is abolished on the effective date of this amendatory Act of 1985, but the incumbent members shall continue to exercise all of the powers and be subject to all of the duties of members of the commission until their respective successors are appointed and qualified. The Governor shall appoint 2 members of the commission whose terms of office shall expire on February 1, 1986, 2 members of the commission whose terms of office shall expire on February 1, 1988, and one member of the commission whose term shall expire on February 1, 1990. Their respective successors shall be appointed for terms of 6 years from the first day of February of the year of appointment. Each member shall serve until his successor is appointed and qualified.

The initial term of both of the 2 additional members appointed pursuant to this amendatory Act of the 91st General Assembly shall expire on February 1, 2006. Their respective successors shall be appointed for terms of 6 years from the first day of February of the year of appointment. Each member shall serve until his or her successor is appointed and qualified.

Notwithstanding any action taken to fill the office on an acting, temporary, or other basis, the office of Executive Director of the Commission shall be vacant on January 1, 2019. On and after January 1, 2019, the Governor shall appoint the Executive Director of the Commission for a 4-year term, with the advice and consent of the Senate.

(Source: P.A. 100-1050, eff. 7-1-19.)

(235 ILCS 5/3-3) (from Ch. 43, par. 99)

Sec. 3-3. A majority of the commission shall constitute a quorum to transact business, but no vacancy shall impair the right of the remaining commissioners to exercise all of the powers of the commission; and every act of a majority of the members of the commission shall be deemed to be the act of the commission. The commission shall have a secretary who shall keep a record of all proceedings, transactions, communications and official acts of the commission and who shall be custodian of all records and perform such other duties as the commission may prescribe.

(Source: P.A. 82-783.)

(235 ILCS 5/3-4) (from Ch. 43, par. 100)

Sec. 3-4. Authority to conduct investigations. The State Commission shall obtain, pursuant to the provisions of the Personnel Code, such inspectors, clerks, and other employees as may be necessary to carry out the provisions of this Act, or to perform the duties and exercise the powers conferred by law upon the State Commission. The inspectors obtained by the State Commission shall not be peace officers and shall not exercise any powers of a peace officer.

The State Commission shall have the power to appoint investigators to conduct investigations, searches, seizures, arrests, and other duties required to enforce the provisions of this Act, on behalf of the State Commission, and to ensure the health, safety, and welfare of the People of the State of Illinois. The Commission's investigators are peace officers and have all the powers possessed by police officers in cities and by sheriffs. State Commission investigators may exercise these powers throughout the State whenever enforcing the provisions of this Act, subject to the rules and orders of the State Commission. No State Commission investigator may have peace officer status or may exercise police powers unless: (1) he or she successfully completes the basic police training course mandated and approved by the Illinois Law Enforcement Training Standards Board; or (2) the Illinois Law Enforcement Training Standards Board waives the training requirement by reason of the investigator's prior law enforcement experience, training, or both.

The Executive Director must authorize to each investigator of the State Commission and to any other employee of the Department exercising the powers of a peace officer a distinct badge that, on its face: (1) clearly states that the badge is authorized by the State Commission; and (2) contains a unique identifying number. No other badge shall be authorized by the State Commission. Nothing in this Section prohibits the Executive Director from issuing shields or other distinctive identification to employees performing security or regulatory duties who are not peace officers if the Executive Director determines that a shield or distinctive identification is needed by the employee to carry out his or her responsibilities.

(Source: P.A. 101-37, eff. 7-3-19.)

(235 ILCS 5/3-4.1)

Sec. 3-4.1. Obtaining evidence. The State Commission has the power to expend sums that the Executive Director deems necessary for the purchase of evidence and for the employment of persons to obtain evidence. The sums shall be advanced to employees authorized by the Executive Director to expend funds, on vouchers signed by the Executive Director.

In addition, the Executive Director is authorized to maintain one or more commercial checking accounts with any State banking corporation or corporations organized under or subject to the Illinois Banking Act for the deposit and withdrawal of moneys to be used solely for the purchase of evidence and for the employment of persons to obtain evidence. No check may be written on nor any withdrawal made from such an account except on the written signature of 2 persons designated by the Executive Director to write those checks and make those withdrawals. The balance of moneys on deposit in any such account shall not exceed $25,000 at any time, nor shall any one check written on or single withdrawal made from any such account exceed $25,000.

