Illinois-2023-HB2864-Introduced

103RD GENERAL ASSEMBLY State of Illinois 2023 and 2024 HB2864

Introduced , by Rep. Theresa Mah

SYNOPSIS AS INTRODUCED:

`235 ILCS 5/1-3.12`	`from Ch. 43, par. 95.12`
`235 ILCS 5/1-3.40`
`235 ILCS 5/3-12`
`235 ILCS 5/5-1`	`from Ch. 43, par. 115`
`235 ILCS 5/5-3`	`from Ch. 43, par. 118`

Amends the Liquor Control Act of 1934. Establishes a third-class wine-makers license. Provides that a third-class wine-makers license allows the manufacture of up to 250,000 gallons of wine per year and the storage and sale of such wine to distributors in this State and to persons without the State, as may be permitted by law. Provides that a person who has a third-class wine-maker's license and annually produces less than 250,000 gallons of wine may make application to the Illinois Liquor Control Commission for a self-distribution exemption to allow the sale of not more than 25,000 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 sell beer, cider, mead, or any combination thereof to non-licensees at their breweries. Provides that a wine-maker's premises license shall allow a licensee who concurrently holds a third-class wine-maker's license to sell and offer for sale at retail in the premises specified in such license up to 250,000 gallons of the third-class wine-maker's wine that is made at the third-class wine-maker's licensed premises per year for use or consumption but not for resale in any form. Provides that a wine-maker's premises license shall allow the licensee to sell and offer for sale at up to 3 (instead of 2) additional locations for use and consumption and not for resale. Sets forth licensing fees for a third-class wine-maker and for a fourth location of a wine-maker's premises license.

LRB103 29721 RPS 56126 b

A BILL FOR

HB2864

LRB103 29721 RPS 56126 b

1 AN ACT concerning liquor.

2 Be it enacted by the People of the State of Illinois,

3 represented in the General Assembly:

4 Section 5. The Liquor Control Act of 1934 is amended by

5 changing Sections 1-3.12, 1-3.40, 3-12, 5-1, and 5-3 as

6 follows:

7 (235 ILCS 5/1-3.12) (from Ch. 43, par. 95.12)

8 Sec. 1-3.12. "Wine-maker" means a person engaged in the

9 making of less than 50,000 gallons of wine annually other than

10 a person issued a Second Class wine-maker's licenseor a

11 third-class wine-maker's license.

12 (Source: P.A. 92-378, eff. 8-16-01.)

13 (235 ILCS 5/1-3.40)

14 Sec. 1-3.40. Manufacturer class license holder.

15 "Manufacturer class license holder" means any holder of a

16 Manufacturer's license as provided in Section 5-1 of this Act.

17 The Manufacturer's licenses are: a Class 1. Distiller, a Class

18 2. Rectifier, a Class 3. Brewer, a Class 4. First Class Wine

19 Manufacturer, a Class 5. Second Class Wine Manufacturer, a

20 Class 6. First Class Winemaker, a Class 7. Second Class

21 Winemaker, a Class 8. Limited Wine Manufacturer, a Class 9.

22 Craft Distiller, a Class 10. Class 1 Craft Distiller, a Class

HB2864

- 2 -

LRB103 29721 RPS 56126 b

1 11. Class 2 Craft Distiller, a Class 12. Class 1 Brewer, ~~and~~ a

2 Class 13. Class 2 Brewer, a Class 14. Third-Class Wine-Maker,

3 and any future Manufacturer's licenses established by law.

4 (Source: P.A. 101-482, eff. 8-23-19; 101-615, eff. 12-20-19.)

5 (235 ILCS 5/3-12)

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

7 (a) The State Commission shall have the following powers,

8 functions, and duties:

9 (1) To receive applications and to issue licenses to

10 manufacturers, foreign importers, importing distributors,

11 distributors, non-resident dealers, on premise consumption

12 retailers, off premise sale retailers, special event

13 retailer licensees, special use permit licenses, auction

14 liquor licenses, brew pubs, caterer retailers,

15 non-beverage users, railroads, including owners and

16 lessees of sleeping, dining and cafe cars, airplanes,

17 boats, brokers, and wine maker's premises licensees in

18 accordance with the provisions of this Act, and to suspend

19 or revoke such licenses upon the State Commission's

20 determination, upon notice after hearing, that a licensee

21 has violated any provision of this Act or any rule or

22 regulation issued pursuant thereto and in effect for 30

23 days prior to such violation. Except in the case of an

24 action taken pursuant to a violation of Section 6-3, 6-5,

25 or 6-9, any action by the State Commission to suspend or

HB2864

- 3 -

LRB103 29721 RPS 56126 b

1 revoke a licensee's license may be limited to the license

2 for the specific premises where the violation occurred. An

3 action for a violation of this Act shall be commenced by

4 the State Commission within 2 years after the date the

5 State Commission becomes aware of the violation.

6 In lieu of suspending or revoking a license, the

7 commission may impose a fine, upon the State Commission's

8 determination and notice after hearing, that a licensee

9 has violated any provision of this Act or any rule or

10 regulation issued pursuant thereto and in effect for 30

11 days prior to such violation.

12 For the purpose of this paragraph (1), when

13 determining multiple violations for the sale of alcohol to

14 a person under the age of 21, a second or subsequent

15 violation for the sale of alcohol to a person under the age

16 of 21 shall only be considered if it was committed within 5

17 years after the date when a prior violation for the sale of

18 alcohol to a person under the age of 21 was committed.

19 The fine imposed under this paragraph may not exceed

20 $500 for each violation. Each day that the activity, which

21 gave rise to the original fine, continues is a separate

22 violation. The maximum fine that may be levied against any

23 licensee, for the period of the license, shall not exceed

24 $20,000. The maximum penalty that may be imposed on a

25 licensee for selling a bottle of alcoholic liquor with a

26 foreign object in it or serving from a bottle of alcoholic

HB2864

- 4 -

LRB103 29721 RPS 56126 b

1 liquor with a foreign object in it shall be the

2 destruction of that bottle of alcoholic liquor for the

3 first 10 bottles so sold or served from by the licensee.

4 For the eleventh bottle of alcoholic liquor and for each

5 third bottle thereafter sold or served from by the

6 licensee with a foreign object in it, the maximum penalty

7 that may be imposed on the licensee is the destruction of

8 the bottle of alcoholic liquor and a fine of up to $50.

9 Any notice issued by the State Commission to a

10 licensee for a violation of this Act or any notice with

11 respect to settlement or offer in compromise shall include

12 the field report, photographs, and any other supporting

13 documentation necessary to reasonably inform the licensee

14 of the nature and extent of the violation or the conduct

15 alleged to have occurred. The failure to include such

16 required documentation shall result in the dismissal of

17 the action.

18 (2) To adopt such rules and regulations consistent

19 with the provisions of this Act which shall be necessary

20 to carry on its functions and duties to the end that the

21 health, safety and welfare of the People of the State of

22 Illinois shall be protected and temperance in the

23 consumption of alcoholic liquors shall be fostered and

24 promoted and to distribute copies of such rules and

25 regulations to all licensees affected thereby.

26 (3) To call upon other administrative departments of

HB2864

- 5 -

LRB103 29721 RPS 56126 b

1 the State, county and municipal governments, county and

2 city police departments and upon prosecuting officers for

3 such information and assistance as it deems necessary in

4 the performance of its duties.

5 (4) To recommend to local commissioners rules and

6 regulations, not inconsistent with the law, for the

7 distribution and sale of alcoholic liquors throughout the

8 State.

9 (5) To inspect, or cause to be inspected, any premises

10 in this State where alcoholic liquors are manufactured,

11 distributed, warehoused, or sold. Nothing in this Act

12 authorizes an agent of the State Commission to inspect

13 private areas within the premises without reasonable

14 suspicion or a warrant during an inspection. "Private

15 areas" include, but are not limited to, safes, personal

16 property, and closed desks.

17 (5.1) Upon receipt of a complaint or upon having

18 knowledge that any person is engaged in business as a

19 manufacturer, importing distributor, distributor, or

20 retailer without a license or valid license, to conduct an

21 investigation. If, after conducting an investigation, the

22 State Commission is satisfied that the alleged conduct

23 occurred or is occurring, it may issue a cease and desist

24 notice as provided in this Act, impose civil penalties as

25 provided in this Act, notify the local liquor authority,

26 or file a complaint with the State's Attorney's Office of

HB2864

- 6 -

LRB103 29721 RPS 56126 b

1 the county where the incident occurred or the Attorney

2 General.

3 (5.2) Upon receipt of a complaint or upon having

4 knowledge that any person is shipping alcoholic liquor

5 into this State from a point outside of this State if the

6 shipment is in violation of this Act, to conduct an

7 investigation. If, after conducting an investigation, the

8 State Commission is satisfied that the alleged conduct

9 occurred or is occurring, it may issue a cease and desist

10 notice as provided in this Act, impose civil penalties as

11 provided in this Act, notify the foreign jurisdiction, or

12 file a complaint with the State's Attorney's Office of the

13 county where the incident occurred or the Attorney

14 General.

15 (5.3) To receive complaints from licensees, local

16 officials, law enforcement agencies, organizations, and

17 persons stating that any licensee has been or is violating

18 any provision of this Act or the rules and regulations

19 issued pursuant to this Act. Such complaints shall be in

20 writing, signed and sworn to by the person making the

21 complaint, and shall state with specificity the facts in

22 relation to the alleged violation. If the State Commission

23 has reasonable grounds to believe that the complaint

24 substantially alleges a violation of this Act or rules and

25 regulations adopted pursuant to this Act, it shall conduct

26 an investigation. If, after conducting an investigation,

HB2864

- 7 -

LRB103 29721 RPS 56126 b

1 the State Commission is satisfied that the alleged

2 violation did occur, it shall proceed with disciplinary

3 action against the licensee as provided in this Act.

4 (5.4) To make arrests and issue notices of civil

5 violations where necessary for the enforcement of this

6 Act.

7 (5.5) To investigate any and all unlicensed activity.

8 (5.6) To impose civil penalties or fines to any person

9 who, without holding a valid license, engages in conduct

10 that requires a license pursuant to this Act, in an amount

11 not to exceed $20,000 for each offense as determined by

12 the State Commission. A civil penalty shall be assessed by

13 the State Commission after a hearing is held in accordance

14 with the provisions set forth in this Act regarding the

15 provision of a hearing for the revocation or suspension of

16 a license.

17 (6) To hear and determine appeals from orders of a

18 local commission in accordance with the provisions of this

19 Act, as hereinafter set forth. Hearings under this

20 subsection shall be held in Springfield or Chicago, at

21 whichever location is the more convenient for the majority

22 of persons who are parties to the hearing.

23 (7) The State Commission shall establish uniform

24 systems of accounts to be kept by all retail licensees

25 having more than 4 employees, and for this purpose the

26 State Commission may classify all retail licensees having

HB2864

- 8 -

LRB103 29721 RPS 56126 b

1 more than 4 employees and establish a uniform system of

2 accounts for each class and prescribe the manner in which

3 such accounts shall be kept. The State Commission may also

4 prescribe the forms of accounts to be kept by all retail

5 licensees having more than 4 employees, including, but not

6 limited to, accounts of earnings and expenses and any

7 distribution, payment, or other distribution of earnings

8 or assets, and any other forms, records, and memoranda

9 which in the judgment of the commission may be necessary

10 or appropriate to carry out any of the provisions of this

11 Act, including, but not limited to, such forms, records,

12 and memoranda as will readily and accurately disclose at

13 all times the beneficial ownership of such retail licensed

14 business. The accounts, forms, records, and memoranda

15 shall be available at all reasonable times for inspection

16 by authorized representatives of the State Commission or

17 by any local liquor control commissioner or his or her

18 authorized representative. The commission may, from time

19 to time, alter, amend, or repeal, in whole or in part, any

20 uniform system of accounts, or the form and manner of

21 keeping accounts.

22 (8) In the conduct of any hearing authorized to be

23 held by the State Commission, to appoint, at the

24 commission's discretion, hearing officers to conduct

25 hearings involving complex issues or issues that will

26 require a protracted period of time to resolve, to

HB2864

- 9 -

LRB103 29721 RPS 56126 b

1 examine, or cause to be examined, under oath, any

2 licensee, and to examine or cause to be examined the books

3 and records of such licensee; to hear testimony and take

4 proof material for its information in the discharge of its

5 duties hereunder; to administer or cause to be

6 administered oaths; for any such purpose to issue subpoena

7 or subpoenas to require the attendance of witnesses and

8 the production of books, which shall be effective in any

9 part of this State, and to adopt rules to implement its

10 powers under this paragraph (8).

