Bill Text: IL SB1927 | 2021-2022 | 102nd General Assembly | Introduced

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Bill Title: Amends the Liquor Control Act of 1934. Provides that a person licensed to make wine under the laws of another state who has a winery shipper's license and annually produces less than 250,000 gallons (instead of 25,000 gallons) of wine or a person who has a first-class or second-class wine manufacturer's license, a first-class or second-class wine-maker's license, or a limited wine manufacturer's license and annually produces less than 250,000 gallons (instead of 25,000 gallons) of wine may make application to the State Commission for a self-distribution exemption to allow the sale of not more than 50,000 gallons (instead of 5,000 gallons) of the exemption holder's wine to retail licensees per year. Makes conforming changes. Effective immediately.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Introduced - Dead) 2022-06-15 - Chief Sponsor Changed to Sen. Don Harmon [SB1927 Detail]

Download: Illinois-2021-SB1927-Introduced.html

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102ND GENERAL ASSEMBLY State of Illinois 2021 and 2022 SB1927 Introduced 2/26/2021, by Sen. Rachelle Crowe SYNOPSIS AS INTRODUCED:
235 ILCS 5/3-12
Amends the Liquor Control Act of 1934. Provides that a person licensed to make wine under the laws of another state who has a winery shipper's license and annually produces less than 250,000 gallons (instead of 25,000 gallons) of wine or a person who has a first-class or second-class wine manufacturer's license, a first-class or second-class wine-maker's license, or a limited wine manufacturer's license and annually produces less than 250,000 gallons (instead of 25,000 gallons) of wine may make application to the State Commission for a self-distribution exemption to allow the sale of not more than 50,000 gallons (instead of 5,000 gallons) of the exemption holder's wine to retail licensees per year. Makes conforming changes. Effective immediately.
LRB102 16129 RPS 21505 b
A BILL FOR
SB1927 LRB102 16129 RPS 21505 b
AN ACT concerning liquor.
Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
Section 5. The Liquor Control Act of 1934 is amended by
changing Section 3-12 as follows:
(235 ILCS 5/3-12)
Sec. 3-12. Powers and duties of State Commission.
(a) The State Commission shall have the following powers,
functions, and duties:
(1) To receive applications and to issue licenses to
manufacturers, foreign importers, importing distributors,
distributors, non-resident dealers, on premise consumption
retailers, off premise sale retailers, special event
retailer licensees, special use permit licenses, auction
liquor licenses, brew pubs, caterer retailers,
non-beverage users, railroads, including owners and
lessees of sleeping, dining and cafe cars, airplanes,
boats, brokers, and wine maker's premises licensees in
accordance with the provisions of this Act, and to suspend
or revoke such licenses upon the State Commission's
determination, upon notice after hearing, that a licensee
has violated any provision of this Act or any rule or
regulation issued pursuant thereto and in effect for 30

SB1927 - 2 - LRB102 16129 RPS 21505 b
days prior to such violation. Except in the case of an
action taken pursuant to a violation of Section 6-3, 6-5,
or 6-9, any action by the State Commission to suspend or
revoke a licensee's license may be limited to the license
for the specific premises where the violation occurred. An
action for a violation of this Act shall be commenced by
the State Commission within 2 years after the date the
State Commission becomes aware of the violation.
In lieu of suspending or revoking a license, the
commission may impose a fine, upon the State Commission's
determination and notice after hearing, that a licensee
has violated any provision of this Act or any rule or
regulation issued pursuant thereto and in effect for 30
days prior to such violation.
For the purpose of this paragraph (1), when
determining multiple violations for the sale of alcohol to
a person under the age of 21, a second or subsequent
violation for the sale of alcohol to a person under the age
of 21 shall only be considered if it was committed within 5
years after the date when a prior violation for the sale of
alcohol to a person under the age of 21 was committed.
The fine imposed under this paragraph may not exceed
$500 for each violation. Each day that the activity, which
gave rise to the original fine, continues is a separate
violation. The maximum fine that may be levied against any
licensee, for the period of the license, shall not exceed