(Source: P.A. 102-1115, eff. 1-9-23.)

(235 ILCS 5/3-5) (from Ch. 43, par. 101)

Sec. 3-5. Each commissioner, the secretary, the Executive Director, and each person appointed by the commission shall, before entering upon the duties of his or her office, take and subscribe to the constitutional oath of office. The secretary, the Executive Director, and each inspector, clerk, and other employee shall devote his or her entire time to the duties of his or her office.

(Source: P.A. 100-1050, eff. 7-1-19.)

(235 ILCS 5/3-6) (from Ch. 43, par. 102)

Sec. 3-6. No person shall be appointed a commissioner, secretary, Executive Director, or inspector for the commission who is not a citizen of the United States. No commissioner, secretary, Executive Director, inspector, or other employee shall be appointed who has been convicted of any violation of any Federal or State law concerning the manufacture or sale of alcoholic liquor prior or subsequent to the passage of this Act or who has paid a fine or penalty in settlement of any prosecution against him or her for any violation of such laws or shall have forfeited his or her bond to appear in court to answer charges for any such violation, nor shall any person be appointed who has been convicted of a felony. No commissioner, Executive Director, inspector, or other employee, may, directly or indirectly, individually or as a member of a partnership, or as a shareholder of a corporation, have any interest whatsoever in the manufacture, sale or distribution of alcoholic liquor, nor receive any compensation or profit therefrom, nor have any interest whatsoever in the purchases or sales made by the persons authorized by this Act, or to purchase or to sell alcoholic liquor. No provision of this section shall prevent any such commissioner, secretary, Executive Director, inspector, or other employee from purchasing and keeping in his or her possession for the use of himself or herself or members of his or her family or guests any alcoholic liquor which may be purchased or kept by any person by virtue of this Act.

(Source: P.A. 100-1050, eff. 7-1-19.)

(235 ILCS 5/3-7) (from Ch. 43, par. 103)

Sec. 3-7. No commissioner, secretary, Executive Director, or person appointed or employed by the commission, shall solicit or accept any gift, gratuity, emolument or employment from any person subject to the provisions of this Act, or from any officer, agent or employee thereof, nor solicit, request from or recommend, directly or indirectly, to any such person or to any officer, agent or employee thereof, the appointment of any person to any place or position, and every such person, and every officer, agent or employee thereof, is hereby forbidden to offer to any commissioner, secretary, Executive Director, or to any person appointed or employed by the commission, any gift, gratuity, emolument or employment. If any commissioner, secretary, Executive Director, or any person appointed or employed by the commission shall violate any of the provisions of this Section, he or she shall be removed from the office or employment held by him or her. Every person violating the provisions of this Section shall be guilty of a Class A misdemeanor.

(Source: P.A. 100-1050, eff. 7-1-19.)

(235 ILCS 5/3-8) (from Ch. 43, par. 104)

Sec. 3-8. Before entering upon the duties of his office, each commissioner shall give a bond, with surety to be approved by the Governor, in the sum of five thousand dollars ($5,000) for the faithful performance of his duties as such commissioner. Before entering upon the duties of his office the secretary shall give a bond, with surety to be approved by the Governor, in the sum of five thousand dollars ($5,000) for the faithful performance of his duties as secretary.

(Source: P.A. 82-783.)

(235 ILCS 5/3-9) (from Ch. 43, par. 105)

Sec. 3-9. Compensation of commissioners, secretary, and employees. The chairman of the Commission shall receive an annual salary of $32,000 or such greater amount as may be set by the Compensation Review Board. The other commissioners shall receive an annual salary of $28,000 or such greater amount as may be set by the Compensation Review Board. The secretary of the Commission shall receive an annual salary as set by the Compensation Review Board. All clerks, inspectors, and employees of the Commission shall receive reasonable compensation in an amount fixed by the Commission, subject to the approval in writing of the Governor.

(Source: P.A. 91-798, eff. 7-9-00.)

(235 ILCS 5/3-10) (from Ch. 43, par. 106)

Sec. 3-10. The commissioners, the secretary, the Executive Director, and all clerks, inspectors, and other employees shall be reimbursed for all actual and necessary traveling and other expenses and disbursements incurred or made by them in the discharge of their official duties. The commission may also incur necessary expenses for office furniture and other incidental expenses.

