HB 5108

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Full Text of HB5108
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	HB5108 - 104th General Assembly
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104TH GENERAL ASSEMBLY
State of Illinois
2025 and 2026
HB5108
Introduced 2/10/2026, by Rep. Kam Buckner
SYNOPSIS AS INTRODUCED:
235 ILCS 5/3-12
Amends the Liquor Control Act of 1934. Provides that the maximum fine that may be levied against any licensee shall not exceed $20,000 per violation (instead of the maximum fine that may be levied against any licensee, for the period of the license, shall not exceed $20,000). Makes a conforming change. Effective immediately.
LRB104 19995 RPS 33446 b
A BILL FOR
		HB5108		LRB104 19995 RPS 33446 b
1    AN ACT concerning liquor.
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
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    (Text of Section before amendment by P.A. 104-451)
8    Sec. 3-12. Powers and duties of State Commission.
9    (a) The State Commission shall have the following powers,
10functions, and duties:
11        (1) To receive applications and to issue licenses to
12    manufacturers, foreign importers, importing distributors,
13    distributors, non-resident dealers, on premise consumption
14    retailers, off premise sale retailers, special event
15    retailer licensees, special use permit licenses, auction
16    liquor licenses, brew pubs, caterer retailers,
17    non-beverage users, railroads, including owners and
18    lessees of sleeping, dining and cafe cars, airplanes,
19    boats, brokers, and wine maker's premises licensees in
20    accordance with the provisions of this Act, and to suspend
21    or revoke such licenses upon the State Commission's
22    determination, upon notice after hearing, that a licensee
23    has violated any provision of this Act or any rule or
		HB5108	- 2 -	LRB104 19995 RPS 33446 b
1    regulation issued pursuant thereto and in effect for 30
2    days prior to such violation. Except in the case of an
3    action taken pursuant to a violation of Section 6-3, 6-5,
4    or 6-9, any action by the State Commission to suspend or
5    revoke a licensee's license may be limited to the license
6    for the specific premises where the violation occurred. An
7    action for a violation of this Act shall be commenced by
8    the State Commission within 2 years after the date the
9    State Commission becomes aware of the violation.
10        In lieu of suspending or revoking a license, the
11    commission may impose a fine, upon the State Commission's
12    determination and notice after hearing, that a licensee
13    has violated any provision of this Act or any rule or
14    regulation issued pursuant thereto and in effect for 30
15    days prior to such violation.
16        For the purpose of this paragraph (1), when
17    determining multiple violations for the sale of alcohol to
18    a person under the age of 21, a second or subsequent
19    violation for the sale of alcohol to a person under the age
20    of 21 shall only be considered if it was committed within 5
21    years after the date when a prior violation for the sale of
22    alcohol to a person under the age of 21 was committed.
23        [The fine imposed under this paragraph may not exceed ]
24    [$500 for each violation.] Each day that the activity, which
25    gave rise to the original fine, continues is a separate
26    violation. The maximum fine that may be levied against any
		HB5108	- 3 -	LRB104 19995 RPS 33446 b
1    licensee[, for the period of the license,] shall not exceed
2    $20,000 per violation. The maximum penalty that may be
3    imposed on a licensee for selling a bottle of alcoholic
4    liquor with a foreign object in it or serving from a bottle
5    of alcoholic liquor with a foreign object in it shall be
6    the destruction of that bottle of alcoholic liquor for the
7    first 10 bottles so sold or served from by the licensee.
8    For the eleventh bottle of alcoholic liquor and for each
9    third bottle thereafter sold or served from by the
10    licensee with a foreign object in it, the maximum penalty
11    that may be imposed on the licensee is the destruction of
12    the bottle of alcoholic liquor and a fine of up to $50.
13        Any notice issued by the State Commission to a
14    licensee for a violation of this Act or any notice with
15    respect to settlement or offer in compromise shall include
16    the field report, photographs, and any other supporting
17    documentation necessary to reasonably inform the licensee
18    of the nature and extent of the violation or the conduct
19    alleged to have occurred. The failure to include such
20    required documentation shall result in the dismissal of
21    the action.
22        (2) To adopt such rules and regulations consistent
23    with the provisions of this Act which shall be necessary
24    to carry on its functions and duties to the end that the
25    health, safety and welfare of the People of the State of
26    Illinois shall be protected and temperance in the
		HB5108	- 4 -	LRB104 19995 RPS 33446 b
1    consumption of alcoholic liquors shall be fostered and
2    promoted and to distribute copies of such rules and
3    regulations to all licensees affected thereby.
4        (3) To call upon other administrative departments of
5    the State, county and municipal governments, county and
6    city police departments and upon prosecuting officers for
7    such information and assistance as it deems necessary in
8    the performance of its duties.
9        (4) To recommend to local commissioners rules and
10    regulations, not inconsistent with the law, for the
11    distribution and sale of alcoholic liquors throughout the
12    State.
13        (5) To inspect, or cause to be inspected, any premises
14    in this State where alcoholic liquors are manufactured,
15    distributed, warehoused, or sold. Nothing in this Act
16    authorizes an agent of the State Commission to inspect
17    private areas within the premises without reasonable
18    suspicion or a warrant during an inspection. "Private
19    areas" include, but are not limited to, safes, personal
20    property, and closed desks.
21        (5.1) Upon receipt of a complaint or upon having
22    knowledge that any person is engaged in business as a
23    manufacturer, importing distributor, distributor, or
24    retailer without a license or valid license, to conduct an
25    investigation. If, after conducting an investigation, the
26    State Commission is satisfied that the alleged conduct
		HB5108	- 5 -	LRB104 19995 RPS 33446 b
1    occurred or is occurring, it may issue a cease and desist
2    notice as provided in this Act, impose civil penalties as
3    provided in this Act, notify the local liquor authority,
4    or file a complaint with the State's Attorney's Office of
5    the county where the incident occurred or the Attorney
6    General.
7        (5.2) Upon receipt of a complaint or upon having
8    knowledge that any person is shipping alcoholic liquor
9    into this State from a point outside of this State if the
10    shipment is in violation of this Act, to conduct an
11    investigation. If, after conducting an investigation, the
12    State Commission is satisfied that the alleged conduct
13    occurred or is occurring, it may issue a cease and desist
14    notice as provided in this Act, impose civil penalties as
15    provided in this Act, notify the foreign jurisdiction, or
16    file a complaint with the State's Attorney's Office of the
17    county where the incident occurred or the Attorney
18    General.
19        (5.3) To receive complaints from licensees, local
20    officials, law enforcement agencies, organizations, and
21    persons stating that any licensee has been or is violating
22    any provision of this Act or the rules and regulations
23    issued pursuant to this Act. Such complaints shall be in
24    writing, signed and sworn to by the person making the
25    complaint, and shall state with specificity the facts in
26    relation to the alleged violation. If the State Commission
		HB5108	- 6 -	LRB104 19995 RPS 33446 b
1    has reasonable grounds to believe that the complaint
2    substantially alleges a violation of this Act or rules and
3    regulations adopted pursuant to this Act, it shall conduct
4    an investigation. If, after conducting an investigation,
5    the State Commission is satisfied that the alleged
6    violation did occur, it shall proceed with disciplinary
7    action against the licensee as provided in this Act.
8        (5.4) To make arrests and issue notices of civil
9    violations where necessary for the enforcement of this
10    Act.
11        (5.5) To investigate any and all unlicensed activity.
12        (5.6) To impose civil penalties or fines to any person
13    who, without holding a valid license, engages in conduct
14    that requires a license pursuant to this Act, in an amount
15    not to exceed $20,000 for each offense as determined by
16    the State Commission. A civil penalty shall be assessed by
17    the State Commission after a hearing is held in accordance
18    with the provisions set forth in this Act regarding the
19    provision of a hearing for the revocation or suspension of
20    a license.