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$20,000. The maximum penalty that may be imposed on a
licensee for selling a bottle of alcoholic liquor with a
foreign object in it or serving from a bottle of alcoholic
liquor with a foreign object in it shall be the
destruction of that bottle of alcoholic liquor for the
first 10 bottles so sold or served from by the licensee.
For the eleventh bottle of alcoholic liquor and for each
third bottle thereafter sold or served from by the
licensee with a foreign object in it, the maximum penalty
that may be imposed on the licensee is the destruction of
the bottle of alcoholic liquor and a fine of up to $50.
Any notice issued by the State Commission to a
licensee for a violation of this Act or any notice with
respect to settlement or offer in compromise shall include
the field report, photographs, and any other supporting
documentation necessary to reasonably inform the licensee
of the nature and extent of the violation or the conduct
alleged to have occurred. The failure to include such
required documentation shall result in the dismissal of
the action.
(2) To adopt such rules and regulations consistent
with the provisions of this Act which shall be necessary
to carry on its functions and duties to the end that the
health, safety and welfare of the People of the State of
Illinois shall be protected and temperance in the
consumption of alcoholic liquors shall be fostered and

SB1927 - 4 - LRB102 16129 RPS 21505 b
promoted and to distribute copies of such rules and
regulations to all licensees affected thereby.
(3) To call upon other administrative departments of
the State, county and municipal governments, county and
city police departments and upon prosecuting officers for
such information and assistance as it deems necessary in
the performance of its duties.
(4) To recommend to local commissioners rules and
regulations, not inconsistent with the law, for the
distribution and sale of alcoholic liquors throughout the
State.
(5) To inspect, or cause to be inspected, any premises
in this State where alcoholic liquors are manufactured,
distributed, warehoused, or sold. Nothing in this Act
authorizes an agent of the State Commission to inspect
private areas within the premises without reasonable
suspicion or a warrant during an inspection. "Private
areas" include, but are not limited to, safes, personal
property, and closed desks.
(5.1) Upon receipt of a complaint or upon having
knowledge that any person is engaged in business as a
manufacturer, importing distributor, distributor, or
retailer without a license or valid license, to conduct an
investigation. If, after conducting an investigation, the
State Commission is satisfied that the alleged conduct
occurred or is occurring, it may issue a cease and desist

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notice as provided in this Act, impose civil penalties as
provided in this Act, notify the local liquor authority,
or file a complaint with the State's Attorney's Office of
the county where the incident occurred or the Attorney
General.
(5.2) Upon receipt of a complaint or upon having
knowledge that any person is shipping alcoholic liquor
into this State from a point outside of this State if the
shipment is in violation of this Act, to conduct an
investigation. If, after conducting an investigation, the
State Commission is satisfied that the alleged conduct
occurred or is occurring, it may issue a cease and desist
notice as provided in this Act, impose civil penalties as
provided in this Act, notify the foreign jurisdiction, or
file a complaint with the State's Attorney's Office of the
county where the incident occurred or the Attorney
General.
(5.3) To receive complaints from licensees, local
officials, law enforcement agencies, organizations, and
persons stating that any licensee has been or is violating
any provision of this Act or the rules and regulations
issued pursuant to this Act. Such complaints shall be in
writing, signed and sworn to by the person making the
complaint, and shall state with specificity the facts in
relation to the alleged violation. If the State Commission
has reasonable grounds to believe that the complaint

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substantially alleges a violation of this Act or rules and
regulations adopted pursuant to this Act, it shall conduct
an investigation. If, after conducting an investigation,
the State Commission is satisfied that the alleged
violation did occur, it shall proceed with disciplinary
action against the licensee as provided in this Act.
(5.4) To make arrests and issue notices of civil
violations where necessary for the enforcement of this
Act.
(5.5) To investigate any and all unlicensed activity.
(5.6) To impose civil penalties or fines to any person
who, without holding a valid license, engages in conduct
that requires a license pursuant to this Act, in an amount
not to exceed $20,000 for each offense as determined by
the State Commission. A civil penalty shall be assessed by
the State Commission after a hearing is held in accordance
with the provisions set forth in this Act regarding the
provision of a hearing for the revocation or suspension of
a license.
(6) To hear and determine appeals from orders of a
local commission in accordance with the provisions of this
Act, as hereinafter set forth. Hearings under this
subsection shall be held in Springfield or Chicago, at
whichever location is the more convenient for the majority
of persons who are parties to the hearing.
(7) The State Commission shall establish uniform