11 Any circuit court may, by order duly entered, require

12 the attendance of witnesses and the production of relevant

13 books subpoenaed by the State Commission and the court may

14 compel obedience to its order by proceedings for contempt.

15 (9) To investigate the administration of laws in

16 relation to alcoholic liquors in this and other states and

17 any foreign countries, and to recommend from time to time

18 to the Governor and through him or her to the legislature

19 of this State, such amendments to this Act, if any, as it

20 may think desirable and as will serve to further the

21 general broad purposes contained in Section 1-2 hereof.

22 (10) To adopt such rules and regulations consistent

23 with the provisions of this Act which shall be necessary

24 for the control, sale, or disposition of alcoholic liquor

25 damaged as a result of an accident, wreck, flood, fire, or

26 other similar occurrence.

HB2864

- 10 -

LRB103 29721 RPS 56126 b

1 (11) To develop industry educational programs related

2 to responsible serving and selling, particularly in the

3 areas of overserving consumers and illegal underage

4 purchasing and consumption of alcoholic beverages.

5 (11.1) To license persons providing education and

6 training to alcohol beverage sellers and servers for

7 mandatory and non-mandatory training under the Beverage

8 Alcohol Sellers and Servers Education and Training

9 (BASSET) programs and to develop and administer a public

10 awareness program in Illinois to reduce or eliminate the

11 illegal purchase and consumption of alcoholic beverage

12 products by persons under the age of 21. Application for a

13 license shall be made on forms provided by the State

14 Commission.

15 (12) To develop and maintain a repository of license

16 and regulatory information.

17 (13) (Blank).

18 (14) On or before April 30, 2008 and every 2 years

19 thereafter, the State Commission shall present a written

20 report to the Governor and the General Assembly that shall

21 be based on a study of the impact of Public Act 95-634 on

22 the business of soliciting, selling, and shipping wine

23 from inside and outside of this State directly to

24 residents of this State. As part of its report, the State

25 Commission shall provide all of the following information:

26 (A) The amount of State excise and sales tax

HB2864

- 11 -

LRB103 29721 RPS 56126 b

1 revenues generated.

2 (B) The amount of licensing fees received.

3 (C) The number of cases of wine shipped from

4 inside and outside of this State directly to residents

5 of this State.

6 (D) The number of alcohol compliance operations

7 conducted.

8 (E) The number of winery shipper's licenses

9 issued.

10 (F) The number of each of the following: reported

11 violations; cease and desist notices issued by the

12 Commission; notices of violations issued by the

13 Commission and to the Department of Revenue; and

14 notices and complaints of violations to law

15 enforcement officials, including, without limitation,

16 the Illinois Attorney General and the U.S. Department

17 of Treasury's Alcohol and Tobacco Tax and Trade

18 Bureau.

19 (15) As a means to reduce the underage consumption of

20 alcoholic liquors, the State Commission shall conduct

21 alcohol compliance operations to investigate whether

22 businesses that are soliciting, selling, and shipping wine

23 from inside or outside of this State directly to residents

24 of this State are licensed by this State or are selling or

25 attempting to sell wine to persons under 21 years of age in

26 violation of this Act.

HB2864

- 12 -

LRB103 29721 RPS 56126 b

1 (16) The State Commission shall, in addition to

2 notifying any appropriate law enforcement agency, submit

3 notices of complaints or violations of Sections 6-29 and

4 6-29.1 by persons who do not hold a winery shipper's

5 license under this Act to the Illinois Attorney General

6 and to the U.S. Department of Treasury's Alcohol and

7 Tobacco Tax and Trade Bureau.

8 (17)(A) A person licensed to make wine under the laws

9 of another state who has a winery shipper's license under

10 this Act and annually produces less than 25,000 gallons of

11 wine or a person who has a first-class or second-class

12 wine manufacturer's license, a first-class or second-class

13 wine-maker's license, or a limited wine manufacturer's

14 license under this Act and annually produces less than

15 25,000 gallons of wine may make application to the

16 Commission for a self-distribution exemption to allow the

17 sale of not more than 5,000 gallons of the exemption

18 holder's wine to retail licensees per year and to sell

19 cider, mead, or both cider and mead to brewers, class 1

20 brewers, class 2 brewers, and class 3 brewers that,

21 pursuant to subsection (e) of Section 6-4 of this Act,

22 sell beer, cider, mead, or any combination thereof to

23 non-licensees at their breweries.

24 (B) In the application, which shall be sworn under

25 penalty of perjury, such person shall state (1) the date

26 it was established; (2) its volume of production and sales

HB2864

- 13 -

LRB103 29721 RPS 56126 b

1 for each year since its establishment; (3) its efforts to

2 establish distributor relationships; (4) that a

3 self-distribution exemption is necessary to facilitate the

4 marketing of its wine; and (5) that it will comply with the

5 liquor and revenue laws of the United States, this State,

6 and any other state where it is licensed.

7 (C) The State Commission shall approve the application

8 for a self-distribution exemption if such person: (1) is

9 in compliance with State revenue and liquor laws; (2) is

10 not a member of any affiliated group that produces

11 directly or indirectly more than 25,000 gallons of wine

12 per annum, 930,000 gallons of beer per annum, or 50,000

13 gallons of spirits per annum; (3) will not annually

14 produce for sale more than 25,000 gallons of wine, 930,000

15 gallons of beer, or 50,000 gallons of spirits; and (4)

16 will not annually sell more than 5,000 gallons of its wine

17 to retail licensees.

18 (D) A self-distribution exemption holder shall

19 annually certify to the State Commission its production of

20 wine in the previous 12 months and its anticipated

21 production and sales for the next 12 months. The State

22 Commission may fine, suspend, or revoke a

23 self-distribution exemption after a hearing if it finds

24 that the exemption holder has made a material

25 misrepresentation in its application, violated a revenue

26 or liquor law of Illinois, exceeded production of 25,000

HB2864

- 14 -

LRB103 29721 RPS 56126 b

1 gallons of wine, 930,000 gallons of beer, or 50,000

2 gallons of spirits in any calendar year, or become part of

3 an affiliated group producing more than 25,000 gallons of

4 wine, 930,000 gallons of beer, or 50,000 gallons of

5 spirits.

6 (E) Except in hearings for violations of this Act or

7 Public Act 95-634 or a bona fide investigation by duly

8 sworn law enforcement officials, the State Commission, or

9 its agents, the State Commission shall maintain the

10 production and sales information of a self-distribution

11 exemption holder as confidential and shall not release

12 such information to any person.

13 (F) The State Commission shall issue regulations

14 governing self-distribution exemptions consistent with

15 this Section and this Act.

16 (G) Nothing in this paragraph (17) shall prohibit a

17 self-distribution exemption holder from entering into or

18 simultaneously having a distribution agreement with a

19 licensed Illinois distributor.

20 (H) It is the intent of this paragraph (17) to promote

21 and continue orderly markets. The General Assembly finds

22 that, in order to preserve Illinois' regulatory

23 distribution system, it is necessary to create an

24 exception for smaller makers of wine as their wines are

25 frequently adjusted in varietals, mixes, vintages, and

26 taste to find and create market niches sometimes too small

HB2864

- 15 -

LRB103 29721 RPS 56126 b

1 for distributor or importing distributor business

2 strategies. Limited self-distribution rights will afford

3 and allow smaller makers of wine access to the marketplace

4 in order to develop a customer base without impairing the

5 integrity of the 3-tier system.

6 (17.5)(A) A person who has a third-class wine-maker's

7 license and annually produces less than 250,000 gallons of

8 wine may make application to the Commission for a

9 self-distribution exemption to allow the sale of not more

10 than 25,000 gallons of the exemption holder's wine to

11 retail licensees per year and to sell cider, mead, or both

12 cider and mead to brewers, class 1 brewers, class 2

13 brewers, and class 3 brewers that, pursuant to subsection

14 (e) of Section 6-4 of this Act, sell beer, cider, mead, or

15 any combination thereof to non-licensees at their

16 breweries.

17 (B) In the application, which shall be sworn under

18 penalty of perjury, such person shall state (1) the date

19 it was established; (2) its volume of production and sales

20 for each year since its establishment; (3) its efforts to

21 establish distributor relationships; (4) that a

22 self-distribution exemption is necessary to facilitate the

23 marketing of its wine; and (5) that it will comply with the

24 liquor and revenue laws of the United States, this State,

25 and any other state where it is licensed.

26 (C) The State Commission shall approve the application

HB2864

- 16 -

LRB103 29721 RPS 56126 b

1 for a self-distribution exemption if such person: (1) is

2 in compliance with State revenue and liquor laws; (2) is

3 not a member of any affiliated group that produces

4 directly or indirectly more than 250,000 gallons of wine

5 per annum, 930,000 gallons of beer per annum, or 50,000

6 gallons of spirits per annum; (3) will not annually

7 produce for sale more than 250,000 gallons of wine,

8 930,000 gallons of beer, or 50,000 gallons of spirits; and

9 (4) will not annually sell more than 25,000 gallons of its

10 wine to retail licensees.

11 (D) A self-distribution exemption holder shall

12 annually certify to the State Commission its production of

13 wine in the previous 12 months and its anticipated

14 production and sales for the next 12 months. The State

15 Commission may fine, suspend, or revoke a

16 self-distribution exemption after a hearing if it finds

17 that the exemption holder has made a material

18 misrepresentation in its application, violated a revenue

19 or liquor law of Illinois, exceeded production of 250,000

20 gallons of wine, 930,000 gallons of beer, or 50,000

21 gallons of spirits in any calendar year, or become part of

22 an affiliated group producing more than 250,000 gallons of

23 wine, 930,000 gallons of beer, or 50,000 gallons of

24 spirits.

25 (E) Except in hearings for violations of this Act or

26 Public Act 95-634 or a bona fide investigation by duly

HB2864

- 17 -

LRB103 29721 RPS 56126 b

1 sworn law enforcement officials, the State Commission, or

2 its agents, the State Commission shall maintain the

3 production and sales information of a self-distribution

4 exemption holder as confidential and shall not release

5 such information to any person.

6 (F) The State Commission shall issue regulations

7 governing self-distribution exemptions consistent with

8 this Section and this Act.

9 (G) Nothing in this paragraph (17.5) shall prohibit a

10 self-distribution exemption holder from entering into or

11 simultaneously having a distribution agreement with a

12 licensed Illinois distributor.

13 (H) It is the intent of this paragraph (17.5) to

14 promote and continue orderly markets. The General Assembly

15 finds that, in order to preserve Illinois' regulatory

16 distribution system, it is necessary to create an

17 exception for smaller makers of wine as their wines are

18 frequently adjusted in varietals, mixes, vintages, and

19 taste to find and create market niches sometimes too small

20 for distributor or importing distributor business

21 strategies. Limited self-distribution rights will afford

22 and allow smaller makers of wine access to the marketplace

23 in order to develop a customer base without impairing the

24 integrity of the 3-tier system.

25 (18)(A) A class 1 brewer licensee, who must also be

26 either a licensed brewer or licensed non-resident dealer

HB2864

- 18 -

LRB103 29721 RPS 56126 b

1 and annually manufacture less than 930,000 gallons of

2 beer, may make application to the State Commission for a

3 self-distribution exemption to allow the sale of not more

4 than 232,500 gallons per year of the exemption holder's

5 beer to retail licensees and to brewers, class 1 brewers,

6 and class 2 brewers that, pursuant to subsection (e) of

7 Section 6-4 of this Act, sell beer, cider, mead, or any

8 combination thereof to non-licensees at their breweries.