21        (6) To hear and determine appeals from orders of a
22    local commission in accordance with the provisions of this
23    Act, as hereinafter set forth. Hearings under this
24    subsection shall be held in Springfield or Chicago, at
25    whichever location is the more convenient for the majority
26    of persons who are parties to the hearing.
		HB5108	- 7 -	LRB104 19995 RPS 33446 b
1        (7) The State Commission shall establish uniform
2    systems of accounts to be kept by all retail licensees
3    having more than 4 employees, and for this purpose the
4    State Commission may classify all retail licensees having
5    more than 4 employees and establish a uniform system of
6    accounts for each class and prescribe the manner in which
7    such accounts shall be kept. The State Commission may also
8    prescribe the forms of accounts to be kept by all retail
9    licensees having more than 4 employees, including, but not
10    limited to, accounts of earnings and expenses and any
11    distribution, payment, or other distribution of earnings
12    or assets, and any other forms, records, and memoranda
13    which in the judgment of the commission may be necessary
14    or appropriate to carry out any of the provisions of this
15    Act, including, but not limited to, such forms, records,
16    and memoranda as will readily and accurately disclose at
17    all times the beneficial ownership of such retail licensed
18    business. The accounts, forms, records, and memoranda
19    shall be available at all reasonable times for inspection
20    by authorized representatives of the State Commission or
21    by any local liquor control commissioner or his or her
22    authorized representative. The commission may, from time
23    to time, alter, amend, or repeal, in whole or in part, any
24    uniform system of accounts, or the form and manner of
25    keeping accounts.
26        (8) In the conduct of any hearing authorized to be
		HB5108	- 8 -	LRB104 19995 RPS 33446 b
1    held by the State Commission, to appoint, at the
2    commission's discretion, hearing officers to conduct
3    hearings involving complex issues or issues that will
4    require a protracted period of time to resolve, to
5    examine, or cause to be examined, under oath, any
6    licensee, and to examine or cause to be examined the books
7    and records of such licensee; to hear testimony and take
8    proof material for its information in the discharge of its
9    duties hereunder; to administer or cause to be
10    administered oaths; for any such purpose to issue subpoena
11    or subpoenas to require the attendance of witnesses and
12    the production of books, which shall be effective in any
13    part of this State, and to adopt rules to implement its
14    powers under this paragraph (8).
15        Any circuit court may, by order duly entered, require
16    the attendance of witnesses and the production of relevant
17    books subpoenaed by the State Commission and the court may
18    compel obedience to its order by proceedings for contempt.
19        (9) To investigate the administration of laws in
20    relation to alcoholic liquors in this and other states and
21    any foreign countries, and to recommend from time to time
22    to the Governor and through him or her to the legislature
23    of this State, such amendments to this Act, if any, as it
24    may think desirable and as will serve to further the
25    general broad purposes contained in Section 1-2 hereof.
26        (10) To adopt such rules and regulations consistent
		HB5108	- 9 -	LRB104 19995 RPS 33446 b
1    with the provisions of this Act which shall be necessary
2    for the control, sale, or disposition of alcoholic liquor
3    damaged as a result of an accident, wreck, flood, fire, or
4    other similar occurrence.
5        (11) To develop industry educational programs related
6    to responsible serving and selling, particularly in the
7    areas of overserving consumers and illegal underage
8    purchasing and consumption of alcoholic beverages.
9        (11.1) To license persons providing education and
10    training to alcohol beverage sellers and servers for
11    mandatory and non-mandatory training under the Beverage
12    Alcohol Sellers and Servers Education and Training
13    (BASSET) programs and to develop and administer a public
14    awareness program in Illinois to reduce or eliminate the
15    illegal purchase and consumption of alcoholic beverage
16    products by persons under the age of 21. Application for a
17    license shall be made on forms provided by the State
18    Commission.
19        (12) To develop and maintain a repository of license
20    and regulatory information.
21        (13) (Blank).
22        (14) On or before April 30, 2008 and every 2 years
23    thereafter, the State Commission shall present a written
24    report to the Governor and the General Assembly that shall
25    be based on a study of the impact of Public Act 95-634 on
26    the business of soliciting, selling, and shipping wine
		HB5108	- 10 -	LRB104 19995 RPS 33446 b
1    from inside and outside of this State directly to
2    residents of this State. As part of its report, the State
3    Commission shall provide all of the following information:
4            (A) The amount of State excise and sales tax
5        revenues generated.
6            (B) The amount of licensing fees received.
7            (C) The number of cases of wine shipped from
8        inside and outside of this State directly to residents
9        of this State.
10            (D) The number of alcohol compliance operations
11        conducted.
12            (E) The number of winery shipper's licenses
13        issued.
14            (F) The number of each of the following: reported
15        violations; cease and desist notices issued by the
16        Commission; notices of violations issued by the
17        Commission and to the Department of Revenue; and
18        notices and complaints of violations to law
19        enforcement officials, including, without limitation,
20        the Illinois Attorney General and the U.S. Department
21        of Treasury's Alcohol and Tobacco Tax and Trade
22        Bureau.
23        (15) As a means to reduce the underage consumption of
24    alcoholic liquors, the State Commission shall conduct
25    alcohol compliance operations to investigate whether
26    businesses that are soliciting, selling, and shipping wine
		HB5108	- 11 -	LRB104 19995 RPS 33446 b
1    from inside or outside of this State directly to residents
2    of this State are licensed by this State or are selling or
3    attempting to sell wine to persons under 21 years of age in
4    violation of this Act.
5        (16) The State Commission shall, in addition to
6    notifying any appropriate law enforcement agency, submit
7    notices of complaints or violations of Sections 6-29 and
8    6-29.1 by persons who do not hold a winery shipper's
9    license under this Act to the Illinois Attorney General
10    and to the U.S. Department of Treasury's Alcohol and
11    Tobacco Tax and Trade Bureau.
12        (17)(A) A person licensed to make wine under the laws
13    of another state who has a winery shipper's license under
14    this Act and annually produces less than 25,000 gallons of
15    wine or a person who has a first-class or second-class
16    wine manufacturer's license, a first-class or second-class
17    wine-maker's license, or a limited wine manufacturer's
18    license under this Act and annually produces less than
19    25,000 gallons of wine may make application to the
20    Commission for a self-distribution exemption to allow the
21    sale of not more than 5,000 gallons of the exemption
22    holder's wine to retail licensees per year and to sell
23    cider, mead, or both cider and mead to brewers, class 1
24    brewers, class 2 brewers, and class 3 brewers that,
25    pursuant to subsection (e) of Section 6-4 of this Act,
26    sell beer, cider, mead, or any combination thereof to
		HB5108	- 12 -	LRB104 19995 RPS 33446 b
1    non-licensees at their breweries.
2        (B) In the application, which shall be sworn under
3    penalty of perjury, such person shall state (1) the date
4    it was established; (2) its volume of production and sales
5    for each year since its establishment; (3) its efforts to
6    establish distributor relationships; (4) that a
7    self-distribution exemption is necessary to facilitate the
8    marketing of its wine; and (5) that it will comply with the
9    liquor and revenue laws of the United States, this State,
10    and any other state where it is licensed.
11        (C) The State Commission shall approve the application
12    for a self-distribution exemption if such person: (1) is
13    in compliance with State revenue and liquor laws; (2) is
14    not a member of any affiliated group that produces
15    directly or indirectly more than 25,000 gallons of wine
16    per annum, 930,000 gallons of beer per annum, or 50,000
17    gallons of spirits per annum; (3) will not annually
18    produce for sale more than 25,000 gallons of wine, 930,000
19    gallons of beer, or 50,000 gallons of spirits; and (4)
20    will not annually sell more than 5,000 gallons of its wine
21    to retail licensees.