(Source: P.A. 100-1050, eff. 7-1-19.)

(235 ILCS 5/3-11) (from Ch. 43, par. 107)

Sec. 3-11. Principal office; meetings; seal; proceedings. The principal office of the Commission shall be in Chicago, but the Commission may, with the approval of the Governor, establish and maintain branch offices at other places. The Commission shall hold regular meetings at least once a month at its office, and may hold such special meetings as it may deem necessary at any time and at any place within the State. The Commission may, for authentication of its records, process and proceedings, adopt, keep and use a common seal, of which seal judicial notice shall be taken in all of the courts of the State, and any process, notice or other paper which the Commission may be authorized by law to issue, shall be deemed sufficient if signed by the secretary of said Commission and authenticated by such seal; and all acts, orders, proceedings, rules, regulations, entries, minutes, and other records of said Commission, and all reports and documents filed with said Commission may be proved in any court of this State by copy thereof certified to by the secretary of said Commission with the seal of said Commission attached.

(Source: P.A. 89-250, eff. 1-1-96.)

(235 ILCS 5/3-12)

Sec. 3-12. Powers and duties of State Commission.

(a) The State Commission shall have the following powers, functions, and duties:

(1) To receive applications and to issue licenses to manufacturers, foreign importers, importing distributors, distributors, non-resident dealers, on premise consumption retailers, off premise sale retailers, special event retailer licensees, special use permit licenses, auction liquor licenses, brew pubs, caterer retailers, non-beverage users, railroads, including owners and lessees of sleeping, dining and cafe cars, airplanes, boats, brokers, and wine maker's premises licensees in accordance with the provisions of this Act, and to suspend or revoke such licenses upon the State Commission's determination, upon notice after hearing, that a licensee has violated any provision of this Act or any rule or regulation issued pursuant thereto and in effect for 30 days prior to such violation. Except in the case of an action taken pursuant to a violation of Section 6-3, 6-5, or 6-9, any action by the State Commission to suspend or revoke a licensee's license may be limited to the license for the specific premises where the violation occurred. An action for a violation of this Act shall be commenced by the State Commission within 2 years after the date the State Commission becomes aware of the violation.

In lieu of suspending or revoking a license, the commission may impose a fine, upon the State Commission's determination and notice after hearing, that a licensee has violated any provision of this Act or any rule or regulation issued pursuant thereto and in effect for 30 days prior to such violation.

For the purpose of this paragraph (1), when determining multiple violations for the sale of alcohol to a person under the age of 21, a second or subsequent violation for the sale of alcohol to a person under the age of 21 shall only be considered if it was committed within 5 years after the date when a prior violation for the sale of alcohol to a person under the age of 21 was committed.

The fine imposed under this paragraph may not exceed $500 for each violation. Each day that the activity, which gave rise to the original fine, continues is a separate violation. The maximum fine that may be levied against any licensee, for the period of the license, shall not exceed $20,000. The maximum penalty that may be imposed on a licensee for selling a bottle of alcoholic liquor with a foreign object in it or serving from a bottle of alcoholic liquor with a foreign object in it shall be the destruction of that bottle of alcoholic liquor for the first 10 bottles so sold or served from by the licensee. For the eleventh bottle of alcoholic liquor and for each third bottle thereafter sold or served from by the licensee with a foreign object in it, the maximum penalty that may be imposed on the licensee is the destruction of the bottle of alcoholic liquor and a fine of up to $50.

Any notice issued by the State Commission to a licensee for a violation of this Act or any notice with respect to settlement or offer in compromise shall include the field report, photographs, and any other supporting documentation necessary to reasonably inform the licensee of the nature and extent of the violation or the conduct alleged to have occurred. The failure to include such required documentation shall result in the dismissal of the action.

(2) To adopt such rules and regulations consistent with the provisions of this Act which shall be necessary to carry on its functions and duties to the end that the health, safety and welfare of the People of the State of Illinois shall be protected and temperance in the consumption of alcoholic liquors shall be fostered and promoted and to distribute copies of such rules and regulations to all licensees affected thereby.