9 (B) In the application, which shall be sworn under

10 penalty of perjury, the class 1 brewer licensee shall

11 state (1) the date it was established; (2) its volume of

12 beer manufactured and sold for each year since its

13 establishment; (3) its efforts to establish distributor

14 relationships; (4) that a self-distribution exemption is

15 necessary to facilitate the marketing of its beer; and (5)

16 that it will comply with the alcoholic beverage and

17 revenue laws of the United States, this State, and any

18 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 prior to

21 action by the State Commission. The State Commission shall

22 approve the application for a self-distribution exemption

23 if the class 1 brewer licensee: (1) is in compliance with

24 the State, revenue, and alcoholic beverage laws; (2) is

25 not a member of any affiliated group that manufactures,

26 directly or indirectly, more than 930,000 gallons of beer

HB2864

- 19 -

LRB103 29721 RPS 56126 b

1 per annum, 25,000 gallons of wine per annum, or 50,000

2 gallons of spirits per annum; (3) shall not annually

3 manufacture for sale more than 930,000 gallons of beer,

4 25,000 gallons of wine, or 50,000 gallons of spirits; (4)

5 shall not annually sell more than 232,500 gallons of its

6 beer to retail licensees and class 3 brewers and to

7 brewers, class 1 brewers, and class 2 brewers that,

8 pursuant to subsection (e) of Section 6-4 of this Act,

9 sell beer, cider, mead, or any combination thereof to

10 non-licensees at their breweries; and (5) has relinquished

11 any brew pub license held by the licensee, including any

12 ownership interest it held in the licensed brew pub.

13 (D) A self-distribution exemption holder shall

14 annually certify to the State Commission its manufacture

15 of beer during the previous 12 months and its anticipated

16 manufacture and sales of beer for the next 12 months. The

17 State Commission may fine, suspend, or revoke a

18 self-distribution exemption after a hearing if it finds

19 that the exemption holder has made a material

20 misrepresentation in its application, violated a revenue

21 or alcoholic beverage law of Illinois, exceeded the

22 manufacture of 930,000 gallons of beer, 25,000 gallons of

23 wine, or 50,000 gallons of spirits in any calendar year or

24 became part of an affiliated group manufacturing more than

25 930,000 gallons of beer, 25,000 gallons of wine, or 50,000

26 gallons of spirits.

HB2864

- 20 -

LRB103 29721 RPS 56126 b

1 (E) The State Commission shall issue rules and

2 regulations governing self-distribution exemptions

3 consistent with this Act.

4 (F) Nothing in this paragraph (18) 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 If a self-distribution exemption holder enters into a

9 distribution agreement and has assigned distribution

10 rights to an importing distributor or distributor, then

11 the self-distribution exemption holder's distribution

12 rights in the assigned territories shall cease in a

13 reasonable time not to exceed 60 days.

14 (G) It is the intent of this paragraph (18) to promote

15 and continue orderly markets. The General Assembly finds

16 that in order to preserve Illinois' regulatory

17 distribution system, it is necessary to create an

18 exception for smaller manufacturers in order to afford and

19 allow such smaller manufacturers of beer access to the

20 marketplace in order to develop a customer base without

21 impairing the integrity of the 3-tier system.

22 (19)(A) A class 1 craft distiller licensee or a

23 non-resident dealer who manufactures less than 50,000

24 gallons of distilled spirits per year may make application

25 to the State Commission for a self-distribution exemption

26 to allow the sale of not more than 5,000 gallons of the

HB2864

- 21 -

LRB103 29721 RPS 56126 b

1 exemption holder's spirits to retail licensees per year.

2 (B) In the application, which shall be sworn under

3 penalty of perjury, the class 1 craft distiller licensee

4 or non-resident dealer shall state (1) the date it was

5 established; (2) its volume of spirits manufactured and

6 sold for each year since its establishment; (3) its

7 efforts to establish distributor relationships; (4) that a

8 self-distribution exemption is necessary to facilitate the

9 marketing of its spirits; and (5) that it will comply with

10 the alcoholic beverage and revenue laws of the United

11 States, this State, and any other state where it is

12 licensed.

13 (C) Any application submitted shall be posted on the

14 State Commission's website at least 45 days prior to

15 action by the State Commission. The State Commission shall

16 approve the application for a self-distribution exemption

17 if the applicant: (1) is in compliance with State revenue

18 and alcoholic beverage laws; (2) is not a member of any

19 affiliated group that produces more than 50,000 gallons of

20 spirits per annum, 930,000 gallons of beer per annum, or

21 25,000 gallons of wine per annum; (3) does not annually

22 manufacture for sale more than 50,000 gallons of spirits,

23 930,000 gallons of beer, or 25,000 gallons of wine; and

24 (4) does not annually sell more than 5,000 gallons of its

25 spirits to retail licensees.

26 (D) A self-distribution exemption holder shall

HB2864

- 22 -

LRB103 29721 RPS 56126 b

1 annually certify to the State Commission its manufacture

2 of spirits during the previous 12 months and its

3 anticipated manufacture and sales of spirits for the next

4 12 months. The State Commission may fine, suspend, or

5 revoke a self-distribution exemption after a hearing if it

6 finds that the exemption holder has made a material

7 misrepresentation in its application, violated a revenue

8 or alcoholic beverage law of Illinois, exceeded the

9 manufacture of 50,000 gallons of spirits, 930,000 gallons

10 of beer, or 25,000 gallons of wine in any calendar year, or

11 has become part of an affiliated group manufacturing more

12 than 50,000 gallons of spirits, 930,000 gallons of beer,

13 or 25,000 gallons of wine.

14 (E) The State Commission shall adopt rules governing

15 self-distribution exemptions consistent with this Act.

16 (F) Nothing in this paragraph (19) shall prohibit a

17 self-distribution exemption holder from entering into or

18 simultaneously having a distribution agreement with a

19 licensed Illinois importing distributor or a distributor.

20 (G) It is the intent of this paragraph (19) to promote

21 and continue orderly markets. The General Assembly finds

22 that in order to preserve Illinois' regulatory

23 distribution system, it is necessary to create an

24 exception for smaller manufacturers in order to afford and

25 allow such smaller manufacturers of spirits access to the

26 marketplace in order to develop a customer base without

HB2864

- 23 -

LRB103 29721 RPS 56126 b

1 impairing the integrity of the 3-tier system.

2 (20)(A) A class 3 brewer licensee who must manufacture

3 less than 465,000 gallons of beer in the aggregate and not

4 more than 155,000 gallons at any single brewery premises

5 may make application to the State Commission for a

6 self-distribution exemption to allow the sale of not more

7 than 6,200 gallons of beer from each in-state or

8 out-of-state class 3 brewery premises, which shall not

9 exceed 18,600 gallons annually in the aggregate, that is

10 manufactured at a wholly owned class 3 brewer's in-state

11 or out-of-state licensed premises to retail licensees and

12 class 3 brewers and to brewers, class 1 brewers, class 2

13 brewers that, pursuant to subsection (e) of Section 6-4,

14 sell beer, cider, or both beer and cider to non-licensees

15 at their licensed breweries.

16 (B) In the application, which shall be sworn under

17 penalty of perjury, the class 3 brewer licensee shall

18 state:

19 (1) the date it was established;

20 (2) its volume of beer manufactured and sold for

21 each year since its establishment;

22 (3) its efforts to establish distributor

23 relationships;

24 (4) that a self-distribution exemption is

25 necessary to facilitate the marketing of its beer; and

26 (5) that it will comply with the alcoholic

HB2864

- 24 -

LRB103 29721 RPS 56126 b

1 beverage and revenue laws of the United States, this

2 State, and any other state where it is licensed.

3 (C) Any application submitted shall be posted on the

4 State Commission's website at least 45 days before action

5 by the State Commission. The State Commission shall

6 approve the application for a self-distribution exemption

7 if the class 3 brewer licensee: (1) is in compliance with

8 the State, revenue, and alcoholic beverage laws; (2) is

9 not a member of any affiliated group that manufacturers,

10 directly or indirectly, more than 465,000 gallons of beer

11 per annum; (3) shall not annually manufacture for sale

12 more than 465,000 gallons of beer or more than 155,000

13 gallons at any single brewery premises; and (4) shall not

14 annually sell more than 6,200 gallons of beer from each

15 in-state or out-of-state class 3 brewery premises, and

16 shall not exceed 18,600 gallons annually in the aggregate,

17 to retail licensees and class 3 brewers and to brewers,

18 class 1 brewers, and class 2 brewers that, pursuant to

19 subsection (e) of Section 6-4 of this Act, sell beer,

20 cider, or both beer and cider to non-licensees at their

21 breweries.

22 (D) A self-distribution exemption holder shall

23 annually certify to the State Commission its manufacture

24 of beer during the previous 12 months and its anticipated

25 manufacture and sales of beer for the next 12 months. The

26 State Commission may fine, suspend, or revoke a

HB2864

- 25 -

LRB103 29721 RPS 56126 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 alcoholic beverage law of Illinois, exceeded the

5 manufacture of 465,000 gallons of beer in any calendar

6 year or became part of an affiliated group manufacturing

7 more than 465,000 gallons of beer, or exceeded the sale to

8 retail licensees, brewers, class 1 brewers, class 2

9 brewers, and class 3 brewers of 6,200 gallons per brewery

10 location or 18,600 gallons in the aggregate.

11 (E) The State Commission may adopt rules governing

12 self-distribution exemptions consistent with this Act.

13 (F) Nothing in this paragraph shall prohibit a

14 self-distribution exemption holder from entering into or

15 simultaneously having a distribution agreement with a

16 licensed Illinois importing distributor or a distributor.

17 If a self-distribution exemption holder enters into a

18 distribution agreement and has assigned distribution

19 rights to an importing distributor or distributor, then

20 the self-distribution exemption holder's distribution

21 rights in the assigned territories shall cease in a

22 reasonable time not to exceed 60 days.

23 (G) It is the intent of this paragraph to promote and

24 continue orderly markets. The General Assembly finds that

25 in order to preserve Illinois' regulatory distribution

26 system, it is necessary to create an exception for smaller

HB2864

- 26 -

LRB103 29721 RPS 56126 b

1 manufacturers in order to afford and allow such smaller

2 manufacturers of beer access to the marketplace in order

3 to develop a customer base without impairing the integrity

4 of the 3-tier system.

5 (b) On or before April 30, 1999, the Commission shall

6 present a written report to the Governor and the General

7 Assembly that shall be based on a study of the impact of Public

8 Act 90-739 on the business of soliciting, selling, and

9 shipping alcoholic liquor from outside of this State directly

10 to residents of this State.

11 As part of its report, the Commission shall provide the

12 following information:

13 (i) the amount of State excise and sales tax revenues

14 generated as a result of Public Act 90-739;

15 (ii) the amount of licensing fees received as a result

16 of Public Act 90-739;

17 (iii) the number of reported violations, the number of

18 cease and desist notices issued by the Commission, the

19 number of notices of violations issued to the Department

20 of Revenue, and the number of notices and complaints of

21 violations to law enforcement officials.

22 (Source: P.A. 101-37, eff. 7-3-19; 101-81, eff. 7-12-19;

23 101-482, eff. 8-23-19; 102-442, eff. 8-20-21; 102-558, eff.

24 8-20-21; 102-813, eff. 5-13-22.)

25 (235 ILCS 5/5-1) (from Ch. 43, par. 115)

HB2864

- 27 -

LRB103 29721 RPS 56126 b

1 Sec. 5-1. Licenses issued by the Illinois Liquor Control

2 Commission shall be of the following classes:

3 (a) Manufacturer's license - Class 1. Distiller, Class 2.

4 Rectifier, Class 3. Brewer, Class 4. First Class Wine

5 Manufacturer, Class 5. Second Class Wine Manufacturer, Class

6 6. First Class Winemaker, Class 7. Second Class Winemaker,

7 Class 8. Limited Wine Manufacturer, Class 9. Craft Distiller,

8 Class 10. Class 1 Craft Distiller, Class 11. Class 2 Craft

9 Distiller, Class 12. Class 1 Brewer, Class 13. Class 2 Brewer,

10 Class 14. Class 3 Brewer, Class 15. Third-Class Wine-Maker,

11 (b) Distributor's license,

12 (c) Importing Distributor's license,

13 (d) Retailer's license,

14 (e) Special Event Retailer's license (not-for-profit),

15 (f) Railroad license,

16 (g) Boat license,

17 (h) Non-Beverage User's license,

18 (i) Wine-maker's premises license,

19 (j) Airplane license,

20 (k) Foreign importer's license,

21 (l) Broker's license,

22 (m) Non-resident dealer's license,

23 (n) Brew Pub license,

24 (o) Auction liquor license,

25 (p) Caterer retailer license,

26 (q) Special use permit license,

HB2864

- 28 -

LRB103 29721 RPS 56126 b

1 (r) Winery shipper's license,

2 (s) Craft distiller tasting permit,

3 (t) Brewer warehouse permit,

4 (u) Distilling pub license,

5 (v) Craft distiller warehouse permit,

6 (w) Beer showcase permit.

7 No person, firm, partnership, corporation, or other legal

8 business entity that is engaged in the manufacturing of wine

9 may concurrently obtain and hold a wine-maker's license and a

10 wine manufacturer's license.