22        (D) A self-distribution exemption holder shall
23    annually certify to the State Commission its production of
24    wine in the previous 12 months and its anticipated
25    production and sales for the next 12 months. The State
26    Commission may fine, suspend, or revoke a
		HB5108	- 13 -	LRB104 19995 RPS 33446 b
1    self-distribution exemption after a hearing if it finds
2    that the exemption holder has made a material
3    misrepresentation in its application, violated a revenue
4    or liquor law of Illinois, exceeded production of 25,000
5    gallons of wine, 930,000 gallons of beer, or 50,000
6    gallons of spirits in any calendar year, or become part of
7    an affiliated group producing more than 25,000 gallons of
8    wine, 930,000 gallons of beer, or 50,000 gallons of
9    spirits.
10        (E) Except in hearings for violations of this Act or
11    Public Act 95-634 or a bona fide investigation by duly
12    sworn law enforcement officials, the State Commission, or
13    its agents, the State Commission shall maintain the
14    production and sales information of a self-distribution
15    exemption holder as confidential and shall not release
16    such information to any person.
17        (F) The State Commission shall issue regulations
18    governing self-distribution exemptions consistent with
19    this Section and this Act.
20        (G) Nothing in this paragraph (17) shall prohibit a
21    self-distribution exemption holder from entering into or
22    simultaneously having a distribution agreement with a
23    licensed Illinois distributor.
24        (H) It is the intent of this paragraph (17) to promote
25    and continue orderly markets. The General Assembly finds
26    that, in order to preserve Illinois' regulatory
		HB5108	- 14 -	LRB104 19995 RPS 33446 b
1    distribution system, it is necessary to create an
2    exception for smaller makers of wine as their wines are
3    frequently adjusted in varietals, mixes, vintages, and
4    taste to find and create market niches sometimes too small
5    for distributor or importing distributor business
6    strategies. Limited self-distribution rights will afford
7    and allow smaller makers of wine access to the marketplace
8    in order to develop a customer base without impairing the
9    integrity of the 3-tier system.
10        (18)(A) A class 1 brewer licensee, who must also be
11    either a licensed brewer or licensed non-resident dealer
12    and annually manufacture less than 930,000 gallons of
13    beer, may make application to the State Commission for a
14    self-distribution exemption to allow the sale of not more
15    than 232,500 gallons per year of the exemption holder's
16    beer to retail licensees and to brewers, class 1 brewers,
17    and class 2 brewers that, pursuant to subsection (e) of
18    Section 6-4 of this Act, sell beer, cider, mead, or any
19    combination thereof to non-licensees at their breweries.
20        (B) In the application, which shall be sworn under
21    penalty of perjury, the class 1 brewer licensee shall
22    state (1) the date it was established; (2) its volume of
23    beer manufactured and sold for each year since its
24    establishment; (3) its efforts to establish distributor
25    relationships; (4) that a self-distribution exemption is
26    necessary to facilitate the marketing of its beer; and (5)
		HB5108	- 15 -	LRB104 19995 RPS 33446 b
1    that it will comply with the alcoholic beverage and
2    revenue laws of the United States, this State, and any
3    other state where it is licensed.
4        (C) Any application submitted shall be posted on the
5    State Commission's website at least 45 days prior to
6    action by the State Commission. The State Commission shall
7    approve the application for a self-distribution exemption
8    if the class 1 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 manufactures,
11    directly or indirectly, more than 930,000 gallons of beer
12    per annum, 25,000 gallons of wine per annum, or 50,000
13    gallons of spirits per annum; (3) shall not annually
14    manufacture for sale more than 930,000 gallons of beer,
15    25,000 gallons of wine, or 50,000 gallons of spirits; (4)
16    shall not annually sell more than 232,500 gallons of its
17    beer to retail licensees and class 3 brewers and to
18    brewers, class 1 brewers, and class 2 brewers that,
19    pursuant to subsection (e) of Section 6-4 of this Act,
20    sell beer, cider, mead, or any combination thereof to
21    non-licensees at their breweries; and (5) has relinquished
22    any brew pub license held by the licensee, including any
23    ownership interest it held in the licensed brew pub.
24        (D) A self-distribution exemption holder shall
25    annually certify to the State Commission its manufacture
26    of beer during the previous 12 months and its anticipated
		HB5108	- 16 -	LRB104 19995 RPS 33446 b
1    manufacture and sales of beer for the next 12 months. The
2    State Commission may fine, suspend, or revoke a
3    self-distribution exemption after a hearing if it finds
4    that the exemption holder has made a material
5    misrepresentation in its application, violated a revenue
6    or alcoholic beverage law of Illinois, exceeded the
7    manufacture of 930,000 gallons of beer, 25,000 gallons of
8    wine, or 50,000 gallons of spirits in any calendar year or
9    became part of an affiliated group manufacturing more than
10    930,000 gallons of beer, 25,000 gallons of wine, or 50,000
11    gallons of spirits.
12        (E) The State Commission shall issue rules and
13    regulations governing self-distribution exemptions
14    consistent with this Act.
15        (F) Nothing in this paragraph (18) shall prohibit a
16    self-distribution exemption holder from entering into or
17    simultaneously having a distribution agreement with a
18    licensed Illinois importing distributor or a distributor.
19    If a self-distribution exemption holder enters into a
20    distribution agreement and has assigned distribution
21    rights to an importing distributor or distributor, then
22    the self-distribution exemption holder's distribution
23    rights in the assigned territories shall cease in a
24    reasonable time not to exceed 60 days.
25        (G) It is the intent of this paragraph (18) to promote
26    and continue orderly markets. The General Assembly finds
		HB5108	- 17 -	LRB104 19995 RPS 33446 b
1    that in order to preserve Illinois' regulatory
2    distribution system, it is necessary to create an
3    exception for smaller manufacturers in order to afford and
4    allow such smaller manufacturers of beer access to the
5    marketplace in order to develop a customer base without
6    impairing the integrity of the 3-tier system.
7        (19)(A) A class 1 craft distiller licensee or a
8    non-resident dealer who manufactures less than 50,000
9    gallons of distilled spirits per year may make application
10    to the State Commission for a self-distribution exemption
11    to allow the sale of not more than 5,000 gallons of the
12    exemption holder's spirits to retail licensees per year.
13        (B) In the application, which shall be sworn under
14    penalty of perjury, the class 1 craft distiller licensee
15    or non-resident dealer shall state (1) the date it was
16    established; (2) its volume of spirits manufactured and
17    sold for each year since its establishment; (3) its
18    efforts to establish distributor relationships; (4) that a
19    self-distribution exemption is necessary to facilitate the
20    marketing of its spirits; and (5) that it will comply with
21    the alcoholic beverage and revenue laws of the United
22    States, this State, and any other state where it is
23    licensed.
24        (C) Any application submitted shall be posted on the
25    State Commission's website at least 45 days prior to
26    action by the State Commission. The State Commission shall
		HB5108	- 18 -	LRB104 19995 RPS 33446 b
1    approve the application for a self-distribution exemption
2    if the applicant: (1) is in compliance with State revenue
3    and alcoholic beverage laws; (2) is not a member of any
4    affiliated group that produces more than 50,000 gallons of
5    spirits per annum, 930,000 gallons of beer per annum, or
6    25,000 gallons of wine per annum; (3) does not annually
7    manufacture for sale more than 50,000 gallons of spirits,
8    930,000 gallons of beer, or 25,000 gallons of wine; and
9    (4) does not annually sell more than 5,000 gallons of its
10    spirits to retail licensees.
11        (D) A self-distribution exemption holder shall
12    annually certify to the State Commission its manufacture
13    of spirits during the previous 12 months and its
14    anticipated manufacture and sales of spirits for the next
15    12 months. The State Commission may fine, suspend, or
16    revoke a self-distribution exemption after a hearing if it
17    finds that the exemption holder has made a material
18    misrepresentation in its application, violated a revenue
19    or alcoholic beverage law of Illinois, exceeded the
20    manufacture of 50,000 gallons of spirits, 930,000 gallons
21    of beer, or 25,000 gallons of wine in any calendar year, or
22    has become part of an affiliated group manufacturing more
23    than 50,000 gallons of spirits, 930,000 gallons of beer,
24    or 25,000 gallons of wine.