(3) To call upon other administrative departments of the State, county and municipal governments, county and city police departments and upon prosecuting officers for such information and assistance as it deems necessary in the performance of its duties.

(4) To recommend to local commissioners rules and regulations, not inconsistent with the law, for the distribution and sale of alcoholic liquors throughout the State.

(5) To inspect, or cause to be inspected, any premises in this State where alcoholic liquors are manufactured, distributed, warehoused, or sold. Nothing in this Act authorizes an agent of the State Commission to inspect private areas within the premises without reasonable suspicion or a warrant during an inspection. "Private areas" include, but are not limited to, safes, personal property, and closed desks.

(5.1) Upon receipt of a complaint or upon having knowledge that any person is engaged in business as a manufacturer, importing distributor, distributor, or retailer without a license or valid license, to conduct an investigation. If, after conducting an investigation, the State Commission is satisfied that the alleged conduct occurred or is occurring, it may issue a cease and desist notice as provided in this Act, impose civil penalties as provided in this Act, notify the local liquor authority, or file a complaint with the State's Attorney's Office of the county where the incident occurred or the Attorney General.

(5.2) Upon receipt of a complaint or upon having knowledge that any person is shipping alcoholic liquor into this State from a point outside of this State if the shipment is in violation of this Act, to conduct an investigation. If, after conducting an investigation, the State Commission is satisfied that the alleged conduct occurred or is occurring, it may issue a cease and desist notice as provided in this Act, impose civil penalties as provided in this Act, notify the foreign jurisdiction, or file a complaint with the State's Attorney's Office of the county where the incident occurred or the Attorney General.

(5.3) To receive complaints from licensees, local officials, law enforcement agencies, organizations, and persons stating that any licensee has been or is violating any provision of this Act or the rules and regulations issued pursuant to this Act. Such complaints shall be in writing, signed and sworn to by the person making the complaint, and shall state with specificity the facts in relation to the alleged violation. If the State Commission has reasonable grounds to believe that the complaint substantially alleges a violation of this Act or rules and regulations adopted pursuant to this Act, it shall conduct an investigation. If, after conducting an investigation, the State Commission is satisfied that the alleged violation did occur, it shall proceed with disciplinary action against the licensee as provided in this Act.

(5.4) To make arrests and issue notices of civil violations where necessary for the enforcement of this Act.

(5.5) To investigate any and all unlicensed activity.

(5.6) To impose civil penalties or fines to any person who, without holding a valid license, engages in conduct that requires a license pursuant to this Act, in an amount not to exceed $20,000 for each offense as determined by the State Commission. A civil penalty shall be assessed by the State Commission after a hearing is held in accordance with the provisions set forth in this Act regarding the provision of a hearing for the revocation or suspension of a license.

(6) To hear and determine appeals from orders of a local commission in accordance with the provisions of this Act, as hereinafter set forth. Hearings under this subsection shall be held in Springfield or Chicago, at whichever location is the more convenient for the majority of persons who are parties to the hearing.

(7) The State Commission shall establish uniform systems of accounts to be kept by all retail licensees having more than 4 employees, and for this purpose the State Commission may classify all retail licensees having more than 4 employees and establish a uniform system of accounts for each class and prescribe the manner in which such accounts shall be kept. The State Commission may also prescribe the forms of accounts to be kept by all retail licensees having more than 4 employees, including, but not limited to, accounts of earnings and expenses and any distribution, payment, or other distribution of earnings or assets, and any other forms, records, and memoranda which in the judgment of the commission may be necessary or appropriate to carry out any of the provisions of this Act, including, but not limited to, such forms, records, and memoranda as will readily and accurately disclose at all times the beneficial ownership of such retail licensed business. The accounts, forms, records, and memoranda shall be available at all reasonable times for inspection by authorized representatives of the State Commission or by any local liquor control commissioner or his or her authorized representative. The commission may, from time to time, alter, amend, or repeal, in whole or in part, any uniform system of accounts, or the form and manner of keeping accounts.

(8) In the conduct of any hearing authorized to be held by the State Commission, to appoint, at the commission's discretion, hearing officers to conduct hearings involving complex issues or issues that will require a protracted period of time to resolve, to examine, or cause to be examined, under oath, any licensee, and to examine or cause to be examined the books and records of such licensee; to hear testimony and take proof material for its information in the discharge of its duties hereunder; to administer or cause to be administered oaths; for any such purpose to issue subpoena or subpoenas to require the attendance of witnesses and the production of books, which shall be effective in any part of this State, and to adopt rules to implement its powers under this paragraph (8).