11 (a) A manufacturer's license shall allow the manufacture,

12 importation in bulk, storage, distribution and sale of

13 alcoholic liquor to persons without the State, as may be

14 permitted by law and to licensees in this State as follows:

15 Class 1. A Distiller may make sales and deliveries of

16 alcoholic liquor to distillers, rectifiers, importing

17 distributors, distributors and non-beverage users and to no

18 other licensees.

19 Class 2. A Rectifier, who is not a distiller, as defined

20 herein, may make sales and deliveries of alcoholic liquor to

21 rectifiers, importing distributors, distributors, retailers

22 and non-beverage users and to no other licensees.

23 Class 3. A Brewer may make sales and deliveries of beer to

24 importing distributors and distributors and may make sales as

25 authorized under subsection (e) of Section 6-4 of this Act,

26 including any alcoholic liquor that subsection (e) of Section

HB2864

- 29 -

LRB103 29721 RPS 56126 b

1 6-4 authorizes a brewer to sell in its original package only to

2 a non-licensee for pick-up by a non-licensee either within the

3 interior of the brewery premises or at outside of the brewery

4 premises at a curb-side or parking lot adjacent to the brewery

5 premises, subject to any local ordinance.

6 Class 4. A first class wine-manufacturer may make sales

7 and deliveries of up to 50,000 gallons of wine to

8 manufacturers, importing distributors and distributors, and to

9 no other licensees. If a first-class wine-manufacturer

10 manufactures beer, it shall also obtain and shall only be

11 eligible for, in addition to any current license, a class 1

12 brewer license, shall not manufacture more than 930,000

13 gallons of beer per year, and shall not be a member of or

14 affiliated with, directly or indirectly, a manufacturer that

15 produces more than 930,000 gallons of beer per year. If the

16 first-class wine-manufacturer manufactures spirits, it shall

17 also obtain and shall only be eligible for, in addition to any

18 current license, a class 1 craft distiller license, shall not

19 manufacture more than 50,000 gallons of spirits per year, and

20 shall not be a member of or affiliated with, directly or

21 indirectly, a manufacturer that produces more than 50,000

22 gallons of spirits per year. A first-class wine-manufacturer

23 shall be permitted to sell wine manufactured at the

24 first-class wine-manufacturer premises to non-licensees.

25 Class 5. A second class Wine manufacturer may make sales

26 and deliveries of more than 50,000 gallons of wine to

HB2864

- 30 -

LRB103 29721 RPS 56126 b

1 manufacturers, importing distributors and distributors and to

2 no other licensees.

3 Class 6. A first-class wine-maker's license shall allow

4 the manufacture of up to 50,000 gallons of wine per year, and

5 the storage and sale of such wine to distributors in the State

6 and to persons without the State, as may be permitted by law. A

7 person who, prior to June 1, 2008 (the effective date of Public

8 Act 95-634), is a holder of a first-class wine-maker's license

9 and annually produces more than 25,000 gallons of its own wine

10 and who distributes its wine to licensed retailers shall cease

11 this practice on or before July 1, 2008 in compliance with

12 Public Act 95-634. If a first-class wine-maker manufactures

13 beer, it shall also obtain and shall only be eligible for, in

14 addition to any current license, a class 1 brewer license,

15 shall not manufacture more than 930,000 gallons of beer per

16 year, and shall not be a member of or affiliated with, directly

17 or indirectly, a manufacturer that produces more than 930,000

18 gallons of beer per year. If the first-class wine-maker

19 manufactures spirits, it shall also obtain and shall only be

20 eligible for, in addition to any current license, a class 1

21 craft distiller license, shall not manufacture more than

22 50,000 gallons of spirits per year, and shall not be a member

23 of or affiliated with, directly or indirectly, a manufacturer

24 that produces more than 50,000 gallons of spirits per year. A

25 first-class wine-maker holding a class 1 brewer license or a

26 class 1 craft distiller license shall not be eligible for a

HB2864

- 31 -

LRB103 29721 RPS 56126 b

1 wine-maker's premises license but shall be permitted to sell

2 wine manufactured at the first-class wine-maker premises to

3 non-licensees.

4 Class 7. A second-class wine-maker's license shall allow

5 the manufacture of up to 150,000 gallons of wine per year, and

6 the storage and sale of such wine to distributors in this State

7 and to persons without the State, as may be permitted by law. A

8 person who, prior to June 1, 2008 (the effective date of Public

9 Act 95-634), is a holder of a second-class wine-maker's

10 license and annually produces more than 25,000 gallons of its

11 own wine and who distributes its wine to licensed retailers

12 shall cease this practice on or before July 1, 2008 in

13 compliance with Public Act 95-634. If a second-class

14 wine-maker manufactures beer, it shall also obtain and shall

15 only be eligible for, in addition to any current license, a

16 class 2 brewer license, shall not manufacture more than

17 3,720,000 gallons of beer per year, and shall not be a member

18 of or affiliated with, directly or indirectly, a manufacturer

19 that produces more than 3,720,000 gallons of beer per year. If

20 a second-class wine-maker manufactures spirits, it shall also

21 obtain and shall only be eligible for, in addition to any

22 current license, a class 2 craft distiller license, shall not

23 manufacture more than 100,000 gallons of spirits per year, and

24 shall not be a member of or affiliated with, directly or

25 indirectly, a manufacturer that produces more than 100,000

26 gallons of spirits per year.

HB2864

- 32 -

LRB103 29721 RPS 56126 b

1 Class 8. A limited wine-manufacturer may make sales and

2 deliveries not to exceed 40,000 gallons of wine per year to

3 distributors, and to non-licensees in accordance with the

4 provisions of this Act.

5 Class 9. A craft distiller license, which may only be held

6 by a class 1 craft distiller licensee or class 2 craft

7 distiller licensee but not held by both a class 1 craft

8 distiller licensee and a class 2 craft distiller licensee,

9 shall grant all rights conveyed by either: (i) a class 1 craft

10 distiller license if the craft distiller holds a class 1 craft

11 distiller license; or (ii) a class 2 craft distiller licensee

12 if the craft distiller holds a class 2 craft distiller

13 license.

14 Class 10. A class 1 craft distiller license, which may

15 only be issued to a licensed craft distiller or licensed

16 non-resident dealer, shall allow the manufacture of up to

17 50,000 gallons of spirits per year provided that the class 1

18 craft distiller licensee does not manufacture more than a

19 combined 50,000 gallons of spirits per year and is not a member

20 of or affiliated with, directly or indirectly, a manufacturer

21 that produces more than 50,000 gallons of spirits per year. If

22 a class 1 craft distiller manufactures beer, it shall also

23 obtain and shall only be eligible for, in addition to any

24 current license, a class 1 brewer license, shall not

25 manufacture more than 930,000 gallons of beer per year, and

26 shall not be a member of or affiliated with, directly or

HB2864

- 33 -

LRB103 29721 RPS 56126 b

1 indirectly, a manufacturer that produces more than 930,000

2 gallons of beer per year. If a class 1 craft distiller

3 manufactures wine, it shall also obtain and shall only be

4 eligible for, in addition to any current license, a

5 first-class wine-manufacturer license or a first-class

6 wine-maker's license, shall not manufacture more than 50,000

7 gallons of wine per year, and shall not be a member of or

8 affiliated with, directly or indirectly, a manufacturer that

9 produces more than 50,000 gallons of wine per year. A class 1

10 craft distiller licensee may make sales and deliveries to

11 importing distributors and distributors and to retail

12 licensees in accordance with the conditions set forth in

13 paragraph (19) of subsection (a) of Section 3-12 of this Act.

14 However, the aggregate amount of spirits sold to non-licensees

15 and sold or delivered to retail licensees may not exceed 5,000

16 gallons per year.

17 A class 1 craft distiller licensee may sell up to 5,000

18 gallons of such spirits to non-licensees to the extent

19 permitted by any exemption approved by the State Commission

20 pursuant to Section 6-4 of this Act. A class 1 craft distiller

21 license holder may store such spirits at a non-contiguous

22 licensed location, but at no time shall a class 1 craft

23 distiller license holder directly or indirectly produce in the

24 aggregate more than 50,000 gallons of spirits per year.

25 A class 1 craft distiller licensee may hold more than one

26 class 1 craft distiller's license. However, a class 1 craft

HB2864

- 34 -

LRB103 29721 RPS 56126 b

1 distiller that holds more than one class 1 craft distiller

2 license shall not manufacture, in the aggregate, more than

3 50,000 gallons of spirits by distillation per year and shall

4 not sell, in the aggregate, more than 5,000 gallons of such

5 spirits to non-licensees in accordance with an exemption

6 approved by the State Commission pursuant to Section 6-4 of

7 this Act.

8 Class 11. A class 2 craft distiller license, which may

9 only be issued to a licensed craft distiller or licensed

10 non-resident dealer, shall allow the manufacture of up to

11 100,000 gallons of spirits per year provided that the class 2

12 craft distiller licensee does not manufacture more than a

13 combined 100,000 gallons of spirits per year and is not a

14 member of or affiliated with, directly or indirectly, a

15 manufacturer that produces more than 100,000 gallons of

16 spirits per year. If a class 2 craft distiller manufactures

17 beer, it shall also obtain and shall only be eligible for, in

18 addition to any current license, a class 2 brewer license,

19 shall not manufacture more than 3,720,000 gallons of beer per

20 year, and shall not be a member of or affiliated with, directly

21 or indirectly, a manufacturer that produces more than

22 3,720,000 gallons of beer per year. If a class 2 craft

23 distiller manufactures wine, it shall also obtain and shall

24 only be eligible for, in addition to any current license, a

25 second-class wine-maker's license, shall not manufacture more

26 than 150,000 gallons of wine per year, and shall not be a

HB2864

- 35 -

LRB103 29721 RPS 56126 b

1 member of or affiliated with, directly or indirectly, a

2 manufacturer that produces more than 150,000 gallons of wine

3 per year. A class 2 craft distiller licensee may make sales and

4 deliveries to importing distributors and distributors, but

5 shall not make sales or deliveries to any other licensee. If

6 the State Commission provides prior approval, a class 2 craft

7 distiller licensee may annually transfer up to 100,000 gallons

8 of spirits manufactured by that class 2 craft distiller

9 licensee to the premises of a licensed class 2 craft distiller

10 wholly owned and operated by the same licensee. A class 2 craft

11 distiller may transfer spirits to a distilling pub wholly

12 owned and operated by the class 2 craft distiller subject to

13 the following limitations and restrictions: (i) the transfer

14 shall not annually exceed more than 5,000 gallons; (ii) the

15 annual amount transferred shall reduce the distilling pub's

16 annual permitted production limit; (iii) all spirits

17 transferred shall be subject to Article VIII of this Act; (iv)

18 a written record shall be maintained by the distiller and

19 distilling pub specifying the amount, date of delivery, and

20 receipt of the product by the distilling pub; and (v) the

21 distilling pub shall be located no farther than 80 miles from

22 the class 2 craft distiller's licensed location.

23 A class 2 craft distiller shall, prior to transferring

24 spirits to a distilling pub wholly owned by the class 2 craft

25 distiller, furnish a written notice to the State Commission of

26 intent to transfer spirits setting forth the name and address

HB2864

- 36 -

LRB103 29721 RPS 56126 b

1 of the distilling pub and shall annually submit to the State

2 Commission a verified report identifying the total gallons of

3 spirits transferred to the distilling pub wholly owned by the

4 class 2 craft distiller.

5 A class 2 craft distiller license holder may store such

6 spirits at a non-contiguous licensed location, but at no time

7 shall a class 2 craft distiller license holder directly or

8 indirectly produce in the aggregate more than 100,000 gallons

9 of spirits per year.