25        (E) The State Commission shall adopt rules governing
26    self-distribution exemptions consistent with this Act.
		HB5108	- 19 -	LRB104 19995 RPS 33446 b
1        (F) Nothing in this paragraph (19) shall prohibit a
2    self-distribution exemption holder from entering into or
3    simultaneously having a distribution agreement with a
4    licensed Illinois importing distributor or a distributor.
5        (G) It is the intent of this paragraph (19) to promote
6    and continue orderly markets. The General Assembly finds
7    that in order to preserve Illinois' regulatory
8    distribution system, it is necessary to create an
9    exception for smaller manufacturers in order to afford and
10    allow such smaller manufacturers of spirits access to the
11    marketplace in order to develop a customer base without
12    impairing the integrity of the 3-tier system.
13        (20)(A) A class 3 brewer licensee who must manufacture
14    less than 465,000 gallons of beer in the aggregate and not
15    more than 155,000 gallons at any single brewery premises
16    may make application to the State Commission for a
17    self-distribution exemption to allow the sale of not more
18    than 6,200 gallons of beer from each in-state or
19    out-of-state class 3 brewery premises, which shall not
20    exceed 18,600 gallons annually in the aggregate, that is
21    manufactured at a wholly owned class 3 brewer's in-state
22    or out-of-state licensed premises to retail licensees and
23    class 3 brewers and to brewers, class 1 brewers, class 2
24    brewers that, pursuant to subsection (e) of Section 6-4,
25    sell beer, cider, or both beer and cider to non-licensees
26    at their licensed breweries.
		HB5108	- 20 -	LRB104 19995 RPS 33446 b
1        (B) In the application, which shall be sworn under
2    penalty of perjury, the class 3 brewer licensee shall
3    state:
4            (1) the date it was established;
5            (2) its volume of beer manufactured and sold for
6        each year since its establishment;
7            (3) its efforts to establish distributor
8        relationships;
9            (4) that a self-distribution exemption is
10        necessary to facilitate the marketing of its beer; and
11            (5) that it will comply with the alcoholic
12        beverage and revenue laws of the United States, this
13        State, and any other state where it is licensed.
14        (C) Any application submitted shall be posted on the
15    State Commission's website at least 45 days before action
16    by the State Commission. The State Commission shall
17    approve the application for a self-distribution exemption
18    if the class 3 brewer licensee: (1) is in compliance with
19    the State, revenue, and alcoholic beverage laws; (2) is
20    not a member of any affiliated group that manufacturers,
21    directly or indirectly, more than 465,000 gallons of beer
22    per annum; (3) shall not annually manufacture for sale
23    more than 465,000 gallons of beer or more than 155,000
24    gallons at any single brewery premises; and (4) shall not
25    annually sell more than 6,200 gallons of beer from each
26    in-state or out-of-state class 3 brewery premises, and
		HB5108	- 21 -	LRB104 19995 RPS 33446 b
1    shall not exceed 18,600 gallons annually in the aggregate,
2    to retail licensees and class 3 brewers and to brewers,
3    class 1 brewers, and class 2 brewers that, pursuant to
4    subsection (e) of Section 6-4 of this Act, sell beer,
5    cider, or both beer and cider to non-licensees at their
6    breweries.
7        (D) A self-distribution exemption holder shall
8    annually certify to the State Commission its manufacture
9    of beer during the previous 12 months and its anticipated
10    manufacture and sales of beer for the next 12 months. The
11    State Commission may fine, suspend, or revoke a
12    self-distribution exemption after a hearing if it finds
13    that the exemption holder has made a material
14    misrepresentation in its application, violated a revenue
15    or alcoholic beverage law of Illinois, exceeded the
16    manufacture of 465,000 gallons of beer in any calendar
17    year or became part of an affiliated group manufacturing
18    more than 465,000 gallons of beer, or exceeded the sale to
19    retail licensees, brewers, class 1 brewers, class 2
20    brewers, and class 3 brewers of 6,200 gallons per brewery
21    location or 18,600 gallons in the aggregate.
22        (E) The State Commission may adopt rules governing
23    self-distribution exemptions consistent with this Act.
24        (F) Nothing in this paragraph shall prohibit a
25    self-distribution exemption holder from entering into or
26    simultaneously having a distribution agreement with a
		HB5108	- 22 -	LRB104 19995 RPS 33446 b
1    licensed Illinois importing distributor or a distributor.
2    If a self-distribution exemption holder enters into a
3    distribution agreement and has assigned distribution
4    rights to an importing distributor or distributor, then
5    the self-distribution exemption holder's distribution
6    rights in the assigned territories shall cease in a
7    reasonable time not to exceed 60 days.
8        (G) It is the intent of this paragraph to promote and
9    continue orderly markets. The General Assembly finds that
10    in order to preserve Illinois' regulatory distribution
11    system, it is necessary to create an exception for smaller
12    manufacturers in order to afford and allow such smaller
13    manufacturers of beer access to the marketplace in order
14    to develop a customer base without impairing the integrity
15    of the 3-tier system.
16    (b) On or before April 30, 1999, the Commission shall
17present a written report to the Governor and the General
18Assembly that shall be based on a study of the impact of Public
19Act 90-739 on the business of soliciting, selling, and
20shipping alcoholic liquor from outside of this State directly
21to residents of this State.
22    As part of its report, the Commission shall provide the
23following information:
24        (i) the amount of State excise and sales tax revenues
25    generated as a result of Public Act 90-739;
26        (ii) the amount of licensing fees received as a result
		HB5108	- 23 -	LRB104 19995 RPS 33446 b
1    of Public Act 90-739;
2        (iii) the number of reported violations, the number of
3    cease and desist notices issued by the Commission, the
4    number of notices of violations issued to the Department
5    of Revenue, and the number of notices and complaints of
6    violations to law enforcement officials.
7(Source: P.A. 101-37, eff. 7-3-19; 101-81, eff. 7-12-19;
8101-482, eff. 8-23-19; 102-442, eff. 8-20-21; 102-558, eff.
98-20-21; 102-813, eff. 5-13-22.)
10    (Text of Section after amendment by P.A. 104-451)
11    Sec. 3-12. Powers and duties of State Commission.
12    (a) The State Commission shall have the following powers,
13functions, and duties:
14        (1) To receive applications and to issue licenses to
15    manufacturers, foreign importers, importing distributors,
16    distributors, non-resident dealers, on premise consumption
17    retailers, off premise sale retailers, special event
18    retailer licensees, special use permit licenses, auction
19    liquor licenses, brew pubs, caterer retailers,
20    non-beverage users, railroads, including owners and
21    lessees of sleeping, dining, and cafe cars, airplanes,
22    boats, brokers, and wine maker's premises licensees in
23    accordance with the provisions of this Act, and to suspend
24    or revoke such licenses upon the State Commission's
25    determination, upon notice after hearing, that a licensee
		HB5108	- 24 -	LRB104 19995 RPS 33446 b
1    has violated any provision of this Act or any rule or
2    regulation issued pursuant thereto and in effect for 30
3    days prior to such violation. Except in the case of an
4    action taken pursuant to a violation of Section 6-3, 6-5,
5    or 6-9, any action by the State Commission to suspend or
6    revoke a licensee's license may be limited to the license
7    for the specific premises where the violation occurred. An
8    action for a violation of this Act shall be commenced by
9    the State Commission within 2 years after the date the
10    State Commission becomes aware of the violation.
11        In lieu of suspending or revoking a license, the State
12    Commission may impose a fine, upon the State Commission's
13    determination and notice after hearing, that a licensee
14    has violated any provision of this Act or any rule or
15    regulation issued pursuant thereto and in effect for 30
16    days prior to such violation.