Any circuit court may, by order duly entered, require the attendance of witnesses and the production of relevant books subpoenaed by the State Commission and the court may compel obedience to its order by proceedings for contempt.

(9) To investigate the administration of laws in relation to alcoholic liquors in this and other states and any foreign countries, and to recommend from time to time to the Governor and through him or her to the legislature of this State, such amendments to this Act, if any, as it may think desirable and as will serve to further the general broad purposes contained in Section 1-2 hereof.

(10) To adopt such rules and regulations consistent with the provisions of this Act which shall be necessary for the control, sale, or disposition of alcoholic liquor damaged as a result of an accident, wreck, flood, fire, or other similar occurrence.

(11) To develop industry educational programs related to responsible serving and selling, particularly in the areas of overserving consumers and illegal underage purchasing and consumption of alcoholic beverages.

(11.1) To license persons providing education and training to alcohol beverage sellers and servers for mandatory and non-mandatory training under the Beverage Alcohol Sellers and Servers Education and Training (BASSET) programs and to develop and administer a public awareness program in Illinois to reduce or eliminate the illegal purchase and consumption of alcoholic beverage products by persons under the age of 21. Application for a license shall be made on forms provided by the State Commission.

(12) To develop and maintain a repository of license and regulatory information.

(13) (Blank).

(14) On or before April 30, 2008 and every 2 years thereafter, the State Commission shall present a written report to the Governor and the General Assembly that shall be based on a study of the impact of Public Act 95-634 on the business of soliciting, selling, and shipping wine from inside and outside of this State directly to residents of this State. As part of its report, the State Commission shall provide all of the following information:

(A) The amount of State excise and sales tax revenues generated.

(B) The amount of licensing fees received.

(C) The number of cases of wine shipped from inside and outside of this State directly to residents of this State.

(D) The number of alcohol compliance operations conducted.

(E) The number of winery shipper's licenses issued.

(F) The number of each of the following: reported violations; cease and desist notices issued by the Commission; notices of violations issued by the Commission and to the Department of Revenue; and notices and complaints of violations to law enforcement officials, including, without limitation, the Illinois Attorney General and the U.S. Department of Treasury's Alcohol and Tobacco Tax and Trade Bureau.

(15) As a means to reduce the underage consumption of alcoholic liquors, the State Commission shall conduct alcohol compliance operations to investigate whether businesses that are soliciting, selling, and shipping wine from inside or outside of this State directly to residents of this State are licensed by this State or are selling or attempting to sell wine to persons under 21 years of age in violation of this Act.

(16) The State Commission shall, in addition to notifying any appropriate law enforcement agency, submit notices of complaints or violations of Sections 6-29 and 6-29.1 by persons who do not hold a winery shipper's license under this Act to the Illinois Attorney General and to the U.S. Department of Treasury's Alcohol and Tobacco Tax and Trade Bureau.

(17)(A) A person licensed to make wine under the laws of another state who has a winery shipper's license under this Act and annually produces less than 25,000 gallons of wine or a person who has a first-class or second-class wine manufacturer's license, a first-class or second-class wine-maker's license, or a limited wine manufacturer's license under this Act and annually produces less than 25,000 gallons of wine may make application to the Commission for a self-distribution exemption to allow the sale of not more than 5,000 gallons of the exemption holder's wine to retail licensees per year and to sell cider, mead, or both cider and mead to brewers, class 1 brewers, class 2 brewers, and class 3 brewers that, pursuant to subsection (e) of Section 6-4 of this Act, sell beer, cider, mead, or any combination thereof to non-licensees at their breweries.

(B) In the application, which shall be sworn under penalty of perjury, such person shall state (1) the date it was established; (2) its volume of production and sales for each year since its establishment; (3) its efforts to establish distributor relationships; (4) that a self-distribution exemption is necessary to facilitate the marketing of its wine; and (5) that it will comply with the liquor and revenue laws of the United States, this State, and any other state where it is licensed.