10 Class 12. A class 1 brewer license, which may only be

11 issued to a licensed brewer or licensed non-resident dealer,

12 shall allow the manufacture of up to 930,000 gallons of beer

13 per year provided that the class 1 brewer licensee does not

14 manufacture more than a combined 930,000 gallons of beer per

15 year and is not a member of or affiliated with, directly or

16 indirectly, a manufacturer that produces more than 930,000

17 gallons of beer per year. If a class 1 brewer manufactures

18 spirits, it shall also obtain and shall only be eligible for,

19 in addition to any current license, a class 1 craft distiller

20 license, shall not manufacture more than 50,000 gallons of

21 spirits per year, and shall not be a member of or affiliated

22 with, directly or indirectly, a manufacturer that produces

23 more than 50,000 gallons of spirits per year. If a class 1

24 craft brewer manufactures wine, it shall also obtain and shall

25 only be eligible for, in addition to any current license, a

26 first-class wine-manufacturer license or a first-class

HB2864

- 37 -

LRB103 29721 RPS 56126 b

1 wine-maker's license, shall not manufacture more than 50,000

2 gallons of wine per year, and shall not be a member of or

3 affiliated with, directly or indirectly, a manufacturer that

4 produces more than 50,000 gallons of wine per year. A class 1

5 brewer licensee may make sales and deliveries to importing

6 distributors and distributors and to retail licensees in

7 accordance with the conditions set forth in paragraph (18) of

8 subsection (a) of Section 3-12 of this Act. If the State

9 Commission provides prior approval, a class 1 brewer may

10 annually transfer up to 930,000 gallons of beer manufactured

11 by that class 1 brewer to the premises of a licensed class 1

12 brewer wholly owned and operated by the same licensee.

13 Class 13. A class 2 brewer license, which may only be

14 issued to a licensed brewer or licensed non-resident dealer,

15 shall allow the manufacture of up to 3,720,000 gallons of beer

16 per year provided that the class 2 brewer licensee does not

17 manufacture more than a combined 3,720,000 gallons of beer per

18 year and is not a member of or affiliated with, directly or

19 indirectly, a manufacturer that produces more than 3,720,000

20 gallons of beer per year. If a class 2 brewer manufactures

21 spirits, it shall also obtain and shall only be eligible for,

22 in addition to any current license, a class 2 craft distiller

23 license, shall not manufacture more than 100,000 gallons of

24 spirits per year, and shall not be a member of or affiliated

25 with, directly or indirectly, a manufacturer that produces

26 more than 100,000 gallons of spirits per year. If a class 2

HB2864

- 38 -

LRB103 29721 RPS 56126 b

1 craft distiller manufactures wine, it shall also obtain and

2 shall only be eligible for, in addition to any current

3 license, a second-class wine-maker's license, shall not

4 manufacture more than 150,000 gallons of wine per year, and

5 shall not be a member of or affiliated with, directly or

6 indirectly, a manufacturer that produces more than 150,000

7 gallons of wine a year. A class 2 brewer licensee may make

8 sales and deliveries to importing distributors and

9 distributors, but shall not make sales or deliveries to any

10 other licensee. If the State Commission provides prior

11 approval, a class 2 brewer licensee may annually transfer up

12 to 3,720,000 gallons of beer manufactured by that class 2

13 brewer licensee to the premises of a licensed class 2 brewer

14 wholly owned and operated by the same licensee.

15 A class 2 brewer may transfer beer to a brew pub wholly

16 owned and operated by the class 2 brewer subject to the

17 following limitations and restrictions: (i) the transfer shall

18 not annually exceed more than 31,000 gallons; (ii) the annual

19 amount transferred shall reduce the brew pub's annual

20 permitted production limit; (iii) all beer transferred shall

21 be subject to Article VIII of this Act; (iv) a written record

22 shall be maintained by the brewer and brew pub specifying the

23 amount, date of delivery, and receipt of the product by the

24 brew pub; and (v) the brew pub shall be located no farther than

25 80 miles from the class 2 brewer's licensed location.

26 A class 2 brewer shall, prior to transferring beer to a

HB2864

- 39 -

LRB103 29721 RPS 56126 b

1 brew pub wholly owned by the class 2 brewer, furnish a written

2 notice to the State Commission of intent to transfer beer

3 setting forth the name and address of the brew pub and shall

4 annually submit to the State Commission a verified report

5 identifying the total gallons of beer transferred to the brew

6 pub wholly owned by the class 2 brewer.

7 Class 14. A class 3 brewer license, which may be issued to

8 a brewer or a non-resident dealer, shall allow the manufacture

9 of no more than 465,000 gallons of beer per year and no more

10 than 155,000 gallons at a single brewery premises, and shall

11 allow the sale of no more than 6,200 gallons of beer from each

12 in-state or out-of-state class 3 brewery premises, or 18,600

13 gallons in the aggregate, to retail licensees, class 1

14 brewers, class 2 brewers, and class 3 brewers as long as the

15 class 3 brewer licensee does not manufacture more than a

16 combined 465,000 gallons of beer per year and is not a member

17 of or affiliated with, directly or indirectly, a manufacturer

18 that produces more than 465,000 gallons of beer per year to

19 make sales to importing distributors, distributors, retail

20 licensees, brewers, class 1 brewers, class 2 brewers, and

21 class 3 brewers in accordance with the conditions set forth in

22 paragraph (20) of subsection (a) of Section 3-12. If the State

23 Commission provides prior approval, a class 3 brewer may

24 annually transfer up to 155,000 gallons of beer manufactured

25 by that class 3 brewer to the premises of a licensed class 3

26 brewer wholly owned and operated by the same licensee. A class

HB2864

- 40 -

LRB103 29721 RPS 56126 b

1 3 brewer shall manufacture beer at the brewer's class 3

2 designated licensed premises, and may sell beer as otherwise

3 provided in this Act.

4 Class 15. A third-class wine-maker's license shall allow

5 the manufacture of up to 250,000 gallons of wine per year and

6 the storage and sale of such wine to distributors in this State

7 and to persons without the State, as may be permitted by law.

8 (a-1) A manufacturer which is licensed in this State to

9 make sales or deliveries of alcoholic liquor to licensed

10 distributors or importing distributors and which enlists

11 agents, representatives, or individuals acting on its behalf

12 who contact licensed retailers on a regular and continual

13 basis in this State must register those agents,

14 representatives, or persons acting on its behalf with the

15 State Commission.

16 Registration of agents, representatives, or persons acting

17 on behalf of a manufacturer is fulfilled by submitting a form

18 to the Commission. The form shall be developed by the

19 Commission and shall include the name and address of the

20 applicant, the name and address of the manufacturer he or she

21 represents, the territory or areas assigned to sell to or

22 discuss pricing terms of alcoholic liquor, and any other

23 questions deemed appropriate and necessary. All statements in

24 the forms required to be made by law or by rule shall be deemed

25 material, and any person who knowingly misstates any material

26 fact under oath in an application is guilty of a Class B

HB2864

- 41 -

LRB103 29721 RPS 56126 b

1 misdemeanor. Fraud, misrepresentation, false statements,

2 misleading statements, evasions, or suppression of material

3 facts in the securing of a registration are grounds for

4 suspension or revocation of the registration. The State

5 Commission shall post a list of registered agents on the

6 Commission's website.

7 (b) A distributor's license shall allow (i) the wholesale

8 purchase and storage of alcoholic liquors and sale of

9 alcoholic liquors to licensees in this State and to persons

10 without the State, as may be permitted by law; (ii) the sale of

11 beer, cider, mead, or any combination thereof to brewers,

12 class 1 brewers, and class 2 brewers that, pursuant to

13 subsection (e) of Section 6-4 of this Act, sell beer, cider,

14 mead, or any combination thereof to non-licensees at their

15 breweries; (iii) the sale of vermouth to class 1 craft

16 distillers and class 2 craft distillers that, pursuant to

17 subsection (e) of Section 6-4 of this Act, sell spirits,

18 vermouth, or both spirits and vermouth to non-licensees at

19 their distilleries; or (iv) as otherwise provided in this Act.

20 No person licensed as a distributor shall be granted a

21 non-resident dealer's license.

22 (c) An importing distributor's license may be issued to

23 and held by those only who are duly licensed distributors,

24 upon the filing of an application by a duly licensed

25 distributor, with the Commission and the Commission shall,

26 without the payment of any fee, immediately issue such

HB2864

- 42 -

LRB103 29721 RPS 56126 b

1 importing distributor's license to the applicant, which shall

2 allow the importation of alcoholic liquor by the licensee into

3 this State from any point in the United States outside this

4 State, and the purchase of alcoholic liquor in barrels, casks

5 or other bulk containers and the bottling of such alcoholic

6 liquors before resale thereof, but all bottles or containers

7 so filled shall be sealed, labeled, stamped and otherwise made

8 to comply with all provisions, rules and regulations governing

9 manufacturers in the preparation and bottling of alcoholic

10 liquors. The importing distributor's license shall permit such

11 licensee to purchase alcoholic liquor from Illinois licensed

12 non-resident dealers and foreign importers only. No person

13 licensed as an importing distributor shall be granted a

14 non-resident dealer's license.

15 (d) A retailer's license shall allow the licensee to sell

16 and offer for sale at retail, only in the premises specified in

17 the license, alcoholic liquor for use or consumption, but not

18 for resale in any form. Except as provided in Section 6-16,

19 6-29, or 6-29.1, nothing in this Act shall deny, limit,

20 remove, or restrict the ability of a holder of a retailer's

21 license to transfer or ship alcoholic liquor to the purchaser

22 for use or consumption subject to any applicable local law or

23 ordinance. For the purposes of this Section, "shipping" means

24 the movement of alcoholic liquor from a licensed retailer to a

25 consumer via a common carrier. Except as provided in Section

26 6-16, 6-29, or 6-29.1, nothing in this Act shall deny, limit,

HB2864

- 43 -

LRB103 29721 RPS 56126 b

1 remove, or restrict the ability of a holder of a retailer's

2 license to deliver alcoholic liquor to the purchaser for use

3 or consumption. The delivery shall be made only within 12

4 hours from the time the alcoholic liquor leaves the licensed

5 premises of the retailer for delivery. For the purposes of

6 this Section, "delivery" means the movement of alcoholic

7 liquor purchased from a licensed retailer to a consumer

8 through the following methods:

9 (1) delivery within licensed retailer's parking lot,

10 including curbside, for pickup by the consumer;

11 (2) delivery by an owner, officer, director,

12 shareholder, or employee of the licensed retailer; or

13 (3) delivery by a third-party contractor, independent

14 contractor, or agent with whom the licensed retailer has

15 contracted to make deliveries of alcoholic liquors.

16 Under subsection (1), (2), or (3), delivery shall not

17 include the use of common carriers.

18 Any retail license issued to a manufacturer shall only

19 permit the manufacturer to sell beer at retail on the premises

20 actually occupied by the manufacturer. For the purpose of

21 further describing the type of business conducted at a retail

22 licensed premises, a retailer's licensee may be designated by

23 the State Commission as (i) an on premise consumption

24 retailer, (ii) an off premise sale retailer, or (iii) a

25 combined on premise consumption and off premise sale retailer.

26 Except for a municipality with a population of more than

HB2864

- 44 -

LRB103 29721 RPS 56126 b

1 1,000,000 inhabitants, a home rule unit may not regulate the

2 delivery of alcoholic liquor inconsistent with this

3 subsection. This paragraph is a limitation under subsection

4 (i) of Section 6 of Article VII of the Illinois Constitution on

5 the concurrent exercise by home rule units of powers and

6 functions exercised by the State.

7 Notwithstanding any other provision of this subsection

8 (d), a retail licensee may sell alcoholic liquors to a special

9 event retailer licensee for resale to the extent permitted

10 under subsection (e).

11 (e) A special event retailer's license (not-for-profit)

12 shall permit the licensee to purchase alcoholic liquors from

13 an Illinois licensed distributor (unless the licensee

14 purchases less than $500 of alcoholic liquors for the special

15 event, in which case the licensee may purchase the alcoholic

16 liquors from a licensed retailer) and shall allow the licensee

17 to sell and offer for sale, at retail, alcoholic liquors for

18 use or consumption, but not for resale in any form and only at

19 the location and on the specific dates designated for the

20 special event in the license. An applicant for a special event

21 retailer license must (i) furnish with the application: (A) a

22 resale number issued under Section 2c of the Retailers'

23 Occupation Tax Act or evidence that the applicant is

24 registered under Section 2a of the Retailers' Occupation Tax

25 Act, (B) a current, valid exemption identification number

26 issued under Section 1g of the Retailers' Occupation Tax Act,

HB2864

- 45 -

LRB103 29721 RPS 56126 b

1 and a certification to the Commission that the purchase of

2 alcoholic liquors will be a tax-exempt purchase, or (C) a

3 statement that the applicant is not registered under Section

4 2a of the Retailers' Occupation Tax Act, does not hold a resale

5 number under Section 2c of the Retailers' Occupation Tax Act,

6 and does not hold an exemption number under Section 1g of the

7 Retailers' Occupation Tax Act, in which event the Commission

8 shall set forth on the special event retailer's license a

9 statement to that effect; (ii) submit with the application

10 proof satisfactory to the State Commission that the applicant

11 will provide dram shop liability insurance in the maximum

12 limits; and (iii) show proof satisfactory to the State

13 Commission that the applicant has obtained local authority

14 approval.