17        For the purpose of this paragraph (1), when
18    determining multiple violations for the sale of alcohol to
19    a person under the age of 21, a second or subsequent
20    violation for the sale of alcohol to a person under the age
21    of 21 shall only be considered if it was committed within 5
22    years after the date when a prior violation for the sale of
23    alcohol to a person under the age of 21 was committed.
24        [The fine imposed under this paragraph may not exceed ]
25    [$500 for each violation.] Each day that the activity, which
26    gave rise to the original fine, continues is a separate
		HB5108	- 25 -	LRB104 19995 RPS 33446 b
1    violation. The maximum fine that may be levied against any
2    licensee[, for the period of the license,] shall not exceed
3    $20,000 per violation. The maximum penalty that may be
4    imposed on a licensee for selling a bottle of alcoholic
5    liquor with a foreign object in it or serving from a bottle
6    of alcoholic liquor with a foreign object in it shall be
7    the destruction of that bottle of alcoholic liquor for the
8    first 10 bottles so sold or served from by the licensee.
9    For the eleventh bottle of alcoholic liquor and for each
10    third bottle thereafter sold or served from by the
11    licensee with a foreign object in it, the maximum penalty
12    that may be imposed on the licensee is the destruction of
13    the bottle of alcoholic liquor and a fine of up to $50.
14        Any notice issued by the State Commission to a
15    licensee for a violation of this Act or any notice with
16    respect to settlement or offer in compromise shall include
17    the field report, photographs, and any other supporting
18    documentation necessary to reasonably inform the licensee
19    of the nature and extent of the violation or the conduct
20    alleged to have occurred. The failure to include such
21    required documentation shall result in the dismissal of
22    the action.
23        (2) To adopt such rules and regulations consistent
24    with the provisions of this Act which shall be necessary
25    to carry on its functions and duties to the end that the
26    health, safety, and welfare of the People of the State of
		HB5108	- 26 -	LRB104 19995 RPS 33446 b
1    Illinois shall be protected and temperance in the
2    consumption of alcoholic liquors shall be fostered and
3    promoted and to distribute copies of such rules and
4    regulations to all licensees affected thereby.
5        (3) To call upon other administrative departments of
6    the State, county and municipal governments, county and
7    city police departments, and prosecuting officers for such
8    information and assistance as it deems necessary in the
9    performance of its duties.
10        (4) To recommend to local commissioners rules and
11    regulations, not inconsistent with the law, for the
12    distribution and sale of alcoholic liquors throughout the
13    State.
14        (5) To inspect, or cause to be inspected, any premises
15    in this State where alcoholic liquors are manufactured,
16    distributed, warehoused, or sold. Nothing in this Act
17    authorizes an agent of the State Commission to inspect
18    private areas within the premises without reasonable
19    suspicion or a warrant during an inspection. "Private
20    areas" includes, but is not limited to, safes, personal
21    property, and closed desks.
22        (5.1) Upon receipt of a complaint or upon having
23    knowledge that any person is engaged in business as a
24    manufacturer, importing distributor, distributor, or
25    retailer without a license or valid license, to conduct an
26    investigation. If, after conducting an investigation, the
		HB5108	- 27 -	LRB104 19995 RPS 33446 b
1    State Commission is satisfied that the alleged conduct
2    occurred or is occurring, it may issue a cease and desist
3    notice as provided in this Act, impose civil penalties as
4    provided in this Act, notify the local liquor authority,
5    or file a complaint with the State's Attorney's Office of
6    the county where the incident occurred or the Attorney
7    General.
8        (5.2) Upon receipt of a complaint or upon having
9    knowledge that any person is shipping alcoholic liquor
10    into this State from a point outside of this State if the
11    shipment is in violation of this Act, to conduct an
12    investigation. If, after conducting an investigation, the
13    State Commission is satisfied that the alleged conduct
14    occurred or is occurring, it may issue a cease and desist
15    notice as provided in this Act, impose civil penalties as
16    provided in this Act, notify the foreign jurisdiction, or
17    file a complaint with the State's Attorney's Office of the
18    county where the incident occurred or the Attorney
19    General.
20        (5.3) To receive complaints from licensees, local
21    officials, law enforcement agencies, organizations, and
22    persons stating that any licensee has been or is violating
23    any provision of this Act or the rules and regulations
24    issued pursuant to this Act. Such complaints shall be in
25    writing, signed and sworn to by the person making the
26    complaint, and shall state with specificity the facts in
		HB5108	- 28 -	LRB104 19995 RPS 33446 b
1    relation to the alleged violation. If the State Commission
2    has reasonable grounds to believe that the complaint
3    substantially alleges a violation of this Act or rules and
4    regulations adopted pursuant to this Act, it shall conduct
5    an investigation. If, after conducting an investigation,
6    the State Commission is satisfied that the alleged
7    violation did occur, it shall proceed with disciplinary
8    action against the licensee as provided in this Act.
9        (5.4) To make arrests and issue notices of civil
10    violations where necessary for the enforcement of this
11    Act.
12        (5.5) To investigate any and all unlicensed activity.
13        (5.6) To impose civil penalties or fines to any person
14    who, without holding a valid license, engages in conduct
15    that requires a license pursuant to this Act, in an amount
16    not to exceed $20,000 for each offense as determined by
17    the State Commission. A civil penalty shall be assessed by
18    the State Commission after a hearing is held in accordance
19    with the provisions set forth in this Act regarding the
20    provision of a hearing for the revocation or suspension of
21    a license.
22        (6) To hear and determine appeals from orders of a
23    local commission in accordance with the provisions of this
24    Act, as hereinafter set forth. Hearings under this
25    subsection shall be held in Springfield or Chicago, at
26    whichever location is the more convenient for the majority
		HB5108	- 29 -	LRB104 19995 RPS 33446 b
1    of persons who are parties to the hearing.
2        (7) The State Commission shall establish uniform
3    systems of accounts to be kept by all retail licensees
4    having more than 4 employees, and, for this purpose, the
5    State Commission may classify all retail licensees having
6    more than 4 employees and establish a uniform system of
7    accounts for each class and prescribe the manner in which
8    such accounts shall be kept. The State Commission may also
9    prescribe the forms of accounts to be kept by all retail
10    licensees having more than 4 employees, including, but not
11    limited to, accounts of earnings and expenses and any
12    distribution, payment, or other distribution of earnings
13    or assets, and any other forms, records, and memoranda
14    which in the judgment of the State Commission may be
15    necessary or appropriate to carry out any of the
16    provisions of this Act, including, but not limited to,
17    such forms, records, and memoranda as will readily and
18    accurately disclose at all times the beneficial ownership
19    of such retail licensed business. The accounts, forms,
20    records, and memoranda shall be available at all
21    reasonable times for inspection by authorized
22    representatives of the State Commission or by any local
23    liquor control commissioner or his or her authorized
24    representative. The State Commission may, from time to
25    time, alter, amend, or repeal, in whole or in part, any
26    uniform system of accounts, or the form and manner of
		HB5108	- 30 -	LRB104 19995 RPS 33446 b
1    keeping accounts.
2        (8) In the conduct of any hearing authorized to be
3    held by the State Commission, to appoint, at the State
4    Commission's discretion, hearing officers to conduct
5    hearings involving complex issues or issues that will
6    require a protracted period of time to resolve, to
7    examine, or cause to be examined, under oath, any
8    licensee, and to examine or cause to be examined the books
9    and records of such licensee; to hear testimony and take
10    proof material for its information in the discharge of its
11    duties hereunder; to administer or cause to be
12    administered oaths; for any such purpose to issue subpoena
13    or subpoenas to require the attendance of witnesses and
14    the production of books, which shall be effective in any
15    part of this State, and to adopt rules to implement its
16    powers under this paragraph (8).