(C) The State Commission shall approve the application for a self-distribution exemption if such person: (1) is in compliance with State revenue and liquor laws; (2) is not a member of any affiliated group that produces directly or indirectly more than 25,000 gallons of wine per annum, 930,000 gallons of beer per annum, or 50,000 gallons of spirits per annum; (3) will not annually produce for sale more than 25,000 gallons of wine, 930,000 gallons of beer, or 50,000 gallons of spirits; and (4) will not annually sell more than 5,000 gallons of its wine to retail licensees.

(D) A self-distribution exemption holder shall annually certify to the State Commission its production of wine in the previous 12 months and its anticipated production and sales for the next 12 months. The State Commission may fine, suspend, or revoke a self-distribution exemption after a hearing if it finds that the exemption holder has made a material misrepresentation in its application, violated a revenue or liquor law of Illinois, exceeded production of 25,000 gallons of wine, 930,000 gallons of beer, or 50,000 gallons of spirits in any calendar year, or become part of an affiliated group producing more than 25,000 gallons of wine, 930,000 gallons of beer, or 50,000 gallons of spirits.

(E) Except in hearings for violations of this Act or Public Act 95-634 or a bona fide investigation by duly sworn law enforcement officials, the State Commission, or its agents, the State Commission shall maintain the production and sales information of a self-distribution exemption holder as confidential and shall not release such information to any person.

(F) The State Commission shall issue regulations governing self-distribution exemptions consistent with this Section and this Act.

(G) Nothing in this paragraph (17) shall prohibit a self-distribution exemption holder from entering into or simultaneously having a distribution agreement with a licensed Illinois distributor.

(H) It is the intent of this paragraph (17) to promote and continue orderly markets. The General Assembly finds that, in order to preserve Illinois' regulatory distribution system, it is necessary to create an exception for smaller makers of wine as their wines are frequently adjusted in varietals, mixes, vintages, and taste to find and create market niches sometimes too small for distributor or importing distributor business strategies. Limited self-distribution rights will afford and allow smaller makers of wine access to the marketplace in order to develop a customer base without impairing the integrity of the 3-tier system.

(18)(A) A class 1 brewer licensee, who must also be either a licensed brewer or licensed non-resident dealer and annually manufacture less than 930,000 gallons of beer, may make application to the State Commission for a self-distribution exemption to allow the sale of not more than 232,500 gallons per year of the exemption holder's beer to retail licensees and to brewers, class 1 brewers, and class 2 brewers that, pursuant to subsection (e) of Section 6-4 of this Act, sell beer, cider, mead, or any combination thereof to non-licensees at their breweries.

(B) In the application, which shall be sworn under penalty of perjury, the class 1 brewer licensee shall state (1) the date it was established; (2) its volume of beer manufactured and sold for each year since its establishment; (3) its efforts to establish distributor relationships; (4) that a self-distribution exemption is necessary to facilitate the marketing of its beer; and (5) that it will comply with the alcoholic beverage and revenue laws of the United States, this State, and any other state where it is licensed.

(C) Any application submitted shall be posted on the State Commission's website at least 45 days prior to action by the State Commission. The State Commission shall approve the application for a self-distribution exemption if the class 1 brewer licensee: (1) is in compliance with the State, revenue, and alcoholic beverage laws; (2) is not a member of any affiliated group that manufactures, directly or indirectly, more than 930,000 gallons of beer per annum, 25,000 gallons of wine per annum, or 50,000 gallons of spirits per annum; (3) shall not annually manufacture for sale more than 930,000 gallons of beer, 25,000 gallons of wine, or 50,000 gallons of spirits; (4) shall not annually sell more than 232,500 gallons of its beer to retail licensees and class 3 brewers and to brewers, class 1 brewers, and class 2 brewers that, pursuant to subsection (e) of Section 6-4 of this Act, sell beer, cider, mead, or any combination thereof to non-licensees at their breweries; and (5) has relinquished any brew pub license held by the licensee, including any ownership interest it held in the licensed brew pub.