15 Nothing in this Act prohibits an Illinois licensed

16 distributor from offering credit or a refund for unused,

17 salable alcoholic liquors to a holder of a special event

18 retailer's license or the special event retailer's licensee

19 from accepting the credit or refund of alcoholic liquors at

20 the conclusion of the event specified in the license.

21 (f) A railroad license shall permit the licensee to import

22 alcoholic liquors into this State from any point in the United

23 States outside this State and to store such alcoholic liquors

24 in this State; to make wholesale purchases of alcoholic

25 liquors directly from manufacturers, foreign importers,

26 distributors and importing distributors from within or outside

HB2864

- 46 -

LRB103 29721 RPS 56126 b

1 this State; and to store such alcoholic liquors in this State;

2 provided that the above powers may be exercised only in

3 connection with the importation, purchase or storage of

4 alcoholic liquors to be sold or dispensed on a club, buffet,

5 lounge or dining car operated on an electric, gas or steam

6 railway in this State; and provided further, that railroad

7 licensees exercising the above powers shall be subject to all

8 provisions of Article VIII of this Act as applied to importing

9 distributors. A railroad license shall also permit the

10 licensee to sell or dispense alcoholic liquors on any club,

11 buffet, lounge or dining car operated on an electric, gas or

12 steam railway regularly operated by a common carrier in this

13 State, but shall not permit the sale for resale of any

14 alcoholic liquors to any licensee within this State. A license

15 shall be obtained for each car in which such sales are made.

16 (g) A boat license shall allow the sale of alcoholic

17 liquor in individual drinks, on any passenger boat regularly

18 operated as a common carrier on navigable waters in this State

19 or on any riverboat operated under the Illinois Gambling Act,

20 which boat or riverboat maintains a public dining room or

21 restaurant thereon.

22 (h) A non-beverage user's license shall allow the licensee

23 to purchase alcoholic liquor from a licensed manufacturer or

24 importing distributor, without the imposition of any tax upon

25 the business of such licensed manufacturer or importing

26 distributor as to such alcoholic liquor to be used by such

HB2864

- 47 -

LRB103 29721 RPS 56126 b

1 licensee solely for the non-beverage purposes set forth in

2 subsection (a) of Section 8-1 of this Act, and such licenses

3 shall be divided and classified and shall permit the purchase,

4 possession and use of limited and stated quantities of

5 alcoholic liquor as follows:

6 Class 1, not to exceed .........................500 gallons

7 Class 2, not to exceed .......................1,000 gallons

8 Class 3, not to exceed .......................5,000 gallons

9 Class 4, not to exceed ......................10,000 gallons

10 Class 5, not to exceed ....................... 50,000 gallons

11 (i) A wine-maker's premises license shall allow a licensee

12 that concurrently holds a first-class wine-maker's license to

13 sell and offer for sale at retail in the premises specified in

14 such license not more than 50,000 gallons of the first-class

15 wine-maker's wine that is made at the first-class wine-maker's

16 licensed premises per year for use or consumption, but not for

17 resale in any form. A wine-maker's premises license shall

18 allow a licensee who concurrently holds a second-class

19 wine-maker's license to sell and offer for sale at retail in

20 the premises specified in such license up to 100,000 gallons

21 of the second-class wine-maker's wine that is made at the

22 second-class wine-maker's licensed premises per year for use

23 or consumption but not for resale in any form. A wine-maker's

24 premises license shall allow a licensee who concurrently holds

25 a third-class wine-maker's license to sell and offer for sale

26 at retail in the premises specified in such license up to

HB2864

- 48 -

LRB103 29721 RPS 56126 b

1 250,000 gallons of the third-class wine-maker's wine that is

2 made at the third-class wine-maker's licensed premises per

3 year for use or consumption but not for resale in any form. ~~A~~

4 ~~first-class wine-maker that concurrently holds a class 1~~

5 ~~brewer license or a class 1 craft distiller license shall not~~

6 ~~be eligible to hold a wine-maker's premises license.~~ A

7 wine-maker's premises license shall allow a licensee that

8 concurrently holds a first-class wine-maker's license, ~~or~~ a

9 second-class wine-maker's license, or a third-class

10 wine-maker's licenseto sell and offer for sale at retail at

11 the premises specified in the wine-maker's premises license,

12 for use or consumption but not for resale in any form, any

13 beer, wine, and spirits purchased from a licensed distributor.

14 Upon approval from the State Commission, a wine-maker's

15 premises license shall allow the licensee to sell and offer

16 for sale at (i) the wine-maker's licensed premises and (ii) at

17 up to 3 ~~2~~additional locations for use and consumption and not

18 for resale. Each location shall require additional licensing

19 per location as specified in Section 5-3 of this Act. A

20 wine-maker's premises licensee shall secure liquor liability

21 insurance coverage in an amount at least equal to the maximum

22 liability amounts set forth in subsection (a) of Section 6-21

23 of this Act.

24 (j) An airplane license shall permit the licensee to

25 import alcoholic liquors into this State from any point in the

26 United States outside this State and to store such alcoholic

HB2864

- 49 -

LRB103 29721 RPS 56126 b

1 liquors in this State; to make wholesale purchases of

2 alcoholic liquors directly from manufacturers, foreign

3 importers, distributors and importing distributors from within

4 or outside this State; and to store such alcoholic liquors in

5 this State; provided that the above powers may be exercised

6 only in connection with the importation, purchase or storage

7 of alcoholic liquors to be sold or dispensed on an airplane;

8 and provided further, that airplane licensees exercising the

9 above powers shall be subject to all provisions of Article

10 VIII of this Act as applied to importing distributors. An

11 airplane licensee shall also permit the sale or dispensing of

12 alcoholic liquors on any passenger airplane regularly operated

13 by a common carrier in this State, but shall not permit the

14 sale for resale of any alcoholic liquors to any licensee

15 within this State. A single airplane license shall be required

16 of an airline company if liquor service is provided on board

17 aircraft in this State. The annual fee for such license shall

18 be as determined in Section 5-3.

19 (k) A foreign importer's license shall permit such

20 licensee to purchase alcoholic liquor from Illinois licensed

21 non-resident dealers only, and to import alcoholic liquor

22 other than in bulk from any point outside the United States and

23 to sell such alcoholic liquor to Illinois licensed importing

24 distributors and to no one else in Illinois; provided that (i)

25 the foreign importer registers with the State Commission every

26 brand of alcoholic liquor that it proposes to sell to Illinois

HB2864

- 50 -

LRB103 29721 RPS 56126 b

1 licensees during the license period, (ii) the foreign importer

2 complies with all of the provisions of Section 6-9 of this Act

3 with respect to registration of such Illinois licensees as may

4 be granted the right to sell such brands at wholesale, and

5 (iii) the foreign importer complies with the provisions of

6 Sections 6-5 and 6-6 of this Act to the same extent that these

7 provisions apply to manufacturers.

8 (l) (i) A broker's license shall be required of all

9 persons who solicit orders for, offer to sell or offer to

10 supply alcoholic liquor to retailers in the State of Illinois,

11 or who offer to retailers to ship or cause to be shipped or to

12 make contact with distillers, craft distillers, rectifiers,

13 brewers or manufacturers or any other party within or without

14 the State of Illinois in order that alcoholic liquors be

15 shipped to a distributor, importing distributor or foreign

16 importer, whether such solicitation or offer is consummated

17 within or without the State of Illinois.

18 No holder of a retailer's license issued by the Illinois

19 Liquor Control Commission shall purchase or receive any

20 alcoholic liquor, the order for which was solicited or offered

21 for sale to such retailer by a broker unless the broker is the

22 holder of a valid broker's license.

23 The broker shall, upon the acceptance by a retailer of the

24 broker's solicitation of an order or offer to sell or supply or

25 deliver or have delivered alcoholic liquors, promptly forward

26 to the Illinois Liquor Control Commission a notification of

HB2864

- 51 -

LRB103 29721 RPS 56126 b

1 said transaction in such form as the Commission may by

2 regulations prescribe.

3 (ii) A broker's license shall be required of a person

4 within this State, other than a retail licensee, who, for a fee

5 or commission, promotes, solicits, or accepts orders for

6 alcoholic liquor, for use or consumption and not for resale,

7 to be shipped from this State and delivered to residents

8 outside of this State by an express company, common carrier,

9 or contract carrier. This Section does not apply to any person

10 who promotes, solicits, or accepts orders for wine as

11 specifically authorized in Section 6-29 of this Act.

12 A broker's license under this subsection (l) shall not

13 entitle the holder to buy or sell any alcoholic liquors for his

14 own account or to take or deliver title to such alcoholic

15 liquors.

16 This subsection (l) shall not apply to distributors,

17 employees of distributors, or employees of a manufacturer who

18 has registered the trademark, brand or name of the alcoholic

19 liquor pursuant to Section 6-9 of this Act, and who regularly

20 sells such alcoholic liquor in the State of Illinois only to

21 its registrants thereunder.

22 Any agent, representative, or person subject to

23 registration pursuant to subsection (a-1) of this Section

24 shall not be eligible to receive a broker's license.

25 (m) A non-resident dealer's license shall permit such

26 licensee to ship into and warehouse alcoholic liquor into this

HB2864

- 52 -

LRB103 29721 RPS 56126 b

1 State from any point outside of this State, and to sell such

2 alcoholic liquor to Illinois licensed foreign importers and

3 importing distributors and to no one else in this State;

4 provided that (i) said non-resident dealer shall register with

5 the Illinois Liquor Control Commission each and every brand of

6 alcoholic liquor which it proposes to sell to Illinois

7 licensees during the license period, (ii) it shall comply with

8 all of the provisions of Section 6-9 hereof with respect to

9 registration of such Illinois licensees as may be granted the

10 right to sell such brands at wholesale by duly filing such

11 registration statement, thereby authorizing the non-resident

12 dealer to proceed to sell such brands at wholesale, and (iii)

13 the non-resident dealer shall comply with the provisions of

14 Sections 6-5 and 6-6 of this Act to the same extent that these

15 provisions apply to manufacturers. No person licensed as a

16 non-resident dealer shall be granted a distributor's or

17 importing distributor's license.

18 (n) A brew pub license shall allow the licensee to only (i)

19 manufacture up to 155,000 gallons of beer per year only on the

20 premises specified in the license, (ii) make sales of the beer

21 manufactured on the premises or, with the approval of the

22 Commission, beer manufactured on another brew pub licensed

23 premises that is wholly owned and operated by the same

24 licensee to importing distributors, distributors, and to

25 non-licensees for use and consumption, (iii) store the beer

26 upon the premises, (iv) sell and offer for sale at retail from

HB2864

- 53 -

LRB103 29721 RPS 56126 b

1 the licensed premises for off-premises consumption no more

2 than 155,000 gallons per year so long as such sales are only

3 made in-person, (v) sell and offer for sale at retail for use

4 and consumption on the premises specified in the license any

5 form of alcoholic liquor purchased from a licensed distributor

6 or importing distributor, (vi) with the prior approval of the

7 Commission, annually transfer no more than 155,000 gallons of

8 beer manufactured on the premises to a licensed brew pub

9 wholly owned and operated by the same licensee, and (vii)

10 notwithstanding item (i) of this subsection, brew pubs wholly

11 owned and operated by the same licensee may combine each

12 location's production limit of 155,000 gallons of beer per

13 year and allocate the aggregate total between the wholly

14 owned, operated, and licensed locations.

15 A brew pub licensee shall not under any circumstance sell

16 or offer for sale beer manufactured by the brew pub licensee to

17 retail licensees.

18 A person who holds a class 2 brewer license may

19 simultaneously hold a brew pub license if the class 2 brewer

20 (i) does not, under any circumstance, sell or offer for sale

21 beer manufactured by the class 2 brewer to retail licensees;

22 (ii) does not hold more than 3 brew pub licenses in this State;

23 (iii) does not manufacture more than a combined 3,720,000

24 gallons of beer per year, including the beer manufactured at

25 the brew pub; and (iv) is not a member of or affiliated with,

26 directly or indirectly, a manufacturer that produces more than

HB2864

- 54 -

LRB103 29721 RPS 56126 b

1 3,720,000 gallons of beer per year or any other alcoholic

2 liquor.