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

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commission's discretion, hearing officers to conduct
hearings involving complex issues or issues that will
require a protracted period of time to resolve, to
examine, or cause to be examined, under oath, any
licensee, and to examine or cause to be examined the books
and records of such licensee; to hear testimony and take
proof material for its information in the discharge of its
duties hereunder; to administer or cause to be
administered oaths; for any such purpose to issue subpoena
or subpoenas to require the attendance of witnesses and
the production of books, which shall be effective in any
part of this State, and to adopt rules to implement its
powers under this paragraph (8).
Any circuit court may, by order duly entered, require
the attendance of witnesses and the production of relevant
books subpoenaed by the State Commission and the court may
compel obedience to its order by proceedings for contempt.
(9) To investigate the administration of laws in
relation to alcoholic liquors in this and other states and
any foreign countries, and to recommend from time to time
to the Governor and through him or her to the legislature
of this State, such amendments to this Act, if any, as it
may think desirable and as will serve to further the
general broad purposes contained in Section 1-2 hereof.
(10) To adopt such rules and regulations consistent
with the provisions of this Act which shall be necessary

SB1927 - 9 - LRB102 16129 RPS 21505 b
for the control, sale, or disposition of alcoholic liquor
damaged as a result of an accident, wreck, flood, fire, or
other similar occurrence.
(11) To develop industry educational programs related
to responsible serving and selling, particularly in the
areas of overserving consumers and illegal underage
purchasing and consumption of alcoholic beverages.
(11.1) To license persons providing education and
training to alcohol beverage sellers and servers for
mandatory and non-mandatory training under the Beverage
Alcohol Sellers and Servers Education and Training
(BASSET) programs and to develop and administer a public
awareness program in Illinois to reduce or eliminate the
illegal purchase and consumption of alcoholic beverage
products by persons under the age of 21. Application for a
license shall be made on forms provided by the State
Commission.
(12) To develop and maintain a repository of license
and regulatory information.
(13) (Blank).
(14) On or before April 30, 2008 and every 2 years
thereafter, the State Commission shall present a written
report to the Governor and the General Assembly that shall
be based on a study of the impact of Public Act 95-634 on
the business of soliciting, selling, and shipping wine
from inside and outside of this State directly to

SB1927 - 10 - LRB102 16129 RPS 21505 b
residents of this State. As part of its report, the State
Commission shall provide all of the following information:
(A) The amount of State excise and sales tax
revenues generated.
(B) The amount of licensing fees received.
(C) The number of cases of wine shipped from
inside and outside of this State directly to residents
of this State.
(D) The number of alcohol compliance operations
conducted.
(E) The number of winery shipper's licenses
issued.
(F) The number of each of the following: reported
violations; cease and desist notices issued by the
Commission; notices of violations issued by the
Commission and to the Department of Revenue; and
notices and complaints of violations to law
enforcement officials, including, without limitation,
the Illinois Attorney General and the U.S. Department
of Treasury's Alcohol and Tobacco Tax and Trade
Bureau.
(15) As a means to reduce the underage consumption of
alcoholic liquors, the State Commission shall conduct
alcohol compliance operations to investigate whether
businesses that are soliciting, selling, and shipping wine
from inside or outside of this State directly to residents

SB1927 - 11 - LRB102 16129 RPS 21505 b
of this State are licensed by this State or are selling or
attempting to sell wine to persons under 21 years of age in
violation of this Act.
(16) The State Commission shall, in addition to
notifying any appropriate law enforcement agency, submit
notices of complaints or violations of Sections 6-29 and
6-29.1 by persons who do not hold a winery shipper's
license under this Act to the Illinois Attorney General
and to the U.S. Department of Treasury's Alcohol and
Tobacco Tax and Trade Bureau.
(17)(A) A person licensed to make wine under the laws
of another state who has a winery shipper's license under
this Act and annually produces less than 250,000 25,000
gallons of wine or a person who has a first-class or
second-class wine manufacturer's license, a first-class or
second-class wine-maker's license, or a limited wine
manufacturer's license under this Act and annually
produces less than 250,000 25,000 gallons of wine may make
application to the State Commission for a
self-distribution exemption to allow the sale of not more
than 50,000 5,000 gallons of the exemption holder's wine
to retail licensees per year.
(B) In the application, which shall be sworn under
penalty of perjury, such person shall state (1) the date
it was established; (2) its volume of production and sales
for each year since its establishment; (3) its efforts to