(D) A self-distribution exemption holder shall annually certify to the State Commission its manufacture of beer during the previous 12 months and its anticipated manufacture and sales of beer for the next 12 months. The State Commission may fine, suspend, or revoke a self-distribution exemption after a hearing if it finds that the exemption holder has made a material misrepresentation in its application, violated a revenue or alcoholic beverage law of Illinois, exceeded the manufacture of 930,000 gallons of beer, 25,000 gallons of wine, or 50,000 gallons of spirits in any calendar year or became part of an affiliated group manufacturing more than 930,000 gallons of beer, 25,000 gallons of wine, or 50,000 gallons of spirits.

(E) The State Commission shall issue rules and regulations governing self-distribution exemptions consistent with this Act.

(F) Nothing in this paragraph (18) shall prohibit a self-distribution exemption holder from entering into or simultaneously having a distribution agreement with a licensed Illinois importing distributor or a distributor. If a self-distribution exemption holder enters into a distribution agreement and has assigned distribution rights to an importing distributor or distributor, then the self-distribution exemption holder's distribution rights in the assigned territories shall cease in a reasonable time not to exceed 60 days.

(G) It is the intent of this paragraph (18) to promote and continue orderly markets. The General Assembly finds that in order to preserve Illinois' regulatory distribution system, it is necessary to create an exception for smaller manufacturers in order to afford and allow such smaller manufacturers of beer access to the marketplace in order to develop a customer base without impairing the integrity of the 3-tier system.

(19)(A) A class 1 craft distiller licensee or a non-resident dealer who manufactures less than 50,000 gallons of distilled spirits per year may make application to the State Commission for a self-distribution exemption to allow the sale of not more than 5,000 gallons of the exemption holder's spirits to retail licensees per year.

(B) In the application, which shall be sworn under penalty of perjury, the class 1 craft distiller licensee or non-resident dealer shall state (1) the date it was established; (2) its volume of spirits manufactured and sold for each year since its establishment; (3) its efforts to establish distributor relationships; (4) that a self-distribution exemption is necessary to facilitate the marketing of its spirits; and (5) that it will comply with the alcoholic beverage and revenue laws of the United States, this State, and any other state where it is licensed.

(C) Any application submitted shall be posted on the State Commission's website at least 45 days prior to action by the State Commission. The State Commission shall approve the application for a self-distribution exemption if the applicant: (1) is in compliance with State revenue and alcoholic beverage laws; (2) is not a member of any affiliated group that produces more than 50,000 gallons of spirits per annum, 930,000 gallons of beer per annum, or 25,000 gallons of wine per annum; (3) does not annually manufacture for sale more than 50,000 gallons of spirits, 930,000 gallons of beer, or 25,000 gallons of wine; and (4) does not annually sell more than 5,000 gallons of its spirits to retail licensees.

(D) A self-distribution exemption holder shall annually certify to the State Commission its manufacture of spirits during the previous 12 months and its anticipated manufacture and sales of spirits for the next 12 months. The State Commission may fine, suspend, or revoke a self-distribution exemption after a hearing if it finds that the exemption holder has made a material misrepresentation in its application, violated a revenue or alcoholic beverage law of Illinois, exceeded the manufacture of 50,000 gallons of spirits, 930,000 gallons of beer, or 25,000 gallons of wine in any calendar year, or has become part of an affiliated group manufacturing more than 50,000 gallons of spirits, 930,000 gallons of beer, or 25,000 gallons of wine.

(E) The State Commission shall adopt rules governing self-distribution exemptions consistent with this Act.

(F) Nothing in this paragraph (19) shall prohibit a self-distribution exemption holder from entering into or simultaneously having a distribution agreement with a licensed Illinois importing distributor or a distributor.

(G) It is the intent of this paragraph (19) to promote and continue orderly markets. The General Assembly finds that in order to preserve Illinois' regulatory distribution system, it is necessary to create an exception for smaller manufacturers in order to afford and allow such smaller manufacturers of spirits access to the marketplace in order to develop a customer base without impairing the integrity of the 3-tier system.

(20)(A) A class 3 brewer licensee who must manufacture less than 465,000 gallons of beer in the aggregate and not more than 155,000 gallons at any single brewery premises may make application to the State Commission for a self-distribution exemption to allow the sale of not more than 6,200 gallons of beer from each in-state or out-of-state class 3 brewery premises, which shall not exceed 18,600 gallons annually in the aggregate, that is manufactured at a wholly owned class 3 brewer's in-state or out-of-state licensed premises to retail licensees and class 3 brewers and to brewers, class 1 brewers, class 2 brewers that, pursuant to subsection (e) of Section 6-4, sell beer, cider, or both beer and cider to non-licensees at their licensed breweries.