3 Notwithstanding any other provision of this Act, a

4 licensed brewer, class 2 brewer, or non-resident dealer who

5 before July 1, 2015 manufactured less than 3,720,000 gallons

6 of beer per year and held a brew pub license on or before July

7 1, 2015 may (i) continue to qualify for and hold that brew pub

8 license for the licensed premises and (ii) manufacture more

9 than 3,720,000 gallons of beer per year and continue to

10 qualify for and hold that brew pub license if that brewer,

11 class 2 brewer, or non-resident dealer does not simultaneously

12 hold a class 1 brewer license and is not a member of or

13 affiliated with, directly or indirectly, a manufacturer that

14 produces more than 3,720,000 gallons of beer per year or that

15 produces any other alcoholic liquor.

16 A brew pub licensee may apply for a class 3 brewer license

17 and, upon~~: (i)~~ meeting all applicable qualifications of this

18 Act~~,~~ and relinquishing all commonly owned brew pub or retail

19 licenses, shall be issued a class 3 brewer license. Nothing in

20 this Act shall prohibit the issuance of a class 3 brewer

21 license if the applicant:

22 (1) has a valid retail license on or before May 1,

23 2021;

24 (2) has an ownership interest in at least two brew

25 pubs licenses on or before May 1, 2021;

26 (3) the brew pub licensee applies for a class 3 brewer

HB2864

- 55 -

LRB103 29721 RPS 56126 b

1 license on or before October 1, 2022 and relinquishes all

2 commonly owned brew pub licenses; and

3 (4) relinquishes all commonly owned retail licenses on

4 or before December 31, 2022.

5 If a brew pub licensee is issued a class 3 brewer license,

6 the class 3 brewer license shall expire on the same date as the

7 existing brew pub license and the State Commission shall not

8 require a class 3 brewer licensee to obtain a brewer license,

9 or in the alternative to pay a fee for a brewer license, until

10 the date the brew pub license of the applicant would have

11 expired.

12 (o) A caterer retailer license shall allow the holder to

13 serve alcoholic liquors as an incidental part of a food

14 service that serves prepared meals which excludes the serving

15 of snacks as the primary meal, either on or off-site whether

16 licensed or unlicensed. A caterer retailer license shall allow

17 the holder, a distributor, or an importing distributor to

18 transfer any inventory to and from the holder's retail

19 premises and shall allow the holder to purchase alcoholic

20 liquor from a distributor or importing distributor to be

21 delivered directly to an off-site event.

22 Nothing in this Act prohibits a distributor or importing

23 distributor from offering credit or a refund for unused,

24 salable beer to a holder of a caterer retailer license or a

25 caterer retailer licensee from accepting a credit or refund

26 for unused, salable beer, in the event an act of God is the

HB2864

- 56 -

LRB103 29721 RPS 56126 b

1 sole reason an off-site event is cancelled and if: (i) the

2 holder of a caterer retailer license has not transferred

3 alcoholic liquor from its caterer retailer premises to an

4 off-site location; (ii) the distributor or importing

5 distributor offers the credit or refund for the unused,

6 salable beer that it delivered to the off-site premises and

7 not for any unused, salable beer that the distributor or

8 importing distributor delivered to the caterer retailer's

9 premises; and (iii) the unused, salable beer would likely

10 spoil if transferred to the caterer retailer's premises. A

11 caterer retailer license shall allow the holder to transfer

12 any inventory from any off-site location to its caterer

13 retailer premises at the conclusion of an off-site event or

14 engage a distributor or importing distributor to transfer any

15 inventory from any off-site location to its caterer retailer

16 premises at the conclusion of an off-site event, provided that

17 the distributor or importing distributor issues bona fide

18 charges to the caterer retailer licensee for fuel, labor, and

19 delivery and the distributor or importing distributor collects

20 payment from the caterer retailer licensee prior to the

21 distributor or importing distributor transferring inventory to

22 the caterer retailer premises.

23 For purposes of this subsection (o), an "act of God" means

24 an unforeseeable event, such as a rain or snow storm, hail, a

25 flood, or a similar event, that is the sole cause of the

26 cancellation of an off-site, outdoor event.

HB2864

- 57 -

LRB103 29721 RPS 56126 b

1 (p) An auction liquor license shall allow the licensee to

2 sell and offer for sale at auction wine and spirits for use or

3 consumption, or for resale by an Illinois liquor licensee in

4 accordance with provisions of this Act. An auction liquor

5 license will be issued to a person and it will permit the

6 auction liquor licensee to hold the auction anywhere in the

7 State. An auction liquor license must be obtained for each

8 auction at least 14 days in advance of the auction date.

9 (q) A special use permit license shall allow an Illinois

10 licensed retailer to transfer a portion of its alcoholic

11 liquor inventory from its retail licensed premises to the

12 premises specified in the license hereby created; to purchase

13 alcoholic liquor from a distributor or importing distributor

14 to be delivered directly to the location specified in the

15 license hereby created; and to sell or offer for sale at

16 retail, only in the premises specified in the license hereby

17 created, the transferred or delivered alcoholic liquor for use

18 or consumption, but not for resale in any form. A special use

19 permit license may be granted for the following time periods:

20 one day or less; 2 or more days to a maximum of 15 days per

21 location in any 12-month period. An applicant for the special

22 use permit license must also submit with the application proof

23 satisfactory to the State Commission that the applicant will

24 provide dram shop liability insurance to the maximum limits

25 and have local authority approval.

26 A special use permit license shall allow the holder to

HB2864

- 58 -

LRB103 29721 RPS 56126 b

1 transfer any inventory from the holder's special use premises

2 to its retail premises at the conclusion of the special use

3 event or engage a distributor or importing distributor to

4 transfer any inventory from the holder's special use premises

5 to its retail premises at the conclusion of an off-site event,

6 provided that the distributor or importing distributor issues

7 bona fide charges to the special use permit licensee for fuel,

8 labor, and delivery and the distributor or importing

9 distributor collects payment from the retail licensee prior to

10 the distributor or importing distributor transferring

11 inventory to the retail premises.

12 Nothing in this Act prohibits a distributor or importing

13 distributor from offering credit or a refund for unused,

14 salable beer to a special use permit licensee or a special use

15 permit licensee from accepting a credit or refund for unused,

16 salable beer at the conclusion of the event specified in the

17 license if: (i) the holder of the special use permit license

18 has not transferred alcoholic liquor from its retail licensed

19 premises to the premises specified in the special use permit

20 license; (ii) the distributor or importing distributor offers

21 the credit or refund for the unused, salable beer that it

22 delivered to the premises specified in the special use permit

23 license and not for any unused, salable beer that the

24 distributor or importing distributor delivered to the

25 retailer's premises; and (iii) the unused, salable beer would

26 likely spoil if transferred to the retailer premises.

HB2864

- 59 -

LRB103 29721 RPS 56126 b

1 (r) A winery shipper's license shall allow a person with a

2 first-class or second-class wine manufacturer's license, a

3 first-class wine-maker's license, a ~~or~~ second-class

4 wine-maker's license, a third-classwine-maker's license, or a

5 limited wine manufacturer's license or who is licensed to make

6 wine under the laws of another state to ship wine made by that

7 licensee directly to a resident of this State who is 21 years

8 of age or older for that resident's personal use and not for

9 resale. Prior to receiving a winery shipper's license, an

10 applicant for the license must provide the Commission with a

11 true copy of its current license in any state in which it is

12 licensed as a manufacturer of wine. An applicant for a winery

13 shipper's license must also complete an application form that

14 provides any other information the Commission deems necessary.

15 The application form shall include all addresses from which

16 the applicant for a winery shipper's license intends to ship

17 wine, including the name and address of any third party,

18 except for a common carrier, authorized to ship wine on behalf

19 of the manufacturer. The application form shall include an

20 acknowledgement consenting to the jurisdiction of the

21 Commission, the Illinois Department of Revenue, and the courts

22 of this State concerning the enforcement of this Act and any

23 related laws, rules, and regulations, including authorizing

24 the Department of Revenue and the Commission to conduct audits

25 for the purpose of ensuring compliance with Public Act 95-634,

26 and an acknowledgement that the wine manufacturer is in

HB2864

- 60 -

LRB103 29721 RPS 56126 b

1 compliance with Section 6-2 of this Act. Any third party,

2 except for a common carrier, authorized to ship wine on behalf

3 of a first-class or second-class wine manufacturer's licensee,

4 a first-class wine-maker's licensee, a ~~or~~ second-class

5 wine-maker's licensee, a third-class wine-maker's licensee, a

6 limited wine manufacturer's licensee, or a person who is

7 licensed to make wine under the laws of another state shall

8 also be disclosed by the winery shipper's licensee, and a copy

9 of the written appointment of the third-party wine provider,

10 except for a common carrier, to the wine manufacturer shall be

11 filed with the State Commission as a supplement to the winery

12 shipper's license application or any renewal thereof. The

13 winery shipper's license holder shall affirm under penalty of

14 perjury, as part of the winery shipper's license application

15 or renewal, that he or she only ships wine, either directly or

16 indirectly through a third-party provider, from the licensee's

17 own production.

18 Except for a common carrier, a third-party provider

19 shipping wine on behalf of a winery shipper's license holder

20 is the agent of the winery shipper's license holder and, as

21 such, a winery shipper's license holder is responsible for the

22 acts and omissions of the third-party provider acting on

23 behalf of the license holder. A third-party provider, except

24 for a common carrier, that engages in shipping wine into

25 Illinois on behalf of a winery shipper's license holder shall

26 consent to the jurisdiction of the State Commission and the

HB2864

- 61 -

LRB103 29721 RPS 56126 b

1 State. Any third-party, except for a common carrier, holding

2 such an appointment shall, by February 1 of each calendar year

3 and upon request by the State Commission or the Department of

4 Revenue, file with the State Commission a statement detailing

5 each shipment made to an Illinois resident. The statement

6 shall include the name and address of the third-party provider

7 filing the statement, the time period covered by the

8 statement, and the following information:

9 (1) the name, address, and license number of the

10 winery shipper on whose behalf the shipment was made;

11 (2) the quantity of the products delivered; and

12 (3) the date and address of the shipment.

13 If the Department of Revenue or the State Commission requests

14 a statement under this paragraph, the third-party provider

15 must provide that statement no later than 30 days after the

16 request is made. Any books, records, supporting papers, and

17 documents containing information and data relating to a

18 statement under this paragraph shall be kept and preserved for

19 a period of 3 years, unless their destruction sooner is

20 authorized, in writing, by the Director of Revenue, and shall

21 be open and available to inspection by the Director of Revenue

22 or the State Commission or any duly authorized officer, agent,

23 or employee of the State Commission or the Department of

24 Revenue, at all times during business hours of the day. Any

25 person who violates any provision of this paragraph or any

26 rule of the State Commission for the administration and

HB2864

- 62 -

LRB103 29721 RPS 56126 b

1 enforcement of the provisions of this paragraph is guilty of a

2 Class C misdemeanor. In case of a continuing violation, each

3 day's continuance thereof shall be a separate and distinct

4 offense.

5 The State Commission shall adopt rules as soon as

6 practicable to implement the requirements of Public Act 99-904

7 and shall adopt rules prohibiting any such third-party

8 appointment of a third-party provider, except for a common

9 carrier, that has been deemed by the State Commission to have

10 violated the provisions of this Act with regard to any winery

11 shipper licensee.

12 A winery shipper licensee must pay to the Department of

13 Revenue the State liquor gallonage tax under Section 8-1 for

14 all wine that is sold by the licensee and shipped to a person

15 in this State. For the purposes of Section 8-1, a winery

16 shipper licensee shall be taxed in the same manner as a

17 manufacturer of wine. A licensee who is not otherwise required

18 to register under the Retailers' Occupation Tax Act must

19 register under the Use Tax Act to collect and remit use tax to

20 the Department of Revenue for all gallons of wine that are sold

21 by the licensee and shipped to persons in this State. If a

22 licensee fails to remit the tax imposed under this Act in

23 accordance with the provisions of Article VIII of this Act,

24 the winery shipper's license shall be revoked in accordance

25 with the provisions of Article VII of this Act. If a licensee

26 fails to properly register and remit tax under the Use Tax Act

HB2864

- 63 -

LRB103 29721 RPS 56126 b

1 or the Retailers' Occupation Tax Act for all wine that is sold

2 by the winery shipper and shipped to persons in this State, the

3 winery shipper's license shall be revoked in accordance with

4 the provisions of Article VII of this Act.