17        Any circuit court may, by order duly entered, require
18    the attendance of witnesses and the production of relevant
19    books subpoenaed by the State Commission and the court may
20    compel obedience to its order by proceedings for contempt.
21        (9) To investigate the administration of laws in
22    relation to alcoholic liquors in this and other states and
23    any foreign countries, and to recommend from time to time
24    to the Governor and through him or her to the legislature
25    of this State, such amendments to this Act, if any, as it
26    may think desirable and as will serve to further the
		HB5108	- 31 -	LRB104 19995 RPS 33446 b
1    general broad purposes contained in Section 1-2 hereof.
2        (10) To adopt such rules and regulations consistent
3    with the provisions of this Act which shall be necessary
4    for the control, sale, or disposition of alcoholic liquor
5    damaged as a result of an accident, wreck, flood, fire, or
6    other similar occurrence.
7        (11) To develop industry educational programs related
8    to responsible serving and selling, particularly in the
9    areas of overserving consumers and illegal underage
10    purchasing and consumption of alcoholic beverages.
11        (11.1) To license persons providing education and
12    training to alcohol beverage sellers and servers for
13    mandatory and non-mandatory training under the Beverage
14    Alcohol Sellers and Servers Education and Training
15    (BASSET) programs and to develop and administer a public
16    awareness program in Illinois to reduce or eliminate the
17    illegal purchase and consumption of alcoholic beverage
18    products by persons under the age of 21. Application for a
19    license shall be made on forms provided by the State
20    Commission.
21        (12) To develop and maintain a repository of license
22    and regulatory information.
23        (13) (Blank).
24        (14) On or before April 30, 2008 and every 2 years
25    thereafter, the State Commission shall present a written
26    report to the Governor and the General Assembly that shall
		HB5108	- 32 -	LRB104 19995 RPS 33446 b
1    be based on a study of the impact of Public Act 95-634 on
2    the business of soliciting, selling, and shipping wine
3    from inside and outside of this State directly to
4    residents of this State. As part of its report, the State
5    Commission shall provide all of the following information:
6            (A) The amount of State excise and sales tax
7        revenues generated.
8            (B) The amount of licensing fees received.
9            (C) The number of cases of wine shipped from
10        inside and outside of this State directly to residents
11        of this State.
12            (D) The number of alcohol compliance operations
13        conducted.
14            (E) The number of winery shipper's licenses
15        issued.
16            (F) The number of each of the following: reported
17        violations; cease and desist notices issued by the
18        State Commission; notices of violations issued by the
19        State Commission and to the Department of Revenue; and
20        notices and complaints of violations to law
21        enforcement officials, including, without limitation,
22        the Illinois Attorney General and the U.S. Department
23        of Treasury's Alcohol and Tobacco Tax and Trade
24        Bureau.
25        (15) As a means to reduce the underage consumption of
26    alcoholic liquors, the State Commission shall conduct
		HB5108	- 33 -	LRB104 19995 RPS 33446 b
1    alcohol compliance operations to investigate whether
2    businesses that are soliciting, selling, and shipping wine
3    from inside or outside of this State directly to residents
4    of this State are licensed by this State or are selling or
5    attempting to sell wine to persons under 21 years of age in
6    violation of this Act.
7        (16) The State Commission shall, in addition to
8    notifying any appropriate law enforcement agency, submit
9    notices of complaints or violations of Sections 6-29 and
10    6-29.1 by persons who do not hold a winery shipper's
11    license under this Act to the Illinois Attorney General
12    and to the U.S. Department of Treasury's Alcohol and
13    Tobacco Tax and Trade Bureau.
14        (17)(A) A person licensed to make wine under the laws
15    of another state who has a winery shipper's license under
16    this Act and annually produces less than 25,000 gallons of
17    wine or a person who has a first-class or second-class
18    wine manufacturer's license, a first-class or second-class
19    wine-maker's license, or a limited wine manufacturer's
20    license under this Act and annually produces less than
21    25,000 gallons of wine may make application to the State
22    Commission for a self-distribution exemption to allow the
23    sale of not more than 5,000 gallons of the exemption
24    holder's wine to retail licensees per year and to sell
25    cider, mead, or both cider and mead to brewers, class 1
26    brewers, class 2 brewers, class 3 brewers, and class 3
		HB5108	- 34 -	LRB104 19995 RPS 33446 b
1    craft distillers that, pursuant to subsection (e) of
2    Section 6-4 of this Act, sell beer, cider, spirits, mead,
3    or any combination thereof to non-licensees at their
4    breweries or distilleries.
5        (B) In the application, which shall be sworn under
6    penalty of perjury, such person shall state (1) the date
7    it was established; (2) its volume of production and sales
8    for each year since its establishment; (3) its efforts to
9    establish distributor relationships; (4) that a
10    self-distribution exemption is necessary to facilitate the
11    marketing of its wine; and (5) that it will comply with the
12    liquor and revenue laws of the United States, this State,
13    and any other state where it is licensed.
14        (C) The State Commission shall approve the application
15    for a self-distribution exemption if such person: (1) is
16    in compliance with State revenue and liquor laws; (2) is
17    not a member of any affiliated group that produces
18    directly or indirectly more than 25,000 gallons of wine
19    per annum, 930,000 gallons of beer per annum, or 50,000
20    gallons of spirits per annum; (3) will not annually
21    produce for sale more than 25,000 gallons of wine, 930,000
22    gallons of beer, or 50,000 gallons of spirits; and (4)
23    will not annually sell more than 5,000 gallons of its wine
24    to retail licensees.
25        (D) A self-distribution exemption holder shall
26    annually certify to the State Commission its production of
		HB5108	- 35 -	LRB104 19995 RPS 33446 b
1    wine in the previous 12 months and its anticipated
2    production and sales for the next 12 months. The State
3    Commission may fine, suspend, or revoke a
4    self-distribution exemption after a hearing if it finds
5    that the exemption holder has made a material
6    misrepresentation in its application, violated a revenue
7    or liquor law of Illinois, exceeded production of 25,000
8    gallons of wine, 930,000 gallons of beer, or 50,000
9    gallons of spirits in any calendar year, or become part of
10    an affiliated group producing more than 25,000 gallons of
11    wine, 930,000 gallons of beer, or 50,000 gallons of
12    spirits.
13        (E) Except in hearings for violations of this Act or
14    Public Act 95-634 or a bona fide investigation by duly
15    sworn law enforcement officials, the State Commission, or
16    its agents, the State Commission shall maintain the
17    production and sales information of a self-distribution
18    exemption holder as confidential and shall not release
19    such information to any person.
20        (F) The State Commission shall issue regulations
21    governing self-distribution exemptions consistent with
22    this Section and this Act.
23        (G) Nothing in this paragraph (17) shall prohibit a
24    self-distribution exemption holder from entering into or
25    simultaneously having a distribution agreement with a
26    licensed Illinois distributor.
		HB5108	- 36 -	LRB104 19995 RPS 33446 b
1        (H) It is the intent of this paragraph (17) to promote
2    and continue orderly markets. The General Assembly finds
3    that, in order to preserve Illinois' regulatory
4    distribution system, it is necessary to create an
5    exception for smaller makers of wine as their wines are
6    frequently adjusted in varietals, mixes, vintages, and
7    taste to find and create market niches sometimes too small
8    for distributor or importing distributor business
9    strategies. Limited self-distribution rights will afford
10    and allow smaller makers of wine access to the marketplace
11    in order to develop a customer base without impairing the
12    integrity of the 3-tier system.
13        (18)(A) A class 1 brewer licensee, who must also be
14    either a licensed brewer or licensed non-resident dealer
15    and annually manufacture less than 930,000 gallons of
16    beer, may make application to the State Commission for a
17    self-distribution exemption to allow the sale of not more
18    than 232,500 gallons per year of the exemption holder's
19    beer to retail licensees and to brewers, class 1 brewers,
20    and class 2 brewers that, pursuant to subsection (e) of
21    Section 6-4 of this Act, sell beer, cider, mead, or any
22    combination thereof to non-licensees at their breweries.