(B) In the application, which shall be sworn under penalty of perjury, the class 3 brewer licensee shall state:

(1) the date it was established;

(2) its volume of beer manufactured and sold for each year since its establishment;

(3) its efforts to establish distributor relationships;

(4) that a self-distribution exemption is necessary to facilitate the marketing of its beer; and

(5) that it will comply with the alcoholic beverage and revenue laws of the United States, this State, and any other state where it is licensed.

(C) Any application submitted shall be posted on the State Commission's website at least 45 days before action by the State Commission. The State Commission shall approve the application for a self-distribution exemption if the class 3 brewer licensee: (1) is in compliance with the State, revenue, and alcoholic beverage laws; (2) is not a member of any affiliated group that manufacturers, directly or indirectly, more than 465,000 gallons of beer per annum; (3) shall not annually manufacture for sale more than 465,000 gallons of beer or more than 155,000 gallons at any single brewery premises; and (4) shall not annually sell more than 6,200 gallons of beer from each in-state or out-of-state class 3 brewery premises, and shall not exceed 18,600 gallons annually in the aggregate, to retail licensees and class 3 brewers and to brewers, class 1 brewers, and class 2 brewers that, pursuant to subsection (e) of Section 6-4 of this Act, sell beer, cider, or both beer and cider to non-licensees at their breweries.

(D) A self-distribution exemption holder shall annually certify to the State Commission its manufacture of beer during the previous 12 months and its anticipated manufacture and sales of beer for the next 12 months. The State Commission may fine, suspend, or revoke a self-distribution exemption after a hearing if it finds that the exemption holder has made a material misrepresentation in its application, violated a revenue or alcoholic beverage law of Illinois, exceeded the manufacture of 465,000 gallons of beer in any calendar year or became part of an affiliated group manufacturing more than 465,000 gallons of beer, or exceeded the sale to retail licensees, brewers, class 1 brewers, class 2 brewers, and class 3 brewers of 6,200 gallons per brewery location or 18,600 gallons in the aggregate.

(E) The State Commission may adopt rules governing self-distribution exemptions consistent with this Act.

(F) Nothing in this paragraph shall prohibit a self-distribution exemption holder from entering into or simultaneously having a distribution agreement with a licensed Illinois importing distributor or a distributor. If a self-distribution exemption holder enters into a distribution agreement and has assigned distribution rights to an importing distributor or distributor, then the self-distribution exemption holder's distribution rights in the assigned territories shall cease in a reasonable time not to exceed 60 days.

(G) It is the intent of this paragraph to promote and continue orderly markets. The General Assembly finds that in order to preserve Illinois' regulatory distribution system, it is necessary to create an exception for smaller manufacturers in order to afford and allow such smaller manufacturers of beer access to the marketplace in order to develop a customer base without impairing the integrity of the 3-tier system.

(b) On or before April 30, 1999, the Commission shall present a written report to the Governor and the General Assembly that shall be based on a study of the impact of Public Act 90-739 on the business of soliciting, selling, and shipping alcoholic liquor from outside of this State directly to residents of this State.

As part of its report, the Commission shall provide the following information:

(i) the amount of State excise and sales tax revenues generated as a result of Public Act 90-739;

(ii) the amount of licensing fees received as a result of Public Act 90-739;

(iii) the number of reported violations, the number of cease and desist notices issued by the Commission, the number of notices of violations issued to the Department of Revenue, and the number of notices and complaints of violations to law enforcement officials.

(Source: P.A. 101-37, eff. 7-3-19; 101-81, eff. 7-12-19; 101-482, eff. 8-23-19; 102-442, eff. 8-20-21; 102-558, eff. 8-20-21; 102-813, eff. 5-13-22.)

(235 ILCS 5/3-13) (from Ch. 43, par. 108a)

Sec. 3-13. The provisions of "The Illinois Administrative Procedure Act", as now or hereafter amended, are hereby expressly adopted and incorporated herein as though a part of this Act, and shall apply to all administrative rules and procedures of the State commission under this Act.

(Source: P.A. 82-783.)