5 A winery shipper licensee must collect, maintain, and

6 submit to the Commission on a semi-annual basis the total

7 number of cases per resident of wine shipped to residents of

8 this State. A winery shipper licensed under this subsection

9 (r) must comply with the requirements of Section 6-29 of this

10 Act.

11 Pursuant to paragraph (5.1) or (5.3) of subsection (a) of

12 Section 3-12, the State Commission may receive, respond to,

13 and investigate any complaint and impose any of the remedies

14 specified in paragraph (1) of subsection (a) of Section 3-12.

15 As used in this subsection, "third-party provider" means

16 any entity that provides fulfillment house services, including

17 warehousing, packaging, distribution, order processing, or

18 shipment of wine, but not the sale of wine, on behalf of a

19 licensed winery shipper.

20 (s) A craft distiller tasting permit license shall allow

21 an Illinois licensed class 1 craft distiller or class 2 craft

22 distiller to transfer a portion of its alcoholic liquor

23 inventory from its class 1 craft distiller or class 2 craft

24 distiller licensed premises to the premises specified in the

25 license hereby created and to conduct a sampling, only in the

26 premises specified in the license hereby created, of the

HB2864

- 64 -

LRB103 29721 RPS 56126 b

1 transferred alcoholic liquor in accordance with subsection (c)

2 of Section 6-31 of this Act. The transferred alcoholic liquor

3 may not be sold or resold in any form. An applicant for the

4 craft distiller tasting permit license must also submit with

5 the application proof satisfactory to the State Commission

6 that the applicant will provide dram shop liability insurance

7 to the maximum limits and have local authority approval.

8 (t) A brewer warehouse permit may be issued to the holder

9 of a class 1 brewer license or a class 2 brewer license. If the

10 holder of the permit is a class 1 brewer licensee, the brewer

11 warehouse permit shall allow the holder to store or warehouse

12 up to 930,000 gallons of tax-determined beer manufactured by

13 the holder of the permit at the premises specified on the

14 permit. If the holder of the permit is a class 2 brewer

15 licensee, the brewer warehouse permit shall allow the holder

16 to store or warehouse up to 3,720,000 gallons of

17 tax-determined beer manufactured by the holder of the permit

18 at the premises specified on the permit. Sales to

19 non-licensees are prohibited at the premises specified in the

20 brewer warehouse permit.

21 (u) A distilling pub license shall allow the licensee to

22 only (i) manufacture up to 5,000 gallons of spirits per year

23 only on the premises specified in the license, (ii) make sales

24 of the spirits manufactured on the premises or, with the

25 approval of the State Commission, spirits manufactured on

26 another distilling pub licensed premises that is wholly owned

HB2864

- 65 -

LRB103 29721 RPS 56126 b

1 and operated by the same licensee to importing distributors

2 and distributors and to non-licensees for use and consumption,

3 (iii) store the spirits upon the premises, (iv) sell and offer

4 for sale at retail from the licensed premises for off-premises

5 consumption no more than 5,000 gallons per year so long as such

6 sales are only made in-person, (v) sell and offer for sale at

7 retail for use and consumption on the premises specified in

8 the license any form of alcoholic liquor purchased from a

9 licensed distributor or importing distributor, and (vi) with

10 the prior approval of the State Commission, annually transfer

11 no more than 5,000 gallons of spirits manufactured on the

12 premises to a licensed distilling pub wholly owned and

13 operated by the same licensee.

14 A distilling pub licensee shall not under any circumstance

15 sell or offer for sale spirits manufactured by the distilling

16 pub licensee to retail licensees.

17 A person who holds a class 2 craft distiller license may

18 simultaneously hold a distilling pub license if the class 2

19 craft distiller (i) does not, under any circumstance, sell or

20 offer for sale spirits manufactured by the class 2 craft

21 distiller to retail licensees; (ii) does not hold more than 3

22 distilling pub licenses in this State; (iii) does not

23 manufacture more than a combined 100,000 gallons of spirits

24 per year, including the spirits manufactured at the distilling

25 pub; and (iv) is not a member of or affiliated with, directly

26 or indirectly, a manufacturer that produces more than 100,000

HB2864

- 66 -

LRB103 29721 RPS 56126 b

1 gallons of spirits per year or any other alcoholic liquor.

2 (v) A craft distiller warehouse permit may be issued to

3 the holder of a class 1 craft distiller or class 2 craft

4 distiller license. The craft distiller warehouse permit shall

5 allow the holder to store or warehouse up to 500,000 gallons of

6 spirits manufactured by the holder of the permit at the

7 premises specified on the permit. Sales to non-licensees are

8 prohibited at the premises specified in the craft distiller

9 warehouse permit.

10 (w) A beer showcase permit license shall allow an

11 Illinois-licensed distributor to transfer a portion of its

12 beer inventory from its licensed premises to the premises

13 specified in the beer showcase permit license, and, in the

14 case of a class 3 brewer, transfer only beer the class 3 brewer

15 manufactures from its licensed premises to the premises

16 specified in the beer showcase permit license; and to sell or

17 offer for sale at retail, only in the premises specified in the

18 beer showcase permit license, the transferred or delivered

19 beer for on or off premise consumption, but not for resale in

20 any form and to sell to non-licensees not more than 96 fluid

21 ounces of beer per person. A beer showcase permit license may

22 be granted for the following time periods: one day or less; or

23 2 or more days to a maximum of 15 days per location in any

24 12-month period. An applicant for a beer showcase permit

25 license must also submit with the application proof

26 satisfactory to the State Commission that the applicant will

HB2864

- 67 -

LRB103 29721 RPS 56126 b

1 provide dram shop liability insurance to the maximum limits

2 and have local authority approval. The State Commission shall

3 require the beer showcase applicant to comply with Section

4 6-27.1.

5 (Source: P.A. 101-16, eff. 6-14-19; 101-31, eff. 6-28-19;

6 101-81, eff. 7-12-19; 101-482, eff. 8-23-19; 101-517, eff.

7 8-23-19; 101-615, eff. 12-20-19; 101-668, eff. 1-1-22;

8 102-442, eff. 8-20-21; revised 2-28-22.)

9 (235 ILCS 5/5-3) (from Ch. 43, par. 118)

10 Sec. 5-3. License fees. Except as otherwise provided

11 herein, at the time application is made to the State

12 Commission for a license of any class, the applicant shall pay

13 to the State Commission the fee hereinafter provided for the

14 kind of license applied for.

15 The fee for licenses issued by the State Commission shall

16 be as follows:

17	`Online`	`Initial`
18	`renewal`	`license`
19		`or`
20		`non-online`
21		`renewal`

22	`For a manufacturer's license:`
23	`Class 1. Distiller` .................	`$4,000`	`$5,000`
24	`Class 2. Rectifier` .................	`4,000`	`5,000`
25	`Class 3. Brewer` ....................	`1,200`	`1,500`

HB2864

- 68 -

LRB103 29721 RPS 56126 b

1	`Class 4. First-class Wine`
2	`Manufacturer` ...................	`1,200`	`1,500`
3	`Class 5. Second-class`
4	`Wine Manufacturer` ..............	`1,500`	`1,750`
5	`Class 6. First-class wine-maker` ....	`1,200`	`1,500`
6	`Class 7. Second-class wine-maker` ...	`1,500`	`1,750`
7	`Class 8. Limited Wine`
8	`Manufacturer`....................	`250`	`350`
9	`Class 9. Craft Distiller`............	`2,000`	`2,500`
10	`Class 10. Class 1 Craft Distiller`...	`50`	`75`
11	`Class 11. Class 2 Craft Distiller`...	`75`	`100`
12	`Class 12. Class 1 Brewer`............	`50`	`75`
13	`Class 13. Class 2 Brewer`............	`75`	`100`
14	`Class 14. Class 3 Brewer`............	`25`	`50`
15	`Class 15. Third-class wine-maker`....	`1,500`	`1,750`
16	`For a Brew Pub License`..............	`1,200`	`1,500`
17	`For a Distilling Pub License`........	`1,200`	`1,500`
18	`For a caterer retailer's license`....	`350`	`500`
19	`For a foreign importer's license` ...	`25`	`25`
20	`For an importing distributor's`
21	`license`.........................	`25`	`25`
22	`For a distributor's license`
23	`(11,250,000 gallons`
24	`or over)`........................	`1,450`	`2,200`
25	`For a distributor's license`
26	`(over 4,500,000 gallons, but`

HB2864

- 69 -

LRB103 29721 RPS 56126 b

1	`under 11,250,000 gallons)`.......	`950`	`1,450`
2	`For a distributor's license`
3	`(4,500,000 gallons or under)`....	`300`	`450`
4	`For a non-resident dealer's license`
5	`(500,000 gallons or over)`
6	`or with self-distribution`
7	`privileges` .....................	`1,200`	`1,500`
8	`For a non-resident dealer's license`
9	`(under 500,000 gallons)` ........	`250`	`350`
10	`For a wine-maker's premises`
11	`license` ........................	`250`	`500`
12	`For a winery shipper's license`
13	`(under 250,000 gallons)`.........	`200`	`350`
14	`For a winery shipper's license`
15	`(250,000 or over, but`
16	`under 500,000 gallons)`..........	`750`	`1,000`
17	`For a winery shipper's license`
18	`(500,000 gallons or over)`.......	`1,200`	`1,500`
19	`For a wine-maker's premises`
20	`license, second location` .......	`500`	`1,000`
21	`For a wine-maker's premises`
22	`license, third location` ........	`500`	`1,000`
23	`For a wine-maker's premises`
24	`license, fourth location`........	`500`	`1,000`
25	`For a retailer's license` ...........	`600`	`750`
26	`For a special event retailer's`

HB2864

- 70 -

LRB103 29721 RPS 56126 b

1	`license, (not-for-profit)` ......	`25`	`25`
2	`For a beer showcase permit` ~~`license`~~`,`
3	`one day only` ...................	`100`	`150`
4	`2 days or more` .................	`150`	`250`
5	`For a special use permit license,`
6	`one day only` ...................	`100`	`150`
7	`2 days or more` .................	`150`	`250`
8	`For a railroad license` .............	`100`	`150`
9	`For a boat license` .................	`500`	`1,000`
10	`For an airplane license, times the`
11	`licensee's maximum number of`
12	`aircraft in flight, serving`
13	`liquor over the State at any`
14	`given time, which either`
15	`originate, terminate, or make`
16	`an intermediate stop in`
17	`the State`.......................	`100`	`150`
18	`For a non-beverage user's license:`
19	`Class 1` ........................	`24`	`24`
20	`Class 2` ........................	`60`	`60`
21	`Class 3` ........................	`120`	`120`
22	`Class 4` ........................	`240`	`240`
23	`Class 5` ........................	`600`	`600`
24	`For a broker's license` .............	`750`	`1,000`
25	`For an auction liquor license` ......	`100`	`150`
26	`For a homebrewer special`

HB2864

- 71 -

LRB103 29721 RPS 56126 b

1	`event permit`....................	`25`	`25`
2	`For a craft distiller`
3	`tasting permit`..................	`25`	`25`
4	`For a BASSET trainer license`........	`300`	`350`
5	`For a tasting representative`
6	`license`.........................	`200`	`300`
7	`For a brewer warehouse permit`.......	`25`	`25`
8	`For a craft distiller`
9	`warehouse permit`...............	`25`	`25`

10 Fees collected under this Section shall be paid into the

11 Dram Shop Fund. The State Commission shall waive license

12 renewal fees for those retailers' licenses that are designated

13 as "1A" by the State Commission and expire on or after July 1,

14 2022, and on or before June 30, 2023. One-half of the funds

15 received for a retailer's license shall be paid into the Dram

16 Shop Fund and one-half of the funds received for a retailer's

17 license shall be paid into the General Revenue Fund.

18 No fee shall be paid for licenses issued by the State

19 Commission to the following non-beverage users:

20 (a) Hospitals, sanitariums, or clinics when their use

21 of alcoholic liquor is exclusively medicinal, mechanical

22 or scientific.

23 (b) Universities, colleges of learning or schools when

24 their use of alcoholic liquor is exclusively medicinal,

25 mechanical or scientific.

26 (c) Laboratories when their use is exclusively for the

HB2864

- 72 -

LRB103 29721 RPS 56126 b

1 purpose of scientific research.

2 (Source: P.A. 101-482, eff. 8-23-19; 101-615, eff. 12-20-19;

3 102-442, eff. 8-20-21; 102-558, eff. 8-20-21; 102-699, eff.

4 4-19-22; revised 2-6-23.)