SB1927 - 12 - LRB102 16129 RPS 21505 b
establish distributor relationships; (4) that a
self-distribution exemption is necessary to facilitate the
marketing of its wine; and (5) that it will comply with the
liquor and revenue laws of the United States, this State,
and any other state where it is licensed.
(C) The State Commission shall approve the application
for a self-distribution exemption if such person: (1) is
in compliance with State revenue and liquor laws; (2) is
not a member of any affiliated group that produces more
than 250,000 25,000 gallons of wine per annum or produces
any other alcoholic liquor; (3) will not annually produce
for sale more than 250,000 25,000 gallons of wine; and (4)
will not annually sell more than 50,000 5,000 gallons of
its wine to retail licensees.
(D) A self-distribution exemption holder shall
annually certify to the State Commission its production of
wine in the previous 12 months and its anticipated
production and sales for the next 12 months. The State
Commission may fine, suspend, or revoke a
self-distribution exemption after a hearing if it finds
that the exemption holder has made a material
misrepresentation in its application, violated a revenue
or liquor law of Illinois, exceeded production of 250,000
25,000 gallons of wine in any calendar year, or become
part of an affiliated group producing more than 250,000
25,000 gallons of wine or any other alcoholic liquor.

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(E) Except in hearings for violations of this Act or
Public Act 95-634 or a bona fide investigation by duly
sworn law enforcement officials, the State Commission, or
its agents, the State Commission shall maintain the
production and sales information of a self-distribution
exemption holder as confidential and shall not release
such information to any person.
(F) The State Commission shall issue regulations
governing self-distribution exemptions consistent with
this Section and this Act.
(G) Nothing in this paragraph (17) shall prohibit a
self-distribution exemption holder from entering into or
simultaneously having a distribution agreement with a
licensed Illinois distributor.
(H) It is the intent of this paragraph (17) to promote
and continue orderly markets. The General Assembly finds
that, in order to preserve Illinois' regulatory
distribution system, it is necessary to create an
exception for smaller makers of wine as their wines are
frequently adjusted in varietals, mixes, vintages, and
taste to find and create market niches sometimes too small
for distributor or importing distributor business
strategies. Limited self-distribution rights will afford
and allow smaller makers of wine access to the marketplace
in order to develop a customer base without impairing the
integrity of the 3-tier system.

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(18)(A) A class 1 brewer licensee, who must also be
either a licensed brewer or licensed non-resident dealer
and annually manufacture less than 930,000 gallons of
beer, may make application to the State Commission for a
self-distribution exemption to allow the sale of not more
than 232,500 gallons of the exemption holder's beer per
year to retail licensees and to brewers, class 1 brewers,
and class 2 brewers that, pursuant to subsection (e) of
Section 6-4 of this Act, sell beer, cider, or both beer and
cider to non-licensees at their breweries.
(B) In the application, which shall be sworn under
penalty of perjury, the class 1 brewer licensee shall
state (1) the date it was established; (2) its volume of
beer manufactured and sold for each year since its
establishment; (3) its efforts to establish distributor
relationships; (4) that a self-distribution exemption is
necessary to facilitate the marketing of its beer; and (5)
that it will comply with the alcoholic beverage and
revenue laws of the United States, this State, and any
other state where it is licensed.
(C) Any application submitted shall be posted on the
State Commission's website at least 45 days prior to
action by the State Commission. The State Commission shall
approve the application for a self-distribution exemption
if the class 1 brewer licensee: (1) is in compliance with
the State, revenue, and alcoholic beverage laws; (2) is

SB1927 - 15 - LRB102 16129 RPS 21505 b
not a member of any affiliated group that manufactures
more than 930,000 gallons of beer per annum or produces
any other alcoholic beverages; (3) shall not annually
manufacture for sale more than 930,000 gallons of beer;
(4) shall not annually sell more than 232,500 gallons of
its beer to retail licensees or to brewers, class 1
brewers, and class 2 brewers that, pursuant to subsection
(e) of Section 6-4 of this Act, sell beer, cider, or both
beer and cider to non-licensees at their breweries; and
(5) has relinquished any brew pub license held by the
licensee, including any ownership interest it held in the
licensed brew pub.
(D) A self-distribution exemption holder shall
annually certify to the State Commission its manufacture
of beer during the previous 12 months and its anticipated
manufacture and sales of beer for the next 12 months. The
State Commission may fine, suspend, or revoke a
self-distribution exemption after a hearing if it finds
that the exemption holder has made a material
misrepresentation in its application, violated a revenue
or alcoholic beverage law of Illinois, exceeded the
manufacture of 930,000 gallons of beer in any calendar
year or became part of an affiliated group manufacturing
more than 930,000 gallons of beer or any other alcoholic
beverage.
(E) The State Commission shall issue rules and