23        (B) In the application, which shall be sworn under
24    penalty of perjury, the class 1 brewer licensee shall
25    state (1) the date it was established; (2) its volume of
26    beer manufactured and sold for each year since its
		HB5108	- 37 -	LRB104 19995 RPS 33446 b
1    establishment; (3) its efforts to establish distributor
2    relationships; (4) that a self-distribution exemption is
3    necessary to facilitate the marketing of its beer; and (5)
4    that it will comply with the alcoholic beverage and
5    revenue laws of the United States, this State, and any
6    other state where it is licensed.
7        (C) Any application submitted shall be posted on the
8    State Commission's website at least 45 days prior to
9    action by the State Commission. The State Commission shall
10    approve the application for a self-distribution exemption
11    if the class 1 brewer licensee: (1) is in compliance with
12    the State, revenue, and alcoholic beverage laws; (2) is
13    not a member of any affiliated group that manufactures,
14    directly or indirectly, more than 930,000 gallons of beer
15    per annum, 25,000 gallons of wine per annum, or 50,000
16    gallons of spirits per annum; (3) shall not annually
17    manufacture for sale more than 930,000 gallons of beer,
18    25,000 gallons of wine, or 50,000 gallons of spirits; (4)
19    shall not annually sell more than 232,500 gallons of its
20    beer to retail licensees and class 3 brewers and to
21    brewers, class 1 brewers, and class 2 brewers that,
22    pursuant to subsection (e) of Section 6-4 of this Act,
23    sell beer, cider, mead, or any combination thereof to
24    non-licensees at their breweries; and (5) has relinquished
25    any brew pub license held by the licensee, including any
26    ownership interest it held in the licensed brew pub.
		HB5108	- 38 -	LRB104 19995 RPS 33446 b
1        (D) A self-distribution exemption holder shall
2    annually certify to the State Commission its manufacture
3    of beer during the previous 12 months and its anticipated
4    manufacture and sales of beer for the next 12 months. The
5    State Commission may fine, suspend, or revoke a
6    self-distribution exemption after a hearing if it finds
7    that the exemption holder has made a material
8    misrepresentation in its application, violated a revenue
9    or alcoholic beverage law of Illinois, exceeded the
10    manufacture of 930,000 gallons of beer, 25,000 gallons of
11    wine, or 50,000 gallons of spirits in any calendar year or
12    became part of an affiliated group manufacturing more than
13    930,000 gallons of beer, 25,000 gallons of wine, or 50,000
14    gallons of spirits.
15        (E) The State Commission shall issue rules and
16    regulations governing self-distribution exemptions
17    consistent with this Act.
18        (F) Nothing in this paragraph (18) shall prohibit a
19    self-distribution exemption holder from entering into or
20    simultaneously having a distribution agreement with a
21    licensed Illinois importing distributor or a distributor.
22    If a self-distribution exemption holder enters into a
23    distribution agreement and has assigned distribution
24    rights to an importing distributor or distributor, then
25    the self-distribution exemption holder's distribution
26    rights in the assigned territories shall cease in a
		HB5108	- 39 -	LRB104 19995 RPS 33446 b
1    reasonable time not to exceed 60 days.
2        (G) It is the intent of this paragraph (18) to promote
3    and continue orderly markets. The General Assembly finds
4    that in order to preserve Illinois' regulatory
5    distribution system, it is necessary to create an
6    exception for smaller manufacturers in order to afford and
7    allow such smaller manufacturers of beer access to the
8    marketplace in order to develop a customer base without
9    impairing the integrity of the 3-tier system.
10        (19)(A) A class 1 craft distiller licensee or a
11    non-resident dealer who manufactures less than 50,000
12    gallons of distilled spirits per year may make application
13    to the State Commission for a self-distribution exemption
14    to allow the sale of not more than 5,000 gallons of the
15    exemption holder's spirits to retail licensees per year.
16        (B) In the application, which shall be sworn under
17    penalty of perjury, the class 1 craft distiller licensee
18    or non-resident dealer shall state (1) the date it was
19    established; (2) its volume of spirits manufactured and
20    sold for each year since its establishment; (3) its
21    efforts to establish distributor relationships; (4) that a
22    self-distribution exemption is necessary to facilitate the
23    marketing of its spirits; and (5) that it will comply with
24    the alcoholic beverage and revenue laws of the United
25    States, this State, and any other state where it is
26    licensed.
		HB5108	- 40 -	LRB104 19995 RPS 33446 b
1        (C) Any application submitted shall be posted on the
2    State Commission's website at least 45 days prior to
3    action by the State Commission. The State Commission shall
4    approve the application for a self-distribution exemption
5    if the applicant: (1) is in compliance with State revenue
6    and alcoholic beverage laws; (2) is not a member of any
7    affiliated group that produces more than 50,000 gallons of
8    spirits per annum, 930,000 gallons of beer per annum, or
9    25,000 gallons of wine per annum; (3) does not annually
10    manufacture for sale more than 50,000 gallons of spirits,
11    930,000 gallons of beer, or 25,000 gallons of wine; and
12    (4) does not annually sell more than 5,000 gallons of its
13    spirits to retail licensees.
14        (D) A self-distribution exemption holder shall
15    annually certify to the State Commission its manufacture
16    of spirits during the previous 12 months and its
17    anticipated manufacture and sales of spirits for the next
18    12 months. The State Commission may fine, suspend, or
19    revoke a self-distribution exemption after a hearing if it
20    finds that the exemption holder has made a material
21    misrepresentation in its application, violated a revenue
22    or alcoholic beverage law of Illinois, exceeded the
23    manufacture of 50,000 gallons of spirits, 930,000 gallons
24    of beer, or 25,000 gallons of wine in any calendar year, or
25    has become part of an affiliated group manufacturing more
26    than 50,000 gallons of spirits, 930,000 gallons of beer,
		HB5108	- 41 -	LRB104 19995 RPS 33446 b
1    or 25,000 gallons of wine.
2        (E) The State Commission shall adopt rules governing
3    self-distribution exemptions consistent with this Act.
4        (F) Nothing in this paragraph (19) shall prohibit a
5    self-distribution exemption holder from entering into or
6    simultaneously having a distribution agreement with a
7    licensed Illinois importing distributor or a distributor.
8        (G) It is the intent of this paragraph (19) to promote
9    and continue orderly markets. The General Assembly finds
10    that in order to preserve Illinois' regulatory
11    distribution system, it is necessary to create an
12    exception for smaller manufacturers in order to afford and
13    allow such smaller manufacturers of spirits access to the
14    marketplace in order to develop a customer base without
15    impairing the integrity of the 3-tier system.
16        (20)(A) A class 3 brewer licensee who must manufacture
17    less than 465,000 gallons of beer in the aggregate and not
18    more than 155,000 gallons at any single brewery premises
19    may make application to the State Commission for a
20    self-distribution exemption to allow the sale of not more
21    than 6,200 gallons of beer from each in-state or
22    out-of-state class 3 brewery premises, which shall not
23    exceed 18,600 gallons annually in the aggregate, that is
24    manufactured at a wholly owned class 3 brewer's in-state
25    or out-of-state licensed premises to retail licensees and
26    class 3 brewers and to brewers, class 1 brewers, class 2
		HB5108	- 42 -	LRB104 19995 RPS 33446 b
1    brewers that, pursuant to subsection (e) of Section 6-4,
2    sell beer, cider, or both beer and cider to non-licensees
3    at their licensed breweries.
4        (B) In the application, which shall be sworn under
5    penalty of perjury, the class 3 brewer licensee shall
6    state:
7            (1) the date it was established;
8            (2) its volume of beer manufactured and sold for
9        each year since its establishment;
10            (3) its efforts to establish distributor
11        relationships;
12            (4) that a self-distribution exemption is
13        necessary to facilitate the marketing of its beer; and
14            (5) that it will comply with the alcoholic
15        beverage and revenue laws of the United States, this
16        State, and any other state where it is licensed.
17        (C) Any application submitted shall be posted on the
18    State Commission's website at least 45 days before action
19    by the State Commission. The State Commission shall
20    approve the application for a self-distribution exemption
21    if the class 3 brewer licensee: (1) is in compliance with
22    the State, revenue, and alcoholic beverage laws; (2) is
23    not a member of any affiliated group that manufacturers,
24    directly or indirectly, more than 465,000 gallons of beer
25    per annum; (3) shall not annually manufacture for sale
26    more than 465,000 gallons of beer or more than 155,000
		HB5108	- 43 -	LRB104 19995 RPS 33446 b
1    gallons at any single brewery premises; and (4) shall not
2    annually sell more than 6,200 gallons of beer from each
3    in-state or out-of-state class 3 brewery premises, and
4    shall not exceed 18,600 gallons annually in the aggregate,
5    to retail licensees and class 3 brewers and to brewers,
6    class 1 brewers, and class 2 brewers that, pursuant to
7    subsection (e) of Section 6-4 of this Act, sell beer,
8    cider, or both beer and cider to non-licensees at their
9    breweries.
10        (D) A self-distribution exemption holder shall
11    annually certify to the State Commission its manufacture
12    of beer during the previous 12 months and its anticipated
13    manufacture and sales of beer for the next 12 months. The
14    State Commission may fine, suspend, or revoke a
15    self-distribution exemption after a hearing if it finds
16    that the exemption holder has made a material
17    misrepresentation in its application, violated a revenue
18    or alcoholic beverage law of Illinois, exceeded the
19    manufacture of 465,000 gallons of beer in any calendar
20    year or became part of an affiliated group manufacturing
21    more than 465,000 gallons of beer, or exceeded the sale to
22    retail licensees, brewers, class 1 brewers, class 2
23    brewers, and class 3 brewers of 6,200 gallons per brewery
24    location or 18,600 gallons in the aggregate.
25        (E) The State Commission may adopt rules governing
26    self-distribution exemptions consistent with this Act.
		HB5108	- 44 -	LRB104 19995 RPS 33446 b
1        (F) Nothing in this paragraph shall prohibit a
2    self-distribution exemption holder from entering into or
3    simultaneously having a distribution agreement with a
4    licensed Illinois importing distributor or a distributor.
5    If a self-distribution exemption holder enters into a
6    distribution agreement and has assigned distribution
7    rights to an importing distributor or distributor, then
8    the self-distribution exemption holder's distribution
9    rights in the assigned territories shall cease in a
10    reasonable time not to exceed 60 days.
11        (G) It is the intent of this paragraph to promote and
12    continue orderly markets. The General Assembly finds that
13    in order to preserve Illinois' regulatory distribution
14    system, it is necessary to create an exception for smaller
15    manufacturers in order to afford and allow such smaller
16    manufacturers of beer access to the marketplace in order
17    to develop a customer base without impairing the integrity
18    of the 3-tier system.
19        (21)(A) A class 3 craft distiller licensee who
20    manufactures less than 100,000 gallons of spirits in the
21    aggregate may make application to the State Commission for
22    a self-distribution exemption to allow the sale of not
23    more than 5,000 gallons of the exemption holder's spirits
24    per year that are manufactured at a wholly owned class 3
25    craft distiller's in-state or out-of-state licensed
26    premises to retail licensees and class 3 brewers and to
		HB5108	- 45 -	LRB104 19995 RPS 33446 b
1    class 3 craft distillers that, pursuant to subsection (e)
2    of Section 6-4, sell beer, cider, spirits, or any
3    combination thereof to non-licensees at their licensed
4    distilleries.
5        (B) In the application, which shall be sworn under
6    penalty of perjury, the class 3 craft distiller licensee
7    shall state:
8            (1) the date it was established;
9            (2) its volume of spirits manufactured and sold
10        for each year since its establishment;
11            (3) its efforts to establish distributor
12        relationships;
13            (4) that a self-distribution exemption is
14        necessary to facilitate the marketing of its spirits;
15        and
16            (5) that it will comply with the alcoholic
17        beverage and revenue laws of the United States, this
18        State, and any other state where it is licensed.
19        (C) Any application submitted shall be posted on the
20    State Commission's website at least 45 days before action
21    by the State Commission. The State Commission shall
22    approve the application for a self-distribution exemption
23    if the class 3 craft distiller licensee:
24            (1) is in compliance with the State, revenue, and
25        alcoholic beverage laws;
26            (2) is not a member of any affiliated group that
		HB5108	- 46 -	LRB104 19995 RPS 33446 b
1        manufacturers, directly or indirectly, more than
2        100,000 gallons of spirits per annum;
3            (3) shall not annually manufacture for sale more
4        than 100,000 gallons of spirits; and
5            (4) does not sell more than 5,000 gallons of its
6        spirits per year to retail licensees and class 3
7        brewers and to class 3 craft distillers that, pursuant
8        to subsection (e) of Section 6-4, sell beer, cider,
9        spirits, or any combination thereof to non-licensees
10        at their licensed distilleries.
11        (D) A self-distribution exemption holder shall
12    annually certify to the State Commission its manufacture
13    of spirits during the previous 12 months and its
14    anticipated manufacture and sales of spirits for the next
15    12 months. The State Commission may fine, suspend, or
16    revoke a self-distribution exemption after a hearing if it
17    finds that the exemption holder has made a material
18    misrepresentation in its application, violated a revenue
19    or alcoholic beverage law of Illinois, exceeded the
20    manufacture of 100,000 gallons of spirits in any calendar
21    year, or became part of an affiliated group manufacturing
22    more than 100,000 gallons of spirits.
23        (E) The State Commission may adopt rules governing
24    self-distribution exemptions consistent with this Act.
25        (F) Nothing in this paragraph shall prohibit a
26    self-distribution exemption holder from entering into or
		HB5108	- 47 -	LRB104 19995 RPS 33446 b
1    simultaneously having a distribution agreement with a
2    licensed Illinois importing distributor or a distributor.
3        (G) It is the intent of this paragraph to promote and
4    continue orderly markets. The General Assembly finds that,
5    in order to preserve Illinois' regulatory distribution
6    system, it is necessary to create an exception for smaller
7    manufacturers in order to afford and allow such smaller
8    manufacturers of spirits access to the marketplace in
9    order to develop a customer base without impairing the
10    integrity of the 3-tier system.
11    (b) On or before April 30, 1999, the Commission shall
12present a written report to the Governor and the General
13Assembly that shall be based on a study of the impact of Public
14Act 90-739 on the business of soliciting, selling, and
15shipping alcoholic liquor from outside of this State directly
16to residents of this State.
17    As part of its report, the Commission shall provide the
18following information:
19        (i) the amount of State excise and sales tax revenues
20    generated as a result of Public Act 90-739;
21        (ii) the amount of licensing fees received as a result
22    of Public Act 90-739;
23        (iii) the number of reported violations, the number of
24    cease and desist notices issued by the Commission, the
25    number of notices of violations issued to the Department
26    of Revenue, and the number of notices and complaints of
		HB5108	- 48 -	LRB104 19995 RPS 33446 b
1    violations to law enforcement officials.
2(Source: P.A. 104-451, eff. 7-1-26.)
3    Section 95. No acceleration or delay. Where this Act makes
4changes in a statute that is represented in this Act by text
5that is not yet or no longer in effect (for example, a Section
6represented by multiple versions), the use of that text does
7not accelerate or delay the taking effect of (i) the changes
8made by this Act or (ii) provisions derived from any other
9Public Act.
10    Section 99. Effective date. This Act takes effect upon
11becoming law.