SB1927 - 16 - LRB102 16129 RPS 21505 b
regulations governing self-distribution exemptions
consistent with this Act.
(F) Nothing in this paragraph (18) shall prohibit a
self-distribution exemption holder from entering into or
simultaneously having a distribution agreement with a
licensed Illinois importing distributor or a distributor.
If a self-distribution exemption holder enters into a
distribution agreement and has assigned distribution
rights to an importing distributor or distributor, then
the self-distribution exemption holder's distribution
rights in the assigned territories shall cease in a
reasonable time not to exceed 60 days.
(G) It is the intent of this paragraph (18) to promote
and continue orderly markets. The General Assembly finds
that in order to preserve Illinois' regulatory
distribution system, it is necessary to create an
exception for smaller manufacturers in order to afford and
allow such smaller manufacturers of beer access to the
marketplace in order to develop a customer base without
impairing the integrity of the 3-tier system.
(19)(A) A class 1 craft distiller licensee or a
non-resident dealer who manufactures less than 50,000
gallons of distilled spirits per year may make application
to the State Commission for a self-distribution exemption
to allow the sale of not more than 5,000 gallons of the
exemption holder's spirits to retail licensees per year.

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(B) In the application, which shall be sworn under
penalty of perjury, the class 1 craft distiller licensee
or non-resident dealer shall state (1) the date it was
established; (2) its volume of spirits manufactured and
sold for each year since its establishment; (3) its
efforts to establish distributor relationships; (4) that a
self-distribution exemption is necessary to facilitate the
marketing of its spirits; and (5) that it will comply with
the alcoholic beverage and revenue laws of the United
States, this State, and any other state where it is
licensed.
(C) Any application submitted shall be posted on the
State Commission's website at least 45 days prior to
action by the State Commission. The State Commission shall
approve the application for a self-distribution exemption
if the applicant: (1) is in compliance with State revenue
and alcoholic beverage laws; (2) is not a member of any
affiliated group that produces more than 50,000 gallons of
spirits per annum or produces any other alcoholic liquor;
(3) does not annually manufacture for sale more than
50,000 gallons of spirits; and (4) does not annually sell
more than 5,000 gallons of its spirits to retail
licensees.
(D) A self-distribution exemption holder shall
annually certify to the State Commission its manufacture
of spirits during the previous 12 months and its

SB1927 - 18 - LRB102 16129 RPS 21505 b
anticipated manufacture and sales of spirits for the next
12 months. The State Commission may fine, suspend, or
revoke a self-distribution exemption after a hearing if it
finds that the exemption holder has made a material
misrepresentation in its application, violated a revenue
or alcoholic beverage law of Illinois, exceeded the
manufacture of 50,000 gallons of spirits in any calendar
year, or has become part of an affiliated group
manufacturing more than 50,000 gallons of spirits or any
other alcoholic beverage.
(E) The State Commission shall adopt rules governing
self-distribution exemptions consistent with this Act.
(F) Nothing in this paragraph (19) shall prohibit a
self-distribution exemption holder from entering into or
simultaneously having a distribution agreement with a
licensed Illinois importing distributor or a distributor.
(G) It is the intent of this paragraph (19) to promote
and continue orderly markets. The General Assembly finds
that in order to preserve Illinois' regulatory
distribution system, it is necessary to create an
exception for smaller manufacturers in order to afford and
allow such smaller manufacturers of spirits access to the
marketplace in order to develop a customer base without
impairing the integrity of the 3-tier system.
(b) On or before April 30, 1999, the Commission shall
present a written report to the Governor and the General

SB1927 - 19 - LRB102 16129 RPS 21505 b
Assembly that shall be based on a study of the impact of Public
Act 90-739 on the business of soliciting, selling, and
shipping alcoholic liquor from outside of this State directly
to residents of this State.
As part of its report, the Commission shall provide the
following information:
(i) the amount of State excise and sales tax revenues
generated as a result of Public Act 90-739;
(ii) the amount of licensing fees received as a result
of Public Act 90-739;
(iii) the number of reported violations, the number of
cease and desist notices issued by the Commission, the
number of notices of violations issued to the Department
of Revenue, and the number of notices and complaints of
violations to law enforcement officials.
(Source: P.A. 100-134, eff. 8-18-17; 100-201, eff. 8-18-17;
100-816, eff. 8-13-18; 100-1012, eff. 8-21-18; 100-1050, eff.
8-23-18; 101-37, eff. 7-3-19; 101-81, eff. 7-12-19; 101-482,
eff. 8-23-19; revised 9-20-19.)
Section 99. Effective date. This Act takes effect upon
becoming law.